Emerging markets of today are represented by companies with international growth ambitions and new opportunities to be exploited. This study explores the characteristics of the Italian Foreign Direct Investment (FDI) in India and aims to fill the gap identified in literature by providing a comprehensive empirical analysis of this issue. The study specifically focuses on the localization drivers of Italian MNCs that internationalized in India. In order to investigate the research questions, a unique database of Italian firms that invested in India was created. The number of Italian companies with subsidiaries in India was found to be low. In terms of geographical distribution, the sample showed prevalence in New Delhi, followed by Mumbai and Bangalore. The main driver for localization choice was found to be the general economic importance of the city, and a majority of the sampled companies chose the place of establishment of their Indian subsidiary mainly based on the location of their clients (prospect and actual). This data was consistent with the idea that ‘market seeking’ is the primary strategic goal for the companies analyzed. A typical ‘multidomestic’ approach was adopted by customizing products and services to the local needs and demands. This supports the progressive embeddedness of the subsidiary into the local market. Under this perspective, FDIs could also represent a way to access local knowledge to be combined at a global scale to contribute to the overall performance of the MNC.
The internationalization path of Italian firms in India: localization drivers
PISONI, ALESSIA;ONETTI, ALBERTO
2013-01-01
Abstract
Emerging markets of today are represented by companies with international growth ambitions and new opportunities to be exploited. This study explores the characteristics of the Italian Foreign Direct Investment (FDI) in India and aims to fill the gap identified in literature by providing a comprehensive empirical analysis of this issue. The study specifically focuses on the localization drivers of Italian MNCs that internationalized in India. In order to investigate the research questions, a unique database of Italian firms that invested in India was created. The number of Italian companies with subsidiaries in India was found to be low. In terms of geographical distribution, the sample showed prevalence in New Delhi, followed by Mumbai and Bangalore. The main driver for localization choice was found to be the general economic importance of the city, and a majority of the sampled companies chose the place of establishment of their Indian subsidiary mainly based on the location of their clients (prospect and actual). This data was consistent with the idea that ‘market seeking’ is the primary strategic goal for the companies analyzed. A typical ‘multidomestic’ approach was adopted by customizing products and services to the local needs and demands. This supports the progressive embeddedness of the subsidiary into the local market. Under this perspective, FDIs could also represent a way to access local knowledge to be combined at a global scale to contribute to the overall performance of the MNC.
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
