Strategic Responses to FDI in Emerging Markets: Are Core Members More Responsive than Peripheral Members of Business Groups?

With increasing foreign direct investment (FDI) into emerging markets, local firms must make critical strategic decisions in order to remain competitive. When faced with multinational enterprises (MNEs) announcing FDI into their industry, local firms can expand operations and challenge the MNE head on, or refrain from responding directly, effectively ceding market share to the MNE investor. We propose that local firms’ responses are shaped by...