A Study of Internationalization of Indian Firms and its Impact on Capacity Building Delhi NCR

Abstract

The process of firms making sequential foreign direct investments have been an area of interest and newlineresearch for long in the field of International Business. International trade literature is wrought with newlineindebtedness towards FDI as a policy for economic development, especially while tracing the growth newlinepath of tiger economies in South East Asia. However, little has been revealed on the subject of OFDI newline[outward foreign direct investment] in the context of Indian or South East Asian companies. OFDI is newlinebetter understood as Indian firms investing abroad through various methods like : marketing and sales newlinesubsidiaries, production facilities, global brand management, takeovers, acquisitions and wholly owned newlinesubsidiaries This becomes not only a method of entering a foreign market but also the process of newlineincreasing foreign commitments in host countries. This draws attention to the process of newlineinternationalization followed by these countries so as to capture overseas markets and improve the newlinevolume of international trade. Much of the early literature on internationalization behaviour concludes newlinethat the process involves a series of incremental stages whereby firms gradually become involved in newlineexporting and other forms of international business. As they do so, they commit greater resources to newlineforeign markets and target countries that have increasing psychic distance ( Johanson and Vahlne, newline1990). This by far was the best study on methodology of internationalization prior to the path breaking newlineresearch of Sea Jin Chang in 1992 when the process of sequential entry by Japanese firms into US had newlinebeen analysed and documented for developing country references. This became the source and newlineinspiration of this study. It was deemed that a background as rich and endowed as India s history of newlineforeign trade, should naturally lead to rapid internationalisation in the modern era. newlineUltimately it is proposed that in future research, other sectors newlinemay also be included in the study of internationalisation and capacity building.