Springing from where? How emerging market firms become multinational enterprises

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Purpose
The purpose of this paper is to show that existing theories, principally Dunning’s OLI model, Mathews LLL model and Rugman’s version of internalization theory are unable to explain the rise of emerging market multinationals (EMNEs). The reason is that they over-emphasize the strategic importance of intangibles and ignore that of complementary local assets. Taking complementary local assets into account makes it possible to understand why EMNEs are able to finance their intangible-buying sprees and, often with the help of their governments, to swap market access for technology.

Design/methodology/approach
This is a conceptual paper based on the bundling model (JIBS 2009) and backed by the case histories of four EMNEs.

Findings
The author shows that EMNEs have much better prospects vis-à-vis established MNEs than generally thought in Western Europe and the USA and that they will become serious competitors.

Originality/value
This is, as far as the author knows, the first explanation of why EMNEs have the bargaining power and the resources necessary to swap or buy technology from established MNEs.
Original languageEnglish
Pages (from-to)568-585
JournalInternational Journal of Emerging Markets
Volume13
Issue number3
DOIs
Publication statusPublished - 2018

Fingerprint

Multinational enterprises
Emerging market firms
Assets
Intangibles
Swaps
Bargaining power
Internalization theory
Finance
Emerging market multinationals
Resources
Competitors
Government
Bundling
Design methodology
Market access

Keywords

  • emerging market multinationals
  • bundlng model
  • Transaction cost economics

Cite this

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title = "Springing from where? How emerging market firms become multinational enterprises",
abstract = "PurposeThe purpose of this paper is to show that existing theories, principally Dunning’s OLI model, Mathews LLL model and Rugman’s version of internalization theory are unable to explain the rise of emerging market multinationals (EMNEs). The reason is that they over-emphasize the strategic importance of intangibles and ignore that of complementary local assets. Taking complementary local assets into account makes it possible to understand why EMNEs are able to finance their intangible-buying sprees and, often with the help of their governments, to swap market access for technology.Design/methodology/approachThis is a conceptual paper based on the bundling model (JIBS 2009) and backed by the case histories of four EMNEs.FindingsThe author shows that EMNEs have much better prospects vis-{\`a}-vis established MNEs than generally thought in Western Europe and the USA and that they will become serious competitors.Originality/valueThis is, as far as the author knows, the first explanation of why EMNEs have the bargaining power and the resources necessary to swap or buy technology from established MNEs.",
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Springing from where? How emerging market firms become multinational enterprises. / Hennart, Jean-Francois.

In: International Journal of Emerging Markets, Vol. 13, No. 3, 2018, p. 568-585.

Research output: Contribution to journalArticleScientificpeer-review

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AB - PurposeThe purpose of this paper is to show that existing theories, principally Dunning’s OLI model, Mathews LLL model and Rugman’s version of internalization theory are unable to explain the rise of emerging market multinationals (EMNEs). The reason is that they over-emphasize the strategic importance of intangibles and ignore that of complementary local assets. Taking complementary local assets into account makes it possible to understand why EMNEs are able to finance their intangible-buying sprees and, often with the help of their governments, to swap market access for technology.Design/methodology/approachThis is a conceptual paper based on the bundling model (JIBS 2009) and backed by the case histories of four EMNEs.FindingsThe author shows that EMNEs have much better prospects vis-à-vis established MNEs than generally thought in Western Europe and the USA and that they will become serious competitors.Originality/valueThis is, as far as the author knows, the first explanation of why EMNEs have the bargaining power and the resources necessary to swap or buy technology from established MNEs.

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