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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

Keywords

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

Keywords

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 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.

Details

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

Keywords

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

Article
Publication date: 27 July 2022

Frank Ohara and Robert Neil Mefford

This study aims to examine the corporate venturing strategy of successful emerging market multinational enterprises and discern commonalities and useful tactics for other firms…

Abstract

Purpose

This study aims to examine the corporate venturing strategy of successful emerging market multinational enterprises and discern commonalities and useful tactics for other firms attempting to follow in their footsteps. Understanding the corporate venturing strategies used by these successful firms may be instructive for other firms whether from emerging markets or developed countries.

Design/methodology/approach

We selected 11 multinationals in emerging markets for this study, from a variety of industries in China, India, Brazil, Mexico, Taiwan and South Korea. Success here is defined as rapid international expansion, increased revenue and greater innovation capacity. These firms have become globally competitive against established companies from the developed countries.

Findings

Some commonality in corporate venturing strategy has been found along with factors that have contributed to this use being effective. They may provide some worthwhile examples for other firms, both in developing and developed countries.

Originality/value

The contributions of this research are to add to the understanding of how some multinationals from developing countries have been able to rapidly build up their capabilities to become successful global competitors through their corporate venturing strategy.

Details

Journal of Business Strategy, vol. 44 no. 5
Type: Research Article
ISSN: 0275-6668

Keywords

Article
Publication date: 3 April 2020

Chusheng Chen, Yun Zhan, Changjun Yi, Xue Li and Yenchun Jim Wu

This study investigates the effect of psychic distance (PD) on outward foreign direct investment (OFDI) by multinational firms originating in emerging economies and the moderating…

Abstract

Purpose

This study investigates the effect of psychic distance (PD) on outward foreign direct investment (OFDI) by multinational firms originating in emerging economies and the moderating effect of firm heterogeneity on this relationship.

Design/methodology/approach

An empirical analysis based on a negative binomial regression model is conducted using OFDI data from 2008 to 2017 on companies listed on the Shanghai and Shenzhen Stock Exchanges in China, an emerging economy.

Findings

The results suggest a U-shaped relationship between PD and OFDI by firms in emerging economies. Both executive foreign experience and state ownership negatively moderate the U-shaped relationship between PD and OFDI.

Practical implications

Emerging economies should encourage and guide multinational firms in engaging in OFDI and emphasize the advantages and disadvantages of PD for multinational firms. Additionally, non-sate-owned firms should recruit those who have a foreign education to provide support for OFDI by firms in emerging economies. Multinational firms should determine investment locations by consulting with executives with foreign experience to improve their ability to engage in OFDI.

Originality/value

This study combines macro and micro perspectives and integrates PD and firm heterogeneity into the same model with a sample of multinational firms originating in China. The findings support the existence of a PD paradox, which helps to enriching the theory on foreign direct investment.

Details

Management Decision, vol. 58 no. 7
Type: Research Article
ISSN: 0025-1747

Keywords

Book part
Publication date: 24 November 2017

Maria Elo

To understand how diaspora entrepreneurship evolves and becomes a small-scale emerging market multinational and how this process is enabled.

Abstract

Purpose

To understand how diaspora entrepreneurship evolves and becomes a small-scale emerging market multinational and how this process is enabled.

Methodology/approach

Case study and ethnographic methods were employed.

Findings

Diaspora entrepreneurs can act as change agents who create and penetrate markets under difficult conditions. They are less influenced by institutional voids in home and host countries when they have strong international diaspora networks that enable a connection to resources, overcoming such voids. Diaspora entrepreneurs may be resource-embedded socially in a way that creates superior competitive advantages and reduces liabilities of foreignness and of outsidership.

Research limitations/implications

Diaspora entrepreneurship incorporates invisible and idiographic potential, such as social capital and knowledge networks. These are not available for other non-incumbent companies (e.g., foreign entrants) and are difficult to research due to access barriers.

Practical implications

Perception and active management of network-based resources is important for opportunity and business development. Management in a transition economy context requires holistic views, deep understanding, and working linkages across markets.

Social implications

Transgenerational entrepreneurship and ethnic traditions are important for the community. Entrepreneurship provides continuity and identity, such as using ethnic language, as well as prosperity and solidarity that are important for supporting cultural identity.

Originality/value

This study connects diaspora entrepreneurship in Central Asia and emerging market multinationals that are small and medium-sized enterprises. Both are underexplored domains, but may share particular institutional settings. Growth and internationalization into a multinational enterprise with an emerging market origin, especially by women entrepreneurs, are rarely studied. This case illustrates the need to capture the processual dynamics, resources, and actor networks, including sociocultural and spatiotemporal factors for better contextualization.

Book part
Publication date: 1 January 2006

Juichuan Chang

The purpose of this study is to provide an integrated framework that conceptualizes multifaceted antecedents pertaining to international expansion of emerging market businesses in…

Abstract

The purpose of this study is to provide an integrated framework that conceptualizes multifaceted antecedents pertaining to international expansion of emerging market businesses in relation to firm performance. This paper develops multiple-item measures of multiple dimensions to clarify ownership structure and three diversification strategy relationships to performance. We test how ownership structure and diversification strategy affect emerging market multinational enterprises’ financial performance. The result shows that the relationship between ownership structure and firm performance is a nonlinear relationship (S shape). We also found that excessive international diversification, product diversification, and geographic scope of the expansion process negatively moderate the impact of Asia Pacific multinational enterprises’ performance.

Details

Value Creation in Multinational Enterprise
Type: Book
ISBN: 978-1-84950-475-1

Article
Publication date: 2 June 2021

Fernando Angulo-Ruiz, Albena Pergelova and William X. Wei

This research aims to assess variations of motivations when studying international location decisions. In particular, this study aims to assess the influence of diverse…

Abstract

Purpose

This research aims to assess variations of motivations when studying international location decisions. In particular, this study aims to assess the influence of diverse motivations – seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints – as determinants of the international location choice of emerging market multinational enterprises (EM MNEs) entering least developed, emerging, and developed countries.

Design/methodology/approach

The authors develop a set of hypotheses based on the ownership–location–internalization framework and complement it with an institutional perspective. The conceptual model posits that the different internationalization motivations (seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints) will impact the location choice of EM MNEs in developed economies, emerging markets or least developed countries. This study uses the 2013 survey data collected by the China Council for the Promotion of International Trade and the Asia Pacific Foundation of Canada. The final sample of analysis of this research includes 693 observations.

Findings

After controlling for several variables, two-stage Heckman regressions show there is a variation of motivations when EM MNEs enter least developed countries, emerging markets and developed economies. EM MNEs are motivated to enter least developed countries to seek markets and resources. Conversely, those firms enter developed countries in their search for technological assets and to escape institutional constraints at home. While the present study findings show a clear difference in the motivations that lead to location choice in least developed vs developed countries, the results are not as clear for location in other emerging countries.

Research limitations/implications

The paper offers empirical support for the importance of motivations as crucial determinants of location choice.

Originality/value

This paper provides a detailed quantitative study on the internationalization location choice of EM MNEs based on their motivations. Though theoretical models underscore the importance of motivations, we know very little about how, in practice, motivations drive location choice. This study contributes to the international location choice literature a deeper understanding of how diverse motivations drive choices of expansion into developed economies, emerging markets or least developed countries.

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

1 – 10 of over 18000