To read this content please select one of the options below:

TRIAD & BRIC MNEs: Will the Internationalization Strategies Converge?

The Challenge of Bric Multinationals

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

Publication date: 24 November 2017



The investment development path of emerging markets’ MNEs is significantly different from the developed (TRIAD) world’s MNEs; BRIC MNEs seem to have taken a different trajectory on account of various political and economic reasons, ranging from the ‘forms of entry’ to ‘country-specific advantages’ (Tulder, R. V. (2010). Toward a renewed stages theory for BRIC multinational enterprises? A home country bargaining approach. In K. P. Sauvant, G. McAllister, & W. A. Maschek (Eds.), Foreign direct investments from emerging markets: The challenges ahead (pp. 61–74). New York, NY: Palgrave Macmillan). Yet, some believe that in the long run the internationalization strategy of the developed world MNEs and BRIC MNEs will converge. Internationalization strategies as measured by OFDI depend on various macroeconomic determinants such as income, interest rate, openness of the economy, etc. The chapter intend to highlight, the significant difference between these two groups of countries on account of diverse political reforms towards internalization of firms, yet see if these different countries might converge.


Regression analysis examines the significance of the role of home government by testing the effect of governance indicators; that is voice and accountability, on OFDI. It further, tests for convergence of internationalization strategies of the two historically divergent groups, also, it tests convergence amongst the BRIC nations. Along with forecasting, time series analysis is also employed to examine convergence using univariate sigma convergence techniques.


Impact of voice and accountability is significant but it hinders OFDI for BRIC nations, while it promotes OFDI for TRIAD & ALL. Moreover, the analysis found the existence of convergence, that is BRIC will catch up with TRIAD, but though convergence exists amongst BRIC if we take a long span of time (45 years), it is absent in short span of time (19 years), as lately BRIC have shown divergent tendency.

Research limitations/implications

Small sample size in multivariate regression analysis. Also, the governance indicator, that is voice and accountability, is perception based, and missing gaps in data for governance indicator is filled using interpolation.


Empirically testing the convergence of BRIC nations with the developed world. A univariate time series analysis is undertaken to understand each country’s heterogeneous FDI outflows and to address the research gap in existing forecasting literature. In addition, the comparison specifically between the Emerging Market Economies, that is the BRIC nations and the developed world gives some useful insights. This chapter ascertains the impact of governance indicator on OFDI; empirical literature shows such analysis for IFDI & FDI, but OFDI is rarely been dealt with.




We would sincerely like to thank Dr. Seema Sangita, our professor at TERI University, her encouragement as well as support with respect to this chapter has been very helpful from the initial stage. We would also like express our gratitude towards Dr. Sudhanshu Kumar, guest faculty at TERI University, for his guidance regarding time series analysis.


Goyal, S. and Chopra, V. (2017), "TRIAD & BRIC MNEs: Will the Internationalization Strategies Converge?", The Challenge of Bric Multinationals (Progress in International Business Research, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 93-143.



Emerald Group Publishing Limited

Copyright © 2017 Emerald Group Publishing Limited