Drawing on brand and innovation management literature, this article presents the development and testing of a theory about the way strong brands shape innovation orientationunder conditions of ...institutional uncertainty. Using a unique database of sixty-two large Latin American multinationals (multilatinas), we illustrate that the strong brands of emerging multinationals interact with institutional uncertainty in the host market to shape the firms’ innovation orientation. We confirm the robustness of the results, by using secondary data on foreign direct investments, advertising, and R&D investments. The implications of our findings for managers of multinational companies are clear: While strong brands enhance the innovation orientation of emerging multinationals, conditions of institutional uncertainty in host markets weaken this relationship.
Although numerous studies analyze mergers and acquisitions (M&As) in and out of developed economies (DE), a much smaller number of studies focus on M&As in and out of emerging economies (EE). Since ...there are significant differences in institutional environments, corporate governance practices, and markets between DE and EE, existing knowledge on acquisitions can be extended by examining M&As in and out of EE. This paper addresses this gap and identifies the main findings of studies on acquisitions in and out of EE. The review deals with EE M&A antecedents and performance outcomes, with a focus on what new insights can be gained and what new research directions are revealed. This paper also develops propositions regarding EE M&A antecedents and performance.
Research Summary
Forming informal ties with political agents is viewed as a viable strategy for multinational enterprises seeking to enter emerging countries. Less is known about the conditions under ...which political connection is most helpful for firms dealing with cross‐border institutional distance. We discuss the distinctive mechanisms through which emerging multinationals may benefit from both home and host political connections. Based on the strategy tripod perspective, we postulate that the importance of different types of connections depends on the overall configurations of a firm’s resources and industry characteristics, and these may change with institutional distance. Our analysis of a sample of Chinese high‐tech manufacturing firms yields new insights into political connections, institutional distance, and the strategy tripod perspective.
Managerial Summary
Political connections play an important role in firms’ international expansion. In this study, we consider the importance of home political connections and host political connections in overcoming institutional barriers to foreign entry. We show that this importance varies, depending on firms’ resource bases and industry dynamics, and it may switch from a useful asset to a dispensable one under certain circumstances. We reach our conclusion from an analysis of Chinese high‐tech manufacturing firms’ foreign direct investment.
While it is widely recognised that an asset-augmenting rather than asset-exploiting strategy drives emerging multinationals’ (EMNEs) internationalization, current research focuses on the motivations ...behind knowledge seeking FDI. What remains less clear is why latecomer firms can engage in learning in advanced countries. Conjoining the “Linkage-Leverage-Learning (LLL)” framework and knowledge seeking literature, this study shows how Chinese investment in the European Union reveals the preconditions for foreign knowledge sourcing. We follow a set-theoretic approach, utilizing fuzzy-set qualitative comparative analysis (fsQCA), to identify equifinal configurations of linkage and leverage conditions leading to high learning propensity of EMNEs. Our analysis extends the LLL framework and complements the recent debate on the theory of the EMNE. We develop propositions based on distinct constellations of learning antecedents.
This article investigates how Indian pharmaceutical firms, facing discontinuous institutional changes in their domestic environment due to economic liberalization and intellectual property reforms, ...have undertaken organizational transformation. Internationalization of resources and product markets constitutes an important component of organizational transformation for local firms in emerging economies. Using longitudinal data on 206 Indian pharmaceutical firms from 1995-2004, we find that firms' access to international technological and financial resources enables product market internationalization. Furthermore, we theorize and find support for our predictions that the association between international resources and markets is conditioned by time and business group affiliation, and product market internationalization affects financial performance. Several implications thus emerge for theory and practice associated with the sources of competitiveness in emerging economy firms and their transformation into globally competitive multinational firms.
Purpose Owing to dual constraints including liability of foreignness and liability of origin when emerging multinationals internationalize, they inevitably face the challenge of overseas ...legitimation. However, few studies have explored how latecomers cross the threshold of legitimacy in the dynamic context of transnational operation. The purpose of this paper is to unravel the evolution process, triggers and specific strategies of overseas legitimacy threshold crossing of emerging multinationals. Design/methodology/approach Through the longitudinal case study of Haier Group and Goldwind Sci & Tech Co., Ltd, this study investigates the periodical characteristics of overseas legitimacy threshold crossings and the co-evolution among critical factors influencing the legitimation process in the host country. Findings First, it summarizes that the legitimacy threshold in the host country experiences a sequential process from pragmatic legitimacy to normative legitimacy, and finally cognitive legitimacy. It is an inevitable choice for emerging multinational enterprises to realize and sustain legitimation from passive adaptation to active creation. Second, it reveals that the triggers for crossing the threshold of overseas legitimacy include periodically dynamic factors – international network linkage and resource system reconfiguration, as well as cross-stage spiral interaction effects. Third, it determines the specific strategies for crossing the threshold of overseas legitimacy, namely, replacement, upgrading and reconstruction of organizational identity, and reveals the important role of insisting on the country-of-origin Facebook in promoting the legitimation. Research limitations/implications This study enriches the legitimacy threshold crossing literature from an evolutional perspective, especially the traditional static legitimacy research. This study also reveals the key impacting factors – international network linkage and resource system reconfiguration – and their evolution process interacted with the legitimation process. Practical implications The emerging multinationals should break the stereotypes from developed markets in that only creating new cognitive patterns through active legitimate strategies can they truly cross the legitimacy threshold in the host country. The emerging multinationals also need to retain their own home country legitimacy traits – Facebook and balance the relation between the image of the home country and the image of host country. Originality/value This paper investigates the process of overseas legitimacy threshold crossing for emerging multinationals in a dynamic context of transnational operation, particularly with respect to the evolutionary role played by international network linkage and resource system reconfiguration.
Despite of the increasing attention on Sustainable Development Goals (SDGs) implementation, emerging multinational corporations (EMNCs), and their foreign subsidiaries, as the promising contributors ...and main agents respectively to address SDG issues worldwide, have been rarely noticed in theoretical research. Drawing upon the loose coupling theory, this study seeks to address the unique challenges EMNCs facing in managing their foreign subsidiaries' SDG implementation, and informs on tackling the potential conflicts in meeting multiple SDG requirements of home and host countries. Based on a sample of 295 foreign subsidiaries from Chinese manufacturing firms, this study adopts polynomial quadratic regression with response surface analysis to examine the relationship between headquarter‐subsidiary (HQS) coupling structure and subsidiary sustainable development, as well as the role of parent corporate environmental responsibility (CER) and FDI motives in this process. Our findings demonstrate support for the positive effect of HQS coupling structure on subsidiary sustainable development, and the moderating role of FDI motives is confirmed. This study reveals the key mechanisms and contingencies of SDG implementation at the subsidiary level, and provides theoretical insights for EMNCs to tackle SDG issues globally, obtain legitimacy locally and deepen international expansion accordingly.
► The current study analyzes Chinese companies investment in R&D in Europe. ► Differences in R&D mgmt. of MNC from emerging countries are highlighted. ► Evidence of Chinese R&D internationalization ...is provided through case studies. ► Chinese R&D units don’t fit with the conventional view of R&D internationalization. ► Chinese R&D units evolve from pure tech. exploration, into tech. exploitation.
Along with their mounting economic might, emerging economies are becoming the object of ever closer analytical attention. Yet the phenomenon of international research and development (R&D) from multinationals headquartered there still remains neglected. The current study analyzes Chinese companies’ investment in R&D in Europe, focusing on three different aspects: technology exploration vs. technology exploitation as investment motive; locational strategies for R&D investments; and the dynamics of motives of overseas R&D units. The analysis proceeds to draw out differences between the R&D internationalization process of multinationals from developed economies and those from emerging economies. Evidence of Chinese R&D internationalization is provided through analyses of five cases of international R&D units set up by Chinese companies in Europe: ZTE Corporation, JAC Motors, Chang’an Motors, Hisense Group, and Hisun Group. Based on the analyses we find that the Chinese R&D units represent important differences from the conventional R&D internationalization process of developed-country multinationals. These differences come about when R&D internationalization is driven predominantly by learning rather than technological innovation, as the extant literature tends to assume. Chinese R&D units appear to evolve often from a strategy of pure technology exploration, over fusion of foreign technologies with R&D activities back home, into one of technology exploitation in foreign locations.
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