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1 – 10 of over 4000Elitsa R. Banalieva, Laszlo Tihanyi, Timothy M. Devinney and Torben Pedersen
Do multinational enterprises evolve differently in emerging and developed economies? Although one camp argues that emerging economy multinationals are different from their…
Abstract
Do multinational enterprises evolve differently in emerging and developed economies? Although one camp argues that emerging economy multinationals are different from their developed country counterparts owing to the underdeveloped institutions in their home countries, another camp counters that they are the same and the existing international business theories can fully explain their strategies. A third camp suggests a more nuanced perspective by finding value in both approaches. In this introductory chapter, we review this debate and offer new perspectives on how to extend existing theories by accounting for four specific aspects of the home country institutional environments of emerging economies: breadth, depth, timing, and duration of exposure to institutional development. We then discuss how the chapters in this volume extend these ideas.
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This paper introduces a conceptual framework to assess the foreign market entry behavior of emerging market multinationals (EMMs). By introducing strategic cognition as the…
Abstract
This paper introduces a conceptual framework to assess the foreign market entry behavior of emerging market multinationals (EMMs). By introducing strategic cognition as the underlying theoretical perspective, this paper postulates that different levels of institutional voids in home markets shape the strategic cognition of EMMs, influencing their market entry behavior due to the prevalence of organizational imprinting in the early stages of internationalization. The paper aims to contribute to the strategic cognition literature by introducing emerging markets as a relevant context in which to apply and extend current thinking. Additionally, it aims to contribute to the institutional voids literature by providing a cognitive framework of behavioral patterns that is rationalized by institutional voids. Finally, the paper contributes to the entry mode literature by proposing strategic cognition as a relevant moderator for foreign entry mode choices, particularly those of EMMs.
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In developed markets, emerging market multinational enterprises (EMNEs) seem to be more discriminated by host country nationals than foreign developed market multinational…
Abstract
Purpose
In developed markets, emerging market multinational enterprises (EMNEs) seem to be more discriminated by host country nationals than foreign developed market multinational enterprises (DMNEs). They are challenged with host country nationals’ prejudices and face a stigma of being from emerging markets. While literature agrees that EMNEs suffer from additional disadvantages due to their country-of-origin, research fails to identify those factors that may lead to a higher discrimination against EMNEs than against foreign DMNEs.
Design/methodology/approach
Based on institutional theory, we look at institutional-related and resource-related antecedents that have an impact on various forms of direct and indirect discrimination by host country nationals.
Originality/value
Our framework analyzes the crucial differences between host country nationals’ perception of EMNEs and foreign DMNEs and the resulting challenges for EMNEs in the developed world. It enhances our understanding of the importance of institutional environments in explaining differences in host country nationals’ discrimination against foreign MNEs.
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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.
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Bent Petersen and Rene E. Seifert
The chapter provides an economic explanation and perspectivation of strategic asset seeking of multinational enterprises from emerging economies (EMNEs) as a prominent feature of…
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.
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The main objective of the present chapter is to address empirically the impacts of institutional distance (ID) on the multinationality level of firms from developing countries and…
Abstract
The main objective of the present chapter is to address empirically the impacts of institutional distance (ID) on the multinationality level of firms from developing countries and interpret how the interaction between ID and firm resources affects firms from developing countries. Using data of firms from developing countries, we estimated an empirical cross-section model. The results show that while cultural distance was not found statistically significant, ID, on the other hand, was statistically significant. The higher the distance between home and host country, the higher the multinationality of firms from developing countries. We also found a positive and statistically significant correlation between intangible resource and multinationality, which suggests a tendency toward new pattern in the internationalization of firms from emerging economies.
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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.
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Amit Karna, Rajesh Upadhyayula and Vikas Kumar
Emerging Market Multinationals (EMNCs) are often seen as firms with singular identity. While they may share certain characteristics, EMNCs are seldom orchestrated and managed in…
Abstract
Emerging Market Multinationals (EMNCs) are often seen as firms with singular identity. While they may share certain characteristics, EMNCs are seldom orchestrated and managed in the same manner. Through a cluster analysis of outward foreign direct investment data of EMNCs from India, we propose taxonomy of EMNCs based on their mode of operation, industry in which they operate, region where they invest and the amount invested. We use a dataset spread over 2007–2013, constituting investment data of 4,824 Indian firms into 7,238 foreign entities. Based on a two-step clustering approach, we propose three strategic archetypes of EMNCs: Global Service Providers, Integrated Manufacturers, and Established Internationalizers. The Global Service Providers mainly consists of firms operating in developed markets with an intention to serve their client needs through wholly owned subsidiaries. Integrated Manufacturers are firms that are primarily operating in other developing markets to sell their products through joint ventures and also present in developed markets through wholly owned subsidiaries – to acquire technology and other resources. The Established Internationalizers are large EMNCs with highest levels of investments, and relatively similar to the Western multinationals. We analyze the characteristics of these three groups of EMNCs based on their strategy and investment behavior, to derive insights into the heterogeneity across EMNCs. We discuss our findings and lay out future directions for research in the area.
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Debora Atala Pires, Thelma Valéria Rocha, Felipe Mendes Borini and Dennys Eduardo Rossetto
The objective is to determine if there are groups of subsidiaries that are different in regard to the implementation of strategies, structures, and processes and the transfer of…
Abstract
Purpose
The objective is to determine if there are groups of subsidiaries that are different in regard to the implementation of strategies, structures, and processes and the transfer of marketing knowledge in emerging markets.
Methodology/approach
A survey with 101 largest foreign subsidiaries located in Brazil was conducted. The data collection process was conducted online and by telephone.
Findings
Three subsidiary groups based on the configuration of their international marketing activities were characterized: Cluster 1, called “Subsidiary with Knowledge Marketing Activities”; Cluster 2, called “Subsidiaries with Global Marketing Activities”; and Cluster 3, called “Subsidiaries with Local Marketing Activities.” Compared to the two other groups, Cluster 1 is the group with the minor number of companies, but it has a better strategic performance than other clusters.
Research limitations/implications
This study was developed in only one emerging country, Brazil, and with 101 subsidiaries from MNCs. This could be extended to other countries, such as China, Russia, India, and Turkey and with more subsidiaries. Related to the construct measurements, one limitation is the qualitative measure of performance.
Practical implications
Subsidiaries that work with global marketing should pool their efforts to create and transfer marketing knowledge to improve their performance. Subsidiaries with local marketing activities may even perform more satisfactorily in the short term, but they should concern to contribute to the overall competitive edge of the corporation.
Originality/value
The discussion about marketing in emerging markets and the way in which the transfer of marketing knowledge can be reflected in the performance.
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