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An extended dual economy model

An extended dual economy model PurposeThe purpose of this paper is to introduce a new theoretical framework called the “extended dual economy model”. Based on the seminal work of Lewis (2014), the author uses it to explain the sectoral specialisation of home countries and their firms and MNEs.Design/methodology/approachThe paper is multi-disciplinary and entirely conceptual, with cool ideas but very few numbers and equations.FindingsEmerging economies exhibit a “duality” in their economic structure that reflects itself in two largely different sets of location (L) characteristics. They are simultaneously home to both “traditional” sectors, which are resource and labour intensive, as well as “modern” sectors, which are knowledge and capital intensive, each of which can be analysed as having two sub-economies. These different sets of location advantages shape the firm-specific advantages of EMNEs and their FDI.Research limitations/implicationsThis analysis helps to underline what shapes the ability of home countries to “emerge”, and the ability of their firms to grow and their MNEs to become internationally competitive. Few EMNEs can thrive in international markets without concurrent growth in their domestic markets. Maintaining the appropriate location assets to optimally support both types of sectors is costly. Each type of sub-economy requires different kinds of support sectors, infrastructure and policies, with little overlap. Weaknesses in its home country L advantages hinder the long-term competitiveness of their EMNEs.Practical implicationsFew EMNEs can thrive in international markets without concurrent growth in their domestic markets. Weaknesses in its home country L advantages hinder the long-term competitiveness of their EMNEs.Originality/valueThe extension of the Lewisian dual economy model allows a number of interesting new insights because it allows us to consider firms, non-firms, informality and the bottlenecks associated with promoting knowledge-intensive sectors in a globalised world. It emphasises structural change, and the need to manage pathways and effectively channel growth. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Emerging Markets Emerald Publishing

An extended dual economy model

Narula, Rajneesh
International Journal of Emerging Markets , Volume 13 (3): 17 – Jul 16, 2018
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References (63)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1746-8809
DOI
10.1108/IJoEM-10-2017-0375
Publisher site
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Abstract

PurposeThe purpose of this paper is to introduce a new theoretical framework called the “extended dual economy model”. Based on the seminal work of Lewis (2014), the author uses it to explain the sectoral specialisation of home countries and their firms and MNEs.Design/methodology/approachThe paper is multi-disciplinary and entirely conceptual, with cool ideas but very few numbers and equations.FindingsEmerging economies exhibit a “duality” in their economic structure that reflects itself in two largely different sets of location (L) characteristics. They are simultaneously home to both “traditional” sectors, which are resource and labour intensive, as well as “modern” sectors, which are knowledge and capital intensive, each of which can be analysed as having two sub-economies. These different sets of location advantages shape the firm-specific advantages of EMNEs and their FDI.Research limitations/implicationsThis analysis helps to underline what shapes the ability of home countries to “emerge”, and the ability of their firms to grow and their MNEs to become internationally competitive. Few EMNEs can thrive in international markets without concurrent growth in their domestic markets. Maintaining the appropriate location assets to optimally support both types of sectors is costly. Each type of sub-economy requires different kinds of support sectors, infrastructure and policies, with little overlap. Weaknesses in its home country L advantages hinder the long-term competitiveness of their EMNEs.Practical implicationsFew EMNEs can thrive in international markets without concurrent growth in their domestic markets. Weaknesses in its home country L advantages hinder the long-term competitiveness of their EMNEs.Originality/valueThe extension of the Lewisian dual economy model allows a number of interesting new insights because it allows us to consider firms, non-firms, informality and the bottlenecks associated with promoting knowledge-intensive sectors in a globalised world. It emphasises structural change, and the need to manage pathways and effectively channel growth.

Journal

International Journal of Emerging Markets – Emerald Publishing

Published: Jul 16, 2018

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