Third World Multinationals: The Rise of Foreign Direct Investment from Developing Countries

Wells, Louis T.

doi:10.1007/978-1-137-28787-8_21

Cited by 61 publications

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“…External factors at home played a significant role in this period and EMNEs internationalized their activities stage by stage through small-scale operations (Lecraw, 1977(Lecraw, , 1993Svetlicic, 2004;Jormanainen and Koveshnikov, 2012) which can be explained by the Uppsala theory of internationalization. EMNEs during the first wave invested mainly in niche markets in other developing countries (Kumar and McLeoid, 1981;Wells, 1983;Lecraw, 1977;Lall, 1983) which were not seen as attractive by developed country multinational enterprises (DMNEs) (Svetlicic, 2004).…”

Section: A New Paradigm Of Internationalization?mentioning

confidence: 99%

“…EMNEs, during the first two waves, heavily relied on their cost advantages and institutional knowledge of operating in similar markets to their own home countries (Kumar, and McLeod, 1981;Wells, 1983;Lecraw, 1993). It is argued that in the first wave MNEs from less developed countries had limited knowledge of global markets and a number of weaknesses compared to their developed country rivals.…”

Section: A New Paradigm Of Internationalization?mentioning

confidence: 99%

“…FDI by developing country firms is not a new phenomenon (Wells, 1983;Lall, 1983, Lecraw, 1993Kumar and McLeod, 1981) but their global reach and the pace and pattern has recently attracted a great deal of attention from academia (Khanna and Palepu 2006;Aulakh 2007;Jormanaien and Kovashnikov 2012;Gaur and Kumar 2010;CuervoCazurra, 2012) and business media (Business Week, 2006;Economist, 2008, Girod, Belin andThomas, 2009;BCG, 2012). Firms from emerging countries have dramatically grown in the global markets recently.…”

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confidence: 99%

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Guest Editors’ Introduction: People Management and Emerging Market Multinationals

Wilkinson

Wood

Demirbağ

2014

Human Resource Management

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There is a very extensive body of literature on how multinationals manage their people in different national contexts. However, the bulk of this literature focuses on the case of multinationals from the advanced industrial economies, and to a considerable extent, the United States. Very much less has been written on multinationals with their country of origin being an emerging market, and what there has focuses on a very limited number of preferred cases. The growing importance of emerging economies has lead to an upsurge of strategy research on the topic (Wright, Filatotchev, Hoskisson and Peng, 2005); however, research on HRM has not paid enough attention to Emerging Market Multinational Enterprises (EMNEs). Many EMNEs tend to be smaller in size with considerably lesser resources and international experience than their counterparts from developed markets limiting their ability to transfer management practice across their subsidiaries (Thite, Wilkinson, & Shah, 2012), although there are important exceptions to this rule. This introductory article seeks to contribute to the emerging body of literature in this area, through seeking to encourage fresh insights particularly on the varieties of people management encountered in different national contexts.Correspondence to: Geoffrey Wood, Professor of International Business, Warwick Business School, University of Warwick, Coventry, CV4 7AL UK, Phone: +44 (0)24 765 24502, Email: Geoffrey.Wood@wbs.ac.uk.Emerging market MNCs have become increasingly prominent -and at times, controversial -within both the developing and developed world. This has encompassed such a diverse range of activities such as takeovers of failing Western firms, the buying up of land and mineral resources in Africa, and the establishment of (often) low cost manufacturing companies in target markets (or in countries with which such markets enjoy free trade agreements) in order to circumnavigate remaining tariff barriers. Whilst the diversity of such activity makes it difficult to draw out general trends, a few issues are of particular importance. The first is the political dimension of MNC activity, an issue relatively neglected in the business and management literature. Where MNCs originate in less democratic countries, relations with parent country governments and senior

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Section: A New Paradigm Of Internationalization?mentioning

confidence: 99%

Section: A New Paradigm Of Internationalization?mentioning

confidence: 99%

mentioning

confidence: 99%

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Guest Editors’ Introduction: People Management and Emerging Market Multinationals

Wilkinson

Wood

Demirbağ

2014

Human Resource Management

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“…Bartlett and Ghoshal (2000, p.134) observed that multinational firms in emerging economies not only lack the usual resources possessed by their "first world" multinational competitors, but are also distinguished by their "strategic, organisational and management diversity". EMNEs usually operate in low value adding activities because of weak technological and managerial capabilities and generally internationalise by exploiting home country specific advantages (Lall, 1983;Lecraw, 1983Lecraw, , 1993Wells Jr, 1983). Rugman (2009) argued that EMNEs internationalise by exploiting home CSAs since these firms may not have significant FSAs to assure success in international markets.…”

Section: Literature Review Internationalisation By Asset Exploitationmentioning

confidence: 99%

“…As stated earlier, the EMNE is deficient in such strategic assets and capabilities since these are not generally available in their developing home markets which are typically characterised by surplus labour, lower operating costs, and large unsaturated markets (Lecraw, 1983;Wells Jr, 1983). …”

Section: Internationalisation For Asset Augmentationmentioning

confidence: 99%

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

Buckley

Munjal

Enderwick

et al. 2016

International Business Review

102

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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.

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Legitimacy Spillovers and Political Risk: The Case of FDI in the East African Community

Stevens

Newenham‐Kahindi

2017

Global Strategy Journal

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Research Summary In order to successfully invest abroad, firms must consider how their actions will affect their acceptance by host country stakeholders such as the government and host society. When perceived as more legitimate, firms will likely experience less political risk; greater illegitimacy will likely result in more political risk. Importantly, such stakeholders often form similar opinions about firms from the same home country—resulting in legitimacy spillovers within a given host environment across similar firms. Moreover, stakeholders in one country form opinions of firms based on their actions in other countries, resulting in across‐country legitimacy spillovers. This article examines legitimacy and illegitimacy spillovers encountered by Chinese, American, Indian, and European firms in East Africa, which resulted in differences in their acceptance and their political risk. Managerial summary Although the literature has begun to consider how firms’ legitimacy affects their political risk, the role of legitimacy spillovers has not been addressed. Using the legitimacy‐based view of political risk and the literature on cognition and social judgments, we develop theory about how within‐country and across‐country spillovers of legitimacy (or illegitimacy) based on firms’ home country origins can affect their political risk. We examine the case of FDI in six East African countries that have experienced a rapid increase in foreign investment despite the presence of political risk. This case shows evidence of legitimacy spillovers resulting in systematic variation in firms’ political risk. Moreover, we find an important role for moderating factors such as the media, historical ties, and distance between countries. Copyright © 2016 John Wiley & Sons, Ltd.

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Third World Multinationals: The Rise of Foreign Direct Investment from Developing Countries

Cited by 61 publications

References 0 publications

Guest Editors’ Introduction: People Management and Emerging Market Multinationals

Guest Editors’ Introduction: People Management and Emerging Market Multinationals

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

Legitimacy Spillovers and Political Risk: The Case of FDI in the East African Community

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