Home country underdevelopment and internationalization

Purpose The purpose of this study is to use the rise of emerging-market multinationals as a vehicle to explore how a firm’s country of origin influences its internationalization. Design/methodology/approach This paper is a conceptual paper. Findings We argue that the home country’s institutional and economic underdevelopment can influence the internationalization of firms in two ways. First, emerging-market firms may leverage innovations made at home to cope with underdeveloped institutions or economic backwardness to gain a competitive advantage abroad, especially in other emerging markets; We call this innovation-based internationalization. Second, they may expand into countries that are more developed or have better institutions to escape weaknesses on these fronts at home; we call this escape-based internationalization. Research limitations/implications Comparative disadvantages influence the internationalization of the firm differently from comparative advantage, as it forces the firm to actively upgrade its firm-specific advantage and internationalize. Practical implications We explain two drivers of internationalization that managers operating in emerging markets can consider when facing disadvantages in their home countries and follow several strategies, namely, trickle-up innovation, self-reliant innovation, improvisation management, self-reliance management, technological escape, marketing escape, institutional escape and discriminatory escape. Originality/value We explain how a firm’s home country’s comparative disadvantage, not just its comparative advantage, can spur firms its internationalization.

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Penetrating the enigma

Strategic Direction ◽

10.1108/sd-04-2018-0083 ◽

2018 ◽

Vol 34 (6) ◽

pp. 10-12

Keyword(s):

Design Methodology ◽

Review Paper ◽

Home Country ◽

Emerging Market ◽

Entry Mode ◽

Lessons Learned ◽

Content Type ◽

Emerging Market Multinationals ◽

Pertinent Information ◽

Practical Implications

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Measuring the service gaps in the roles of quantity surveyors in the emerging market

Benchmarking An International Journal ◽

10.1108/bij-07-2014-0066 ◽

2016 ◽

Vol 23 (5) ◽

pp. 1111-1131 ◽

Cited By ~ 7

Author(s):

AbdulLateef Olanrewaju

Keyword(s):

Emerging Markets ◽

Construction Industry ◽

Design Methodology ◽

Emerging Market ◽

Supply And Demand ◽

The Other ◽

Primary Data ◽

Content Type ◽

Practical Implications ◽

Survey Questionnaires

Purpose – The opportunities that the emerging markets present to the players in the construction industry means that the players need to expand on the scope and size of their responsibilities and duties to the stakeholders. Each of the professionals now demands more specialised and sophisticated services from one another. The other players in the construction industry now require more emerging responsibilities and duties from the quantity surveyors. The purpose of this paper is to examine the roles that “modern” quantity surveyors play by measuring the gaps that exist in the services that the quantity surveyors provide. Design/methodology/approach – Primary data are collected through survey questionnaires. In total, 23 roles played by modern quantity surveyors are identified and addressed to the respondents to rank the rate at which quantity surveyors provide these “emerging” services. The collected data were analysed statistically. Findings – The results of the findings led to the conclusion that the quantity surveyors were not meeting the expectations of other players. Therefore, for competitiveness, quantity surveyors need to better meet demand expectations. Research limitations/implications – This findings of this research are constrained to the services or functions that the quantity provide in the construction industry. Practical implications – This knowledge is valuable to academic institutions that offer quantity surveying programmes, to practicing quantity surveyors, governments, and other players in the construction industry. It will allow quantity surveyors to reconcile supply and demand expectations. Originality/value – There is no known conclusive empirical study on services offered by quantity surveyors in any emerging markets. Therefore, the findings offer a fresh understanding on the services of quantity surveyors not only in Nigeria but elsewhere. While some of the services are common, others are peculiar to emerging markets.

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The impact of artificial intelligence (AI) finance on financing constraints of non-SOE firms in emerging markets

International Journal of Emerging Markets ◽

10.1108/ijoem-02-2021-0299 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Jun Shao ◽

Zhukun Lou ◽

Chong Wang ◽

Jinye Mao ◽

Ailin Ye

Keyword(s):

Emerging Markets ◽

Emerging Market ◽

Financing Constraints ◽

Content Type ◽

Emerging Market Countries ◽

Finance Development ◽

Cash Flow Sensitivity ◽

The Impact ◽

The Relationship ◽

Practical Implications

PurposeThis study investigates the impact of AI finance on financing constraints of non-SOE firms in an emerging market.Design/methodology/approachUsing a sample of non-SOE listed companies in China from 2011 to 2018, this research employs the cash–cash flow sensitivity model to examine the effect of AI finance on financing constraints of non-SOE firms.FindingsWe find that the development of AI finance can alleviate the financing constraints of non-SOE firms. Further, we document that such effect is more pronounced for smaller firms, more innovative firms and firms in developing areas.Practical implicationsThis study suggests that emerging market countries can ease the financing constraints of non-SOE firms by promoting AI finance development.Originality/valueThis study, to the best of our knowledge, is the first one to explore the relationship between AI finance development and financing constraints of non-SOE firms in emerging markets.

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The underdog bites back

Strategic Direction ◽

10.1108/sd-12-2013-0096 ◽

2014 ◽

Vol 30 (1) ◽

pp. 11-13

Keyword(s):

Case Studies ◽

Design Methodology ◽

Reading Time ◽

Cultural Practices ◽

Emerging Market ◽

Brand Name ◽

Content Type ◽

Emerging Market Multinationals ◽

Pertinent Information ◽

Practical Implications

Purpose – Reviews the latest management developments across the globe and pinpoints practical implications from cutting-edge research and case studies. Design/methodology/approach – This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings – Globalization continues to have enormous consequences for business. One of the most intriguing thus far is the way that many firms defy humble origins to secure multinational status. Those that started life in an emerging market are a prime example of this transformation. Logic says that it should not really happen. After all, it is usually tough for any foreign company to crack an overseas market. Having to adjust to different regulations, cultural practices and business norms ensures that. There is often discrimination to overcome too. For emerging market multinationals (EMMs), such challenges are magnified to a considerable degree. If that is not enough, these companies are up against firms from advanced nations. That means competition boasting more resources, more knowledge, more international experience and a more recognized brand name. By definition, an EMM is a relatively new kid on the block in all these respects. Originality/value – The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to digest format.

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Brazilian corporations, the state and transnational activity: introduction to the special issue

Critical Perspectives on International Business ◽

10.1108/cpoib-03-2014-0015 ◽

2014 ◽

Vol 10 (4) ◽

pp. 230-236 ◽

Cited By ~ 6

Author(s):

Andreas Nölke

Keyword(s):

Emerging Markets ◽

Emerging Market ◽

Interdisciplinary Cooperation ◽

The State ◽

Special Issue ◽

Content Type ◽

Emerging Market Multinationals ◽

Brazilian State ◽

Close Cooperation ◽

Transnational Activities

Purpose – The aim of the paper is to introduce a special issue which looks at the collaboration between the Brazilian state and Brazilian corporations with regard to the transnational activities of the latter. Design/methodology/approach – Departing from the state of the art of current studies of emerging market multinationals, the paper highlights the need for interdisciplinary work to understand the particular role of the state with regard to the outward expansion of these companies. The paper then highlights the different approaches the five papers of the special issue have taken to address this task. Findings – Although Brazil can be counted among the most liberal emerging markets, the special issue finds a very close cooperation between the Brazilian state and Brazilian multinationals. The former helps to finance overseas expansion of Brazilian multinationals, supports the solution of conflicts with the governments of neighboring countries and articulates the interests of Brazilian multinationals in global governance. The problems created by this close cooperation rather materialize with third parties, in particular with somewhat poorer countries in the Brazilian neighborhood, but also with smaller companies, consumers or radical social movements in Brazil. Originality/value – The paper shows the diversity of approaches that an interdisciplinary cooperation between Political Science, Political Economy, Development Studies and International Business can mobilize to make sense of very close state-business cooperation with regard to transnational activities of emerging markets multinationals.

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Blind spots in global strategy: applications in emerging markets

Cross Cultural & Strategic Management ◽

10.1108/ccsm-02-2016-0039 ◽

2016 ◽

Vol 23 (4) ◽

pp. 531-550 ◽

Cited By ~ 2

Author(s):

Seung Ho Park ◽

Gerardo R. Ungson

Keyword(s):

Emerging Markets ◽

Government Intervention ◽

Emerging Market ◽

Blind Spot ◽

Global Strategy ◽

Content Type ◽

Local Companies ◽

Global Strategies ◽

Practical Implications ◽

Blind Spots

Purpose The purpose of this paper is to apply the concept of blind spot to illustrate the misapplication of extant global strategies to emerging markets. The authors discuss cases of multinationals and indigenous local companies to draw insights on firm operations in emerging markets. The authors unpack four specific blind spots that have resonated repeatedly in their operations: an adherence to unqualified scaling, the intractability of localization, the opacity of non-government intervention, and an undue attention to disruption rather than transformation. The study concludes with recommendations that can help companies be better aware of the blind spots and manage more effectively in emerging markets. Design/methodology/approach Conceptual. Findings Four blind spots: an adherence to unqualified scaling, the intransitivity of localization, the illusion of non-government intervention, and an undue attention to disruption rather than transformation. Practical implications The paper is primarily for practitioners. Originality/value This study presents some of the key findings from our previous studies on emerging market issues. The authors recently published four different books on various themes on emerging markets. The findings presented in this paper come strictly from these previous projects.

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When does informal finance help exports of emerging market firms? A contingent perspective

Review of International Business and Strategy ◽

10.1108/ribs-01-2021-0008 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Nitin Pangarkar ◽

B. Elango

Keyword(s):

Emerging Markets ◽

International Business ◽

Home Country ◽

Emerging Market ◽

Interactive Effect ◽

Informal Finance ◽

Content Type ◽

Time Period ◽

Emerging Market Firms ◽

Formal Finance

Purpose The purpose of this study is to examine whether the usage of informal finance helps exports of emerging market firms. Design/methodology/approach The study analyzes a large dataset of observations on emerging market firms. To address the issue of a non-random sample and correct for self-selection in the regression analyzes, this paper uses the two-stage Heckman procedure. In the first stage, this study uses a sample of 74,148 firms from 135 countries over an 11-year time period (2006 to 2016). In the second stage, which includes only firms involved in exports, the analyses are based on 13,608 observations on firms from 135 countries over the same time period. Findings The study finds that the usage of informal finance helps exports of emerging market firms. Furthermore, the interactive effect between informal finance and home country affluence also influences exports. Research limitations/implications The analyses do not account for destination market characteristics such as size and growth. Practical implications The study suggests that emerging market firms should not shy away from using informal finance which can often be more convenient, and sometimes cheaper, than formal finance. Informal finance’s timeliness might be particularly useful for pursuing strategies such as exporting. Originality/value Studies in international business implicitly assume that finance is available for pursuing strategies such as exports or foreign direct investment. However, formal finance is scarce in emerging markets. By drawing a linkage between informal finance and exports in emerging markets, the study adds to the international business literature. The study also examines joint and interactive effects of home country characteristics and deployment of informal finance on exporting.

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Corporate sustainability in SMEs: an Asian perspective

Journal of Asia Business Studies ◽

10.1108/jabs-10-2017-0176 ◽

2020 ◽

Vol 14 (1) ◽

pp. 109-138

Author(s):

Maitreyee Das ◽

K. Rangarajan ◽

Gautam Dutta

Keyword(s):

Sustainable Development ◽

Literature Review ◽

Emerging Markets ◽

Emerging Market ◽

Corporate Sustainability ◽

Literature Survey ◽

Content Type ◽

Proposed Model ◽

Research Questions ◽

Practical Implications

Purpose The purpose of this paper is to do a thorough literature review to assess the current status of corporate sustainability (CS) practices, issues and challenges in small and medium enterprises (SMEs) and based on literature suggest a model that can improve and strategically manage their sustainability practices in the emerging market context of Asia. Design/methodology/approach After setting the theoretical background on why the corporations need to shoulder the responsibility of sustainable development, the authors did a high level literature review to estimate the gap area and based on the findings formulated some research questions on why the SMEs, more specifically those in Asian emerging market, are lagging behind in terms of CS practices. Next, using the “literature survey” as the methodology the authors did a thorough in-depth literature review to answer the above research questions and organised the findings in light of those research questions. Considering the research gap and the crucial role of SMEs in a country’s economic progress the authors restricted the literature search on CS in the case of SMEs only. Findings CS is a well-practiced area in big organisations. However, the literature suggests that in the case of SMEs the situation is different. Social and environmental practices are grossly neglected in SMEs more specifically in emerging markets. Existing literature mentions that collaborative mode of operation, government policy and facilitation, supporting organisation culture can positively influence SME’s sustainability performance, and hence, improve their financial performance. Research limitations/implications The conceptual model has been developed based on suggestions and recommendations in western countries context. To establish the validity of the model in the Asian business scenario it needs to be tested with a sizable sample of SMEs in the Asian market. Practical implications The current paper has practical implications both for academic research on sustainable development and also in business development. The proposed model in the current form is based on the literature survey only. Once such a model is empirically established this can be proved beneficial for providing guidance to SMEs to enhance the sustainability of their business operations. Moreover, environmental and social best practices adopted by SMEs will also have a positive influence on society and the environment in the long run. Originality/value This paper had done a country-wise comparison of sustainable practices in SMEs and based on the recommendations and suggestions of different scholars as found in the detailed literature review, the authors developed few research propositions and also presented a conceptual model. Finally, to address the gap it mentions some future research possibilities to test and validate the proposed model in the context of SMEs in emerging markets of Asia.

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Cross-border acquisitions of emerging markets firms

Strategic Direction ◽

10.1108/sd-03-2017-0060 ◽

2017 ◽

Vol 33 (6) ◽

pp. 26-28

Keyword(s):

Emerging Markets ◽

Emerging Market ◽

Foreign Firms ◽

Major Question ◽

Content Type ◽

Cross Border ◽

Post Merger Integration ◽

The Many ◽

Merger Integration ◽

Practical Implications

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Merger and acquisitions (M&As) involving foreign firms is one of the many consequences of globalization. Participating in such cross-border ventures provides organizations with valuable opportunities to increase their presence on the international stage. But post-merger integration can be a time of considerable dilemma for the acquiring company. A major question facing most is what form marketing strategies should take. Are standardized approaches most relevant or is it better to adapt these strategies to ensure their suitability for localized environments? The issue is especially important for companies based within emerging markets. Statistics show that emerging market firms are increasingly engaging in cross-border acquisitions. However, research into the strategies deployed has thus far been minimal. Practical implications The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

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Springing from where? How emerging market firms become multinational enterprises

International Journal of Emerging Markets ◽

10.1108/ijoem-09-2017-0324 ◽

2018 ◽

Vol 13 (3) ◽

pp. 568-585 ◽

Cited By ~ 4

Author(s):

Jean-François Hennart

Keyword(s):

Bargaining Power ◽

Multinational Enterprises ◽

Design Methodology ◽

Western Europe ◽

Market Access ◽

Emerging Market ◽

Content Type ◽

Emerging Market Multinationals ◽

The Usa ◽

Conceptual Paper

Purpose The purpose of this paper is to show that existing theories, principally Dunning’s OLI model, Mathews LLL model and Rugman’s version of internalization theory are unable to explain the rise of emerging market multinationals (EMNEs). The reason is that they over-emphasize the strategic importance of intangibles and ignore that of complementary local assets. Taking complementary local assets into account makes it possible to understand why EMNEs are able to finance their intangible-buying sprees and, often with the help of their governments, to swap market access for technology. Design/methodology/approach This is a conceptual paper based on the bundling model (JIBS 2009) and backed by the case histories of four EMNEs. Findings The author shows that EMNEs have much better prospects vis-à-vis established MNEs than generally thought in Western Europe and the USA and that they will become serious competitors. Originality/value This is, as far as the author knows, the first explanation of why EMNEs have the bargaining power and the resources necessary to swap or buy technology from established MNEs.

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