Property Rights and the Control of Strategy: Foreign Ownership Rules and Domestic Firm Globalization in Indian Industry

This study examines the influence of foreign ownership levels on domestic firms' exporting behavior in India. Foreign ownership is categorized according to the control exercisable at different levels of ownership by foreign shareholders. The degree of strategic control a foreign shareholder can possess is determined by the institutional structure of the Indian environment that firms operate in. The results show that, after controlling for a variety of firm and environment-specific factors, only when property rights devolve unequivocally to foreign owners do domestic firms display the higher export orientation that is consonant with the process of globalization of their operations.