Financial internationalization of emerging country multinationals: evidence from India
Qualitative Research in Financial Markets
ISSN: 1755-4179
Article publication date: 27 July 2021
Issue publication date: 12 January 2022
Abstract
Purpose
Financial internationalization is of particular importance to emerging country firms. Its significance arises from the impact of institutional void and related agency problems (common to emerging markets) on the internationalization path of these firms. Building on concepts from international finance, agency theory and institutional theory, this paper aims to examine the main aspects of financial internationalization by emerging country multinationals, namely, cross-listing, foreign ownership and foreign independent directors.
Design/methodology/approach
This paper follows a multiple case study approach which is a good fit for the exploratory nature of this research. The interest is to examine the context-driven financial internationalization of each case firm and replicate the firm-level information to find a common strategy.
Findings
The findings suggest that financial internationalization by emerging country multinationals starts mainly as these firms plan to enter advanced country markets. It is a dynamic process that entails interaction between financial internationalization and real internationalization, as well as among different aspects of financial internationalization. Cross-listing comprises the first stage of the process. Then, foreign ownership, particularly foreign institutional investments, would increase gradually in response to advances in financial and factor markets. Recruiting foreign independent directors seems to be adopted last, possibly out of fear of losing control of strategic decisions.
Originality/value
This paper presents a unique perspective that delineates different stages of the process of financial internationalization by emerging country multinationals. This complements the efforts to explain the distinct path of internationalization followed by these firms and supplements scarce literature by including emerging multinationals from India where the matter has not yet attracted proper attention.
Keywords
Citation
Jamaleh, M. and Shukla, A. (2022), "Financial internationalization of emerging country multinationals: evidence from India", Qualitative Research in Financial Markets, Vol. 14 No. 1, pp. 119-148. https://doi.org/10.1108/QRFM-12-2020-0229
Publisher
:Emerald Publishing Limited
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