Abstract
We consolidate and comprehensively review the international business (IB) literature on the firm-specific advantages (FSAs) of emerging market multinational enterprises (EM MNEs). We do so through a systematic examination of 88 empirical and conceptual articles published in top-ranked IB journals between 2011 and 2018. The results reveal that in the past decades, EM MNEs have acquired several of the same FSAs as their counterparts in developed countries (developed country enterprises or DC MNEs) - financial resources, technologies, marketing capabilities, brand equity, R&D intensity, and management competencies. However, more recently, EM MNEs have developed additional unique FSAs in the form of managerial capabilities - to cope with competition in uncertain and constantly changing environments; easy access to cheaper capital; a stronger commitment to networks, such as those with diaspora communities; and, political connections. These additional FSAs have catalyzed the internationalization of EM MNEs. Our study also shows that some hurdles remain in the IB literature on FSAs. For instance, while IB scholars agree that EM MNEs have different investment motives depending on whether they invest in other emerging economies or developed economies, scholars are silent on the exact FSAs necessary to make EM MNEs investments in the respective economies successful. To advance the IB literature, we present some promising future research areas and challenge scholars to pursue further empirical studies on the FSAs of EM MNEs.
Highlights
The advantages derived from multinational enterprises’ (MNEs) possession of specific assets and capabilities has for decades, been the subject of intense scrutiny by international business (IB) scholars, and it continues to be so
As this review has shown, the literature dealing with the firm-specific advantages (FSAs) of emerging market multinational enterprises (EM MNEs) is strongly characterized by research on multinationals from BRIC countries, in particular from the two largest emerging markets, China (32%) and India (10%)
We have reviewed the IB research status on FSAs in EM MNEs from seven top journals between 2011 and 2018, taking a qualitative survey approach
Summary
The advantages derived from multinational enterprises’ (MNEs) possession of specific assets and capabilities has for decades, been the subject of intense scrutiny by international business (IB) scholars, and it continues to be so. A key tenet of IB theory is that to become an MNE and survive overseas against indigenous competitors; firms must possess significant FSAs over their competitors that can help them offset disadvantages when competing abroad (Dunning, 1988; Hymer, 1960/1976; Wells, 1983). One identified FSA of EM MNEs was the flexibility that came from being small and possessing technology that was less cutting-edge than their developed country competitors were, but better suited for a developing country context (Lall, 1983a; Wells, 1983)
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