Strategically employing natural channels in an emerging market

In an era in which the cost efficiencies associated with standardization tend to be the dynamic force that drives international strategy, the growing movement toward understanding and adapting to natural channels of distribution appears to be an anomaly. The authors explore the natural channel phenomena—i.e., the local or national channel that has evolved within a market—within the context of U.S. multinational operations in the emerging market of India. Twenty‐two in‐depth interviews conducted with U.S. multinational international marketing managers engaged in distribution operations in India guide the exploration of the internal and external factors influencing channel strategy. The interviews provide validity for the natural channel model put forth by Griffith and Ryans (1995) while substantially advancing theoretical and managerial insights into the importance of factors influencing distribution. Finally, strategic distribution approaches employed by U.S. multinationals to effectively operate in India are presented. Insights for academics and practitioners are addressed. © 2005 Wiley Periodicals, Inc.     

Intrinsic motivation of luxury consumers in an emerging market

Consumers no longer consider luxury as an absolute goal. Even though previous studies have primarily linked luxury with consumers' extrinsic motivation, intrinsic motivational factors have seen few studies. As a result of this gap, this study attempts to investigate the intrinsic factors that influence consumers' experiences with luxury brands. By using self-determination theory, this paper aims to assess the personal ‘self’ factors of luxury consumers' enriching experiences. An offline questionnaire from 316 luxury consumers was used to collect data for the study. AMOS SEM v 22 was then used to analyse the data. Our findings indicate that luxury consumers have shifted to luxury for ‘self,’ and are driven by intrinsic factors. As luxury relates to consumers' self-fulfilment, it creates an intrinsic and substantive experience for customers that assists them in their search for self-growth. The study contributes to the literature concerning personal self and enriching experiences through luxury consumption and creates an opportunity to examine the impact of consumers’ happiness, which was discovered to be a critical indicator of enriched luxury experience and word of mouth, resulting in a boosting of the personal self.     

Venture capital as an innovation ecosystem engineer in an emerging market

How can venture capital (VC) firms transform a weak innovation ecosystem into a productive and robust one? While the literature has found VC firms’ catalyst role in innovation in developed markets, we know little about whether and how they affect innovation in an emerging market, where formal institutions (e.g., regulations and markets) and informal institutions (e.g., professional networks) to enable VC firms’ catalyst role are relatively lacking. First, we argue that VC firms play a different and more proactive role in these markets as an “ecosystem engineer” through governing the resource flow and selecting deviation, which drive regional innovation performance. Second, such effects are further positively moderated by the presence of multinational enterprises (MNEs) in a region. Lastly, over time, while the direct effects of VC firms persist and increase, the moderating effects of MNE presence decline. Empirically, we examined a Chinese provincial-level panel data of VC activities (1999–2009) and patent applications (2000–2010) and found supportive evidence. Implications are discussed.     

Consolidation and market structure in emerging market banking systems

This paper examines the evolution of market structure in emerging markets banking systems during the 1990s. While a significant process of bank consolidation has been taking place in these countries, reflected in a sharp decline in the number of banks, this process has not systematically been associated with increased concentration as measured by standard indices. Moreover, econometric estimates based on the Panzar and Rosse (1987) methodology suggest that overall, markets have not become less competitive in a sample of eight European and Latin American countries. Lowering barriers to entry, such as allowing increased participation of foreign banks, appears to have prevented a decline in competitive pressures associated with consolidation.     

Expropriation risk and housing prices: Evidence from an emerging market

This paper examines the microeconomic determinants of residential real estate prices in Caracas, Venezuela, using a private database containing 17,526 transactions from 2008 to 2009. The particular institutional characteristics of many countries in Latin America, and Venezuela in particular, where land invasions and expropriations (with only partial compensation) have been common threats to property owners, provide us with an opportunity to test the effects of these risks on housing prices using a unique database. The effect of these risks on property prices is negative and significant. To our knowledge, this is the first attempt to quantify these impacts in the Hedonic pricing literature applied to real estate. Size, the number of parking spaces, the age of the property, the incidence of crime, and the average income in the neighborhood are significant determinants of prices. Finally, this paper analyzes the microeconomic determinants of housing prices at the municipal level.     

Competing in an emerging market: antecedents and consequences of market orientation and the role of environmental factors

Adoption of market orientation is an investment decision involved with benefit and cost considerations. How environmental factors influence the adoption of market orientation has received scant attention in the literature. This study fills the void by investigating the environmental antecedents to market orientation. In addition, the research explores the role market orientation and customer satisfaction play for firms operating in an emerging market in search of growth and prosperity. Based on data collected from India, one of the BRIC nations and an important emerging market, results show that turbulent and dynamic market conditions foster an adoption of market orientation, which leads to high levels of customer satisfaction, and in turn leads to customer loyalty. Managerial implications and future research directions are discussed.     

A review and evaluation of market orientation research in an emerging African economy

ABSTRACT

The paper synthesizes the level of strategic market orientation of firms operating in the emerging economy of Ghana over the last two decades. It dwells on market orientation studies in general, and the banking industry and exporting firms in particular. Market orientation has a positive relationship with performance for both foreign and domestic firms across the many studies. Foreign firms in general appear more market oriented due to experience effect and relationship with parent organizations. As competition heats up in the banking industry, organizations need to be more innovative to sustain their performance or to survive. For exporting firms, there is the need for decreased formalization and increased decentralization so as to enhance the levels of market orientation. The paper develops propositions to guide organizations in applying marketing principles in the running of their business activities. Further, the paper provides an update on the literature with suggestions for future research in the theory and practice of strategic market orientation in the context of the study.     

Entrepreneurs and internationalization: A study of Western immigrants in an emerging market

Our interview-based study began as an investigation of Westerners residing in Vietnam. Our sample fell into three groups: local expatriates, expatriate entrepreneurs, and hybrids (those who worked for a multinational while owning a local company). Based on this finding, we re-examined the data to explore expatriates as employers. Two themes emerged. The first revealed expatriate entrepreneurs and hybrids as active market players who were competitors for local talent and/or potential local distributors or partners in Vietnam. The second theme indicated a parallel process: the internationalization of firms entering a foreign market and the internationalization of individuals entering that same market. Our contribution is the opening of the ‘homogeneous’ black box of Western immigrants and the expansion of the concept of the expatriate entrepreneur, thus reinserting the role of the individual in the process of firm internationalization.     

Firm competencies on market entry success: Evidence from a high-tech industry in an emerging market

This study explores the effects of three firm competencies, namely, business network, new product development (NPD), and marketing management on market entry success of a high-tech industry in an emerging market. Business network encompasses research and development (R&D) partnership, inter-organizational network, and government relationship (guanxi). NPD consists of R&D capability and product process innovation, while marketing management encompasses distribution channel, promotion, branding, and information management. Using data from 55 biopharmaceutical multinational companies in China, this study applies structural equation modeling technique with confirmatory factor analysis for testing and estimating relationships. We find that only marketing directly influences entry success, whereas the other two yield indirect effects. Our study also suggests the critical role of business network as a prerequisite for entry process. Simultaneously, NPD serves as the driving force of marketing through the creation of product competitiveness.     

Herding behaviour in an emerging market: Evidence from the Moscow Exchange

This study investigates the extent to which herding towards the market consensus for Russian stocks is driven by fundamental and non-fundamental factors. We find evidence that investors on the Moscow Exchange herd without any reference to fundamentals during unanticipated financial crises coupled with high uncertainty, in falling markets, and during days with extreme upward oil price movements. In contrast, in periods of high liquidity and on days of international sanction announcements during the Ukrainian crisis, herding behaviour is merely driven by fundamentals. In Russia, macroeconomic news releases induce both information-related herding and herding without any reference to fundamentals. These results suggest that motives of investors' herding behaviour vary under specific market conditions such as market trends, liquidity, uncertainty, arrival of new information, and oil price volatility.     

Investor participation and the volatility-volume relation: Evidence from an emerging market

Using a unique dataset from the Chinese stock market that keeps track of the daily number of shareholders, we find that the ownership breadth (proxied by the number of shareholders) is negatively related to stock price volatility. However, consistent with the previous literature on volatility-volume relation, we find that the stock price volatility remains positively related to number of traders participating in the market. We also find that the relations of both the daily order imbalance and the daily depth imbalance with the number of shareholders (traders) are negative (positive). Our results suggest that a higher number of shareholders tend to supply liquidity and reduce volatility, while a higher number of traders tend to compete for liquidity and increase volatility.     

Stabilization and real adjustment in emerging market economies

Based on theory and on evidence from the Southern Cone the following paper concludes for emerging market economies (1) that fiscal reform is of utmost importance for macroeconomic reforms, (2) that credibility cannot be imported via a fixed exchange rate but has to be established by internal reforms and (3) that an exchange rate based stabilization remains a high-risk strategy even in the case of strong adjustment efforts.     

Monetary policy and the yield curve in an emerging market: the Greek case

This paper explores the impact of monetary policy actions on the nominal term yield curve in the Greek money market. Essentially, the monetary transmission mechanism is under scrutiny in testing monetary policy effectiveness. We focus on the dynamic inter-relationship between the short-term monetary policy instrument (Overnight rate) and market rates across the term structure. The findings are in accordance with the fact that Expectations Hypothesis monetary policy actions have a significant impact on all market rates; however, the impact is decreasing monotonically with maturity of the interest rate.     

Measuring alternative asset prices in an emerging market: The case of the South African art market

Investments in alternative assets, such as art, are influenced by indices that measure price movements in these assets. This paper uses the South African art market to consider how different methodologies influence price estimates in a setting where repeated sales of the same artworks are limited. The focus is on estimating art prices in South Africa, based on a comprehensive database of South African art auctions. A new pseudo-repeat sales method is proposed, to overcome data limitations facing conventional hedonic and repeat sales methods. While the methods suggest similar trends in South African art prices, the levels and volatilities of the returns vary widely, depending on the method used to estimate the price index. The paper also introduces a test for price bubbles that accounts for the measurement error associated with constructed art price indices. Unlike indices based on central tendency methods, regression-based methods indicate mildly explosive prices for oil and watercolour art in South Africa, in the run-up to the global financial crisis. The new test suggests similar conclusions, but indicates shorter periods of explosive price behaviour.     

Sustainable market orientation: a competitive strategic tool in an emerging economy context

The purpose of this research is to test the effect of sustainable market orientation (SMO) as a strategic tool on banks’ sustainable balanced firm performance (SBFP) in an emerging economy. The research data was collected via the survey approach through self-administered questionnaires to 445 bank employees. Exploratory Factor Analysis was employed to establish the dimensionality of the research constructs, whereas multiple linear regressions were utilised to test the research hypotheses. Results suggest that SMO is positively and significantly related to sustainable balanced performance of banks. The study confirms the SMO concept promulgated in prior studies. Employees’ opinions on bank Managers incorporating sustainability management variables into market orientation as a strategy are encouraged by scholars to engender SBFP. Strategic approaches of this kind leads to balance performance of organisations and the larger society which is central to all stakeholders. This study may be the initial quantitative investigation into SMO and SBFP in the strategic marketing literature.     

The determinants of foreign product preference amongst elite consumers in an emerging market

By integrating the Theory of Reasoned Action (TRA) and self-image congruence, this study seeks to investigate elite consumers’ purchase intentions towards products made in foreign countries. The data were gathered via a survey conducted amongst 316 Sri Lankan elite consumers across two product categories. The findings demonstrate that consumers’ attitudes towards products made in foreign countries are driven by subjective norms and self-image congruence. The study shows that self-image congruence is the stronger predictor of consumers’ attitudes towards products made in foreign countries. Also, the effect of self-image congruence on consumers’ purchase intentions is partially mediated by their attitudes towards products made in foreign countries.     

Assessing consumer logistics functions in grocery shopping: Evidence from an emerging market

Abstract

Consumer logistics (CL), focuses on the role of consumers in the logistical processing of goods for the purpose of consumption from point of acquisition to the point of disposal. The objective of this study is to test and validate the CL scale as introduced by Bahn, Granzin, and Tokman for grocery shopping in a previously unexplored country setting, namely in Turkey. Our findings show in contrast to Bahn et al. only six CL functions: information search, transportation management and materials handling, storage management & inventory needs assessment, contingent inventory operations & product acquisition, intra-household communication, and interdependent transportation operations. These six CL functions are more applicable for an emerging market, such as Turkey. These findings are consistent across the different socio-demographic characteristics in our sample.     

Duration,trading volume and the price impact of trades in an emerging futures market

This paper examines the price impact of trading intensity on the MexDer TIIE28 interest rate futures contract, one of the world's most actively traded contracts. A novel volume-augmented duration model of price discovery decomposes trading intensity into liquidity and information components. Duration between transactions exerts a positive influence on price changes, while increases in order flow and trade volume exert positive and negative influences, respectively. The liquidity component dominates the information measure, suggesting that liquidity considerations dictate trade timing. These findings are rationalized with reference to MexDer's organizational structure, specifically the affirmative obligations placed upon marketmakers to trade a minimum volume.     

Stock market liquidity,family ownership,and capital structure choices in an emerging country

This study examines the impact of equity liquidity and family ownership on capital structure decisions in an emerging market context. Using univariate analysis, I find a positive relationship between liquidity and leverage. Further, this study uses multivariate panel regression analysis with firm clustering, and controls for other variables. Contrary to studies on U.S. firms, I find insignificant empirical evidence that stock liquidity increases leverage for Egyptian firms. Moreover, evidence shows a significant positive relationship between family ownership and leverage. These results hold when employing the instrumental variables approach and estimating two-stage least Squares regressions to control for the endogeneity problem.