I study the relationship between pro-market reforms and the expansion of emerging market multinational companies (EMNCs). Extending institutional economics, I propose a co-evolutionary process, whereby pro-market reforms in emerging markets induce the transformation of domestic firms into EMNCs, and the global expansion of EMNCs in turn facilitates the deepening of pro-market reforms in the home country. Specifically, I first explain how pro-market reforms lead to the emergence of EMNCs via international competitiveness, upgrading needs, and escape; I then explain how the global expansion of EMNCs leads to a deepening of pro-market reforms at home via learning, spillovers, and lobbying. I complement these explanations with a discussion of contingencies at the firm (private vs. state, domestic vs. foreign firms), industry (global vs. local industries), and country (developing vs. transition countries) levels.
I thank Ellie Banalieva, Tim Devinney, Torben Pedersen, Laszlo Tihanyi, and reviewers for useful suggestions for improvement and the Walsh Research Professorship and the Robert Morrison Fellowship for financial support. All errors are mine.
Cuervo-Cazurra, A. (2015), "The Co-Evolution of Pro-Market Reforms and Emerging Market Multinationals", Emerging Economies and Multinational Enterprises (Advances in International Management, Vol. 28), Emerald Group Publishing Limited, pp. 71-94. https://doi.org/10.1108/S1571-502720150000028007Download as .RIS
Emerald Group Publishing Limited
Copyright © 2015 Emerald Group Publishing Limited