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Article
Publication date: 15 May 2017

Alvaro Cuervo-Cazurra and Ravi Ramamurti

The purpose of this study is to use the rise of emerging-market multinationals as a vehicle to explore how a firm’s country of origin influences its internationalization.

Abstract

Purpose

The purpose of this study is to use the rise of emerging-market multinationals as a vehicle to explore how a firm’s country of origin influences its internationalization.

Design/methodology/approach

This paper is a conceptual paper.

Findings

We argue that the home country’s institutional and economic underdevelopment can influence the internationalization of firms in two ways. First, emerging-market firms may leverage innovations made at home to cope with underdeveloped institutions or economic backwardness to gain a competitive advantage abroad, especially in other emerging markets; We call this innovation-based internationalization. Second, they may expand into countries that are more developed or have better institutions to escape weaknesses on these fronts at home; we call this escape-based internationalization.

Research limitations/implications

Comparative disadvantages influence the internationalization of the firm differently from comparative advantage, as it forces the firm to actively upgrade its firm-specific advantage and internationalize.

Practical implications

We explain two drivers of internationalization that managers operating in emerging markets can consider when facing disadvantages in their home countries and follow several strategies, namely, trickle-up innovation, self-reliant innovation, improvisation management, self-reliance management, technological escape, marketing escape, institutional escape and discriminatory escape.

Originality/value

We explain how a firm’s home country’s comparative disadvantage, not just its comparative advantage, can spur firms its internationalization.

Details

Competitiveness Review: An International Business Journal, vol. 27 no. 3
Type: Research Article
ISSN: 1059-5422

Keywords

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Article
Publication date: 10 August 2018

Alvaro Cuervo-Cazurra, Jorge Carneiro, Diego Finchelstein, Patricio Duran, Maria Alejandra Gonzalez-Perez, Miguel A. Montoya, Armando Borda Reyes, Maria Tereza Leme Fleury and William Newburry

This paper aims to analyze how emerging market firms upgrade their capabilities by focusing on “uncommoditizing strategies” that enable them to achieve levels of…

Abstract

Purpose

This paper aims to analyze how emerging market firms upgrade their capabilities by focusing on “uncommoditizing strategies” that enable them to achieve levels of international competitiveness beyond the comparative advantages of their home countries and serve markets with premium pricing, quality and reputation of products.

Design/methodology/approach

In this paper, the authors studied 18 Latin American companies across six countries. Latin America represents an ideal setting because many of these countries have traditionally developed using natural resource endowments, and their firms have tended to rely on these in their internationalization. To facilitate the analysis of each case and the comparisons across cases, the authors used the same analytical framework for the companies, identifying the sources of differentiation and cost efficiency strategies that enabled these firms to upgrade their capabilities and compete on the basis of premium pricing, quality and reputation.

Findings

The analysis identified a general framework that represents an abstraction of the actions taken by these companies over time. The proposed model consists of three main elements used to pursue uncommoditizing strategies: tropicalized innovation, global efficiency and coordinated control.

Originality/value

Recent research on emerging market firms has shown interest in how these firms upgrade their capabilities. This paper contributes to this stream of research by providing an overarching framework that not only bridged previous narrower studies but also explained how firms can develop uncommoditizing strategies to upgrade their capabilities. Further, this paper helps managers by providing a comprehensive yet succinct overview of the main strategies that they can use to help their firms to achieve international competitiveness.

Details

Multinational Business Review, vol. 27 no. 2
Type: Research Article
ISSN: 1525-383X

Keywords

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Book part
Publication date: 24 June 2015

Alvaro Cuervo-Cazurra

I study the relationship between pro-market reforms and the expansion of emerging market multinational companies (EMNCs). Extending institutional economics, I propose a…

Abstract

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.

Details

Emerging Economies and Multinational Enterprises
Type: Book
ISBN: 978-1-78441-740-6

Keywords

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Article
Publication date: 20 April 2015

Alvaro Cuervo-Cazurra and Rajneesh Narula

– The purpose of this paper is to introduce the debate forum on internationalization motives of this special issue of Multinational Business Review.

Abstract

Purpose

The purpose of this paper is to introduce the debate forum on internationalization motives of this special issue of Multinational Business Review.

Design/methodology/approach

The authors reflect on the background and evolution of the internationalization motives over the past few decades, and then provide suggestions for how to use the motives for future analyses. The authors also reflect on the contributions to the debate of the accompanying articles of the forum.

Findings

There continue to be new developments in the way in which firms organize themselves as multinational enterprises (MNEs), and this implies that the “classic” motives originally introduced by Dunning in 1993 need to be revisited. Dunning’s motives and arguments were deductive and atheoretical, and these were intended to be used as a toolkit, used in conjunction with other theories and frameworks. They are not an alternative to a classification of possible MNE strategies.

Originality/value

This paper and the ones that accompany it, provide a deeper and nuanced understanding on internationalization motives for future research to build on.

Details

The Multinational Business Review, vol. 23 no. 1
Type: Research Article
ISSN: 1525-383X

Keywords

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Article
Publication date: 20 April 2015

Alvaro Cuervo-Cazurra, Rajneesh Narula and C. Annique Un

– The purpose of this the paper is to review the motives for internationalization to clarify previous arguments and provide a theory-driven classification.

Abstract

Purpose

The purpose of this the paper is to review the motives for internationalization to clarify previous arguments and provide a theory-driven classification.

Design/methodology/approach

The authors build on behavioral economics and propose a classification of internationalization motives as the result of the interaction among two dimensions, an economics-driven exploitation of existing resources or exploration of new resources, and a psychology-driven search for better host country conditions or avoidance of poor home country conditions.

Findings

These two dimensions result in four internationalization motives: sell more, in which the company exploits existing resources at home and obtains better host country conditions; buy better, in which the company exploits existing resources abroad and avoids poor home country conditions; upgrade, in which the company explores for new resources, and it obtains better host country conditions; and escape, in which the company explores for new resources and avoids poor home country conditions.

Originality/value

This theory-driven classification provides predictive power for future analyses of internationalization motives.

Details

The Multinational Business Review, vol. 23 no. 1
Type: Research Article
ISSN: 1525-383X

Keywords

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Book part
Publication date: 23 December 2005

C. Annique Un and Alvaro Cuervo-Cazurra

We analyze the role of top managers in the process of improving existing products in large established firms. The results of an inductive study reveal two key arguments…

Abstract

We analyze the role of top managers in the process of improving existing products in large established firms. The results of an inductive study reveal two key arguments. First, we find that the process is an “involved” top-down approach, rather than middle-up-down or bottom-up, discussed in previous studies on new product creation. Top managers actively participate throughout the process, taking on four roles: evaluation of product market performance, selection of products for improvement, initiation of the innovation process through delegation to middle managers of the responsibility to organize bottom-level employees to take actions toward product improvement, and monitoring of progress to ensure improvement (ESIM). Top managers become involved as necessary to reduce the resistance of people at the middle and lower levels to change in current routines. Second, we find that in companies that achieve superior product improvement, managers have well-developed professional absorptive capacity and have routinized frequent interactions to evaluate, select, initiate, and monitor. Other characteristics of managers, such as personal absorptive capacity, incentive system, or mandate from above, are common across both high and low performers.

Details

Strategy Process
Type: Book
ISBN: 978-1-84950-340-2

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Book part
Publication date: 24 June 2015

Abstract

Details

Emerging Economies and Multinational Enterprises
Type: Book
ISBN: 978-1-78441-740-6

To view the access options for this content please click here

Abstract

To view the access options for this content please click here
Book part
Publication date: 24 June 2015

Abstract

Details

Emerging Economies and Multinational Enterprises
Type: Book
ISBN: 978-1-78441-740-6

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Book part
Publication date: 23 December 2005

Abstract

Details

Strategy Process
Type: Book
ISBN: 978-1-84950-340-2

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