Host countries' level of development affects internationalization from emerging markets. The challenges and opportunities firms face, the resources and assets they need, and ultimately how they ...internationalize are shaped by whether firms internationalize to developing or developed countries, and whether they operate within a single or across multiple levels of host country development. I propose a typology of four firm strategies to deal with different host location types: local optimization, global consolidation, brokering and niche filling. Local optimization happens when firms seek out less competitive markets in similar and lower income countries, managing institutional and infrastructural challenges through collective action. Firms seeking global consolidation manage their limited capabilities and legitimacy through mergers and acquisitions as they springboard from low to high income host locations. Suppliers in global value chains and the customer-facing partners of advanced multinationals in low income countries are arbitrageurs between high and low income countries. They use brokering to avoid head-on competition with advanced multinationals, but to grow, firms must retain their primary relationships while developing non-competing relationships. Niche filling involves firms targeting knowledge-intensive offerings at lucrative high income markets, managing their smaller resource base vis-à-vis competitors through non-equity or digitally-enabled modes of internationalization. Firms can simultaneously use different strategies for different types of foreign markets.
Drawing on the information processing perspective from psychology, the study builds and tests a conceptual model to explain how the country-of-origin image (COI) and media coverage are associated ...with the organizational legitimacy of emerging multinational enterprises (EMNEs), and how the relationships are moderated by the education level of individuals in a developed host country. This study investigates the relationships by highlighting the multidimensional nature of these concepts. Our findings suggest that affective COI is positively associated with both pragmatic and sociopolitical legitimacy, economic COI is positively associated with pragmatic legitimacy, and political COI is positively associated with sociopolitical legitimacy. The findings also demonstrate that media influence legitimacy; however, the extent to which media influence legitimacy depends on individuals’ education levels. These findings advance our understanding of organizational legitimacy and its antecedents, providing new insights into strategies for building legitimacy in foreign countries.
•Affective country-of-origin image is related to pragmatic and sociopolitical legitimacy of EMNEs in a developed host country•Economic country-of-origin image is positively associated with pragmatic legitimacy of EMNEs in a developed host country•Political country-of-origin image is positively associated with sociopolitical legitimacy of EMNEs in a developed host country•The influence of media on legitimacy of EMNEs depends on individuals’ education levels
Outward foreign direct investment (OFDI) by emerging economy multinational enterprises (EMNEs) is an increasingly significant global economic phenomenon. A growing and extensive body of research has ...examined the OFDI performance outcomes of EMNEs. Our systematic review seeks to capture the diverse theoretical lenses adopted and advanced in this stream of research, synthesize empirical findings, identify methodological challenges, and recommend directions for future research. Following a comprehensive and rigorous literature review, we identified 175 relevant studies published from 2001 to 2020. Our review suggests that a wide range of theories across disciplinary boundaries have been applied, and in some cases extended, to understand the performance outcomes of the OFDI of EMNEs. Empirically, previous studies have focused on different performance dimensions when assessing the OFDI outcomes of EMNEs, and investigated antecedents and contingencies across micro, meso, and macro levels. Based on our review findings, we propose a number of future research directions to move this research stream forward.
•Freedom of digital media (FDM) is associated with EMNEs’ entry mode choice.•High level of FDM is positively associated with the likelihood of choosing WOS.•Transparency within an EMNE strengthen the ...positive relationship.•External control of corruption also strengthens the positive relationship.
The impact of freedom of digital media in host countries has been under-researched in the literature of the internationalization decisions of emerging multinational enterprises (EMNEs). Through integrating the stakeholder perspective with transaction cost economics, we examine the role of host-country digital media in influencing the foreign direct investment (FDI) entry mode choice of EMNEs and its boundary conditions associated with internal and external corruption-controlling efforts. Using a panel dataset of Chinese listed manufacturing firms’ outward FDI between 2010 and 2016, our empirical analyses indicate that freedom of digital media in a host country has positive impact on an EMNE’s wholly owned subsidiary choice as FDI entry mode. This main relationship is strengthened by EMNE transparent information disclosure and external control of corruption in the host country.
Emerging multinational enterprises (EMNEs) often engage in strategic-asset-seeking foreign direct investment (FDI) for competitive catch-up. This study explores the linkages between an EMNE’s ...competitive scenario consisting of a configuration of its awareness-motivation-capability (AMC) conditions and the comparative institutional advantages of its strategic-asset-seeking destination. Our configurational analyses of Chinese FDIs in the technology-intensive industries of OECD countries reveal a taxonomy of four distinct asset-seeking strategies of EMNEs. Our findings shed novel insights into the strategic variations within EMNEs based on a theoretically and methodologically extended AMC framework. This study also extends the varieties of capitalism literature by addressing the implications of comparative institutional advantages for foreign entrants, rather than domestic incumbent firms.
There is a considerable gap in academic theoretical literature about the international training of expatriates in multinational enterprises (MNEs). While the majority of research has focused on ...developed (Western) multinationals operating in developing countries, very limited research has been conducted on emerging multinational enterprises (EMNEs) operating in developed countries and the expatriates who work in them. In this study, we explore the international training of expatriates in Indian MNEs from the information technology industry operating in Australia to examine how they provide training to their expatriate staff who are sent on international assignments. We collected qualitative data in the form of multiple case studies via interviews with senior executives based in the Australian subsidiaries. Our findings reveal that Indian IT MNEs provide a variety of centralised training programmes for their managerial and technical expatriates and use training as a key instrument to leverage and transfer home country knowledge to their Australian subsidiaries. We also found that each stakeholder involved in the training process plays a distinct role in the knowledge transfer process, which allows Indian EMNEs to integrate the training with their people-centred business model to deliver IT services in host countries.
This article builds on existing international business literature that examines the drivers of cross‐border mergers and acquisitions (M&As) within emerging and developing economy contexts, ...theoretically exploring how dynamic capabilities (DCs) are connected to these drivers, and how African emerging multinational enterprises (EMNEs) can pursue them to achieve competitiveness. The article's contribution is the development of a DC framework and testable propositions for African EMNEs' cross‐border M&As. The theoretical framework shows the division of DC dimensions—sensing, seizing, and transforming—and establishes explanations for their linkage with institutional and resource drivers for African EMNEs' cross‐border M&A competitiveness. In addition, the article outlines managerial implications to this effect. Overall, the article contributes to the emerging literature on the international expansion of African EMNEs through cross‐border M&As by underscoring the role of DCs.
There is a growing body of literature on multinational enterprises (MNEs) and the extent to which they diffuse or transfer their human resource management (HRM) practices in foreign subsidiaries. ...Much of the research, however, examines the HRM practices of multinational enterprises from developed countries operating in developing countries rather than vice versa. This study investigates the transfer of HRM practices in Indian information technology MNEs with subsidiaries in Australia and draws on data collected through interviews with senior subsidiary managers. The findings indicate that contrary to what is suggested in the existing literature, Indian IT MNEs do not operate using a polycentric HR model but behave in a manner similar to Western MNEs. They adopt a hybridisation approach using headquarter(HQ)-local practices that merge home-country policies with locally responsive HRM practices to suit their Australian subsidiary context. This article discusses the implications of this finding for theory and practice in EMNEs.
The concept of “liability of foreignness” — the costs of doing business abroad — has been known and discussed since the mid-1970s. At the core of these discussions is the role that firm capabilities ...play in overcoming or limiting these costs. This raises the question of how firms with inappropriate, limited or constrained capabilities relative to their host environment overcome the liability of foreignness. This paper focuses on the subsidiaries of “emerging multinationals” and how they manage the demands of a technologically and economically highly developed host country. A host location with sophisticated markets and well-developed institutional infrastructure may be a highly challenging environment for firms that have grown their organizational capabilities in less developed contexts. This paper explores that situation and considers how resources available on the market — for example through supplier inputs — assist subsidiaries to benefit from their presence in a munificent location. Despite the acknowledged limitations of a transaction-based approach, this paper presents evidence that purchasing knowledge provides an accessible strategy for overcoming some liabilities of foreignness.
Objective: This teaching case describes the trajectory of the internationalization of WEG, a Brazilian company producer of electric engines. This study proposes to fulfill the following objectives: ...(a) comprehend the company’s process of internationalization from the perspective of international business theories; (b) analyse why the way taken in the process of internationalization by the business unit WEG Automação occurred in a sequential way to that of WEG Motores; and, (c) reveal if the network of WEG Motores generated positive externalities to the internationalization of WEG Automação.
Method: Teaching case, based on real case. The primary and secondary data were used for the development of this teaching case. The primary data was obtained through a semistructured interview with the director of WEG Automação and mangers of the unit, made during late 2016. The interviews were transcripted and used together with the secondary data for the development of this teaching case. The secondary data was obtained using institutional information available at WEG’s website and documents of the company. Besides, the interviewers performed direct observation during visits of a long duration to the company.
Relevance/originality: The company’s move of internationalization shows its value inside the context of emerging multinational companies, considering that different units feed themselves with internal and external skills during the process, corroborating aspects of the behavioral approach of the Uppsala Models.
Theoretical / Methodological Contributions: The case contributes to apply theorical lens of International Business, as Network and Uppsala Model to explain the movement of internationalization process of a Global firm, specifically to compare the process between two of its units business – WMO and WAU.
Social / management contributions: This teaching case application is recommended for graduation or undergraduate courses in Administration, Foreign Trade and International Management, to discuss in subjects such as: Internationalization of Companies, International Business, Internationalization Theories, and Emerging Markets. The use of the case help to improve analytical skills of students, about real situation of an emerging market firm that become a global player.
Keywords: Internationalization. Emerging Multinational. Network. Business units of WEG. Teaching Case.
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