Emerging Market Multinationals and Spillovers to Home Country Local Firms

2022 ◽  
Author(s):  
Shayal Prasad ◽  
Peter Zamborsky
Author(s):  
Alvaro Cuervo-Cazurra ◽  
Ravi Ramamurti

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.


2018 ◽  
Vol 34 (6) ◽  
pp. 10-12

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 This literature review paper concentrates on the range of theories that help clarify emerging market multinationals’ entry mode strategies as they expand into new international zones. The strategic lessons learned from the journeys of these companies include the influential role that institutions in their home country can play in how the company operates on foreign soil. Originality/value The briefing saves busy executives, strategists 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.


Sign in / Sign up

Export Citation Format

Share Document