Strategic Asset Seeking by EMNEs: A Matter of Liabilities of Foreignness – or Outsidership?

Is the Strategic Asset Seeking Investment Proclivity of Chinese MNEs Different to that of Developed Market MNEs? A Comparative Analysis of Location Choice and Orientation

“…This idea of similarities between CMNEs and DMNEs, as opposed to the differences much discussed in the theoretical and empirical literature, is therefore reinforced by our logit modelling results. Petersen and Seifert (2014) may speak for many when they note: 'A remarkable characteristic [of EMNEs] has been their tendency to acquire strategic assets in developed markets' (p. 376), we argue more caution is required in asserting that CMNE SAS FDI orientation is really different to that of DMNEs. Our comparative approach using a direct measure of SAS to establish a proxy for SAS orientation and an explanatory variable to capture FSAs suggests that reaching this conclusion based on location choice approaches alone is problematic.…”

“…The first, which focuses mainly on the nature of the domestic home market, puts forward reasons for forces that may encourage SAS in all emerging market businesses. This includes; the 'link-leverage-learn' (LLL) argument (Mathews 2006); the 'institutional perspective' and so called 'home country effects' (Anderson and Sutherland 2015a;Hertenstein et al 2017); the impact of 'complementary local resources' (Hennart 2012); asymmetries in liabilities of foreignness (Petersen and Seifert 2014); and related to domestic market institutional voids, the important role of business group affiliation (Yiu 2011). All of these arguments can and have been applied to the case of CMNEs.…”

“…Some argue SAS investments are especially common among CMNEs, as they look to rapidly catch-up with their DMNE counterparts (Rui and Yip 2008), aided at times by state support ) and a number of other favorable domestic home market conditions. This includes: access to complementary local resources (Hennart 2012); asymmetries in liabilities of foreignness (Petersen and Seifert 2014); business group affiliation (Yiu 2011); and the imperative to catch-up and learn from foreign rivals (Child and Rodrigues 2005;Mathews 2006). Much research has thus highlighted CMNE FDI behavior as being characterized by comparatively rapid, high risk investments, often to psychically distant developed markets.…”

A comparative analysis of location and non-location-bounded strategic asset seeking in emerging and developed market MNEs: An application of new internalization theory

“…SAS may be facilitated and aided at times by state support (Luo, Xue, & Han, 2010), including favorable domestic home market conditions such as: access to complementary local resources (Hennart, 2012); asymmetries in liabilities of foreignness (Petersen & Seifert, 2014); business group affiliation (Chari, 2013); and the ability to learn from foreign rivals (Mathews, 2006). Much research has thus highlighted EMNEs' FDI behavior as being characterized by comparatively rapid, high risk SAS investments, often to psychically distant developed markets, for the purposes of firm-level catchup (Luo & Tung, 2018).…”

“…As Petersen and Seifert (2014) argue, these may be ordered into two general groups. One group, considers the role of specific, often institution related factors, in driving SAS.…”