Opportunities and challenges for multiple-embeddedness through mergers and acquisitions in emerging economies

Abstract

Purpose – The purpose of this paper is to examine opportunities and challenges from multiple-embeddedness of developed countries multinational enterprises (DMNEs) in emerging economies. It further investigates the effect of global financial crisis on the DMNE’s embeddedness strategies. Design/methodology/approach – Utilising POLS regression on secondary data bases, such as World Bank Development Indicators, over two period, first, from 2003 to 2007 (pre global financial crisis period), and second, from 2008 to 2012 (post global financial crisis), this study models the advantages and challenges faced by DMNEs into emerging markets. Findings – Findings suggest that challenges in terms of institutional and cultural differences have decreased over time. This may be due to the DMNE’s experience of operating in emerging economies. Research limitations/implications – Since the global financial crisis is on-going, further changes in terms of opportunities and challenges are yet to be uncovered. Further investigations using qualitative designs are also warranted because many qualitative phenomena, such as cultural differences, cannot be captured through purely quantitative methods. Practical implications – There are two practical implications. First, policy makers can appreciate the change in the economic gravity in the current scenario. Openness of economies may further bring in economic equilibrium in favour of emerging economies. Second, managers of businesses looking to internationalise should pay attention towards changing market conditions and requirements in emerging economies. Social implications – This paper portrays the importance emerging economies which consist of a large proportion of the world’s population. Originality/value – In the current economic scenario, this paper seeks to highlight the opportunities and challenges for multiple embeddedness through mergers and acquisitions in emerging economies, which is seen to be timely and topical and at the same time advances the theoretical knowledge and practical implications.