The Challenge of Bric Multinationals

ISBN: 978-1-78635-350-4, eISBN: 978-1-78635-349-8

ISSN: 1745-8862

Publication date: 24 November 2016


(2016), "Prelims", Tulder, R.V., Verbeke, A., Carneiro, J. and Gonzalez-Perez, M.A. (Ed.) The Challenge of Bric Multinationals (Progress in International Business Research, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. i-xxiii.



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Series Editors: The European International Business Academy (EIBA)

Recent Volumes:

Volume 1: Progress in International Business Research – Edited by Gabriel R. G. Benito and Henrich R. Greve
Volume 2: Foreign Direct Investment, Location and Competitiveness – Edited by John H. Dunning and Philippe Gugler
Volume 3: New Perspectives in International Business Research – Edited by Maryann P. Feldman and Grazia D. Santangelo
Volume 4: Research on Knowledge, Innovation and Internationalization – Edited by Jorma Larimo and Tia Vissak
Volume 5: Reshaping the Boundaries of the Firm in an Era of Global Interdependence – Edited by José Pla-Barber and Joaquín Alegre
Volume 6: Entrepreneurship in the Global Firm – Edited by Alain Verbeke, Ana Teresa Tavares-Lehmann and Rob van Tulder
Volume 7: New Policy Challenges for European MNEs – Edited by Rob van Tulder, Alain Verbeke and Liviu Voinea
Volume 8: International Business and Sustainable Development – Edited by Rob van Tulder, Alain Verbeke and Roger Strange
Volume 9: Multinational Enterprises, Markets and Institutional Diversity – Edited by Alain Verbeke, Rob van Tulder and Sarianna Lundan
Volume 10: The Future of Global Organizing – Edited by Rob van Tulder, Alain Verbeke and Rian Drogendijk

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Erasmus University Rotterdam, Rotterdam, The Netherlands


Haskayne School of Business, University of Calgary, Calgary, Canada; Solvay Business School, University of Brussels (VUB), Brussels, Belgium; Henley Business School, University of Reading, Henley-on-Thames, United Kingdom


Pontificia Universidade Catolica do Rio de Janeiro, Rio de Janeiro, Brazil


Universidad EAFIT, Medellín, Colombia

United Kingdom – North America – Japan India – Malaysia – China

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ISBN: 978-1-78635-350-4

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List of Contributors

Anna Abramova MGIMO University, Russia
Maria Alejandra Gonzalez-Perez Universidad EAFIT, Colombia
Pratik Arte University of Vaasa, Finland
Marina Amado Bahia Gama Fundação Getúlio Vargas, Brazil
Timur Atnashev Russian Presidential Academy of National Economy and Public Administration (RANEPA), Russia
Andrew Barron Toulouse Business School, University of Toulouse, France
José Alonso Borba UFSC – Universidade Federal de Santa Catarina, Brazil
Alexander Bulatov MGIMO University, Russia
Cyntia Vilasboas Calixto Fundação Getúlio Vargas, Brazil
Jorge Carneiro Pontifical Catholic University of Rio de Janeiro (PUC-Rio), Brazil
Vasudha Chopra TERI University, India
Fábio Dal-Soto School of Management and Business, Universidade do Vale do Rio dos Sinos (Unisinos), Sço Leopoldo, RS, Brazil
Luis Alfonso Dau Northeastern University, D’Amore-McKim School of Business, International Business & Strategy Group, Boston, MA, USA
Marleen Dieleman NUS Business School, National University of Singapore, Singapore
Igor Dukeov Stockholm School of Economics, Russia
Bettysa Dornelas Pontifical Catholic University of Rio de Janeiro (PUC-Rio), Brazil
Maria Elo Turku School of Economics, Finland
Felipe Esteves Pontifical Catholic University of Rio de Janeiro (PUC-Rio), Brazil
Olga Garanina Graduate School of Management, St Petersburg State University
Ivan Lapuente Garrido School of Management and Business, Universidade do Vale do Rio dos Sinos (Unisinos), Sáo Leopoldo, RS, Brazil
Valeria Gattai University of Milan-Bicocca, Italy
Germano Adolfo Gehrke FURB – Universidade Regional de Blumenau, Brazil
Srishti Goyal TERI University, India
Vadim Iliunin Stockholm School of Economics, Russia
Badar Alam Iqbal International University of Business, Agriculture and Technology, Bangladesh
Liena Kano University of Calgary, Canada
Bipin Kumar National Law University, Jodhpur, Rajasthan, India
Alexey Kuznetsov Primakov Institute of World Economy and International Relations of the Russian Academy of Sciences (IMEMO), Russia
Yuri Kvashnin Primakov Institute of World Economy and International Relations of the Russian Academy of Sciences (IMEMO), Russia
Michał K. Lemański Nottingham University Business School China
Hoyêdo Nunes Lins UFSC – Universidade Federal de Santa Catarina, Brazil
Xiaoyan Luo University of Ningbo, China
Alice Maltseva MGIMO University, Russia
Ajeet N. Mathur Indian Institute of Management Ahmedabad, India
Brent McKenzie University of Guelph, Canada
Jefferson Marlon Monticelli School of Management and Business, Universidade do Vale do Rio dos Sinos (Unisinos), Sáo Leopoldo, RS, Brazil
Piergiovanna Natale University of Milan-Bicocca, Italy
Mohd Nayyer Rahman Aligarh Muslim University, India
Suzana B. Rodrigues FUMEC University, Brazil & Rotterdam School of Management, The Netherlands
Liliana Rodriguez-Arango Universidad EAFIT, Colombia
Ninel Seniuk MGIMO University, Russia
Susana Costa e Silva Universidade Católica Portuguesa, Catolica Porto Business School, Portugal
Rob van Tulder RSM Erasmus University Rotterdam, The Netherlands
Teimuraz Vashakmadze IBS-M, RANEPA, Russia
Alain Verbeke Haskayne School of Business, University of Calgary, Calgary, Canada
Louis T. Wells Harvard Business School, Harvard University, Boston, USA
David Wesley Northeastern University, D’Amore-McKim School of Business, International Business & Strategy Group, Boston, MA, USA
Duane Windsor Rice University, Jones Graduate School of Business, Houston, Texas, USA
Seign-goura Yorbana University of Neuchâtel, Institute of Sociology, Switzerland

About the Editors

Rob van Tulder is Full Professor of International Business-Society Management at the Rotterdam School of Management/Erasmus University Rotterdam. He has been a visiting professor at a number of universities and a consultant to international organisations (such as the United Nations, the International Monetary Fund and the European Union), multinational enterprises, non-governmental organisations, and ministries around the world. He is co-founder of the Department of Business-Society Management, one of the leading departments in the world studying and teaching about the contribution of business and society. He founded the SCOPE databank project, which in collaboration with UNCTAD compiles the listings of the world’s largest multinational enterprises from developed and developing countries ( Dr. van Tulder is founder and academic director of the Partnerships Resource Centre (, which studies the cross-sector partnerships between firms, NGOs and government for sustainable development. The Resource Centre itself is organised as a partnership among business schools, multinational enterprises, governments and NGOs. Over the past 25 years, Dr. van Tulder has published in particular across disciplinary boundaries (development, international business, political science, international relations, economics and innovation) on the following topics: internationalization motives, European and global business, high-tech industries, corporate social responsibility, sustainability, codes of conduct, reputation management, skills, network strategies, cross-sector partnership strategies, smaller industrial countries (welfare states) and European Community/Union policies. His latest book publications include, inter alia: Managing the Transition to a Sustainable Enterprise (Routledge/Earthscan, 2014); Doing Business in Africa (2013, NABC); Corporate Responsibilities in Turbulent Times, Beijing (2010, 2012, China Economic Publishing House (in Chinese); Skill Sheets: An Integrated Approach to Research, Study and Management (Pearson International, 2012) ( For more information, see: Forthcoming books are under preparation on ‘Business Models for the Future’, ‘Global Business’ (second edition of the widely heralded, 2006 publication ‘International Business-Society Management’) and ‘Wicked Problems’.

Dr. Alain Verbeke is Professor of International Business Strategy and holds the McCaig Research Chair in Management at the Haskayne School of Business, University of Calgary. He is also the Research Director of the Strategy and Organization Area at the Haskayne School of Business. In 2014, Dr. Verbeke was elected as the Inaugural Alan M. Rugman Memorial Fellow at the Henley Business School, University of Reading (UK). He is the Editor-in-Chief of the Journal of International Business Studies (2017–2019).

Earlier in his career, Dr. Verbeke served as the Director of the MBA programme, Solvay Business School, University of Brussels (VUB), where he remains an adjunct professor. He has been a Visiting Professor at Dalhousie University, the University of Toronto and the Université Catholique de Louvain, as well as an Associate Fellow of Templeton College (University of Oxford). He has also been an Academic Associate of the Centre for International Business and Management, Judge Business School (University of Cambridge) and was associated with Skolkovo Institute for Emerging Market Studies (SIEMS), as an affiliated researcher. In June 2016, he was appointed as a Non-Resident Fellow with the Center for Emerging Market Studies, China Europe International Business School (CEIBS), Shanghai, China. Dr. Verbeke is an elected Fellow of the Academy of International Business, and has served as Secretary and Treasurer of the Fellows.

Dr. Verbeke has been a member of the European Science and Technology Assembly (ESTA), the highest advisory body to the European Commission on the future of European scientific and innovation policy and has served on the board of directors of various educational and scientific research institutions. He is a leading thinker on complex project evaluation, the strategic management of multinational networks, as well as the governance and restructuring of complex organisations.

In the consulting sphere, Dr. Verbeke has personally directed over 100 strategic management projects, most of these with a focus on the interface between large-scale investment programmes and governance challenges. His academic research agenda consists of revisiting, rethinking and augmenting the core paradigms in strategic management and international business, especially internalisation theory, which is a joint transaction cost economics and resource-based view of the firm, focused on the governance of new resource combinations. He has particular expertise in the management of headquarters – subsidiary relationships and broader governance challenges in large multinational enterprises.

Dr. Verbeke has authored or edited more than 30 books and more than 200 refereed publications, including many articles in leading scholarly journals such as the Journal of International Business Studies, the Strategic Management Journal and the Journal of Management Studies.

Jorge Carneiro has a PhD degree in Business Administration from the Federal University of Rio de Janeiro. Associate Professor of Strategy and International Business at PUC-Rio (Pontifical Catholic University of Rio de Janeiro), in transition to FGV São Paulo School of Business Administration (FGV/EAESP).

Member of the board of EIBA (European International Business Academy, 2011–2016). Chair of the strategy division of ANPAD (the Brazilian Academy of Management). Former member (2009–2014) of the Executive Committee of the BALAS (Business Association of Latin American Studies). Chair of the BALAS 2012 conference, Chair of EIBA 2015 conference and Academic Program Chair of the AIB-LAT (Academy of International Business, Latin American chapter) 2017 conference.

Editor-in-chief of the Brazilian Administration Review (2010–2015; BAR is published by ANPAD and is among the top five Brazilian management journals), guest editor of four special issues on Latin America published by the Journal of Business Research, and current member of the editorial advisory board of the Brazilian Administration Review and of Management Research and member of the editorial review board of the International Journal of Emerging Markets.

Carneiro has published more than 40 peer-reviewed articles. His research interests focus on strategic planning, internationalisation of emerging market enterprises, and organisational performance measurement. His research has been published in International Business Review, Journal of Business Research, Management Decision, Engineering Economics, Latin American Business Review, Brazilian Administration Review, Academia Revista Latinoamericana de Administración, among other journals.

Carneiro’s PhD thesis received the 2008 Award from the Brazilian Ministry of Education for best PhD dissertation in Business Administration.

Prior to embracing the academic career, Carneiro accumulated extensive professional experience in the oil & gas industry and at dotcom companies.

Carneiro has had short teaching assignments at leading business schools in Latin America – Incae (Costa Rica) and ESAN (Peru).

Maria Alejandra Gonzalez-Perez (PhD, MBS, Psy) is Full Professor of Management at Universidad EAFIT (Colombia). Maria Alejandra is Vice-President of Administration at the Academy of International Business (AIB) (2015–2018), coordinator of the Colombian universities in the virtual institute of the United Nations Conference for Trade and Development (UNCTAD) since 2009, Distinguished Fellow of the Association of Certified Commercial Diplomats; Research Partner at the CEIBS Center for Emerging Market Studies, and Editor-in-Chief of the business journal AD-minister. Dr. Gonzalez-Perez holds a PhD in International Business and Corporate Social Responsibility, and a Master’s degree in Business Studies in Industrial Relations and Human Resources Management from the National University of Ireland, Galway. She also did postdoctoral research at the Community Knowledge Initiative (CKI) in NUI Galway. Prof. Gonzalez-Perez was the Head of the Department of International Business (2009–2013) and Director of the International Studies Research Group (2008–2013) at Universidad EAFIT (Colombia). Prior to her positions in Colombia, she worked as a researcher in various organisations such as the Centre for Innovation and Structural Change (CISC), Irish Chambers of Commerce, and the Economics of Social Policy Research Unit (ESPRU) in Ireland. She has also been a Visiting Professor at ESAN (Lima, Peru); Bocconi Business School (Milan, Italy); and Foreign Trade University (Hanoi, Vietnam).

Dr. Gonzalez-Perez has published 12 books, 40 academic peer-reviewed papers and several book chapters in the areas of internationalisation, sustainability, corporate social responsibility and international migration. She is a regular contributor to Latin American business media. Her research results have been presented in nearly 90 international academic conferences in all the continents. Also, she was trained as a Clinical Psychologist at the Universidad Pontificia Bolivariana (UPB) in Colombia. Maria Alejandra has lived, studied or worked in the UK, USA, Ireland, France, Spain and Colombia, and have travelled as a tourist to over 60 countries.

Preface to This Volume – A Tribute to Louis T. Wells

Louis T. Wells then….. … and now

The extant body of scholarly work on multinational Enterprises (MNEs) has been hampered by an inevitable selection bias. With the majority of MNEs coming from developed countries, theories of international business have been informed mainly by the study of (large) corporations from countries or regions such as the United States, Europe and later Japan. Subsequent empirical studies have also regularly suffered from a confirmation bias – the tendency to search inductively for particular information and to interpret such information in a way that confirms existing hypotheses, while giving comparatively less consideration to alternative research avenues. The growing importance in the world economy of ‘emerging economies’, accompanied by the large-scale appearance of MNEs from these countries, has not only widened the empirical basis of research but has also made it increasingly important to augment international business theory. Over the last decade, this debate has increasingly focused on the question whether ‘emerging market multinationals’ (EMNEs) are fundamentally different from ‘developed country MNEs’ and thus require new theory. Whatever side one chooses in this debate (see the various contributions in this volume), the danger of another selection bias arises: if all emerging economy MNEs are simply lumped together in one set, and contrasted against developed economy MNEs in general, the absence of more fine-grained analysis will lead to research outcomes lacking much relevance. 1

In order to address the selection bias and confirmation bias challenges in international business studies, while paying sufficient attention to the diversity associated with the recent phenomenon of ‘multinationals from former developing countries’, proper ‘calibration’ of the research would appear essential. More specifically, in case the selected empirical basis is too narrow, this might hamper generalisation; in case the selected empirical basis is too broad, studies will lead to overly general results that will not contribute to enriching substantively the international business literature. This volume takes as its starting point that an intermediate approach is needed, with requisite contextual and institutional differentiation among emerging economies being acknowledged. With regard to developed country MNEs, efforts were made in the past to distinguish among various countries of origin (Anglo-Saxon vs. European vs. Asian MNEs), between small and large country multinationals, between state-owned and private sector MNEs, and among groups according to sectorial specialisation. With regard to developing country MNEs, the literature has been less distinctive at the outset and has followed a more sequential pattern. In a first stage, the analysis revolved around ‘Third World Multinationals’, where Louis T. Wells was a – if not the – key intellectual contributor. 2 This was followed by literature on ‘developing country multinationals’, engaging primarily in South-South investment. More recently, there has been a focus on ‘Emerging Market Multinationals’, which supposedly also invest in developed economies. The present research volume argues that this last designation is much too broad, to arrive at any meaningful conclusion for theory development or managerial practice. In contrast, the group of ‘BRIC’ multinationals (Brazil, Russia, India, China) would appear to represent a more cohesive set of countries to study, given the size of each domestic market involved, the presence of substantial entrepreneurship in each of these countries leading to the formation of several, large internationally operating firms, and the attempts by each national government to establish a contextually optimal mix between active government involvement in international trade and investment, and international market openness.

Given our choice of this specific set of countries, we attracted papers for this volume that contain new empirical data, often collected by young scholars who only recently entered the area of international business scholarship. But we must also pay tribute to the original insights from the pioneers in this area – who typically had a profound understanding of the phenomena they studied. In this context, we decided to dedicate this research volume to Louis T. Wells. His classic 1983 book on ‘Third World Multinationals’ was two decades ahead of its time. It demonstrated convincingly that studying a different sample of multinationals could refine and seriously enrich the study of international business. As of 2014, each Progress in International Business Research (PIBR) volume has been dedicated to a leading international business scholar. The 2014 volume on institutional diversity was dedicated to the late Daniël Van Den Bulcke – an early institution builder in the field of international business and a founding father of the European International Business Academy (EIBA). The 2015 volume on the future of global organising was dedicated to the memory of Alan Rugman, a leading international business scholar and educator. Fortunately, the honouree of the present volume, Louis T. Wells is alive and well, as illustrated by his thoughtful essay, which represents Chapter 1 of this book, and in which he provides a personal reflection on his scholarly oeuvre. In Chapter 2, Kano, Verbeke and Van Tulder provide a contemporary interpretation of the core ideas developed in Wells’ classic work, and couch this in modern internalisation theory terms. In Chapter 3, the more externally oriented dimensions of Wells’ work are expanded upon, in order to provide further credence to the choice of BRIC multinationals, as the main subject matter addressed in this research volume.

Louis T. Wells is presently the Herbert F. Johnson Professor of International Management – Emeritus, at Harvard Business School. Professor Wells was born in Nashville, Tennessee, but grew up in Atlanta, Georgia. He received a B.S. in Physics with Highest Honors from Georgia Tech. He studied for one year at the Technische Hochschule Stuttgart, in Germany. After a short period in the U.S. Army and repossessing cars for a bank, he went to Harvard Business School, where he received an MBA. He continued and earned a DBA in International Business and then joined the faculty. At Harvard, Professor Wells taught courses on the international economic and political environment of business and managing in developing countries, in the MBA and executive programmes. He was director of the doctoral programmes for several years. He retired from the School in 2012.

His books and monographs include Managing the Multinational Enterprise: Organization of the Firm and Ownership of the Subsidiary (with John Stopford); Negotiating Third World Mineral Agreements: Promises as Prologue (with David N. Smith); A Product Life Cycle for International Trade (as editor); Third World Multinationals; The Choice of Technology in Developing Countries: Some Cautionary Tales; Marketing a Country (with Alvin Wint); Using Tax Incentives to Compete for Foreign Investment: Are They Worth the Costs? (with Nancy J. Allen, Jacques Morisset, and Neda Pirnia); and Making Foreign Investment Safe: Property Rights and National Sovereignty (with Rafiq Ahmed). His articles have addressed similar subject matter, as well as African art and tokens.

Professor Wells was involved in the start-up of management schools in Indonesia (IPMI) and Pakistan (LUMS) and served on the faculty council of the Harvard Institute for International Development and the steering committee of the Columbia Center for Sustainable Investment.

He has worked as an advisor to governments – directly and through the World Bank, UN agencies, GIZ and Harvard Institute for International Development – on mining negotiations, foreign investment policy, industrial policy and establishing investment promotion agencies. He has worked for the governments of Liberia, Sierra Leone, Ghana, Nigeria, Democratic Republic of the Congo, Namibia, Mozambique, Egypt, Tanzania, Kenya, Colombia, Peru, Venezuela, the Dominican Republic, Croatia, Serbia, Montenegro, Turkey, Malaysia, Papua New Guinea, Mongolia, Sri Lanka and Thailand. He was a frequent advisor to the Indonesian government over a 30-year period and resident advisor for 18 months. He continues to be involved in arbitrations of disputes between foreign investors and host countries as well as an advisor to governments in mining negotiations.

His non-professional interests have included traditional African and tribal Indonesian art, vintage sports cars, and tokens issued by foreign investors in developing countries. He is married to Ellen Seidensticker and has two children and one grandchild.



For a detailed analysis, see Verbeke and Kano (2015).


Verbeke & Kano (2015) Verbeke, A. , & Kano, L. (2015). The new internalization theory and multinational enterprises from emerging economies: A business history perspective. Business History Review, 89(3), 415445.

Wells (1983) Wells, L. T. (1983). Third world multinationals: The rise of foreign investments from developing countries. Cambridge, MA: MIT Press Books.

Part I: The Challenge of BRIC Multinationals, a Challenge for BRIC Multinationals? – A Tribute to Louis T. Wells
Third World Multinationals: A Retrospective
Third World Multinationals – Then and Now
Introduction to This Volume: What Makes BRIC Multinationals Special?
Part II: Bric Multinationals – International Expansion Patterns, International Organization and Environmental Trends
New Facts about BRIC Multinationals: From Macro to Micro Evidence
TRIAD & BRIC MNEs: Will the Internationalization Strategies Converge? Studying the Convergence of FDI Outflows across Nations and Determining the Role of Home Country Government in Enhancing FDI Outflows
BRIC Multinational Enterprises: The Roles of Corruption and Nationalism
Overcoming the Home Field Disadvantage: How BRICS Firms Adapt to Market Reforms
Giants from Emerging Markets: The Internationalization of BRIC Multinationals
BRIC(S) as an Emerging Block?
BRICS and Free Trade Agreements: A Special Relationship
Part III: Brazilian Multinationals – Cases
Internationalization as Co-Evolution of Market – And Non-market Strategies: The Case of Vale
Hering, from a Global Production Network Player to a Regional Retail Leader
Natura – The International Expansion of Brazilian Cosmetics Leader Natura: In Search of a European Scent
Do Institutions Matter? The Case of Wines Manufacturer from AN Emerging Economy
Building Political Connexions to Expand Overseas: The Trajectory of a Brazilian Construction Company
Part IV: Russian Multinationals – Cases
Russian MNCs: Empirical and Theoretical Aspects
Internationalization of Russian Business: A Double-Headed Strategy?
The Role of Sanctions in the Internationalization of Russian Multinationals Toward China: The Case of Energy and ICT Sectors
Against All Odds – A Diaspora Entrepreneur Developing Russian and Central Asian Markets
When The Subsidiary Leads Expansion: From Russia to Belarus and Beyond
Part V: Indian Multinationals – Cases
Early Internationalisation of New and Small Indian Firms: An Exploratory Study
Chemistry Looks to the Future at Innovassynth
Part VI: Chinese Multinationals – Cases
FDI Strategies of Chinese Companies in the Electronics Industry: Motives, Locations, and Entry Mode Choices
Local Issues of Chinese Direct Investment in Africa: The Case of China National Petroleum Corporation International Chad (2006–2013)
JAC Motors – How a Chinese Car Manufacturer Successfully Approached the Brazilian Market