Asian Multinational Enterprises Research Articles

Cross‐Border Vertical Integration and Technology in Factory Asia: Evidence from Korea

Factory Asia, supply chains in Asian countries, is a center of global manufacturing. Over the last decade, Asian multinational enterprises have become a significant part of Factory Asia. In this paper, we examine the boundaries of Korean firms in Asia. More specifically, we test the predictions of property rights theory for cross‐border vertical integration, using firm‐level data from Korean multinational enterprises. In line with the theory's predictions, we find that cross‐border backward vertical integration is positively related to the R&D intensity of domestic producing industries and negatively related to those of foreign supplying industries, but only when transactions between the producing and supplying industries are large enough. These results can help us to understand how Asian multinational enterprises develop their supply chains in Asia.

Out of India: Towards a conceptual framework on internationalization motives, parenting styles and human resource management practices among Indian MNE subsidiaries in Ireland

The significant growth of Asian multinational enterprises (MNEs) in western economies in recent years, in particular in smaller advanced economies such as Ireland, has led to calls for a deeper understanding of the drivers of location choice among these MNEs and for more compelling accounts of the parenting and management of the subsidiaries being established. In this conceptual contribution, we focus on the specific case of Indian MNEs with subsidiaries in Ireland. Assembling theoretical insights from the literature on parenting styles and headquarter-subsidiary interactions, coupled with practice-led observations garnered from Indian MNEs, we develop a conceptual framework elucidating key variations in headquarter-subsidiary relationships and the HR policy and practice mix. We reason that the preferred approach to corporate parenting, vested in adding value to the subsidiary, extracting value from it, or seeking a balance in the overall exchange, results in a range of interactions between headquarters and subsidiaries, encompassing integration, collaboration or local responsiveness. Furthermore, we postulate that the preferred headquarter-subsidiary interactions influence the subsequent HR recipes adopted in the subsidiary setting as it seeks to build its strategic position within the broader MNE network. In order to deepen lines of inquiry around these different interactions, we advance a series of propositions for testing.

Configurations of home-country experience, leapfrog strategy, and management team composition for acceleration of international expansion: Evidence from Asian multinational enterprises

Asian multinational enterprises (MNEs) are latecomers in the world economy, but some have accelerated their international expansion pace and become significant players in the twenty-first century globalization. This study adopts the set-theoretic approach to explain the acceleration of international expansion among latecomer MNEs. Specifically, this study explores configurations of home-country experience, leapfrog strategy, and management team composition that contribute to some latecomer MNEs’ high acceleration of international expansion. The results suggest seven applicable configurations, reflecting three archetypes of latecomer MNEs that achieve high acceleration of international expansion. We named the three archetypes by employing metaphors of fast-moving animals: (1) newborn tigers, (2) safari lions, and (3) savannah cheetahs, which represent distinctive sub-breeds of latecomer MNEs in the new zoology of the present globalized world. The results offer unique insights into theoretical debates regarding the sufficiency of conventional international business theories for explaining the international expansion of latecomer MNEs.

Sources of Capabilities for Asian Multinational Enterprises’ Accelerated Internationalization

Multinational enterprises (MNEs) from the Asia-Pacific region have become significant participants in the world economy. Compared with developed-country MNEs that follow the stages model of interna...

Examining the ‘black box’ of human resource management in MNEs in China: exploring country of origin effects

We examine the impact of HPWS on the attitudes and retention of Chinese employees in multinational enterprises (MNEs) operating in China. More specifically, we examine the extent to which the degree of HPWS and the impact of these practices differ according to the country of origin of the MNE. We surveyed a sample of 410 Chinese employees currently working in Western and Asian MNEs. The findings indicate significant ‘country of origin’ effects, where employees of Western and Asian MNEs perceive different levels of HPWS are in operation in their respective organisations. Employee trust, job satisfaction and affective commitment are all important factors in the retention of Chinese employees of MNEs, with high levels of commitment being the most significant factor. However, the relative impact of these factors on employee retention differs by country of origin of the MNE.

Towards a Guanxi‐based theory of internationalization: Chinese, Taiwanese and evolving MNEs

PurposeThe aim of this paper is to review theories on the kinship‐based collaboration for Asian multinational enterprises (MNEs). Although cooperation issues have reached the top of the Asian MNE agenda, comprehensive empirical and theoretical studies in these areas have remained patchy. Motivated expressly by the sparseness of theory development, this study seeks to establish and examine the model of kinship‐based alliance for MNEs. Drawing on kinship‐based theory, this paper contends that cross‐border collaboration within the same region is increasingly important in driving MNEs from emerging economies to internationalisation.Design/methodology/approachThis study attempts to focus on kinship‐based collaborations from emerging economies to internationalization in the context of high‐tech industries by reviewing relevant studies and presents research propositions.FindingsThe study proposes that the model of kinship‐based alliance can be affected by these factors: economic (partner contributions in term of scale‐link theories), geographic, cultural and social (which are broadly defined as kinship‐based factors) factors. Therefore, the model of kinship‐based alliance can be characterized as an evolutionary struggle between these factors to develop a form of cross‐border cooperation.Originality/valueThe model of kinship based alliance enriches the theoretical field of internationalisation strategies for MNEs from developing economies, and this model also provides knowledge of collaboration behaviour for managers of high‐tech firms to create appropriate synergy for each party of an alliance.

An exploratory study of internationalization strategies of Malaysian and Taiwanese firms

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.

The regional character of Asian multinational enterprises

In recent issues of this Journal a debate has raged concerning the appropriate nature of academic research in the Asia Pacific region. While we support the desire for both rigor and regional relevance in this research, we wish to demonstrate a strong commonality between the performance of large Asian firms and others from Europe and North America. This prompts us to question the need for a new theory of the MNE based on the experience of Asian firms. Like their counterparts elsewhere, the large Asian firms mostly operate on an intra-regional basis. While in the literature it has been assumed that the path to success for Asian firms is globalization, we show that the data supporting this is confined to a handful of unrepresentative case studies. We also present a bibliometric analysis which shows an overwhelming case study sample selection bias in academic studies towards this small number of unrepresentative cases.

Internationalization Strategies of Emerging Asian MNEs – Case Study Evidence on Singaporean and Malaysian Firms

Empirical research on the internationalization processes, strategies and operations of Asian multinational enterprises (MNEs) from countries at different levels of development is limited to date. Drawing on primary data from ten matched case studies of emerging Singaporean and Malaysian MNEs in five industrial sectors, this research examines and analyses their internationalization characteristics and strategies and evaluates them within the IDP (investment development path) perspective. The findings indicate that the emerging Singaporean and Malaysian MNEs, while exhibiting characteristics such as that described in extant theories also suggest some differences. The empirical findings, limitations, implications and areas for further research are discussed.

MNEs’ strategies in Central and Eastern Europe: key elements of subsidiary behaviour

Abstract * At the centre of the interface between the developmental needs of national industry and evolutionary processes in the MNEs' subsidiaries are knowledge-seeking and knowledge-generation processes. * Based on new survey evidence, we examine the strategies of MNE in Central and Eastern Europe (CEE). In particular, we investigate the knowledge characteristics of MNE subsidiaries in CEE by analysing the roles of subsidiaries, market orientation and sources of technology over time. Key Results * Initially market-seeking operations dominated in CEE, with little integration of CEE subsidiaries into global MNE networks. The relative scarcity of export-oriented efficiency-seeking operations in CEE can be explained by persistent high-levels of uncertainty in CEECs and resistance from MNEs' longer-established Western European manufacturing subsidiaries. * European MNEs pursue the most country-centred strategies while the Asian MNEs have the highest export-orientation. Also it is found that CEE subsidiaries in motor vehicle and mechanical engineering have the highest export-orientation to European Union markets. However we suggest that product differentiation using CEE creative capabilities (i.e. technology and engineering expertise) rather than cost-competitiveness, may ultimately secure a more sustainable and embedded entry into MNEs' wider European (or global) networks. * Host governments may consider targeted and coherent policies that reduce business uncertainties and, thus, may sway MNEs to locate higher value-added activities in their country. Introduction MNEs pursue a variety of strategic objectives when investing in Central and Eastern Europe (CEE), thus establishing different types of operations (Estrin/Hughes/Todd 1997, Mutinelli/Piscitello 1997), and interacting in different ways with the host economy. This paper examines which alternative strategies are being pursued by multinational enterprises (MNEs) in CEE and their implications for the processes of industrial transformation and economic development in CEE. The contributions to the host economy would greatly vary with the heterogeneity of MNEs' operations and evolutionary processes that emerge at subsidiary level. Our analysis thus aims to provide a fuller understanding of how MNEs contribute to sustainable economic development. At the centre of the interface between the developmental needs of the host-country economy and evolutionary processes in the MNEs' subsidiaries are knowledge-seeking and knowledge-generation processes. A major research concern is thus how MNEs contribute to knowledge accumulation by providing a creative component in the transformation of transition economies (Dunning 1994, Manea 2002, Meyer 2004). This study addresses these issues by analysing the characteristics of subsidiaries that may influence the nature and value of MNEs' contribution to economic development. Recent research has analysed MNE operations in CEE economies in terms of motivations for foreign investment and types of subsidiaries (Lankes/Venables 1996, Mutinelli/Piscitello 1997, Meyer 1998, Rojec 1994, Rojec/Svetlicic 1993, Estrin et al. 1997, Donges/Wieners 1994). We go beyond this literature by considering the contribution of foreign enterprises to transition economies as being caseor role-specific. Subsidiaries have different strategic roles in their MNE group and vary in many attributes and their business activities. In consequence, they differ in their interactions with the local environment and their contribution to economic development (Meyer 2004). The needs of transition economies have evolved in two distinct phases: 1) the fundamental restructuring of the industrial sector and 2) the post-transition phase with more steady changes. The second phase involves different challenges as firms and countries have to sustain international competitiveness by developing and exploiting dynamic sources of comparative advantage. …

An Exploratory Study of Internationalization Strategies of Emerging Malaysian Multinational Enterprises

ABSTRACT There is limited empirical research on the internationalization processes, strategies, organizations and operations of Asian Multinational Enterprises (MNEs) and particularly Malaysian MNEs. Drawing on secondary sources and data and specifically from 12 case studies of emerging Malaysian MNEs, this paper examines and analyses their internationalization strategies, including motivations, patterns and sources of competitive advantage. The findings indicate that the emerging Malaysian MNEs, while exhibiting characteristics such as that described in recent empirical studies, also suggest that different emerging strategies are being tried. The sustainability of these strategies, limitations of the paper and areas for further research are discussed.

The Economic Analysis of International Production/Distribution Networks in East Asia and Latin America: The Implication of Regional Trade Arrangements

This paper applies an economic approach to empirically investigate differences in inward foreign direct investment (FDI) patterns between East Asia and Latin America and discusses the implication of regional trade arrangements. International production/distribution networks in East Asia effectively utilize the new economic logic of fragmentation, agglomeration, and optimal internalization and seem to greatly contribute to economic development. The paper examines statistical data for international trade as well as the activities of Japanese and U.S. multinational enterprises (MNEs) and argues that international production/distribution networks, particularly in machinery industries, are extensively developed in East Asia while remaining immature in Latin America. The impact of regional trade arrangements is substantially different depending on whether international production/distribution networks have already been developed or not. Our findings suggest that the impact of FTAA on FDI in Latin America by East Asian MNEs could be either positive or negative, depending on the content of FTAA and accompanying policies. If differentials between intra-regional tariffs and MFN-based tariffs are kept large, import-substituting FDI from East Asia may stagnate or even decrease. With a proper policy package to nurture international production/distribution networks, on the other hand, FDI from East Asia could be accelerated and contributed to deeper integration of Latin America.

Toward a Geocentric Theory of Multinational Evolution: The Implications from the Asian MNEs as Latecomers

Despite their growing proliferation and importance, the multinational enterprises (MNEs) from the developing countries have not received adequate attention. Further, there is a growing concern with the validity of the extant MNE theories in the context of globalization and network. This paper seeks to address two questions: (1) how much can we apply the extant MNE theories (which are built on the evidence from the developed countries) to the MNEs from the developing countries as latecomers; and (2) how much can the evidence of the MNEs from the developing countries as latecomers offer to modify and enhance the extant MNE theories. The evidence of one longitudinal embedded case study shows that the extant MNE theories need modifications (so as to apply to the MNEs from the developing countries as latecomers) and enhancements (so as to better explain all MNEs). Also discussed are the significant implications for further theory building with regard to MNEs in the context of globalization and network.