Prior evidence confirms the existence of a close relationship between home-country characteristics and knowledge-related arguments in the explanation of M&A outflows. This contribution bridges the ...gap between national systems of innovation (NSIs) and emerging multinationals (EMNE) literature for operationalising a bilateral learning process resulting from the link between a process of internationalisation (as followed by firms from emerging economies) and the generation of two interactive processes: domestic learning and learning abroad. The combination of them may generate positive synergies that reinforce the use of M&As by EMNE over other forms of internationalisation. The empirical analysis is built from factor analysis and cluster, and dynamic panel data methodology for a sample of 78 countries, including both developed and developing economies. With empirical analysis we demonstrate how M&A outflows may compensate for domestic weaknesses in less-advanced home NSIs through technological catch-up, and how inward foreign direct investment has contributed a positive influence.
Although the major part of literature on foreign direct investment FDI is largely based on the assumption of imperfections in goods and factor markets, a small but growing literature has been looking ...for a potential impact of imperfections in capital markets which resulted in the development of a group of financial theories on FDI over the years. We examine 119 articles including 104 articles published in 59 leading journals, and 9 classic books. We use the qualitative methodology to analyze their content. The analysis enabled us to identify four main strands of financial theories on FDI. The first explains FDI as a response to different exchange rate variables. The second one applies the portfolio theory to international diversification by multinationals. Third strand sees FDI through the lens of behavioral finance. Finally, the last strand investigates the distinct internationalization path that is followed by financially disadvantaged multinationals domiciled in emerging countries. The analysis revealed theoretical inconsistencies within each group and among different groups of financial theories that is also translated into inconclusive empirical results on many occasions. The analysis also uncovered a geographical bias where in multinationals and FDI from emerging countries are substantially under researched. While the idea of forming one financial theory on FDI is attractive, our suggestion is that future research should opt for a context-specific inclusion of financial factors until the debate about the efficiency of financial markets is settled.
Background. A firm, as it develops, tends to overcome local, regional, and national business environment boundaries by expanding into global economic space. The intense dynamics of ...internationalization, the expansion of multinational companies from emerging economies, the presence of multinational companies owned by the state are just a few of the specificities that shape the global business environment today. In the literature, these trends have become challenging topics, both open to criticism and appreciation.
Aims and approach. In this study we aim to map the expansion of business in the international environment from a sectoral perspective. In this respect, using the data synthesized by UNCTAD in the World's Top 100 non-financial MNEs and Top 100 non-financial MNEs from developing and transition economies, we aggregated, for each sector, the main performance indicators (assets, sales and employment) which reflects the magnitude of the expansion of the activity of the companies included in these ranks outside the economic area of origin. Also, based on the algorithm for calculating the Transnationality Index, we have calculated an aggregate Sectoral Transnationality Index for each of the two tops.
Conclusions. The analysis carried out leads to a series of conclusions regarding the dynamics and configuration of the universe of the world's most prominent multinational companies. Although this is mainly an exploratory research, we appreciate that this sectoral approach leads to a deeper level of analysis, expanding the area of knowledge in the field and, at the same time, creating a framework for new investigative perspectives.
This study investigates the simultaneous influences of culture and global mindedness on the foreign subsidiaries of Brazilian multinationals (B rMNs). Because the ability to develop competences ...abroad is critical for emerging multina tionals competitiveness, we proposed hypotheses and tested a model for how the competenc es of subsidiaries may be affected by the dimensions of global mindedness and culture. To do so, we conducted a multilevel survey involving the headquarters and subsidiaries of majo r BrMNs. The results suggest that global mindedness, which encompasses global orientation, g lobal knowledge, and global skills, is positively related to the development of subsidiari es ́ competences. By contrast, cultural factors, including power distance and uncertainty a voidance, are negatively related to competences development. Therefore, these dimension s may exert simultaneous and opposing stimuli and unaligned forces that affect the develo pment of competences abroad, generating a “tug of war” effect.
Purpose
– The purpose of this paper is to examine the motivations behind Indian firms’ outward investment, i.e. whether these firms are investing abroad in search of market, resource, technology, ...strategic-assets, efficiency, etc. Outward FDI by Indian firms has increased considerably in recent years. Such investments have gone to more than hundred host countries and into various sectors. The higher volume of outward FDI following policy reforms requires examination of factors that have motivated Indian firms to invest in different host countries.
Design/methodology/approach
– The empirical analysis is done for the period from 2008-2009 to 2011-2012 using firm-destination panel data with appropriate adjustment for clustering.
Findings
– The analysis provides evidence of the existence of multiple motives behind such investments. Indian firms are found to have invested abroad in search of resource, technology (strategic-assets) and efficiency, whereas the evidence on market-seeking motive is found to be at best weak in the empirical analysis. The results are robust to the use of alternative sample of outward investing firms.
Practical implications
– This analysis of firm-level motivation of outward FDI by Indian multinationals has pertinent policy implications as well. The presence of multiple motives implies that Indian firms could bring multiple benefits to the Indian economy through outward FDI.
Originality/value
– The link between outward FDI and host country factors is examined at the firm level as against at the aggregative level using a comprehensive and unique official database on actual outward FDI made by Indian firms, originating from both manufacturing and non-manufacturing sectors, in the form of equity and loan.
A number of indicators point to the astonishing rise of emerging market multinationals (eMNCs) in the world economy. In the past, eMNCs have competed as low-cost alternatives to their G-7 ...counterparts. To accomplish this, they focussed on driving efficiency and productivity across supply chains and building brand recognition in their home countries at the expense of branding on a global scale. This trend begins to change. Indeed, the data shows that eMNCs make clear headway in global branding, becoming serious competitors to their better known and well-established advanced economy counterparts. In this article, we use company data from different public sources: the Fortune Global 500 ranking, Standard & Poor’s Capital IQ and the Financial Times’ fDImarkets and for the price comparison for different ecommerce platforms. The findings show that eMNCs have prioritised revenue growth over profits and are starting to position themselves as brand leaders while still competing on price.
Latin American countries were pioneers in developing economies’ outward foreign direct investment (OFDI) activities. Since late 1960s and early 1970s, Latin American countries led the first wave of ...OFDI from developing economies, steered mainly by Argentina and Brazil. Though they lost ground during debt crisis in 1980s, Latin American countries were catching up in OFDI since late 1990s. In contrast, China’s participation in OFDI started much later, mainly after the year 2000 but hast accelerated very fast since 2008. Even though China and Latin American countries are the main investors from emerging markets, they have many differences in their outward foreign direct investment characteristics, capabilities and development paths. This paper analyses and compares the outward investment data of China and Latin American countries distinguishing the different internationalisation phases of both regions. It also looks at industrial and firm level characteristics analysing the Chinese Minmetals and the Brazilian Vale.
Purpose
The aim of this work is to investigate the key factors that lead to a successful deal in the case of acquisitions of Western companies by multinationals from emerging countries (EMNCs).
...Design/methodology/approach
This study adopts a qualitative paradigm and uses a case study method as a tool of analysis. The case concerns Fondalmec, an Italian unlisted medium-sized joint stock company. The company was acquired in 2007 by the Indian multinational Endurance. Primary data were collected through semi-structured interviews and integrated with secondary data retrieved from relevant documents such as annual reports prepared before and after the acquisition.
Findings
Research findings show that EMNCs have some country-specific characteristics, which should be adequately assessed and realigned to the characteristics of the host country and targets’ resources during both the evaluation phase and the integration process.
Research limitations/implications
The research limitation is attributed to there being only one case study analysis.
Practical implications
The study recommends examining the country of origin of the acquirer and suggests EMNCs’ managers to prefer a “light-touch” integration of Western target companies to gain access to their intangible assets and achieve success.
Originality/value
This work differs from much of the existing literature on mergers and acquisitions because it focuses on EMNCs and analyses the target company together with the buyer and their post-operative development strategy. Furthermore, it is one of the few empirical research studies on non-listed companies, which are often overlooked given the greater difficulty of accessing data.
Contrary to contentions in earlier literature that emerging multinationals are only regional players, the evidence on the globalness of Indian firms presented in this study suggests that a number of ...emerging multinationals are global firms. Their strategies target both the developed and the developing markets and the intensity of their overseas operations is comparable with or far greater than those of the world’s leading multinationals. Many of these firms have greater sales or capital assets outside their home base. Indeed, many of them qualify as global firms as they have a significant presence (over 10% of sales) in each of the four regions (the triad and the non-triad developing regions) and no region alone accounts for more than 50% of their global sales. The study of the transformation of emerging multinationals into non-home region players provides considerable potential for better understanding management theories and practices.
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