From joint ventures to independent investment strategies of entering the markets of BRIC countries

Authors

  • Бранко Ракита Faculty of Economics, University of Belgrade
  • Душан Марковић Faculty of Economics, University of Belgrade

Keywords:

BRIK countries, institutional environment, joint ventures, acquisitions and greenfeld projects

Abstract

The first decade of the 21st century was characterized by signifcant socio-economic and political changes and rapid technological progress on the global level. Among these changes gradual and steady shif of power from Triade countries to so called BRIC countries stands out. BRIC countries make more than 40% of world population, more than 25% of global GDP and contribute to the growth of global GDP by 30%. According to the mid-term prognosis of all the eminent research institutes and consulting agencies BRIC countries will continue their growth, which will increase their economic and political in?uence on the global level. Multinational companies (MNC) see BRIC countries as an opportunity to expand their businesses since, until recently leading markets of Triade countries are now depicted by sharp competition and low growth rates. Nevertheless, the institutions in BRIC countries are relatively inefcient and specifc which makes MNCs modify the business strategies they apply in their home markets. At frst, MNCs gave huge advantage to joint ventures with local partners over individual investments. Yet, over the past few years the number and value of individual investments have increased significantly due to valuable past experience in the new business environment. BRIC countries are expected to attract more foreign direct investments in the form of individual projects in the future.

Downloads

Download data is not yet available.

References

Benassy, Q.A., Maylis, C., Tierry, M. (2007). Institutional Determinants of Foreign Direct Investment. Te World Economy, Vol 30. Issue 5, pp. 764 – 782.

Iankova, E., Katz, J. (2003). Strategies for political risk mediation by international firms in transition economies: the case of Bulgaria, Journal of world business, No. 38, pp. 182 – 203.

Khanna. T., Palepu, G. K., Sinha, J. (2005). Strategies Tat Fit Emerging Markets. Harvard Business Review, Jun, pp. 63 - 77.

Kwok, C., Tadesse, S. (2006). The MNC as an Agent of Change for Host Country Institutions: FDI and Corruption. Journal of International Business Studies, Vol.37, pp. 767 – 785

Porter, M., Kramer, M. (2006). Strategy and Society. Harvard Business Review, december, str. 78 – 92

Ракита, Б. (2006). Међународни бизнис и менаџмент. Београд: Економски факултет

Ракита, Б. (2009). Међународни маркетинг – од локалне до глобалне перспективе. Београд: Економски факултет

Tetsufumi, Y., Swarnali, A., Kelston, A. (2009). Te BRICs as Driver of Global Consumpiton. Goldman Sachs Global Economics Paper, 09/07, pp. 1 – 4, http://www2.goldmansachs.com/our-thinking/brics/brics-reportspdfs/drivers-consumption.pdf (30.12.2011)

Wilson, D., Dragusanu, R. (2008). The Expanding Middle: The Exploding World Middle Class and Falling Global Inequality. Goldman Sachs Global Economics Paper, No 170, pp. 1 – 24, http://www.ryanallis.com/wp-content/uploads/2008/07/expandingmiddle.pdf (30.12.2011)

http://databank.worldbank.org

http://www.transparency.org

http://euromonitor.typepad.com

http://www.doingbusiness.org

http://www.forbes.com

http://www.unctad.org/templates/Page.asp?intItemID=5545&lang=1 (31.12.2011)

http://www.oecd.org/dataoecd/40/14/48968701.pdf (06.01.2012.)

Downloads

Published

2012-02-29

How to Cite

Ракита, Б., & Марковић, Д. (2012). From joint ventures to independent investment strategies of entering the markets of BRIC countries. Acta Economica, 10(16), 85–106. Retrieved from http://ae.ef.unibl.org/index.php/AE/article/view/136

Issue

Section

Review article

Most read articles by the same author(s)