Abstract
As multinational enterprise (MNEs) from emerging markets grow into maturity they face significant challenges surrounding their identities and home country bases and, as a result, we see them making different choices. National champions choose to retain their corporate headquarters and identity from their emerging market homes while corporate emigrants relocate their head-offices abroad. Targets of mergers and acquisitions (M and A) may move to the acquirer's home or stay where they were born. Through an examination of South African-born firms that are cross-listed on both the Johannesburg securities exchange and one other exchange, we identify the differences between these evolutionary paths and discuss the drivers and constraints on relocation decisions. Key words: South Africa, emerging markets, multinational enterprise, location advantage, headquarters.
Highlights
A shifting balance of economic power towards emerging markets has been evident for some time as the world’s economic centre of gravity has moved East and South, away from organization for economic cooperation and development (OECD) countries and towards emerging economies (OECD, 2010)
Mean scores for the various factors of locational advantage were compared across developed countries and emerging markets as a McGregor database group as well as to South Africa in particular
Our results provide empirical support for the proposition that emerging market multinational enterprises (EMNEs) headquarters location are constrained by ownership factors and encouraged by levels of foreign business interest
Summary
A shifting balance of economic power towards emerging markets has been evident for some time as the world’s economic centre of gravity has moved East and South, away from organization for economic cooperation and development (OECD) countries and towards emerging economies (OECD, 2010). In 2005, 34 of the fortune global 500 companies were from emerging markets. This number had risen to 73 (Fortune, 2009). Even this increase, understates the true nature of the transition that is underway. Mature MNEs from developed markets have been able to retain their dominant positions through the acquisition of emerging market firms and this is a partial explanation for the limited representation of emerging market multinational enterprises (EMNEs) in the global 500 ranking. A more important reason may be the relocation of EMNEs themselves, from their emerging market homes to developed countries. This latter phenomenon has yet to receive much attention from researchers
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