From LLL to IOL3: Moving dragon multinationals research forward

Abstract

In the past decade, there has been a large number of studies on how firms from the fast developing Asia-Pacific region initiate and manage their international business expansions, leading to an emerging area of research which could be labeled as dragon multinationals research. To illustrate how we can move dragon multinationals research forward, in this editorial we first expand John Mathews' linkage-leveragelearning (LLL) model to an extended framework of inward linkages-outward linkagesleverage-learning (IOL 3 ) framework that aims to help us better analyze what makes dragon multinationals' international expansion unique. We then introduce the papers selected for this Special Issue and highlight their contributions in line with our proposed new analytical framework. Finally, we use the framework to explore opportunities and directions for future research on dragon multinationals.

Age Matters: The Contingency of Economic Distance and Economic Freedom in Emerging Market Firm’s Cross-Border M&A Performance

“…Second, in line with a recent call for a more refined understanding of the home country institutional constraint of LLL framework (Lu et al 2017), our findings support the interaction effect of the country level characteristics, including economic distance and economic freedom, on EMFs' post-acquisition operating performance. While economic distance in general negatively impacts the EMF acquirers' postacquisition performance, the home emerging economy in transition in terms of its economic freedom presents significant challenges.…”

“…A recent study on Chinese listed firms also suggests that older companies with more experience have the greater absorptive capacity, which results in a better position to overcome the cultural differences and enjoy better stock return after the acquisitions events (Li et al 2016). Likewise, Lu et al (2017) reviewed recent studies based on dragon multinationals and expanded LLL model to an extended framework of inward linkages-outward linkages-leverage-learning (IOL3) framework. Lu et al (2017) observed that beyond the outward linkages, established dragon multinationals also developed inward linkages within their home market, so they can garner home country resources which are instrumental in propelling EMFs' further internationalization.…”

“…Likewise, Lu et al (2017) reviewed recent studies based on dragon multinationals and expanded LLL model to an extended framework of inward linkages-outward linkages-leverage-learning (IOL3) framework. Lu et al (2017) observed that beyond the outward linkages, established dragon multinationals also developed inward linkages within their home market, so they can garner home country resources which are instrumental in propelling EMFs' further internationalization. Hence, we propose that older EMFs are better equipped with the needed experience and capabilities to navigate the complexity of formal and informal institutions in the host market and enjoy the LLL benefits afforded in the economic distance.…”

“…Overall, we take an integrative approach and build on the LLL framework to examine SA firms' post-acquisition operating performance. We contribute to the researchers' recent call for more understanding of the interaction between the firm level and country level characteristics for SA firms' internationalization (Lu et al 2017;Meyer et al 2009;Ramamurti 2016). Lu et al (2017) reviewed the studies on dragon multinationals and suggested that original LLL framework developed by Mathews (2006) downplayed the critical factors of the EMFs' home institutional environment.…”

“…We contribute to the researchers' recent call for more understanding of the interaction between the firm level and country level characteristics for SA firms' internationalization (Lu et al 2017;Meyer et al 2009;Ramamurti 2016). Lu et al (2017) reviewed the studies on dragon multinationals and suggested that original LLL framework developed by Mathews (2006) downplayed the critical factors of the EMFs' home institutional environment. As mentioned in the recent review article of springboard EMFs (Luo and Tung 2018), the inorganic growth via cross-border acquisitions provides an excellent opportunity to propel SA firms' growth by augmenting their strategic capabilities and reducing their vulnerability to home institutions.…”