Internationalization of Indian Enterprises: Patterns, Strategies, Ownership Advantages and Implications

Dr Nagesh Kumar, Research and Information System for Developing Countries (RIS)

The recent spate of large cross-border acquisitions e.g. Tata Steel-Corus, Hindalco-Novelis, and Tata Motors-Jaguar/Land Rover, among others and Greenfield investments by Indian companies have helped in focusing attention on the emergence of new corporate players on the global scene. Rising numbers and magnitudes of outward investments by Indian companies have made it an important and perhaps a more dynamic aspect of increasing global economic integration of Indian economy along with trade in goods and services and inward FDI. India’s emergence as a source of FDI outflows is impressive for its level of development. It is argued that the destinations, sectoral composition, motivations, and entry strategies of Indian investments have been changing with magnitudes. Some of the recent acquisitions included Indian companies targeting much larger companies based in developed countries. What have been the motivations of Indian companies’ strategies to invest abroad and how have they changed over time. While leveraged buyouts enable financing of such deals, ability to find financial resources is generally not enough for such investments. The theory of internationalization of firms makes outward investments conditional upon ownership of some firm specific intangible assets that have revenue productivity abroad or provide some leverage to their owners. What are sources of Indian companies’ ownership advantages? Whether overseas investments are leading to corporate restructuring and patterns of production networking to exploit efficiency gains or overseas operations continue to remain disparate with only change of ownership? These are some questions that this paper attempts to explore.

About the speaker
Dr Kumar obtained his PhD in Economics from the Delhi School of Economics and joined the faculty of RIS in 1985. During 1993-98, Dr Kumar served on the faculty of the UNU/INTECH and directed its research programme on Globalization, FDI and technology transfers in developing countries. He has also served as a consultant to the World Bank, ADB, UNDP, UNCTAD, UNIDO, UN-ESCAP, ILO, the Commonwealth Secretariat, the Commission on Intellectual Property Rights, among other organizations. Currently Dr Kumar is Director-General of the Research and Information System for Developing Countries (RIS). Dr Kumar serves on a number of government committees and expert groups and on the Governing Boards of the International Centre for Trade and Sustainable Development (ICTSD), Geneva; and the South Asia Centre for Policy Studies (SACEPS), Dhaka. He is recipient of the Exim Bank of India’s first International Trade Research Award in 1989 and a GDN Medal for best research awarded by the World Bank and the Japanese Government in 2000. He has written extensively on the developmental impact of FDI, industrial and technology development policies, the challenge of new technologies for development, on regional economic co-operation in Asia, and on WTO and development, among other themes. His recent books include: Globalization and the Quality of Foreign Direct Investment (Oxford University Press, 2002), Protecting Foreign Investment: Implications of a WTO regime and Policy Options (Zed Press, London, 2003) (with Carlos Correa); Reforms, Labour Markets and Social Security in India (Oxford University Press, 2004) (co-editor with Ramgopal Agarwala and Michelle Riboud); and Towards an Asian Economic Community: Vision of a New Asia, (editor, Singapore: ISEAS, 2005). He is co-editor of South Asia Economic Journal (published by Sage) and writes a fortnightly column ‘Trading Ideas’ in the Financial Express (New Delhi).

Venue: Keizer karelplein 19, conference room, 4th floor

Date: 13 June 2008

Time: 12:00 - 13:00  CET