The Role of Home-country Trade Facilitation in MNCs' Entry Into Emerging Markets: Learnings From Danfoss' Entry Into Kenya

Abstract

This thesis explores what role home-country trade facilitation plays in multinational corporations’ entry into emerging markets. When global north MNCs internationalize to emerging markets, they face significant challenges pertaining to the differences in business and institutional environments between developed and emerging markets. International business literature has traditionally been preoccupied with answering how MNCs face and overcome these challenges, yet little academic attention has been given to the role that trade facilitation - and particularly home-country trade facilitation - plays in this regard. The purpose of this paper is thus to address this gap in the literature by bridging the existing international business and trade facilitation literature to create an original analytical framework fit to uncover the sequential and evolving role that trade facilitation plays in MNCs’ market entry. Utilizing a series of semi-structured interviews and other qualitative data, the framework is employed to analyze the role of home-country TF in the current market entry of Danfoss, a Danish MNC, into Kenya. This paper concludes that the role of home-country trade facilitation was to aid the company in areas where its internal capabilities were insufficient. Further, home-country trade facilitation played a notable role in all stages of Danfoss’ market entry, yet its importance and usefulness varied significantly across different phases of the entry process. The learnings of the empirical analysis present several implications for how home-country trade facilitators in emerging markets may adjust and improve their services to facilitate MNCs’ market entry more effectively. As such, this paper has both important and tangible implications for international business literature, as well as practical implications for home-country trade facilitation in emerging markets.