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Book part
Publication date: 24 June 2015

Elitsa 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.

Details

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

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Article
Publication date: 27 February 2009

Rajesh K. Pillania

There is an increased interest in research and explanation for emerging markets and multinational corporations (MNCs). This paper aims to study emerging markets and MNCs.

Abstract

Purpose

There is an increased interest in research and explanation for emerging markets and multinational corporations (MNCs). This paper aims to study emerging markets and MNCs.

Design/methodology/approach

The paper takes help of existing literature and industry examples.

Findings

The success record of MNCs from developed countries in emerging market has been mixed. The MNCs from emerging markets are now expanding and acquiring companies in developed countries at a rapid pace in recent years. This is reflected in the increasing number of emerging markets MNCs in the Fortune Global 500 list. Emerging market MNCs are giving tough competition to developed country MNCs in other emerging markets as well as Third World countries. The emerging market MNCs' power and impact has increased significantly and many of them have become household names across the world.

Research limitations/implications

MNCs play a very important role in global business. Multinationals and emerging markets have become a popular subject of research.

Practical implications

MNCs from developed countries need to understand emerging markets better. Emerging markets multinationals need to learn further in conquest for global markets.

Originality/value

This paper looks at various issues involved in multinationals and emerging markets.

Details

Business Strategy Series, vol. 10 no. 2
Type: Research Article
ISSN: 1751-5637

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Article
Publication date: 14 April 2014

Terry D. Alkire

Upon entering developed markets, emerging market multinational corporations (EMNCs) from China and India must compete with both host companies and other developed nation…

Abstract

Purpose

Upon entering developed markets, emerging market multinational corporations (EMNCs) from China and India must compete with both host companies and other developed nation MNCs to attract and recruit necessary local talent. The purpose of this paper is to examine to what extent EMNC firms will be perceived as less attractive employers than their developed nation counterparts due to a perceived liability of origin bias. Major demographic and psychographic factors that may affect this bias will also be identified.

Design/methodology/approach

Seven hypotheses were tested on a total of 626 German, French and American respondents. Participants were randomly presented identical job descriptions from four hypothetical MNCs (American, European, Indian and Chinese) and were asked to evaluate the perceived attractiveness of working for, as well as their intent to pursue employment with, the offering firm.

Findings

Using hierarchical linear regression testing, combined with analysis of variance testing, EMNCs were found to have significantly lower organizational attractiveness than equivalent European or American owned MNCs. Mixed results were found for the various hypotheses based on the moderator variables.

Research limitations/implications

Because the study included three distinct sub-groups, supplemental analyses controlling for possible variances between the sub-groups themselves are included. This multicultural study is one of the first to address the human perspective of EMNC outward foreign direct investment (OFDI) by identifying the existence of a potential liability of origin bias toward emerging market firms manifested by potential developed market job applicants. Furthermore, this study is one of the first to examine the influence of applicant age, professional status, gender and nationality with respect to the differences in the perceived level of organizational attractiveness between emerging market and developed nation firms.

Originality/value

This paper extends the literature in three important research areas. First, an extension to the literature on the highly relevant topic of OFDI by Chinese and Indian firms is made. Second, traditional research in the field of organizational attractiveness is further extended by combining it with the timely subject of Chinese and Indian OFDI into developed markets. Finally, this study extends international business literature by studying the influence of demographic and psychographic moderators on the perceived level of organizational attractiveness between emerging market and developed nation firms.

Details

International Journal of Emerging Markets, vol. 9 no. 2
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 17 June 2009

Tao (Tony) Gao and Talin E. Sarraf

This paper explores the major factors influencing multinational companies’ (MNCs) propensity to change the level of resource commitments during financial crises in emerging

Abstract

This paper explores the major factors influencing multinational companies’ (MNCs) propensity to change the level of resource commitments during financial crises in emerging markets. Favorable changes in the host government policies, market demand, firm strategy, and infrastructural conditions are hypothesized to influence the MNCs’ decision to increase resource commitments during a crisis. The hypotheses are tested with data collected in a survey of 82 MNCs during the recent Argentine financial crisis (late 2002). While all the above variables are considered by the respondents as generally important reasons for increasing resource commitments during a crisis, only favorable changes in government policies significantly influence MNCs’ decisions to change the level of resource commitments during the Argentine financial crisis. The research, managerial implications, and policy‐making implications are discussed.

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Article
Publication date: 1 March 2013

Naveen K. Jain, Douglas R. Hausknecht and Debmalya Mukherjee

The paper aims to understand which location determinants are relevant in a subsidiary location decision under the interaction influence of an emergingmarket firm's (EMF…

Abstract

Purpose

The paper aims to understand which location determinants are relevant in a subsidiary location decision under the interaction influence of an emergingmarket firm's (EMF) resource and internationalization motives.

Design/methodology/approach

The paper prepares a typology of an EMF's resources which are different from those of a developed‐country firm. It proceeds to argue which internationalization motives are likely to work for an EMF endowed with a specific resource. Finally, the paper posits the impact of resource and internationalization motives on the relevance of some location determinants over others in an EMF's location decision matrix.

Findings

The conceptual framework proposes a relationship between EMF resources, internationalization motives and location determinants and prioritizes some location determinant(s) over others for various combinations of EMF resource and internationalization motives.

Research limitations/implications

The paper contributes to the literature by proposing a unique typology of EMF resources. The overall framework informs the scholars about the importance of idiosyncratic resources as the basis of differential location decisions.

Practical implications

This article presents a guiding framework for multinational managers to assess optimum location decisions on the basis of idiosyncratic firm resources and internationalization motives.

Originality/value

The paper fills a scholarly gap by proposing a framework that relates firm resources and internationalization motives to location determinants. In the process, the paper also proposes a resource typology for resources unique to EMFs.

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Article
Publication date: 8 August 2016

Kia Hamid Yeganeh

This paper aims to examine the conditions, characteristics and strategies pertaining to the rise of emerging marketsmultinationals (EMNEs).

Abstract

Purpose

This paper aims to examine the conditions, characteristics and strategies pertaining to the rise of emerging marketsmultinationals (EMNEs).

Design/methodology/approach

The paper relies on both academic and professional resources to offer a holistic understanding of EMNEs by reviewing, analyzing and classifying their underlying conditions, characteristics, internationalization motivations, strategies and competitive advantages.

Findings

The analysis indicates that EMNEs ascended as a result of major socio-economic transformations in the past two decades after the Cold War; follow an accelerated path of expansion; implement flexible and decentralized organizational configurations; enjoy strong political connections; do not internationalize according to the ownership-location-internalization paradigm, rather follow the linkage-leverage-learning pattern; benefit from multiple sources of competitive advantage and adopt five main types of international strategies; are becoming more sophisticated and represent serious threats to their counterparts from advanced economies.

Research limitations/implications

As emerging markets and their multinationals are highly heterogeneous, the findings and suggestions remain context-bound.

Practical implications

The paper synthesizes the EMNEs literature, bridges theory and practice and offers an integrative outline that can be useful for international business managers.

Originality/value

The paper takes an all-inclusive approach and provides insights into multiple societal and organizational facets of EMNEs.

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Book part
Publication date: 24 June 2015

Michael Hilb

This paper introduces a conceptual framework to assess the foreign market entry behavior of emerging market multinationals (EMMs). By introducing strategic cognition as…

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.

Details

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

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Book part
Publication date: 25 October 2014

Katrin Held and Nicola Berg

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.

Details

Multinational Enterprises, Markets and Institutional Diversity
Type: Book
ISBN: 978-1-78441-421-4

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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

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Book part
Publication date: 25 October 2014

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…

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.

Details

Multinational Enterprises, Markets and Institutional Diversity
Type: Book
ISBN: 978-1-78441-421-4

Keywords

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