Open AccessA Risky Mode Of Foreign Market Entry: International Portfolio Investments
Author(s) -
Ülkü Yüksel,
Asli Yuksel-Mermod
Publication year - 2010
Publication title -
journal of business and economics research
Language(s) - English
Resource type - Journals
eISSN - 2157-8893
pISSN - 1542-4448
DOI - 10.19030/jber.v8i8.746
Subject(s) - portfolio , internationalization , economics , investment style , monetary economics , business , financial economics , international trade , microeconomics , return on investment , open ended investment company , production (economics)
There are various forms of entrance into foreign markets, varying in magnitude and direction of risks which may endanger either the investor or the host country. Some of the foreign market entry modes involve just financial investments with almost no risks, such as international portfolio investments, whilst others require an additional commitment from the investor’s part. This two-fold investment style; that is, money only versus money plus varied amounts of dedication, makes up the magnitude of the risk involved. While the former (money on shares only) may be considered unconventional, the latter (i.e., money plus commitment) entails traditional modes of foreign market entry. This study examines international portfolio investments, also called hot money, as a viable and unconventional foreign market entry alternative, triggered by the forces of globalization. Accordingly, the authors’ point of view indicates a departure from conventional foreign market entry mode literature and draws on the resource based view (RBV) and eclectic theory of internationalization.