Key task and word count (or equivalent):
For this assignment, you need to write an individual essay.
3000 words in total (excluding references)
Assignment Details and Instructions
There are two parts to this assignment, both parts equally weighted. 3000 words in total.
Choose an emerging market of your choice – India
Part 1:
For you chosen emerging market, explain the ‘institutional voids’ that are present in the market. Explain how these would affect foreign investors, and how investors may overcome these ‘voids’.
Part 2:
For your chosen market explain, with examples, the nature of risk in terms of:
· Political risk
· Currency risk
· Cross cultural risk
· Commercial risk
Evaluate these risks in terms of how they may impact potential foreign investors.
PART 1
For India, explain the ‘institutional voids’ that are present in the market. Explain how these would affect foreign investors, and how investors may overcome these ‘voids’.
For India, explain the ‘institutional voids’ that are present in the market. Items to include:
• Define and explain institutional voids – in general terms
• Why do they matter? – in general terms
• Give examples from the literature – property rights etc, for your chosen market
• How do these translate to specific areas in markets? – i.e. Product, Capital, Labour markets
Explain how these would affect foreign investors, and how investors may overcome these ‘voids’.
All firms, home or foreign, need to navigate the institutional voids that exist. This requires a strategy, and that strategy is connected to mode of entry. Strategy in general terms can include.
– Adapting business models to local conditions
– Shaping or altering these conditions
– Geographical clustering
– Form alliances with foreign firms
See: Marquis, C. and Raynard, M., 2015. Institutional strategies in emerging markets. The Academy of Management Annals, 9(1), pp.291-335.
a. Relational Strategies
b. Infrastructure-building strategies
c. Socio-cultural bridging strategies
There is some overlap between the above frameworks, but they can be useful for structuring ideas.
• Connect the above to mode of entry, e.g. findings of:
– Meyer, K.E., Estrin, S., Bhaumik, S.K. and Peng, M.W., 2009. Institutions, resources, and entry strategies in emerging economies. Strategic management journal, 30(1), pp.61-80.
– Or other literature that does similar approach (findings tend to be similar)
• Are there any real-world examples / cases for your chosen country – either successful or otherwise as evidence? No need for detail here.
• Short conclusion – summarising issues and evidence.
Part 2:
For India explain, with examples, the nature of risk in terms of:
• Political risk
• Currency risk
• Cross cultural risk
• Commercial risk
Evaluate these risks in terms of how they may impact potential foreign investors.
Straightforward structure:
– Brief introduction to risk
– Go through each of the categories and apply, with supporting data as evidence, the nature of risk. Can use historical data if considered appropriate.
– Make some judgement as to the relative importance of each with respect to your chosen market
