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Navigating Global Markets: The Impact of FDI on Startups' Access to Insights, Networks, and Brand Visibility

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  • Yeboah, Samuel

Abstract

This systematic review explores the multifaceted impact of Foreign Direct Investment (FDI) on local startups' access to global markets. FDI plays a pivotal role in facilitating the expansion of local businesses into international markets by offering valuable resources and insights. The review delves into several critical dimensions: Distribution Networks: FDI grants startups access to established distribution networks of multinational corporations (MNCs), providing a channel to reach a broader customer base. It discusses the trade-offs between distribution-oriented and production-oriented FDI, highlighting their effects on startups' global reach. Market Knowledge: Foreign investors bring invaluable market insights and intelligence, aiding startups in understanding customer preferences, cultural nuances, and competitive landscapes. This section explores how market knowledge helps foreign investors overcome the liability of foreignness and enhances their competitiveness and innovation. Brand Visibility: Partnering with well-known foreign corporations enhances startups' credibility and visibility in global markets, leading to increased trust among potential customers. It investigates the determinants of brand visibility and its role in overcoming foreignness. Local Insights: FDI provides startups with access to foreign investors' local expertise, enabling them to tailor their products or services to meet the demands of specific international markets. This paper analyses the sources and determinants of local insights. Through an examination of these dimensions, this systematic review sheds light on the transformative potential of FDI in enabling local startups to access international markets. It also emphasizes the importance of strategic partnerships, knowledge sharing, and the adaptation of strategies for success in global business environments.

Suggested Citation

  • Yeboah, Samuel, 2023. "Navigating Global Markets: The Impact of FDI on Startups' Access to Insights, Networks, and Brand Visibility," MPRA Paper 118434, University Library of Munich, Germany, revised 30 Aug 2023.
    • Handle: RePEc:pra:mprapa:118434
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    More about this item

    Keywords

    Global Markets; Distribution Networks; Market Knowledge; Brand Visibility; Local Insights; Startups; International Expansion; Market Entry; Multinational Corporations (MNCs);
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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