Institutions and Investments by Emerging-Economy Multinationals in Developed Economies: Solar PV Firms and the Role of Political Authorities in Germany

Abstract

Foreign investments by emerging-economy multinational enterprises (EMNEs) have recently generated much scholarly interest (Buckley et al., 2008; Mathews, 2006; Williamson and Raman, 2011). Key theoretical debates have focused on how this investment differs, if at all, from that by developed-economy multinationals. This work has revealed key insights into the nature of EMNEs and the implications of their activities for international business theory (e.g. Annushkina and Colonel, 2013; Gameltoft et al., 2012; Mathews, 2006; Ramamurti, 2012; Sinkovics et al., 2014). In particular, research has highlighted two key factors that distinguish outward foreign direct investment (OFDI) by emerging-economy firms compared to their developed-economy counterparts. First, home-country governments play a relatively prominent role in promoting foreign investments by EMNEs, especially mergers and acquisitions (Buckley et al., 2007; Child and Marinova, 2014; Ramamurti, 2012; Sauvant, 2009; Zhang et al., 2011). Second, EMNEs often acquire firms abroad for their superior capabilities (Mathews, 2006).