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The competitiveness of emerging country multinational enterprise

The competitiveness of emerging country multinational enterprise PurposeThis paper aims to conduct a theoretical enquiry into the questions as to whether emerging country multinationals’ competitiveness derives from country-specific advantage (CSA) or firm-specific advantages (FSA). The case of China is also examined.Design/methodology/approachCSAs and FSAs are examined both in theory and in the specific case of China as explicators of outward foreign direct investment from emerging countries.FindingsFSAs and CSAs are found to be imprecise explanatory mechanisms to explain the competitiveness of emerging country multinationals. The examination of imperfections in emerging markets and in global markets and the internalisation responses of firms in different contexts is found to be a superior explanation of the financial flows classified as “outward direct investment”.Originality/valueInternalisation theory requires a focus on mechanisms to convert home country attributes into competitive advantages and suggests that FSAs are context dependent, ephemeral and subject to negation by the competitive actions of rival firms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Competitiveness Review: An International Business Journal incorporating Journal of Global Competitiveness Emerald Publishing

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1059-5422
DOI
10.1108/CR-03-2016-0017
Publisher site
See Article on Publisher Site

Abstract

PurposeThis paper aims to conduct a theoretical enquiry into the questions as to whether emerging country multinationals’ competitiveness derives from country-specific advantage (CSA) or firm-specific advantages (FSA). The case of China is also examined.Design/methodology/approachCSAs and FSAs are examined both in theory and in the specific case of China as explicators of outward foreign direct investment from emerging countries.FindingsFSAs and CSAs are found to be imprecise explanatory mechanisms to explain the competitiveness of emerging country multinationals. The examination of imperfections in emerging markets and in global markets and the internalisation responses of firms in different contexts is found to be a superior explanation of the financial flows classified as “outward direct investment”.Originality/valueInternalisation theory requires a focus on mechanisms to convert home country attributes into competitive advantages and suggests that FSAs are context dependent, ephemeral and subject to negation by the competitive actions of rival firms.

Journal

Competitiveness Review: An International Business Journal incorporating Journal of Global CompetitivenessEmerald Publishing

Published: May 15, 2017

References