An exploratory study of internationalization strategies of Malaysian and Taiwanese firms

Abstract

PurposeThere is limited empirical research on the internationalization processes, strategies and operations of Asian multinational enterprises (MNEs) from countries at different levels of development. This paper examines and analyzes the internationalization strategies and characteristics of Asian MNEs within the investment development path (IDP) perspective.Design/methodology/approachPrimary data are drawn from matched case studies of emerging MNEs from Taiwan (a newly industrializing country) and Malaysia (a fast developing country) in the textile and electronics industries.FindingsThe internationalization strategies of our Taiwanese and Malaysian case firms were founded on cost‐based competencies and other location‐based advantages, brought together by an extensive web of ethnic networks. Differences between our Taiwanese and Malaysian case firms were found and discussed. In general, the Taiwanese firms were more internationalized (at stage 3 of IDP) than the Malaysian firms (stage 2). They had more developed and elaborate production networks and greater own design manufacturing/own brand manufacturing participation than the Malaysian firms.Research limitations/implicationsThe research did not capture the operational strategies at the level of the subsidiary or JV. The findings were exploratory and formed the basis for research propositions presented. As indicated there existed a wide empirical research gap on Asian as well as Taiwanese and Malaysian MNEs. These need to be filled to provide further evidence and answers to the issues raised in the paper. Other potential areas of research could include longitudinal studies of Asian MNEs to examine whether they will resemble Western MNEs as they evolve, the impact of ethnic networks on the performance of Asian MNEs of both Chinese and non‐Chinese origins, and the role of the state in internationalization strategies.Originality/valueFew studies have been done on emerging market multinationals and their internationalisation strategies.