Country conditions in emerging markets and their effects on entry mode decisions of multinational manufacturing enterprises: Evidence from Russia

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Abstract

Purpose – The purpose of this paper is to examine entry modes employed by foreign multinational manufacturing enterprises entering Russia. It is designed to discover how multinational firm decision makers perceive country conditions in Russia and to provide the basis for further study to uncover what factors influence their decision to locate manufacturing in such volatile markets rather than employing other, less riskier modes of entry. Design/methodology/approach – This paper uses indepth interviews of decisionmakers operating foreign manufacturing firms in different industries in Russia. Under the author's guidance, the interviewees discuss openended questions concerning country conditions in Russia, their evolution and effect on entry modes. The interviewers take notes which are shown to the interviewees at the end of each interview to make sure the notes represent the true and unbiased views of the interviewees. Findings – Finally, favorable economic conditions and large multinational firms' internal factors seem to have become the single decisive factor affecting these firms decision to use the riskiest mode in Russia which described in some literature as one of the least stable emerging markets. Research limitations/implications – The paper is limited to a small number of cases and qualitative research. Practical implications – This paper is an insight into country conditions in emerging economies. Originality/value – Country conditions in emerging markets have not yet been considered from this perspective and effects of all have been studied. However, effects of globalization on large firms adaptability to country conditions have been overlooked by scholars.

Original languageEnglish
Pages (from-to)375-388
Number of pages14
JournalInternational Journal of Emerging Markets
Volume4
Issue number4
DOIs
Publication statusPublished - 25 Sep 2009
Externally publishedYes

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Keywords

  • Emerging markets
  • Manufacturing industries
  • Market entry
  • Multinational companies
  • Russia

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