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Boomerang Multinationals? Strategic Flexibilities or Rigidities? A Perspective on Developed versus Emerging Market Re-entrants

Research on EMNEs has come centre stage in international business (IB), with a surge of studies urging scholars to investigate the differences between the international decisions made by developed market multinationals (DMNEs) and emerging market multinationals (EMNEs). Neither has considered that this can be looked at in the context of foreign market re-entry showing that EMNEs have not only commenced to expand internationally but have also exited and subsequently re-entered foreign countries. This study explores the similarities and differences concerning DMNEs’ and EMNEs’ re-entry decisions. We found that EMNE and DMNE re-entrants are more similar than they are different, particularly when re-entering developed host markets. Regarding re-entry into emerging host markets, our findings suggest that, much like DMNE re-entrants, EMNEs can learn from the exit experience and alter their strategies to re-enter and overcome their competitive disadvantages that led to an untimely exit. We discuss the implications for IB theory of looking at the foreign market (re)entry decisions of EMNEs from a strategic flexibility and organizational learning perspectives.

Keywords

Foreign market re-entry, Exit, Emerging market multinationals, Strategic flexibility, Learning, Comparative study

JEL Classification

M1

Published on 20th November 2018
Authors Kamel Mellahi, Keith Glaister
Series Reference JHD-2018-09