Do we need different frameworks to explain infant MNEs from developing countries?
Narula, Rajneesh (2011). Do we need different frameworks to explain infant MNEs from developing countries?. UNU-MERIT.
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Author Narula, Rajneesh Title Do we need different frameworks to explain infant MNEs from developing countries? Publication Date 2011 Publisher UNU-MERIT Abstract Applying extant IB theory, I argue that initial firm internationalisation is shaped by the interdependence and dynamic interaction between its O assets and the L assets of its home location. Regardless of nationality, the initial O assets of an infant MNE tend to be constrained by the L assets available to them, rather than by their strategy. I also contrast the modus operandi of developing country (DC) infant MNEs with those from advanced economies, highlighting the similarities and differences. The O assets of DC MNEs are largely determined by home country influences. Advanced economy MNEs have a larger set of L assets to draw from, because a wider variety of non-home country influences exist. Strategy and host countries begin to play a greater role once MNEs have moved past the nascent stage. I also take a look at the changes due to globalization and how it has affected the propensity of firms to internationalise. I argue that successful firms (regardless of nationality) will increasingly explore internationalisation, but the basic pre-condition - that of possessing competitive O assets - remains the same. There is also no reason to believe that this is likely to happen disproportionately from the developing countries. Keyword FDI
MNEs
Eclectic paradigm
Developing countries
Emerging economies marketsJEL F23
L52
O14
O19Copyright Holder UNU-MERIT Copyright Year 2011 -
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