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Strategic Asset Seeking by EMNEs: A Matter of Liabilities of Foreignness – or Outsidership?

Multinational Enterprises, Markets and Institutional Diversity

ISBN: 978-1-78441-422-1, eISBN: 978-1-78441-421-4

ISSN: 1745-8862

Publication date: 25 October 2014

Abstract

Purpose

The chapter provides an economic explanation and perspectivation of strategic asset seeking of multinational enterprises from emerging economies (EMNEs) as a prominent feature of today’s global economy.

Approach

The authors apply and extend the “springboard perspective.” This perspective submits that EMNEs acquire strategic assets in developed markets primarily for use in their home markets.

Findings

The authors succumb that the springboard perspective is alluring theoretically as well as empirically as it suggests that when EMNEs acquire strategic assets, they experience liabilities of foreignness (LOF) that are low relative to those of MNEs from developed markets. The authors concede to this LOF asymmetry but also point out that liabilities of outsidership (LOO) can offset or weaken the home-market advantage of some EMNEs when competing with MNEs.

Research implications

LOO appears as the more relevant concept to use when explaining strategic asset seeking of EMNEs. A set of propositions are formulated to guide empirical testing.

Originality/value

The insights gained from using the springboard perspective and the LOO concept are non-trivial: They basically predict future dominance of ‘insider’ EMNEs at the expense of MNEs from developed markets.

Keywords

Citation

Petersen, B. and Seifert, R.E. (2014), "Strategic Asset Seeking by EMNEs: A Matter of Liabilities of Foreignness – or Outsidership?", Multinational Enterprises, Markets and Institutional Diversity (Progress in International Business Research, Vol. 9), Emerald Group Publishing Limited, Bingley, pp. 375-398. https://doi.org/10.1108/S1745-886220140000009015

Publisher

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Emerald Group Publishing Limited

Copyright © 2014 Emerald Group Publishing Limited