The role of multinational enterprises in global valuation

2019 ◽  
Vol 15 (1) ◽  
pp. 4-23
Author(s):  
Tamir Agmon
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
High Growth ◽  
Current Data ◽  
Global Sourcing ◽  
Content Type ◽  
Growth Convergence ◽  
Convergence Process ◽  
Rapid Changes ◽  
Global Companies

Purpose The research proposition of this paper is that multinational enterprises (MNEs) were important in the process of growth and divergence that took place in the world in the nineteenth and twentieth centuries. The rate of growth of GDP per capita was unprecedented, but it was coupled with an increasing gap between the developed and the developing countries. MNEs are even more important in the growth and convergence process that started at the beginning of the twenty-first century where the gap is closing. Global sourcing is the strategy that has led to closing the gap while high growth continues. The paper aims to discuss these issues. Design/methodology/approach The study is based on macroeconomics general equilibrium model in an imperfect market and on looking at the inventive process as the driving process of the development and the location of MNEs. Using a financial economics model of assets and liabilities, it is shown that MNEs affect the geopolitical distribution of income and wealth through expanding their liabilities. The methodology is a combination of applying economic model and using historical and current data to motivate the use of the model and to validate the models and the conclusions derived from them. Findings MNEs and major global companies before the name MNE was used were shaped by major macroeconomic processes like the inventive process and the same time they were the prime movers of the two major economic processes of the last 200 years: growth and divergence and growth and convergence. The ideas-led growth model shows why MNEs are becoming larger. As MNEs became bigger they start to import inputs through value maximizing strategy of global sourcing. This led to transfer of value to suppliers in emerging markets that grow over time and eventually it led to new MNEs from emerging markets large countries like China and from smaller countries in Asia and elsewhere. The growth convergence process and the resulting changes in the geopolitical distribution of MNEs is assisted by rapid changes in technology that reduces transactions cost. The continuation of rapid changes in transactions costs is likely to change the current structure, strategy and the location of MNEs and may reverse the growth convergence process once more. Originality/value The study begins with aggregate macroeconomic processes and relates them to the development of MNEs and in particular to the development of MNEs from emerging markets. It highlights the importance of global value chains and global sourcing in the process of growth and divergence and the turning of the “Wheel for Fortune” toward China and India as it has been prior to the sixteenth century.

The influence of motivations on international location choice in least developed, emerging and developed countries: evidence from Chinese MNEs

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fernando Angulo-Ruiz ◽  
Albena Pergelova ◽  
William X. Wei
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Location Choice ◽  
Emerging Market ◽  
Developed Countries ◽  
Asia Pacific ◽  
Institutional Constraints ◽  
Least Developed Countries ◽  
Content Type ◽  
Developed Economies

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.

FDI inflows and intellectual property rights for MNEs in emerging markets: an alternative approach through the lens of trademarks in Vietnam (1986-2016)

2020 ◽  
Vol 28 (4) ◽  
pp. 483-519
Author(s):  
Amy Linh Thuy Nguyen
Keyword(s):  
Intellectual Property ◽  
Emerging Markets ◽  
Multinational Enterprises ◽  
Emerging Market ◽  
Research Process ◽  
Intellectual Property Right ◽  
Intangible Asset ◽  
Ip Protection ◽  
Fdi Inflows ◽  
Content Type

Purpose While the current anti-globalisation wave is considered as a regional and cyclical relapse among Western countries, the new era of globalisation has shifted away from stagnant developed economies towards the rising prosperity of emerging Asia, where it is attracting substantial global inward foreign direct investment (FDI). Focussing on Vietnam, the country that is seen as Asia’s next economic tiger, the question of how important intellectual properties (IP) protection is in the international competition for FDI inflows is still unsettled, especially on the under-researched topic of trademarks. Design/methodology/approach This paper takes on the business history approach, which allows rich evidence from the dynamic and evolving natures of multinational enterprises (MNEs) to drive the research process, so that international business scholars can test models rigorously. The evidence provided in this paper is essentially qualitative and combines trademark registrations data, with trade and FDI statistics between 1986 and 2016, also draws on companies’ archives, industry reports and related newspaper articles. Findings This paper provides the chronology of intellectual property right (IPR) legal landscapes and the dynamic co-evolution of trademarks and FDI inflows in Vietnam. Three trademark protection strategies for MNEs and their patterns here are addressed. The paper also argues that trademarks bring new insights and IP protection strategy for pharmaceutical MNEs for the case of Vietnam is as important in trademarks as it is in patents. In emerging markets with strong incentives for FDI such as Vietnam, MNEs are not necessarily put off by weak IPR, but rather create alternative strategies for dealing with the lack of IP protection in these emerging market settings. Originality/value This study challenges the stream of thoughts that view trademarks as a “neglected intangible asset” among different IPRs, while in fact, trademarks advance MNEs’ knowledge by ensuring competitiveness and long-run survival in emerging markets. This paper is among the first few attempts to look at pharmaceutical industry through the lens of trademarks, moving away from the traditional patent-focussed approach. It extends the understanding of OLI paradigm and highlights that MNEs need to possess Oa and Op advantages not only at the beginning of internationalisation process but rather evolving through the time to cope with imitation risks in the host country.

Evolving talent management patterns and challenges in Russia and Kazakhstan

2019 ◽  
Vol 14 (3) ◽  
pp. 411-426
Author(s):  
Violetta Khoreva ◽  
Edyta Kostanek
Keyword(s):  
Emerging Markets ◽  
Emerging Economies ◽  
Multinational Enterprises ◽  
Design Methodology ◽  
Talent Management ◽  
Business Leaders ◽  
Structured Interviews ◽  
Content Type ◽  
Employer Perspective ◽  
Fierce Competition

Purpose The purpose of this paper is to investigate the evolving patterns and challenges of talent management (TM) in the emerging markets of Russia and Kazakhstan from the employer perspective. Increasing the understanding of how TM is recognized from the employer perspective may better equip us to address how to effectively manage and lead the available talents in these and other emerging markets. Design/methodology/approach The authors conducted a qualitative study comprising 50 semi-structured interviews, with 37 business leaders from Russian subsidiaries, and 13 from Kazakh subsidiaries, in all cases of Nordic Multinational enterprises (MNEs). Findings The study supports the object approach to TM in the emerging markets of Russia and Kazakhstan. The authors reveal that the exclusive and developable talent philosophy is predominant in these emerging markets, where TM faces the challenges of fierce competition for talents and an insufficient supply, so business leaders tend to be reluctant to inform employees of their talent pool membership. The results demonstrate that MNEs do not act independently of context, thus supporting calls for consideration of the local institutional context. Originality/value TM is still a somewhat novel idea in many emerging economies, and challenges related to managing talents are believed to be far more complex in such settings. Furthermore, to the best of authors’ knowledge, no studies have investigated the notion of talent and TM conceptualization in the emerging markets from an employer perspective.

R&D by US multinationals in China: geography and patterns of co-invention

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Irina Ervits
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Knowledge Integration ◽  
Innovation Management ◽  
Content Type ◽  
Patent Applications ◽  
The Rich ◽  
Technological Clusters ◽  
Internal Networks ◽  
High Degree

PurposeThis paper addresses the geographical dimension of cross-border knowledge integration, expressed as the co-invention of patent filings and investigates the siting of patenting activities by major US corporations in China. Most importantly, the study looks into the patterns of international co-invention or the links of these locations to headquarters and other company subsidiaries.Design/methodology/approachThe study explores the cases of six US multinationals that file international patent applications in China. The applications were analyzed based on the composition of invention teams and the locations of inventors.FindingsThe co-invented patent filings by US multinational enterprises (MNEs) in China demonstrate a high degree of US–Chinese subsidiary collaboration. Links with other subsidiaries are marginal, and at the same time, high levels of sole patenting by inventors in China point to competence-creating research and development (R&D) activities taking place.Practical implicationsThe lack of subsidiary-subsidiary collaboration, especially subsidiaries in other emerging markets, indicates a less diversified strategy of leveraging internal networks of knowledge. This also implies that Chinese subsidiaries still lack attractiveness as partners in subsidiary-subsidiary co-invention. Only two companies in our sample, Procter & Gamble and Intel, demonstrate a highly diversified, integrated and transnational pattern of innovation management.Originality/valueThe paper contributes to the contextual understanding of the rich landscape of R&D activities of major US MNEs in China. By exploring these cases, the paper identifies a number of trends. First, the R&D activities in this sample are highly concentrated in technological clusters located in Beijing and Shanghai. Technological clustering is an important advantage of the innovation landscape in emerging markets. Second, the paper underscores the importance of differentiating between different types of co-invention. The patent applications in this sample tend to unite inventors mostly from the US and China, and so multi-country applications involving subsidiaries in other countries are rare. Thus, the level of integration outside the center-host bandwidth is low. However, Chinese subsidiaries demonstrate high levels of autonomy by filing single-country applications, which implies that they are building their own research identity.

scholarly journals Can blockchain-technology fight corruption in MNEs’ operations in emerging markets?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Matthew Davis ◽  
Thomas Taro Lennerfors ◽  
Daniel Tolstoy
Keyword(s):  
Emerging Markets ◽  
International Business ◽  
Multinational Enterprises ◽  
Design Methodology ◽  
International Management ◽  
Social Implications ◽  
Content Type ◽  
Blockchain Technology ◽  
Business Operations ◽  
Technological Perspective

Purpose The purpose of the study is to explore, with anchorage in theories about the normalization of corruption, under what conditions blockchain technology can mitigate corruptive practices of multinational enterprises (MNEs) in emerging markets (EMs). Design/methodology/approach By synthesizing a technological perspective and theory on corruption, the authors examine the feasibility of blockchain for fighting corruption in MNEs’ business operations in EMs. Findings Blockchain technology is theorized to have varying mitigating effects on the rationalization, socialization and institutionalization of corruption. The authors provide propositions describing the effects and the limitations of blockchain for mitigating corruption in EMs. Social implications This paper offers a perspective for how to tackle acute business problems and social problems pronounced in international business but also prevailing elsewhere. Originality/value The study contributes to literature in international management by systematically exploring how and under what conditions blockchain can mitigate the normalization of corruption.

scholarly journals International projects and political risk management by multinational enterprises: insights from multiple emerging markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tahir Ali ◽  
Aurangzeab Butt ◽  
Ahmad Arslan ◽  
Shlomo Yedidia Tarba ◽  
Sniazhana Ana Sniazhko ◽  
...  
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Emerging Markets ◽  
Social Exchange ◽  
Multinational Enterprises ◽  
Political Risk ◽  
Analytical Framework ◽  
International Project ◽  
Content Type ◽  
Political Risks

PurposeThis study investigates an under-researched yet fundamental question of how a developed country multinational enterprises (DMNE) perceives and manages political risks when undertaking infrastructure projects in the emerging markets (EMs).Design/methodology/approachThe authors use an abduction-based qualitative research approach to analyze six international project operations of a multinational enterprise originating from Finland in five EMs.FindingsThe findings suggest that the overall nature of political risks in EMs is not the same, except few political risk factors that are visible in most EMs. Consequently, the applied risk management mechanisms vary between EMs, except with few common mechanisms. The authors develop an integrative analytical framework of political risk management based on the findings.Originality/valueThis paper is one of the first studies to identify political risk factors for western MNEs while undertaking international project operations and link them to reduction mechanisms used by them. The authors go beyond the notion of risk being conceptualized at a general level and evaluate 20 specific political risk factors referred to in extant literature. The authors further link these political risk factors with both social exchange and transaction cost theories conceptually as well as empirically. Finally, the authors develop a relatively comprehensive analytical framework of political risk management based on the case projects' findings that combine several strands of literature, including the social exchange theory, transaction cost theory, international market entry, project management and finance literature streams.

Institutional determinants of foreign direct investment inflows: evidence from emerging markets

2019 ◽  
Vol 15 (2) ◽  
pp. 245-261 ◽  
Author(s):  
Justin Paul ◽  
Pravin Jadhav
Keyword(s):  
Foreign Direct Investment ◽  
Emerging Markets ◽  
Direct Investment ◽  
Multinational Enterprises ◽  
Political Stability ◽  
Strategic Decision ◽  
Content Type ◽  
Institutional Determinants ◽  
Using Data ◽  
Determinants Of Fdi

Purpose Foreign direct investment (FDI) is a strategic decision for achieving competitive advantage by multinational enterprises. The purpose of this paper is to explore the role of institutional determinants of FDI using data from 24 emerging markets including China, India, Indonesia, Turkey, Thailand, Malaysia and Pakistan. Design/methodology/approach In order to identify factors that attract FDI in emerging markets, this study has used data from sources such as the World Bank, Index of Economic Freedom and UNCTAD. Findings The findings of this research indicate that infrastructure quality, trade cost measured by tariff and non-tariff barriers, institutional quality measured by effective rule of law, political stability, regulatory quality and control on corruption are significant determinants of FDI in emerging markets. Originality/value This is the first study to analyze the sectoral institutional determinants of Inward FDI in the important emerging economies, to the best of authors’ knowledge.

How emerging markets firms will become global leaders

2016 ◽  
Vol 11 (3) ◽  
pp. 274-287 ◽  
Author(s):  
Robert Grosse
Keyword(s):  
Emerging Markets ◽  
Multinational Enterprises ◽  
Design Methodology ◽  
Value Added ◽  
Policy Implications ◽  
Single Model ◽  
Content Type ◽  
Success Stories ◽  
Practical Implications ◽  
Insight Into

Purpose – Over time the countries characterized as “emerging” change, and some of the companies from these countries become world leaders even as many of those from traditional economic powers fade. There is nothing guaranteed about success of companies from emerging markets (EMs), other than the fact that some of the firms that do survive will be among the success stories of the future. The purpose of this paper is to explore two questions: what enables companies from EMs to compete with existing firms? Is there a conceptual structure that is best for analyzing these firms and their strategies? Design/methodology/approach – This paper discusses the strengths of EM multinational enterprises (MNEs) from the perspective of Dunning’s eclectic view, and gives four detailed examples of companies from this perspective. Findings – It is suggested that while the eclectic view offers excellent insight into EM MNEs, an analysis of their strategies and policy implications requires further perspective such as through the global value-added chain. Research limitations/implications – No single model will capture all of the important features of EM MNEs, but Dunning’s view and the global value-added chain are good tools. Practical implications – Hopefully, both research analysts and company managers will be able to utilize the view presented here to better manage/understand EM MNEs. Originality/value – This view demonstrates a mechanism for exploring key elements of EM MNEs and by moving to the global value-added chain additional, original perspective is gained.

scholarly journals International marketing agility: conceptualization and research agenda

2020 ◽  
Vol 37 (2) ◽  
pp. 261-272 ◽  
Author(s):  
Emanuel Gomes ◽  
Carlos M.P. Sousa ◽  
Ferran Vendrell-Herrero
Keyword(s):  
Multinational Enterprises ◽  
Design Methodology ◽  
Conceptual Development ◽  
International Marketing ◽  
Global Markets ◽  
Important Research ◽  
Foreign Markets ◽  
Content Type ◽  
Rapid Changes ◽  
Agile Learning

PurposeThe aim of this paper is to conceptualize the notion of international marketing agility.Design/methodology/approachThe approach adopted is to review and create a synopsis of the existing body of research on strategic agility and develop a conceptualization on how international marketing agility (IMA) should be analyzed.FindingsInternational marketing agility is an emerging concept driven largely by rapid changes in global markets. There is a growing need for exporting SMEs and multinational enterprises to consider IMA as a means of building competitive advantage in foreign markets.Research implications/limitationsWhile the conceptual development presented in this paper is not exhaustive, our model highlights important research avenues in IMA that need exploring.Originality/valueThis article examines an emerging concept in international marketing that serves as a platform to cope with the changes taking place in this fast-changing global environment. A framework is proposed where we conceptualize IMA as a process triggered by agile logic (a nonconformist and open mental stance) and facilitated by agile learning (being able to search and interpret data), to cause agile actions (being able to commit, co-ordinate and respond quickly with flexibility to ever-changing conditions).

Market demand for sustainability in management education

2014 ◽  
Vol 15 (3) ◽  
pp. 291-303 ◽  
Author(s):  
Matthew Gitsham ◽  
Timothy S. Clark
Keyword(s):  
Multinational Enterprises ◽  
Management Education ◽  
Market Demand ◽  
Senior Executives ◽  
Content Type ◽  
Corporate Leaders ◽  
Business Executives ◽  
Global Companies ◽  
Faculty And Administrators ◽  
Survey Responses

Purpose – This paper aims to contribute to the ongoing debate about the relevance of sustainability in management education through exploration of the needs and expectations of a key group of business schools’ stakeholders – senior executives of leading corporations. Design/methodology/approach – The paper presents findings from a survey regarding sustainability within management education returned by executives from a wide span of global companies. The study includes 194 survey responses by senior executives from companies that are signatories of the United Nations Global Compact. Findings – Results from a survey of executives from leading multinational enterprises reveal widespread recognition that sustainability issues are increasingly important for effective management, thus that managers must be appropriately trained for these emerging challenges. Survey results also indicate the kinds of skills and qualities seen as valuable by corporate leaders. Research limitations/implications – It is not possible to extrapolate from this study the aggregate sentiment of all senior business executives, but the sample of 194 respondents is significant. Practical implications – The expressed demand from business leaders provides context for business school faculty and administrators involved in the development of appropriately trained professionals. Originality/value – The study provides indication of demand from a significant subset of influential executives, providing support for the on-going progress of the integration of sustainability topics and training in the curricula of business and other fields.

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