scholarly journals Emerging countries’ country-specific advantages (CSAs) and competitiveness of emerging market multinational enterprises (EMNEs)

2017 ◽  
Vol 27 (3) ◽  
pp. 194-207 ◽  
Author(s):  
Philippe Gugler
Keyword(s):  
Multinational Enterprises ◽  
Emerging Market ◽  
Empirical Studies ◽  
Emerging Countries ◽  
International Expansion ◽  
Host Countries ◽  
Content Type ◽  
Country Specific ◽  
Theoretical Developments

Purpose A significant stream of literature focuses on host countries’ locations when explaining why firms internalize some of their activities in specific countries. At first glance, home location schemes and specificities seem to have attracted less attention in the scientific community. The purpose of this contribution is to provide a literature review linked to the specific issue of emerging countries’ country-specific advantages and the competitiveness of emerging market multinational enterprises. Design/methodology/approach The approach is to present the main theoretical developments related to the role of home countries in the internationalization process of domestic firms in general and as far as the home context of emerging countries is concerned. Findings A rigorous analysis of the literature shows that theoretical developments and empirical studies on international business do refer explicitly or at least implicitly to the role of home countries in the international expansion of firms. Originality/value The value of this review is to develop the main streams of the literature and to serve as a basis for the other contributions published in this area.

International expansion for knowledge acquisition or knowledge acquisition for international expansion?

2019 ◽  
Vol 28 (2) ◽  
pp. 177-200 ◽  
Author(s):  
Clarice Secches Kogut ◽  
Renato Dourado Cotta de Mello ◽  
Angela da Rocha
Keyword(s):  
Knowledge Acquisition ◽  
Latin American ◽  
Multinational Enterprises ◽  
Longitudinal Design ◽  
Emerging Market ◽  
Theoretical Perspective ◽  
Multinational Firm ◽  
International Expansion ◽  
Content Type ◽  
Catch Up

Purpose Starting from the knowledge-based view as a theoretical perspective, this study aims to examine how an emerging market multinational enterprise (EMMNE) engages in reverse knowledge transfer (RKT) processes and how such processes are managed by headquarters. Therefore, this paper captures the perspective of top management concerning RKT and the processes used to create, transfer and integrate knowledge. Design/methodology/approach The study uses a longitudinal design based on the case method of investigation. The case selected for the study was a Brazilian company theoretically sampled for being a domestically, regionally and globally important, information-rich company that operates in an industry in which technology plays a crucial role. The company was also selected for having had asset-seeking motives in at least some of its foreign market entries and for having successfully absorbed foreign-acquired capabilities. Findings The study provides counterfactual evidence to the springboard perspective, considering timing and speed of the internationalization and catch-up processes and the size of acquisitions. The study also highlights differences to other emerging market multinational enterprises, concerning the internationalization trajectory and catch-up moves, and to traditional MNEs, regarding RKT challenges and practices. Research limitations/implications The main limitations of the study relate to the case study method, which does not allow for statistical generalization, although it does support analytical generalization. Originality/value The study contributes to the literature by shedding light on the process by which a Latin American multinational firm developed technological capabilities to compete globally, focusing on the symbiotic, self-nurturing relationship between internationalization processes and technology acquisition and integration processes. Moreover, the work provides novel theoretical insights regarding timing, location, size and execution of the RKT activities. Finally, the paper contributes to the understanding of the relational aspects of the RKT process by focusing on building human relationships as the major force behind knowledge integration and examining the resistance of the acquired companies from developed markets to adopt the parent company’s best practices, or to contribute to its integrated knowledge, when the parent company is an EMMNE.

Air Asia India: competing for air space in an emerging economy

2017 ◽  
Vol 27 (5) ◽  
pp. 516-532 ◽  
Author(s):  
Tulsi Jayakumar
Keyword(s):  
Multinational Enterprises ◽  
Business Models ◽  
Joint Venture ◽  
Low Cost ◽  
Emerging Market ◽  
Secondary Data ◽  
Emerging Economy ◽  
Competitive Strategies ◽  
Content Type ◽  
Country Specific

Purpose The purpose of this paper is to understand the competitive landscape of emerging market economies (EMEs) and the implications of business models and strategies used by multinational enterprises (MNEs) to enter and operate in such landscapes. It does so by considering the aviation sector in an emerging economy – India, and by studying the strategies pursued by AirAsia India – the Indian joint venture of AirAsia Investment Limited and Tata Sons.. Design/methodology/approach The paper follows a case study approach. Secondary data sources from the library, company website and newspaper articles have been used to build a case that would encourage students to discuss and analyze the competitive strategies followed by MNEs in EMEs. Findings Emerging markets offer attractive investment opportunities to MNEs across several industries. However, their markets for intermediate goods and services possess imperfections. Competitiveness in such markets will require going beyond country-specific and firm-specific advantages. MNEs will need to integrate location-specific advantages with internalization advantages of these market imperfections to operate successfully in the complex environments of EMEs. A one-size-fits-all approach of transposing successful strategies from home markets will fail to create value. Practical implications MNEs, such as AirAsia, will need to develop participatory skills to leverage the location-specific-advantages of EMEs and reduce their own curse of foreignness to be able to succeed in EMEs. Originality/value This paper contributes to extant literature by studying the competitive strategies pursued by a global leader in an EME. The case of the “World’s Best Low-Cost Airline” – AirAsia’s India operations seeks to go beyond the Eclectic Paradigm and the country-specific and firm-specific advantages framework, to provide a location-internalization paradigm for operating in EMEs.

Home government influence on Russian MNEs: balancing control against interest

2016 ◽  
Vol 11 (4) ◽  
pp. 474-496 ◽  
Author(s):  
Andrei Panibratov
Keyword(s):  
Multinational Enterprises ◽  
Home Country ◽  
Emerging Market ◽  
International Strategy ◽  
Content Type ◽  
Strong Product ◽  
Institutional Forces ◽  
The Government ◽  
Role Of The Government

Purpose The purpose of this paper is to provide a better understanding of how the government influences the internationalization of emerging MNEs and, more specifically, answer the questions how and to what extent does the combination of the home country government’s control and interest influence Russian MNEs. Design/methodology/approach First, the author examined sector-specific factors and institutional forces that affect the development of the Russian economy’s industries. Second, the author has classified the sectors included in this study into four groups according to the following two main criteria: the interest of the government in the development of the sector, and the degree of state control for the firms in the sector. Third, the author has analyzed the forms and types of the government participation in firms’ internationalization in defined groups based on the observation of industries’ legislative acts and state decrees and orders. After that, the author has verified the existence of certain similarities of strategies under the governmental influence, and finally discussed the extent of the control and interest implied by the government toward these firms. Findings After analyzing the patterns of the state involvement in firms’ internationalization in various groups the author found that some of the groups are characterized by similar types of government role and their responses are, also, sometimes similar. The author presents a more detailed look at the above results in Table III, and explain the two-sided role of the government in different groups of firms. Research limitations/implications While the literature emphasizes that institutional forces shape the internationalization of emerging multinational enterprises, they have not been comprehensively linked to explaining the contradictory role of the government in this process. The author addresses this gap by examining an integrated influence that home government factors (namely, control and interest) exert in enabling firms to compete abroad. In addition, the author contributes to the knowledge about the behavior of Russian firms, which is one of the less researched areas in the field of international management. Practical implications The paper also has value for companies’ strategists as it provides them with understanding of the complexity of government-related determinants influencing the internationalization process of their firms and the types of firms’ abilities to be developed or supported. It also provides a practical tool for modeling their international strategy formation and accounting for different types of state influences on internationalization of EM firms. Originality/value This paper highlights the government-related aspects of the internationalization of Russian MNEs. Even when they go abroad with strong product capabilities and a proactive managerial style, they still benefit from home country institutional resources. The author sees the strength of the empirical findings in further extension of the understanding of origins, consequences and prospects of internationalization of emerging market firms with the home government involvement.

The role of clusters in the global innovation strategy of MNEs

2015 ◽  
Vol 25 (3) ◽  
pp. 324-340 ◽  
Author(s):  
Philippe Gugler ◽  
Michael Keller ◽  
Xavier Tinguely
Keyword(s):  
Data Analysis ◽  
Innovation Process ◽  
Patent Data ◽  
Content Type ◽  
Innovation Activities ◽  
Global Innovation ◽  
New Knowledge ◽  
Country Specific ◽  
Theoretical Developments

Purpose – This paper aims to focus on the role of clusters as home and host country-specific advantages for multinational enterprises (“MNEs”) in the organization of their internal and external networks to optimize the diffusion and generation of new knowledge. Strategic asset-seeking investment has been a major driver of the internalization of innovation activities performed by MNEs abroad. This paper demonstrates the attractiveness of foreign clusters in the global innovation process of MNEs. The main assumption is that location within innovative clusters may foster the ability of firms to generate new innovations. Design/methodology/approach – This paper illustrates the theoretical developments through the example of firms located in the Basel pharmaceutical clusters which have invested in other clusters abroad. Findings – The results are based on an in-depth patent data analysis and confirm the importance of clusters in an innovation-driven industry. Originality/value – This paper focuses on the role of clusters as home and host country-specific advantages for “MNEs” in the organization of their internal and external networks to optimize the diffusion and generation of new knowledge. Strategic asset-seeking investment has been a major driver of the internalization of innovation activities performed by MNEs abroad. This paper demonstrates the attractiveness of foreign clusters in the global innovation process of MNEs. The main assumption is that location within innovative clusters may foster the ability of firms to generate new innovations. This paper illustrates the theoretical developments through the example of firms located in the Basel pharmaceutical clusters which have invested in other clusters abroad. The results are based on an in-depth patent data analysis and confirm the importance of clusters in an innovation-driven industry.

scholarly journals Foreign Country-Specific Experience And Ownership Level: Moderating Effect Of Host Country’s Government Corruption

2016 ◽  
Vol 32 (6) ◽  
pp. 1561
Author(s):  
Kyungho Kim
Keyword(s):  
Host Country ◽  
Empirical Studies ◽  
International Expansion ◽  
Economic Activities ◽  
Host Countries ◽  
Specific Experience ◽  
Government Corruption ◽  
Negative Effect ◽  
The Relationship ◽  
Country Specific

According to internalization theory, corporate international expansion occurs as a series of incremental commitment processes, such as an increased level of ownership. In addition, it is well known that host country-specific experience facilitates the increased ownership level. However, the existing empirical studies show the mixed results about the relationship between host country-specific experience and ownership level: positive, negative, and non-significant. To elucidate these mixed results, this study carefully explores how host country’s government corruption moderates the relationship, given that institutional environments influence standard economic activities within a specific economy. This study found that host country-specific experience has a positive effect on the ownership level in their foreign subsidiaries but the positive relationship was moderated by the negative effect of host countries’ government corruption. Accordingly, this study carefully qualifies the direct relationship between country-specific experience and ownership strategy, suggesting that an institutional contingency perspective needs to be considered to understand corporate international expansion strategies by the increased ownership level.

scholarly journals Technological innovation as a source of Chinese multinationals’ firm-specific advantages and internationalization

2019 ◽  
Vol 14 (1) ◽  
pp. 115-133 ◽  
Author(s):  
Shaowei He ◽  
Zaheer Khan ◽  
Yong Kyu Lew ◽  
Grahame Fallon
Keyword(s):  
Multinational Enterprises ◽  
Technological Knowledge ◽  
Mature Stage ◽  
Competitive Advantages ◽  
Content Type ◽  
Global Competitiveness ◽  
Chinese Multinationals ◽  
Innovative Capabilities ◽  
Country Specific

Purpose The purpose of this paper is to examine how innovation-related firm-specific ownership advantage (FSA) plays a role in developing the competitive advantage of Chinese multinationals when they internationalize. Design/methodology/approach Based on a review of the existing literature concerning foreign direct investment by emerging economy multinational enterprises (EMNEs), the authors identify that numerous studies explain this phenomenon on the basis of their location-bound country-specific advantages. However, such views do not fully explain the key underlying factors behind the rapid rise and success of many EMNEs as these firms rapidly internationalize and develop global competitiveness in developed markets. The current research explores three leading innovative Chinese EMNEs from the engineering sector: BYD, Sany Heavy Industry and CSR China. Findings The authors find that EMNEs’ knowledge, and particularly their innovation-creating technological knowledge, has contributed greatly to their successful internationalization. The illustrative cases show that the three firms have now moved beyond the infant to the mature stage of EMNE development through developing their technological knowledge in order to realize FSA through internationalization. This study helps in contributing fresh reflections to the continuing debate concerning the causes of internationalization and global competitive development by EMNEs and the role of their FSAs in these processes. Originality/value This is one of the few studies which have demonstrated that some of the EMNEs do possess firms’ specific advantage which helps explain their innovative capabilities, competitive advantages and subsequent internationalization patterns.

scholarly journals Dual isomorphic mechanisms and the role of a transnational agent

2019 ◽  
Vol 27 (3) ◽  
pp. 266-284
Author(s):  
Yoo Jung Ha ◽  
Yingqi Wei
Keyword(s):  
Multinational Enterprises ◽  
Joint Effect ◽  
Domestic Institutions ◽  
Institutional Pressures ◽  
Environmental Innovation ◽  
Host Countries ◽  
Content Type ◽  
Domestic Firms ◽  
Positive Effect

Purpose Corporate environmental innovation (CEI) is a proactive type of response to increasing public scrutiny regarding firms’ environmental performance. While past studies have overwhelmingly focused on coercive mechanisms and assumed a closed national institutional field, less attention has been given to non-coercive and transnational inter-firm mimetic mechanisms. This paper aims to investigate the joint effect of coercive isomorphic mechanisms from domestic institutions and mimetic isomorphic mechanisms from foreign multinational enterprises (MNE) on CEI adoption in domestic firms. Design/methodology/approach The study’s empirical analysis is based on data from 1,967 firms from the 2010 Korean Innovation Survey, as well as other official statistics. Findings This study reports the following results: the direct effects of domestic institutions on CEI adoption in domestic firms vary according to institution type; foreign MNEs have a positive effect, whether using global or local CEI strategies; and the positive effect of foreign MNEs strengthens when the stringency of domestic environmental regulation increases. Originality/value This paper shows that CEI diffusion is driven by both coercive institutional pressures and inter-firm mimetic mechanisms, including their joint effects. Foreign MNEs act as boundary-spanners that activate a dual isomorphic mechanism, affecting social as well as economic development in host countries. Finally, evidence of interaction between domestic coercive and transnational mimetic mechanisms supports the authors’ contention that national institutional fields are increasingly interconnected.

To wait or not to wait: pacing international expansion in China for best results

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ruihua Joy Jiang ◽  
Jie Xiong ◽  
Yuan Ding ◽  
Ravi Parameswaran
Keyword(s):  
Multinational Enterprises ◽  
Emerging Market ◽  
Foreign Market ◽  
Decision Makers ◽  
International Expansion ◽  
Content Type ◽  
Expansion Strategy ◽  
Fine Grained ◽  
Top Managers

Purpose How to enter and expand in a newly emerged foreign market is less understood. Should multinational enterprises move fast or slowly? In this study, the authors take China as the context to investigate what factors will lead to a fast expansion strategy in a foreign market. The purpose of this paper is to understand whether fast expansion benefits firms’ performance in a rapidly emerging market. Design/methodology/approach Based on insights from field interviews, the authors developed a theoretical framework. Then, the authors collected data from surveys of managers of multinational enterprises from Western countries to test their hypothesis. This research context is based on the experience of multinational enterprises in China which opened up to foreign direct investment in 1979. Findings This study shows that internally, strategic long-term investment goals, top management team commitment and externally switching costs and the growth in the demand market which will push firms to expand fast in the newly emerged China market. Faster pace of expansion benefits the performance of multinational enterprises in a newly emerged market. Originality/value Based on the onsite interviews followed by the survey of top managers of multinational enterprises located in China, this study provides a fine-grained analysis of the importance of pace and its key antecedents. Thus, the results provide new insights to decision-makers of multinational enterprises when considering expanding in an emerging market at its early stages of growth.

Internationalizing concept or product? H. Stern Jewelers in Asia

2014 ◽  
Vol 52 (9) ◽  
pp. 1703-1723
Author(s):  
Jorge Carneiro ◽  
Geraldine Tonoli ◽  
Talita Barbosa Matos Peixoto ◽  
Rafael Magalhães Costa ◽  
Fábio de Matos Domingues ◽  
...  
Keyword(s):  
Emerging Market ◽  
Empirical Studies ◽  
Secondary Data ◽  
Class Discussion ◽  
Usual Sense ◽  
International Expansion ◽  
Strategic Positioning ◽  
Content Type ◽  
Teaching Case ◽  
Teaching Cases

Purpose – The purpose of this paper is to offer instructors a real managerial dilemma faced by a prestigious Brazilian jewelry company as it decides how it should expand into two Asian countries: China and South Korea. Design/methodology/approach – The authors followed guidelines for developing teaching cases as those suggested by Gill's (2011) seminal contribution, Informing with the Case Method. Findings – Since this is a teaching case, there are no “findings” in the usual sense of the word related to traditional empirical studies. Research limitations/implications – Data for the case came mainly from the stated visions and opinions of the firm's spokesperson and may reflect his own particular (though influential) views. The authors also used public secondary data from consulting companies, market research firms and business magazines. Although these accounts may be partial, this is not a severe limitation since a teaching case is expected to provide some information, but not a full set of information, in order to better reflect real managerial situations. Practical implications – This case study may help students understand and “live trough” a real managerial dilemma, related to international expansion to a rather distinct environment from those the firm has been accustomed to. Originality/value – This teaching case brings relevant material for in-class discussion of a successful emerging market firm that has successfully paved its way into developed Western markets and now seeks to expand into Eastern lands. Decisions related to strategic positioning and international marketing make the core of the managerial dilemmas that the firm has to face.

The efficacy of multilateral anti-bribery convention with national government enforcement

2020 ◽  
Vol 27 (3) ◽  
pp. 885-895
Author(s):  
Mushfiq Swaleheen ◽  
Marcus Tim Allen
Keyword(s):  
Multinational Enterprises ◽  
Home Country ◽  
Public Officials ◽  
Host Countries ◽  
Content Type ◽  
Illegal Behavior ◽  
Foreign Countries ◽  
Country Factors ◽  
Public Corruption

Purpose The purpose of this paper is to investigate the role of multinational enterprises’ (MNEs) home country corruption in their decision to bribe officials in foreign host countries. Design/methodology/approach A model that predicts MNE bribing by controlling for a multitude of foreign host country factors is used. The information contained in the orthogonal residuals from this model is exploited to see whether MNE’s home country factors, particularly the level of public corruption, work to amplify illegal behavior by respective MNE in abroad. Findings MNEs pay more in bribes when the foreign officials they face are more corrupt. This behavior worsens when MNE’s home country has more corruption. Social implications All UN member countries are signatories to the UN Convention against Corruption that proscribes the bribing of foreign public officials by respective MNEs. The Convention’s reliance on home country enforcement of stipulations against the bribing of foreign officials by respective MNEs exposes its efficacy of the malfeasance of home country public officials. Originality/value This paper extends the literature to an examination of MNE’s use of bribes in a world with a global anti-corruption regime. Additionally, it ties MNE behavior in foreign countries to corruption in MNE’s home country.

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