Presentador: Santiago Mingo (Profesor UAI, Business School; PhD Business Administration, Harvard University)​

Web: https://negocios.uai.cl/profesor/santiago-mingo/

Título del trabajo:
«Distance, Experience, and the Proximity of Cross-Border Investments to the Focal Market: The Case of Private Equity in Three Emerging Market Regions»

Abstract:
Previous research on cross-border investments has focused mainly on understanding how firms choose focal markets, while the determinants of investment activity around focal markets has remained unexplored. Drawing from the literature on organizational learning and cross-national distance, we study the proximity to the focal market of cross-border investments made by a firm within a particular region. In our setup, the proximity of a firm’s investment activity to the focal market can take a range of values from low proximity to high proximity. We theorize about three effects that can have a significant impact on the proximity of a firm’s investment activity to a focal market: (1) the distance transitivity effect, linked to cross-national distance between the firm’s home market and the focal market; (2) the vacuum effect, linked to organizational learning through experience in the focal market; and (3) the neighborhood effect, linked to organizational learning through experience in the region where the focal market is located. We also examine how these effects interact with each other. In our empirical study, we consider institutional, cultural, and geographic proximity measures. To test our theoretical arguments, we use a dataset of private equity firms that made investments in three emerging market regions—Latin America, Southeast Asia, and Eastern Europe—from 1996 to 2011. Our results support most of our hypotheses. We conclude that cross-national distance and experience play important roles in the within-region investment activity around a focal market.