Emerging Market Multinationals Research Articles

Emerging market multinationals’ embeddedness in Global South countries: an empirical study of Chinese MNEs in Peru

Purpose This paper aims to investigate how emerging market multinational enterprises (EMNEs) are integrating and expanding into other emerging market host countries, focusing on Chinese mining companies in Peru. Design/methodology/approach Adopting a qualitative approach, an in-depth analysis of two Chinese state-owned enterprises’ strategies was conducted, building on stakeholder theory and the business ecosystem perspective. Findings This study reveals a reliance on high-level political lobbying rather than localized engagement strategies. However, findings point to increasing grassroots resistance among local stakeholders, undermining EMNEs’ bargaining power. Originality/value This paper argues for a paradigm shift toward inclusive, cooperative “translocal governance” approaches as empowered communities gain voice. Key contributions include advancing theoretical understanding of changing stakeholder relationships and power configurations in emerging countries, underscoring the rising significance of microlevel sociocultural embeddedness for MNE success and highlighting practical imperatives for EMNEs to embark on rapid localization strategies in Latin America. By elucidating multilayered integration realities in Peru, this interdisciplinary study yields contextualized insights and enriches perspective on the conditions and pathways for EMNEs to build sustainability in Global South emerging market environments.

SUSTAINABILITY-ORIENTED INNOVATION AND CSR: A QUANTITATIVE RESEARCH IN BRAZILIAN MULTINATIONALS

Objective: The purpose of this study is to analyze the relationship between Sustainability-Oriented Innovation (SOI) and Corporate Social Responsibility (CSR) in Brazilian multinationals. Theoretical Framework: The theoretical framework provides relevant information on CSR and SOI, which forms the basis for the development of hypotheses. Method: To collect data, an e-survey was conducted with Brazilian multinationals operating in various industries and segments, resulting in 60 valid questionnaires. The data was analyzed through multivariate analysis, employing canonical correlation and multiple linear regression procedures. Results and Discussion: The results of the multivariate analysis empirically supported five hypotheses (h1, h2, h3, h4, and h5). However, the results did not support the hypothesis that predicted a positive correlation between SOI practices and CSR as a differentiation strategy. Research Implications: The practical and theoretical implications of this research are significant, particularly in shedding light on emerging market multinationals, with a specific focus on Brazilian companies. By specifically examining Brazilian multinationals, this research fills a crucial gap in the literature, offering insights into the unique challenges and opportunities faced by firms from an emerging market like Brazil. Originality/Value: The findings of this study provide valuable guidance for Brazilian multinational corporations seeking to enhance their CSR initiatives and SOI practices. By understanding the relationships between CSR, SOI, and other key variables, these companies can develop more effective strategies to navigate global markets while simultaneously addressing social and environmental concerns.

Emerging market multinationals and the politics of internationalization

Firms’ internationalization, the most essential topic in the international business discipline, have in recent years become highly entangled with political processes at multiple levels. Neither firm strategies and processes, nor IB theories and models have yet caught up with increasing politicization. In this paper, we pose three questions: why are firms increasingly affected by politics in their internationalization? How do firms respond to the increasing role of politics? And finally, how do theories considered foundational across IB research incorporate politics? We discuss how the resource-based view, transaction cost economics, institutional theory and agency theory relate to politics. Further, we identify eight predominant dimensions where firms are affected by politics. Finally, we suggest that the increasing role of politics can be ascribed not only to specific macro-level historical events but also to more fundamental micro-level transformations in prevalent institutional configurations of firms’ value adding activities.

Consumer response to the new normal: examining the role of anticipated recovery, smart governance and prosocial behavior in driving satisfaction

Purpose Drawing on the stimulus–organism–response framework, this study examined the environmental stimuli driving tourists' internal, or organismic, states. In addition, the authors investigated the association of the identified organismic variables with the response variables during the COVID-19 pandemic. Specifically, the study examined how the associations between tourists' anticipation of recovery and the national government's smart governance, on one hand, and tourists' desire to travel domestically, their attitude toward domestic travel and their willingness to exhibit prosocial behaviors, on the other, further drive the satisfaction they derive from domestic travel.Design/methodology/approach The authors used an online questionnaire to collect self-report, single-wave data from individuals residing in India, an emerging market (N = 421).Findings The findings demonstrate (1) the association of anticipated recovery on the desire to travel and prosocial behavior; (2) the association of smart governance on attitude (although negative); (3) the association of desire, attitude and prosocial behavior on satisfaction; and (4) the lack of any moderation effect for perceived severity.Originality/value This study is the first empirical study to investigate the impact of tourists' perceptions and dispositions and the efficacy of the national government on tourists' desire to travel domestically and on their satisfaction with domestic travel. The findings can help emerging market multinationals and global brands engage better with domestic consumers in emerging markets within the context of the current pandemic. In addition, the findings can help to prepare these players to handle future disruptions caused by global health contingencies.

Going digital EMNEs: The role of digital maturity capability

International Business (IB) has increasingly focused on born-digital multinationals, but less attention is being directed to traditional multinationals aiming to remain competitive by digitally transforming themselves (that is, achieving greater digital maturity). This phenomenon cannot be extrapolated from born digitals. This gap is deeper with emerging market multinationals (EMNEs), which find major challenges to joining the digital age. Recalling that strategically located subsidiaries are critical for EMNEs’ success, we ask: How do EMNEs pursue digital maturity and how do their subsidiaries contribute to this process? A capability-based view of multinational enterprises and relevant EMNE literature help us to conceptualize Digital Maturity Capability as a complex capability paramount to developing competitiveness in the digital age. Using survey data from 91 Brazilian multinationals, we found that EMNEs build elements of competitive advantage in modern markets through enhanced digital maturity while leveraging foreign subsidiaries for increasing value chain and ecosystem integration.We contribute to making the capabilities framework more relevant within IB and advance the analysis of going digital multinationals with the experience of EMNEs. Such results have practical implications for managers navigating the digital era's choppy waters.

Generous to a fault: Differential impact of CSR investments on financial gains in Indian market multinationals

To date, the extant Corporate Social Responsibility (CSR) literature has overlooked the performance consequences of different forms of CSR investments made by Emerging Market Multinational Corporations (EMNCs). Addressing this knowledge gap, and drawing on legitimacy theory, we examine the impact of external CSR investments (e.g., social and community philanthropic support activities) and internal CSR investments (e.g., working conditions, employee rights and equal employment opportunities) on financial performance of EMNCs, while also accounting for the moderating effects of internationalization location choices. We test our hypotheses on a panel consisting of 1513 unique Indian EMNCs, in the 2014–2019 time-period. On applying various estimation techniques, the findings reveal that both external and internal CSR investments are positively associated with financial performance of EMNCs, while the destination location of foreign investments and home-host geographic and institutional distance moderate these relationships. This study offers new empirical evidence on the financial implications of different types of CSR investments available to EMNCs and advances legitimacy theory by expanding its dimensional and contextual scope.

How does rapid internationalization explain emerging-market multinationals' innovation? The moderating role of organizational capacity

PurposeThe purpose of this study is to investigate the impact of rapid internationalization by emerging-market multinational enterprises (EMNEs) on their innovation performance. It also seeks to identify any potential moderating factors that could influence this relationship.Design/methodology/approachBy analyzing data from listed Chinese MNEs from 2012 to 2022, this study applies a negative binomial regression model to test the research hypotheses.FindingsThis study uncovers an inverted U-shaped relationship between the internationalization speed of EMNEs and their innovation performance. It also suggests that strong absorptive, learning and managerial capacities could play positive moderating roles in the effect of internationalization speed on EMNEs’ innovation performance.Originality/valueThis study highlights rapid global expansion, promoting new knowledge acquisition for EMNEs. However, due to time-compression dilemmas with limited EMNE firm-specific advantages, overly accelerated internationalization hinders learning effectiveness. Additionally, this study reveals the critical importance of three firm-specific capacities in EMNEs – absorptive, learning and managerial capacities – in efficiently assimilating newly acquired knowledge from foreign markets and enhancing their innovation performance through rapid internationalization.

Knowledge exploration in cross-border acquisitions: how does absorptive capacity matter?

Purpose This study aims to explore how the absorptive capacity of emerging market multinationals (EMNEs) facilitates increased acquirer performance in industry exploration and technology exploration cross-border acquisitions (CBAs). Design/methodology/approach The research context for this study is Brazilian EMNEs and their CBAs. The final database contains 101 CBAs. Findings The authors find that industry exploration strategies negatively affect financial performance, but technology exploration strategies have a positive effect. The acquirer’s absorptive capacity can exacerbate the negative effects, except in instances of technology exploration strategies, where there is a demonstrable benefit from the acquirer’s absorptive capacity. Originality/value The study contributes first by providing a more nuanced understanding of the effects of absorptive capacity on postacquisition performance, depending on the type of knowledge explored. Second, by drawing on EMNE learning perspectives, the authors demonstrate the versatility of absorptive capacity in emerging markets.

Do It Right the First Time? Exploring the First Cross-border Acquisition and Expansion Frequency of Emerging Market Multinationals

Abstract Do it right the first time! But, how? Current dialogue on the expansion of emerging market multinational enterprises (EMNEs) is pervasive. Nonetheless, it ought to have examined strategic attributes and the speed of implementing different strategies for their first venture. Drawing on the springboard perspective, this study tests the impact of EMNEs' first cross-border acquisition (CBA) strategy and speed on their consequential expansion frequency and performance. We also examine the boundary conditions of comparative nationalism between countries, in view of the resurgence of nationalism in an era of deglobalization. Findings reveal that EMNEs' rapid adoption of a focused strategy for their first CBA increases their expansion frequency, while the adoption of a conglomerate strategy decreases it. These relationships are affected in reverse by high comparative nationalism, and the performance consequences of expansion vary with firms using different strategies for their first attempt. This study enriches the EMNE literature and highlights the role of national ideologies in international business research.

Emerging market multinationals and international investment agreements

This study investigates the effects of international investment agreements (IIAs) on the internationalization decisions of emerging market multinationals (EMNEs). Drawing on the POLI advantage framework, we argue that bilateral investment treaties (BITs) add to the political and institutional capabilities of EMNEs, enhancing their OLI advantages in host countries. We identify two mechanisms through which BITs facilitate EMNEs’ internationalization: by offsetting political risk and by mitigating the informational asymmetries and transaction costs associated with investing in unfamiliar destinations. We probe the plausibility of our claims with data from an original survey of firms in four emerging economies and a larger sample of bilateral FDI flows from UNCTAD’s FDI/MNEs database. Our findings show a positive association between BITs and FDI from the South, especially in politically unstable and unfamiliar contexts. Apart from adding to the International Business literature on EMNEs, this study contributes to International Political Economy scholarship on FDI by highlighting the growing relevance of South-South IIAs.

Geopolitical risk and foreign subsidiary performance of emerging market multinationals

In recent years, enterprises have faced increasing uncertainty due to rising geopolitical risks. This paper examines the impact of geopolitical risk (GPR) in host countries on the performance of foreign subsidiaries of A-share-listed Chinese multinational enterprises (MNEs) from 2003 to 2020. The results show that the GPR of host countries negatively affects the foreign subsidiary performance of Chinese MNEs. The deteriorated local business environment acts as a channel for this negative relationship. Moreover, such a negative relationship is mitigated for listed firms with more international experience and senior executives with an overseas background, when the foreign subsidiaries do not operate in sensitive industries or when there is a better institutional environment in the host countries. This study extends the literature on how external uncertainty affects the performance of foreign subsidiaries of emerging market multinational enterprises. It also sheds light on the internationalization of firms through the management of international uncertainty.

Government Effectiveness, Institutional Distance, and Equity Ownership in Cross-Border Acquisitions by Emerging Economies: A Comparative Analysis

Our study enhances comprehension regarding the motivations behind cross-border acquisitions (CBMA) by Emerging Market Multinationals (EMNEs). This research explores the impact of both formal and informal institutional distance on equity ownership in emerging markets. Additionally, we posit that these direct correlations are more pronounced for EMNEs compared to Multinational Enterprises (MNEs). To validate these hypotheses, we compare the CBMA of firms based in developing countries with those in developed countries. Motivated by the need to better understand a prominent group of foreign acquirers, we examine acquisitions initiated by EMNEs over a 12-year period. We observe that acquirers from developing countries tend to hold greater equity share in targets located in more economically advanced nations, sharing cultural proximity. Our study’s empirical findings highlight the differential impact of economic distance on the equity share sought by acquirers based in emerging markets, contingent upon the level of government efficiency. Specifically, we note that this relationship shifts from a linear correlation in instances of low government efficiency to a curvilinear association in situations of high government efficiency. While the cultural distance seems to have a greater adverse effect on the degree of ownership taken in acquisitions for EMNEs compared to Emerging Market Multinationals (DMNEs). It lends support to the position that the context of institutions, and institutional theory, matter.

Does the legitimacy of countries influence the internationalization of emerging market multinationals

Legitimacy is fundamental to business internationalization and access to new markets. This variable is particularly important for emerging market multinationals (EMNEs) as they face numerous obstacles, including the information that consumers in the host country have about these companies in addition to the legitimacy of the country of origin. Therefore, this study tests whether home country information and legitimacy affect the legitimacy of EMNEs and consumer purchase intentions. Specifically, this research focuses on EMNEs of Chinese origin due to their rapid growth at the international level and in the fast fashion sector because of the change in the positioning of large brands in favor of sustainability. The model is validated through an empirical study of 261 regular Shein shoppers using PLS-SEM. The academic and managerial implications of this research clarify the antecedents and consequences of the legitimacy of EMNEs and provide recommendations for the management of EMNEs and business success.

An Institutional Perspective on Strategic Alignment of International Human Resource Management in Multinational Enterprises

ABSTRACT Multinational enterprises (MNEs) seek global alignment of international human resource management (IHRM) systems and practices for efficiency and control. Previous studies have provided conflicting evidence regarding the best approach for HR implementation across countries. Disparate institutional contexts in host countries may make MNE strategic IHRM alignment problematic. Adopting an institutional perspective, we offer a conceptual model which addresses these obstacles through the provision of a process approach solution. We extend the general MNE model to emerging market multinationals (EMNEs), highlighting why EMNEs differ from traditional MNEs in seeking SIHRM alignment. Implications for practice and future research are discussed.

Innovation Training and Entrepreneurial Climate in Emerging Market Multinational Corporations

Despite their innovation practices, Latin American companies seem to show low levels of corporate entrepreneurship. More research on corporate practices directed at infusing an entrepreneurial climate in the region is needed. This study draws on a recent theory that brings together configuration theory with prior corporate entrepreneurship conceptualizations. With this study, the authors test whether innovation training programs increase the entrepreneurial climate of multinational corporations from Latin American emerging markets. The authors of this study collected data from a sample of 2,796 employees of a Colombian multinational, divided into two groups of trained and untrained staff. They hypothesise that the corporate entrepreneurship climate would be higher in the trained group. They specify and validate a series of multigroup structural equation models to test their hypothesis. The results of this study suggest that some dimensions of entrepreneurial climate are higher when companies implement innovation programs.

Emerging market multinationals’ liability of outsidership

This study investigated how the liability of outsidership affects emerging-market multinationals. We argue that besides lack of access to local networks, lack of access to leadership positions in global value chain networks is another possible source of the liability of outsidership, and it affects emerging market firms more than multinationals from developed countries. Accordingly, multinationals from emerging markets are more likely than those from developed countries to exit from a foreign market in which they had invested. Allying with technology partners and developed-country non-technology partners could help EMNEs overcome the LOO. Those findings are based on a study of mobile money services provided by multinationals from both emerging markets and developed countries during the period 2001–2022.

The Role, Nature and Contribution of Indian Emerging Market Multinational Companies in African Countries

This article examines factors pertaining to the development of Indian emerging market multinational companies (EMNCs) in African countries. India is a member of the BRICS grouping of developing countries, the others being Brazil, China, Russia and South Africa. Therefore, understanding its role, scale and dynamics of internationalising in the African context is particularly important. The following key areas are examined: the historical and socio-economic context, internationalisation strategies of Indian MNCs in African countries, home and host country factors, labour markets in host countries and human resource management (HRM) approaches of selected Indian EMNCs in particular African countries. Most work on international business and international HRM in Africa focuses on the Sino-Africa nexus. Both China and India are members of the BRICS grouping but have followed different trajectories in internationalising in the African context. This analysis helps fill a gap by evaluating the Afro-Indian relationship in business, particularly EMNCs from India. The analysis finds the following abiding themes in the historical connections and relationships of Indian EMNCs: the role of family-owned businesses, human resource development and long-term host country commitment.

Multilatinas’ foreign divestment and host country institutional uncertainty: is there a best entry strategy?

PurposeThis paper aims to investigate the divestment behavior of emerging market multinationals from Latin America – multilatinas – by examining how their foreign market entry decision impacts the likelihood of subsidiary divestment.Design/methodology/approachThe hypotheses are tested using Cox’s proportional hazard rate model in a longitudinal database of Brazilian multinational companies established in 43 countries.FindingsResults indicate that these subsidiaries can thrive in environments that bear similarities to their home country, being less likely to divest in institutionally weak countries. Contrary to developed country multinationals, these firms benefit from foreign entry decisions that entail handling partnerships abroad; thus, wholly-owned greenfield (WOGF) investments have a higher likelihood of being divested.Originality/valueTo the best of the authors’ knowledge, this paper is the first to analyze foreign divestment from multilatinas, accounting for how entry mode strategy and host country institutions may impact these firms’ de-internationalization.

Strategi Penetrasi Pasar Global: Eksplorasi Bibliometrik tentang Pemasaran Internasional, Mode Masuk Pasar, dan Strategi Ekspor

The global business landscape is characterized by rapid change and increasing complexity. In this dynamic environment, understanding firms' strategies to penetrate international markets is crucial. This study conducts a comprehensive bibliometric analysis to uncover the intellectual landscape of global market penetration strategies in international marketing, market-entry, and export strategies. Through careful examination of influential authors, essential works, research clusters, and emerging trends, this study offers valuable insights into the state of the field. Leading authors such as Ravi Ramamurti, Mike W. Peng, and Jean-François Hennart have significantly shaped our understanding of emerging market multinationals and internationalization strategies. Their seminal works have challenged conventional paradigms and encouraged innovative thinking. Identifying research clusters underscores the multifaceted nature of global market penetration, covering market entry modes, internationalization theory, and emerging market dynamics. Emerging digitalization, e-commerce, and sustainability trends highlight the ever-evolving international marketing landscape. The implications of this analysis extend to researchers, educators, policymakers, and practitioners, providing valuable guidance for future research, curriculum development, policy formulation, and strategic decision-making in the global arena.

Does corporate social responsibility affect the performance of cross-border M&A of emerging market multinationals?

How can emerging market multinationals (EMMs) overcome the outsider disadvantage and thus improve performance of cross-border Mergers and acquisitions(M&A)? This article discussed that corporate social responsibility(CSR) has influence on performance of cross-border M&A under regulation of institutional distance, to address this inquiry based on the theory of social license to operate, We empirically demonstrate that:(1) corporate social responsibility has remarkable forward correlation with completion rate of cross-border M&A, while corporate social responsibility has a strong negative influence on the length of time spent on completing cross-border M&A, indicating corporate social responsibility is beneficial to enhance the performance of cross-border M&A; (2) Large institutional distance between cross-border M&A parties can diminish the strong positive influence of corporate social responsibility on performance of cross-border M&A of EMMs.