Emerging Economy MNEs: How does home country munificence matter?

Abstract

Multinational Enterprises (MNEs) from emerging economies (EEs) are establishing operations in advanced economies (AEs), apparently departing from traditional models of internationalization. We explore an under-explored difference between EE MNE and their AE counterparts concerning their country of origin: EEs have less munificent business environments. This leads EE MNEs to make different location choices than AE MNEs when entering AEs, specifically because they are more deterred by barriers to entry. We therefore predict EE MNEs to be relatively more deterred by distance and weak intellectual property protection and relatively more attracted by diaspora of migrants and by markets. Our empirical results are consistent with these predictions.

A comparative analysis of location and non-location-bounded strategic asset seeking in emerging and developed market MNEs: An application of new internalization theory

“…Orbis provides data on over 140 million companies worldwide. It is increasingly used in International Busines research, owing to its wide and rich international coverage (Estrin et al, 2018;Jones & Temouri, 2016). We rely upon it extensively to gather firm-level details of the acquiring firms which we use for our main control variables.…”

“…If this interpretation is correct, it is worth briefly reflecting on the implications for the many studies that have to date that remarked upon the strong SAS orientation of EMNEs. Among these studies there are actually very few DMNE/EMNE comparisons, with several notable exceptions (Estrin et al, 2018;Jindra et al, 2016;Sutherland, Anderson, & Hertenstein, 2017). Jindra et.…”

“…Secondly, and perhaps more interestingly, what are the properties of the strategic assets EMNEs actually seek and how do their location-boundedness properties influence EMNE SAS behaviors? While the first question has received considerable conceptual interest, comparative empirical testing of EMNE SAS intensity with respect to DMNEs remains under-researched, with a few notable exceptions (Estrin, Meyer, & Pelletier, 2018;Jindra, Hassan, & Cantner, 2016). As regards the second question, we still know comparatively little about the properties of the strategic assets sought, or whether and how these may differ between EMNEs and DMNEs.…”

Age Matters: The Contingency of Economic Distance and Economic Freedom in Emerging Market Firm’s Cross-Border M&A Performance

“…Externally, older EMFs with reputation of operating under the older regime in their home country might experience resistance from host country stakeholders during post-acquisition integration (Ellis et al 2015). Especially in the recent years, many emerging economies experience rapid economic growth and the home markets of EMFs are able to provide a more munificent business environment (Estrin et al 2018). Likewise, the young South African firms are born in an era after Apartheid and the institutional environment is more conducive for a well-connected global economy, in which young South African firms are more likely to have a global orientation to capitalize their cross-border mergers and acquisition and improve the overall firm performance due to the linkage, leverage and learning (LLL) benefits (Matthew 2006).…”

A new approach to data access and research transparency (DART)

“…3. Data used under license from a commercial data provider: Many studies in finance, economics, and strategy use commercial databases such as those of Bureau van Dijk (e.g., Estrin, Meyer, & Pelletier, 2018;Useche, Miguelez, & Lissoni, 2019), Toyo Keizai (e.g., Delios & Beamish, 1999;Stallkamp et al, 2018) and WIND (a database of Chinese firms used by e.g., Liang, Ren, & Sun, 2015), to mention a few. In such cases, the copyright is held by a privately owned organization that provides access to its data by subscription to authors' universities.…”