Focused and ambidextrous catch-up strategies of emerging economy multinationals

Yoona Choi, Lin Cui, Yi Li, Xizhou Tian

    Research output: Contribution to journalArticle

    Abstract

    Many emerging economy multinationals (EMNEs) conduct asset-seeking foreign direct investment as a strategy to catch up to global market leaders. This catch-up strategy can be implemented in a focused (purely exploratory) or ambidextrous (simultaneously exploratory and exploitative) manner. This study examines the influence of industry environment on EMNEs' adoption of these catch-up strategies. Integrating an industry-based view with an upper-echelon perspective, we argue that industry munificence promotes a focused catch-up strategy but hinders the ambidextrous alternative. These opposing effects are further magnified by the functional diversity of EMNEs' managerial teams because functionally diversified teams are more likely to allocate attention to external cues in the industrial environment, as opposed to forming a unified strategic orientation internally. Using a panel of EMNEs from China over the period of 2005-2010, we find strong support for our main effects of industry munificence on both catch-up strategies and the moderating effect of managerial team's functional diversity towards ambidextrous catch-up strategy.
    Original languageEnglish
    Pages (from-to)1-13
    JournalInternational Business Review
    Volume29
    Issue number6
    DOIs
    Publication statusPublished - 2020

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