Asset-Exploitation Versus Asset-Seeking: Implications for Location Choice of Foreign Direct Investment from Newly Industrialized Economies

Makino, Shige; Lau, Chung‐Ming; Yeh, Rhy-Song

doi:10.1057/palgrave.jibs.8491024

Cited by 635 publications

(568 citation statements)

References 0 publications

Supporting

Mentioning

516

Contrasting

Unclassified

Order By: Relevance

“…Preferential treatment and access to cheap money can spur Chinese firms to invest abroad, because abundant funding can (1) reduce the commercial and financial risks connected to overseas investment projects, (2) mitigate disadvantages of ''home country embeddedness'' and institutional distance (cf. Makino et al 2002), and (3) enable the subsidization of potentially less profitable technology-and brand-seeking ventures, especially in industrialized countries, which might otherwise threaten the long-term survival of the investing firm. In the eclectic theory, the ability of firms to derive benefits from such capital market imperfections constitutes an ownership-specific (O) advantage, which may enable them to out-compete rival foreign firms (Dunning and Lundan 2008).…”

Section: Approach 2: Domestic Capital Market Imperfectionsmentioning

confidence: 99%

Internalisation Theory and Outward Direct Investment by Emerging Market Multinationals

Buckley

2017

Manag Int Rev

View full text Add to dashboard Cite

The rise of multinational enterprises from emerging countries (EMNEs) poses an important test for theories of the multinational enterprise such as internalisation theory. It has been contended that new phenomena need new theory. This paper proposes that internalisation theory is appropriate to analyse EMNEs. This paper examines four approaches to EMNEs-international investment strategies, domestic market imperfections, international corporate networks and domestic institutions-and three case studies-Chinese outward FDI, Indian foreign acquisitions and investment in tax havens-to show the enduring relevance and predictive power of internalisation theory. This analysis encompasses many other approaches as special cases of internalisation theory. The use of internalisation theory to analyse EMNEs is to be commended, not only because of its theoretical inclusivity, but also because it has the ability to connect and to explain seemingly desperate phenomena.

show abstract

Section: Approach 2: Domestic Capital Market Imperfectionsmentioning

confidence: 99%

Internalisation Theory and Outward Direct Investment by Emerging Market Multinationals

Buckley

2017

Manag Int Rev

View full text Add to dashboard Cite

show abstract

“…The motive of acquisition is to build competitive advantages within the acquiring firm. MNEs from the 'Newly Industrialized Countries' (NIC) also followed asset augmentation strategies in their internationalization during the 1980's (Makino, Lau, & Yeh, 2002;Mathews, 2006). Acquisitions are generally undertaken for the purpose of acquiring technology (Mutinelli & Piscitello, 1998), strategic resources (Deng, 2009), and globally known brands (Sauvant, 2005).…”

Section: Internationalisation For Asset Augmentationmentioning

confidence: 99%

“…LG, and Haier, followed asset augmentation strategies to leapfrog the competition (Makino et al, 2002). Today these multinationals are able to compete successfully with traditional MNEs (Mathews, 2006).…”

Section: Asset Augmentation and Emnes' Internationalisationmentioning

confidence: 99%

Cross-border acquisitions by Indian multinationals: Asset exploitation or asset augmentation?

Buckley

Munjal

Enderwick

et al. 2016

International Business Review

102

View full text Add to dashboard Cite

This paper examines cross-border acquisitions by Indian multinationals and places them in the context of Emerging Country Multinationals. It tests hypotheses based on internalisation theory and the resource based view to ask if these firms are asset exploiting or asset augmenting in their takeover behaviour. Internal financial and technological resources are found to be important explanatory variables, as is asset seeking; of brands, technology and market access. The home environment in India allows firms to amass profits, to manage in a culturally diverse setting and to develop asset bundling skills. All these factors are significant in determining cross-border acquisitions.

show abstract

“…Particularly with the rise of Asian multinationals, an assetaugmenting or asset seeking perspective explains the entry of latecomers to seek resources and overcome their competitive disadvantages (Makino et al 2002;Mathews 2002Mathews , 2006Child and Rodrigues 2005). These alternate perspectives explain FDI as a tool for enhancing competitiveness rather than exploiting their existing set of advantages.…”

mentioning

confidence: 99%

International Venturing by Indian IT Firms: A Motive Analysis

Varma¹

2010

Journal of Emerging Knowledge on Emerging Markets

View full text Add to dashboard Cite

Asset-Exploitation Versus Asset-Seeking: Implications for Location Choice of Foreign Direct Investment from Newly Industrialized Economies

Cited by 635 publications

References 0 publications

Internalisation Theory and Outward Direct Investment by Emerging Market Multinationals

Internalisation Theory and Outward Direct Investment by Emerging Market Multinationals

Cross-border acquisitions by Indian multinationals: Asset exploitation or asset augmentation?

International Venturing by Indian IT Firms: A Motive Analysis

Contact Info

Product

Resources

About