What is “strategic asset seeking FDI”?

Abstract

Purpose – The purpose of this paper is to shed more light on the concept of “strategic asset-seeking FDI”, which is frequently used in discussion of emerging economy multinational enterprises (MNEs), but it is challenged by some scholars. The author argues that he needs this category because an important type of foreign direct investment (FDI) is not captured by the other motives identified by John Dunning, namely, market-, efficiency- and natural-resource-seeking FDI. Design/methodology/approach – The author illustrates the phenomenon of strategic asset-seeking FDI with case examples that form the starting point for his theoretical arguments. Findings – Some FDI is undertaken explicitly with the aim to use assets acquired abroad to enhance the operations of the investor in other markets, including, notably, the investors’ home market. This contribution to capability-building processes of the MNE, indeed, constitutes an important and distinct type of investment motive. Originality/value – The author concluded that Dunning’s typology remains a powerful tool to analyze contemporary business strategies, but it suggests refining the definition of the categories.