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Book part
Publication date: 24 November 2016

Duane Windsor

The research question is how home country corruption and nationalism may affect operations of BRIC multinational enterprises. BRIC composition permits a comparison of two…

Abstract

Purpose

The research question is how home country corruption and nationalism may affect operations of BRIC multinational enterprises. BRIC composition permits a comparison of two authoritarian regimes and two constitutional democracies. Each BRIC features a different combination of corruption and nationalism. The chapter adds South Africa information for two limited reasons. First, from 2010 South Africa is a member of the BRIC summit process. South Africa is an important entry point to Africa, for BRIC multinationals and particularly for China. Second, concerning corruption and nationalism South Africa is analytically useful as a control context that helps illustrate but does not appear to change highly exploratory BRIC findings.

Methodology/approach

The chapter draws on limited literature and information concerning corruption and nationalism in BRICs to suggest tentative possibilities. Transparency International provides bribe payers index estimates for 28 large economies, with important multinational enterprises, and corruption perceptions index estimates including those 28 countries. These estimates include the four BRICs and South Africa. The available sources suggest some suggested findings about varying impacts of home country corruption and nationalism on operations of BRIC multinationals.

Findings

China and Russia are authoritarian regimes in transition from central planning-oriented communist regimes. They are global military powers, expanding influence in their respective regions. Brazil, India, and South Africa are constitutional democracies. India, a nuclear-armed military power, seeks a regional leadership role in South Asia. Brazil and South Africa are key countries economically in their regions. BRIC multinationals are positioned between home country and host country conditions. Chinese and Russian multinationals may reflect a stronger nationalistic tendency due to home country regimes and ownership structure.

Originality/value

The chapter is an original but highly exploratory inquiry into impacts of corruption and nationalism on BRIC multinationals. Extant BRIC literature tends to understudy effects of home country corruption and nationalism on managerial mindset and incentives in either commercial or state-owned enterprises.

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

Keywords

Book part
Publication date: 24 November 2016

Valeria Gattai and Piergiovanna Natale

In this chapter, we document the growing importance of FDI from BRIC countries in relation to FDI from both developed and developing countries and investigate the types of firms…

Abstract

Purpose

In this chapter, we document the growing importance of FDI from BRIC countries in relation to FDI from both developed and developing countries and investigate the types of firms that are responsible for BRIC FDI.

Methodology/approach

We follow a two-step empirical approach. First, we provide macro evidence on FDI from BRIC countries. We use UNCTAD data to highlight the patterns of FDI flows and stocks. Second, we provide firm-level evidence on FDI. Using ORBIS data, we elaborate a rich taxonomy of FDI that accounts for the decision to invest abroad and for the location, ownership, and number of foreign subsidiaries. Thus, we characterize BRIC multinationals’ involvement in FDI and examine the relationship between FDI and performance at the firm level.

Findings

We unveil new facts about BRIC multinationals. BRIC multinationals are in the minority in their home countries, but they outperform domestic enterprises. Within the group of BRIC investors, those firms that invest in developing countries, that operate in joint ventures, or that have more than five foreign subsidiaries are in the minority, but they outperform those firms that select other FDI strategies.

Research limitations/implications

Our estimates document a positive and robust correlation between FDI and performance; however, the cross-sectional nature of our data does not permit a proper causality analysis.

Originality/value

Our work contributes to the International Economics literature on internationalization and firm performance as well as to the International Business literature on FDI from emerging economies. With respect to the former, we innovate by studying the relation between FDI strategies and firm performance. In relation to the latter, we innovate by introducing firm-level data and a cross-country approach that lets us illustrate the roles and features of FDI from BRIC countries.

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

Keywords

Abstract

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

Book part
Publication date: 24 November 2016

Luis Alfonso Dau and David Wesley

The goal of this chapter is to discuss the managerial implications of regulatory reforms in BRICS countries and how those reforms affect the strategy and performance of BRICS

Abstract

Purpose

The goal of this chapter is to discuss the managerial implications of regulatory reforms in BRICS countries and how those reforms affect the strategy and performance of BRICS multinationals. In particular, we consider (1) how firms may learn from the institutional and competitive changes at home that accompany pro-market reforms and use this knowledge to venture out successfully across borders, (2) how firms may learn through their international operations as a means to enhance their competitiveness and responsiveness to reforms in their home market, and (3) how BRICS multinationals differ from other emerging market multinationals.

Methodology

The chapter is primarily conceptual and relies heavily on case studies, interviews, and public financial data.

Findings

Ultimately, reforms are implemented by the state, but the strategic responses of managers to these reforms are largely what determine whether their firms will survive and thrive under the new and evolving regulatory conditions. BRICS firms are particularly well positioned to take advantage of reforms within their own countries and in other emerging markets, including other BRICS nations.

Originality/value

The chapter underscores the importance of aligning strategy with home and host market policies and environments.

Research Limitations

The observations presented are conceptual and have not been verified quantitatively. We rely heavily on historical observation and, therefore, much of the analysis is selective to those firms and may not apply to other firms.

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

Keywords

Book part
Publication date: 24 November 2016

Liliana Rodriguez-Arango and Maria Alejandra Gonzalez-Perez

This chapter aims to provide a descriptive analysis and a theoretical interpretation of the challenges for international expansion of four large multinationals of each of the BRIC

Abstract

Purpose

This chapter aims to provide a descriptive analysis and a theoretical interpretation of the challenges for international expansion of four large multinationals of each of the BRIC countries (JBS from Brazil, VimpelCom from Russia, Tata Motors from India, and Lenovo from China).

Methodology/approach

This study employs a qualitative approach, following a multiple-case study methodology, by analyzing four prominent cases of the internationalization of BRIC multinationals.

Findings

The internationalization process of the studied BRIC multinationals was influenced by the type of inputs and resources that each company had in their home country and the search for needed resources in other firms abroad that may have helped them to complement their business assets. The international expansion of these firms have been characterized by overcoming of several obstacles through the possession of firm-specific advantages, mainly composed of managerial capabilities, expertise, and knowledge about the markets and their companies.

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

Keywords

Article
Publication date: 6 July 2010

Sergey Filippov

The focus of this paper is the emergence of Russia's multinational companies. It aims to analyse their motives to internationalise as well as the approaches to…

5113

Abstract

Purpose

The focus of this paper is the emergence of Russia's multinational companies. It aims to analyse their motives to internationalise as well as the approaches to internationalisation. While relevance of the theoretical perspectives is highlighted, the purpose of this paper is to contribute to the understanding of the present‐day phenomenon of emerging Russian multinationals.

Design/methodology/approach

The paper relies on a qualitative approach for the analysis of the nature of Russian multinationals. The phenomenon of the emerging Russian multinationals is analysed through the prism and using insights from a number of subjects, namely transition studies, politics, innovation studies and international business studies.

Findings

The paper traces the evolution of Russian companies; the idiosyncratic path of their formation serves as a background for understanding of their internationalisation strategies. A special attention is devoted to the R&D activities of Russian multinational companies, and access to foreign technology is found to be an important driver of internationalisation.

Research limitations/implications

The paper highlights relevance of further research on Russian multinationals and outlines research avenues.

Practical implications

The paper is rich in its practical implications. Specifically, it elaborates on the European Union‐Russian bilateral relations and the role of Russian multinationals in the European economies. The issue of political involvement is raised, and the paper seeks to identify whether Russian companies serve as tools of foreign policy, or they operate as business agents.

Originality/value

Despite their increasingly important role in the global economy, Russian companies have been largely overshadowed by the emergence of Indian and Chinese multinationals and not sufficiently addressed, even neglected, in the literature. Therefore, the objective of this paper is to fill in some gaps in the literature regarding this research area.

Details

International Journal of Emerging Markets, vol. 5 no. 3/4
Type: Research Article
ISSN: 1746-8809

Keywords

Book part
Publication date: 10 December 2018

Xinyi Wu and Gary Gereffi

In the digital economy, what are the strategies of multinationals from developed countries and emerging markets? How do regulations in the home country affect their growth? Recent…

Abstract

In the digital economy, what are the strategies of multinationals from developed countries and emerging markets? How do regulations in the home country affect their growth? Recent digital multinationals in diverse national and institutional contexts raise questions that require new approaches in international business (IB) studies. This chapter examines two leading firms in the global e-commerce industry: Amazon and Alibaba. We compare their digital capabilities and physical asset-building strategies over the past two decades and we connect the Internet governance environment in the United States and China with their business models and internationalization patterns. We argue that despite the platform and global nature of Amazon’s and Alibaba’s activities, the recent moves of governments across the world to regulate Internet governance poses an important challenge for digital multinationals. This research features a comparative analysis of two prominent digital multinationals and identifies a promising area for future IB strategy studies.

Details

International Business in the Information and Digital Age
Type: Book
ISBN: 978-1-78756-326-1

Keywords

Book part
Publication date: 24 November 2017

Srishti Goyal and Vasudha Chopra

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…

Abstract

Purpose

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.

Methodology/approach

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.

Findings

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.

Originality/value

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.

Details

The Challenge of Bric Multinationals
Type: Book
ISBN: 978-1-78635-350-4

Keywords

Article
Publication date: 6 July 2015

Peter J. Williamson

The purpose of this paper is to re-assess both the nature and sources of the competitive advantages which multinationals expanding from home bases in emerging economies (EMNEs…

5048

Abstract

Purpose

The purpose of this paper is to re-assess both the nature and sources of the competitive advantages which multinationals expanding from home bases in emerging economies (EMNEs) may enjoy in the global market.

Design/methodology/approach

The paper analyses the results of 12 concurrent studies undertaken by a group of experts who were asked to examine how strategies for innovation, international value chain configuration and foreign mergers and acquisitions contributed to the competitive advantages of multinationals emerging from Brazil, Russia, India and China (the BRICs), respectively.

Findings

EMNEs do have competitive advantages that can underpin their expansion abroad, but these are mainly “non-traditional” advantages that have been built by finding innovative ways to leverage advantages of their home countries. EMNE’s internationalisation is as much about accessing new resources and knowledge to enable them to extend their competitive advantage, as it is a route to exploiting existing advantages over a larger set of markets. As a result, the global value chain structure of EMNEs tends to be fundamentally different from that chosen by incumbent multinationals.

Research limitations/implications

The study is limited to EMNEs from the BRIC countries, but implications for EMNEs emerging from other countries are discussed.

Originality/value

We bring to bear extensive data and a systematic approach to understanding the new breed of multinationals emerging from the BRIC countries; their sources of competitive advantage; and how they are using innovation, foreign investment and overseas acquisitions to transform global competition.

Details

critical perspectives on international business, vol. 11 no. 3/4
Type: Research Article
ISSN: 1742-2043

Keywords

Article
Publication date: 19 August 2011

Johny K. Johansson and Laurence Leigh

The purpose of this paper is to provide an empirical assessment of the degree to which global firms have penetrated markets in emerging countries in the new millennium. The focus…

2199

Abstract

Purpose

The purpose of this paper is to provide an empirical assessment of the degree to which global firms have penetrated markets in emerging countries in the new millennium. The focus is on the “big four” emerging countries of Brazil, Russia, India, and China (BRIC), and the study examines penetration in three product categories: beer, hair care, and carbonated soft drinks.

Design/methodology/approach

The conceptual development draws on a normative‐descriptive framework, predicting the behavior of multinationals from normative models of their strategic behavior. Predictions are evaluated against market share data for the multi‐domestic product categories.

Findings

Multinationals with strong global brands will introduce their global brands and be successful also in multi‐domestic local markets where preferences differ across countries. However, the key to success is not always their global brands, but could equally likely be an acquired local brand. Some local brands successfully defend their markets, and even venture abroad into neighboring regions.

Research limitations/implications

Globalization does not mean the success of global brands as much as success of global firms. In the end, the penetration of local emerging markets is not necessarily from global brands, but from global companies with acquired local brands.

Originality/value

The paper establishes that any fear of elimination of valued local brands is overblown. It also helps dispel the myth that emerging countries cannot develop strong international brands on their own. But one issue remains: the financial clout of global firms is difficult for emerging firms to counter.

Details

Multinational Business Review, vol. 19 no. 3
Type: Research Article
ISSN: 1525-383X

Keywords

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