EM MNEs Research Articles

Is Ambidexterity the Strategy for Navigating the Post-Pandemic Business World? An Exploration of Ambidexterity as a Survival Mechanism for Firms

To be or not to be? - in business - ‘to plan ahead or to respond to the immediate ever-changing situation?’ The key to business survival, as O’Reilley & Tushman (2008) point out, is a company’s ability to engage in both ‘advantage’ and ‘opportunity’ seeking activities simultaneously - ambidexterity. Ambidexterity is a “unique strategic behavior of emerging market multinational enterprises (EM MNEs)” (Luo & Rui, 2009, p. 49). Ambidexterity of strategy showcased by EM MNEs can serve as a blueprint for survival of global businesses facing seismic shifts in the long and short-term environments. Exploring ambidexterity hinges on finding balance, to survive and thrive - traditional and innovative receive unequal focus but duality of focus. Ambidexterity can provide a framework to generate resilient behaviors to face challenging times (Stokes et al., 2018; Weik, 1995). An ambidextrous strategy, paradoxical thinking, planning, and actions will have to be engaged to navigate the way forward. Resulting in overarching questions: does strategic ambidexterity improve the firm's response to business disruptions, and will ambidexterity ensure the firm's competitive advantage and survival?

International ambidexterity and innovation performance: The moderating role of the host country's institutional quality

Organizational ambidexterity has been employed in the study of international business. Existing studies advocate an ambidextrous internationalization strategy for multinational enterprises in emerging markets (EM MNEs). However, the performance effect and moderating mechanism of international ambidexterity have not been fully explored yet. This study expands the combinative view of organizational learning and institutional perspective, and examines the impact and moderating mechanism of international ambidexterity on firm performance based on 387 Chinese multinationals. This study adopts the questionnaire survey method to obtain the research sample and tests the relationships among variables through multiple regression analysis. The conclusions indicate that both the balanced and combined dimensions of international ambidexterity positively impact innovation performance. Additionally, EM MNEs operating in countries with well-developed institutions are more innovative than those operating in countries with underdeveloped institutions. This study not only promotes the development of internationalization and institutional theories but also guides managers of EM MNEs to formulate internationalization strategies.

Internationalization of emerging economies: Empirical investigation of cross-border mergers & acquisitions and greenfield investment by Chinese firms

This study incorporates the eclectic paradigm and institutional theory to examine the key determinants of Chinese firms’ cross-border mergers and acquisitions (M&As) and greenfield (GF) investment in advanced economies (AEs) and developing economies (DEs) during the period 2003–2016. It uses a negative binomial regression model. In terms of M&As, our findings are consistent with the growing theoretical literature on emerging market multinational enterprises (EM MNEs). However, Chinese firms’ GF investments in AEs and DEs show results that are inconsistent with predictions, which means that research on GF investment requires more scrutiny and in-depth analysis. Although both economic and institutional factors affect Chinese firms’ location strategies, institutions tend to play a more dynamic role in shaping the location decisions for Chinese GF investments, implying that institutional context has a greater moderating effect on the link between investment motives and GF activity. In a nutshell, one should be cautious in generalizing Chinese cross-border M&A deals to GF investments or other entry modes.

Escaping from institutional weakness by EM-MNEs: the role of firms’ resources vulnerability

PurposeHow does emerging market multinational enterprises’ (EM MNEs) resource vulnerability to domestic institutional weakness influence the escapist outward foreign direct investment (OFDI)? This study aims to focus on how varying qualities of technological resources make EM MNEs vulnerable to institutional weakness at home and when such a vulnerability triggers escapist OFDI.Design/methodology/approachA mix of primary and secondary data is used to study evidence of escapist OFDI in the case of multilatinas. Structural equation modelling and hierarchical regressions were applied to test the hypotheses.FindingsDomestic institutional weakness triggers escapist OFDI only when EM MNEs’ resources are vulnerable to institutional pressures. Technological leadership increases the vulnerability of EM MNEs to the pressure of institutional weaknesses at home, which, in turn, motivates escapist OFDI.Originality/valueIn discussing the role of firm resources and their vulnerability to institutional weakness, a mechanism is proposed to shed light on how EM MNEs transform the general country framework of the institutional environment into the specific decision to escape via OFDI.

The influence of motivations on international location choice in least developed, emerging and developed countries: evidence from Chinese MNEs

PurposeThis research aims to assess variations of motivations when studying international location decisions. In particular, this study aims to assess the influence of diverse motivations – seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints – as determinants of the international location choice of emerging market multinational enterprises (EM MNEs) entering least developed, emerging, and developed countries.Design/methodology/approachThe authors develop a set of hypotheses based on the ownership–location–internalization framework and complement it with an institutional perspective. The conceptual model posits that the different internationalization motivations (seeking technology, seeking brand assets, seeking markets, seeking resources and escaping institutional constraints) will impact the location choice of EM MNEs in developed economies, emerging markets or least developed countries. This study uses the 2013 survey data collected by the China Council for the Promotion of International Trade and the Asia Pacific Foundation of Canada. The final sample of analysis of this research includes 693 observations.FindingsAfter controlling for several variables, two-stage Heckman regressions show there is a variation of motivations when EM MNEs enter least developed countries, emerging markets and developed economies. EM MNEs are motivated to enter least developed countries to seek markets and resources. Conversely, those firms enter developed countries in their search for technological assets and to escape institutional constraints at home. While the present study findings show a clear difference in the motivations that lead to location choice in least developed vs developed countries, the results are not as clear for location in other emerging countries.Research limitations/implicationsThe paper offers empirical support for the importance of motivations as crucial determinants of location choice.Originality/valueThis paper provides a detailed quantitative study on the internationalization location choice of EM MNEs based on their motivations. Though theoretical models underscore the importance of motivations, we know very little about how, in practice, motivations drive location choice. This study contributes to the international location choice literature a deeper understanding of how diverse motivations drive choices of expansion into developed economies, emerging markets or least developed countries.

Firm-specific advantages: a comprehensive review with a focus on emerging markets

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.

Linking Global Value Chain to FDI Establishment Mode of Emerging Market Multinational Enterprises

This study draws upon and extends the global value chain (GVC) perspective to examine the establishment mode of foreign direct investment (FDI) of emerging market multinational enterprises (EM MNEs). It addresses how FDI establishment mode is influenced by the value chain extension strategy of EM MNEs. The empirical analysis of 605 FDIs made by Chinese MNEs from 2007 to 2015 shows that EM MNEs are more likely to choose acquisition over greenfield investment if they pursue vertical value chain extension through FDI. Further, EM MNEs pursuing upstream extension of the value chain are more likely to choose acquisition over greenfield investment than those focusing on downstream extension. In addition, the likelihood of EM MNEs choosing acquisition over greenfield investment is greater if they pursue vertical value chain extension in culturally more distant countries.

International ambidexterity in firms' innovation of multinational enterprises from emerging economies: an investigation of TMT attributes

PurposeExtant research has integrated ambidexterity perspective into international business studies and calls for emerging market multinational enterprises (EM MNEs) to implement exploration and exploitation activities simultaneously in foreign markets. However, less attention has been paid to empirically test whether and how international ambidexterity can benefit the innovation performance of EM MNEs. Based on the data of international manufacturing firms in China, this paper explores the relationship between international ambidexterity and innovation performance and investigates four contingency factors of top management team (TMT): two external resource accumulation elements (i.e. TMT business ties and TMT political ties) and two internal resource integration elements (i.e. TMT contingency rewards and TMT social integration).Design/methodology/approachThe author conducts multiple hierarchical linear regression analysis to test the hypothesis by collecting survey data from 227 MNEs from several Economic Development Zones located in Zhejiang province in China.FindingsThe results show that international ambidexterity is positively related to innovation performance, and the international ambidexterity–innovation performance relationship is amplified when TMTs build strong ties with external business partners and political departments, when EM MNEs link top managers' income to team collective performance and create a highly social integrated TMT.Originality/valueThe results contributes to answer the question that how well EM MNEs will succeed and enrich the context specificity of international ambidexterity. The findings also help us better understand the inconsistent empirical findings in organizational ambidexterity by uncovering the contingency role of several TMT attributes.

How GVC division affects cross-border M&A of Chinese Firms？

With the political development and deepening trade liberation, many emerging market countries have been deeply involved in global value chains (GVCs). Emerging market multinational enterprises (EM MNEs) and their cross-border mergers and acquisitions (MA (2) Heterogeneity is found in the above relationship. Compared with the cross-border MA (3) Capability, competitivity and the need of acquiring strategic assets have a mediate effect on the above relationship.

R&D internationalization, product diversification and international performance for emerging market enterprises: An empirical study on Chinese enterprises

One motivation behind R&D internationalization for emerging market multinationals (EM MNEs) is to expand international markets. This paper analyzes whether the R&D internationalization of EM MNEs contributes to an improvement in international performance measured by foreign sales as a percentage of total sales (FSTS). Using panel data on China's listed companies, this paper introduces more scientific and normative indicators for measuring R&D internationalization in terms of geographic distribution (breadth) and overseas investment (depth). The results reveal an inverted U-shape relationship between R&D internationalization and international performance that is initially positive and eventually becomes negative. Product diversification has a significant moderating effect on the relationship between R&D internationalization breadth and international performance.

The Soft Side of Management and EM MNEs’ Entry Mode Decisions: Acquisition vs Greenfield

Emerging Market Multinational Enterprises (EM MNEs) mainly differ with their traditional peers regarding accelerated pace of EM MNE internationalization to overcome latecomer issues. Unfortunately,...

When Are Emerging Market Multinationals More Risk-taking?

It is recognized that many emerging market multinationals (EM MNEs) are risk-taking or radical when undertaking outbound FDI. Risk-taking, however, is profoundly endogenous and therefore it is misl...

The impact of OFDI on firm innovation in an emerging country

This study investigates whether and to what extent EM MNEs employ OFDI for knowledge-seeking and knowledge-integration purposes to improve their innovation capability at home. Extending previous studies that have identified the knowledge-seeking motives and also provided some evidence for their validity, our study aims to examine how such OFDI can benefit the innovation performance of EM MNEs at home. Using survey data from a sample of manufacturing firms in China, we demonstrate that OFDI is positively related to innovation performance. We also find that the positive relationship between OFDI and innovation performance is stronger when foreign firms have acquired an ownership interest in an EM MNE and when they have higher R&D intensity. Finally, theoretical and managerial implications are discussed.

The impact of OFDI on firm innovation in an emerging country

This study investigates whether and to what extent EM MNEs employ OFDI for knowledge-seeking and knowledge-integration purposes to improve their innovation capability at home. Extending previous studies that have identified the knowledge-seeking motives and also provided some evidence for their validity, our study aims to examine how such OFDI can benefit the innovation performance of EM MNEs at home. Using survey data from a sample of manufacturing firms in China, we demonstrate that OFDI is positively related to innovation performance. We also find that the positive relationship between OFDI and innovation performance is stronger when foreign firms have acquired an ownership interest in an EM MNE and when they have higher R&D intensity. Finally, theoretical and managerial implications are discussed.

Emerging Market MNEs: Qualitative Review and Theoretical Directions

Abstract The growth of emerging market multinational enterprises (EM MNEs) has enriched existing international business theories but conveyed also new puzzles and questions for these theories and perspectives. To synthesize what we know and what we do not concerning international expansion of EM MNEs, we use the qualitative content analysis method, systematically reviewing 166 articles from 11 leading IB and management journals published during the period of 1990–2014. Our review examines five major areas, including theoretical foundations, major topics, research methods, country studied, and leading authors. Our review shows a strong and growing momentum of EM MNE research over the past 25 years that has tackled a variety of topics by IB scholars who are geographically diversified. To further advance future research on EM MNEs, we submit several new directions, comprising comparative and competitive (dis)advantages, process of international catch up, institutional complexity, heterogeneity and typology of EM MNEs, and host and home country links and global orchestration.

Accelerate or delay? The consequences of big step internationalization

This study tries to extend the internationalization theory by investigating the big step internationalization that is majorly selected by EM MNEs in recent years. I contend that the conventional wisdom does not consider the risk of being a late mover in the face of increased global competition. Using data on Chinese listed firms, I find that big step internationalization in the early stage accelerate the speed of subsequent FDI expansion, and this effect is more salient for firms choose acquisitions as their entry mode and have strong political connections with home country government. However, the board of directors’ international experience negatively moderates this effect.

Entry mode and emerging market MNEs: An analysis of Chinese greenfield and acquisition FDI in the United States

A growing theoretical literature on emerging market MNEs argues they use aggressive acquisitions, often to psychically distant, developed host countries, to obtain strategic assets. The use of acquisitions as the dominant entry mode for strategic asset seeking, therefore, stands at heart of current EM MNE theorizing. To date, however, systematic empirical testing of the motivations for different entry modes by EM MNEs is limited. We address this gap by exploring the motivations for Chinese greenfield and acquisition investments in the United States. Our results are broadly supportive of the growing theoretical literature on EM MNEs, arguing acquisitions are the primary mode of strategic asset seeking in developed markets. We also find state ownership impacts strategic assets seeking and strategic asset seeking intensified in the post global financial crisis period.

International entrepreneurship and information technology strategies of the multinational enterprises from emerging markets

Traditional foreign direct investment FDI theories fail to provide a theoretical framework for international entrepreneurship IE and internationalisation strategies IS of multinational enterprises from emerging markets EM MNEs that strive to acquire competitive advantages through dynamic international expansion. EM MNEs share certain features of IS in common: springboard, dynamic internalisation, technological catch-up, and knowledge exploration. Furthermore, innovation for creating new products and production methods led by contemporary EM MNEs was and is the outcome of their pursuit of externally oriented and knowledge-seeking, dynamic opportunity-seeking, and agile mimic IE.

A Dialectical Process View of Cultural Diversity and Geographic Diversity for Emerging Market MNEs

We investigate input states, outcome states, and necessary conditions in the process by which diversity improves performance in emerging market multinational enterprises (EM MNEs). We focus on geog...

International Springboard by Emerging Market Enterprises: A Contextual Perspective

The springboard view toward emerging market multinationals (EM MNEs) has elucidated why and how EM MNEs use international expansion as a strategic springboard to acquire critical capabilities in order to compensate for their competitive disadvantages and to catch up with advanced country MNEs in order to mitigate their liability of lateness. To extend this view, we suggest that EM MNEs are highly heterogeneous in the extent to which they do and can internationally springboard. Springboarding is particularly affected by the availability of countries offering rich prospects for strategic asset and opportunity seeking. As EM MNEs face different institutional and resource constraints at home, they differ in their pressure to springboard overseas. Further, the extent to which EM MNEs form a strong organizational platform for internationalization and connect their internationally dispersed units to leverage acquired knowledge and resources strengthens their capability to initiate international springboarding, as well as their motivation to emphasize it further. Our analysis of archival and survey data of senior executives at the headquarters of 191 EM MNEs from China provide evidence for the contextual embeddedness of international springboard in these environmental and organizational conditions.