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Is production the core competence for the internationalization of emerging country firms?

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  • Fleury, Afonso
  • Fleury, Maria Tereza Leme
  • Borini, Felipe Mendes
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    Abstract

    The rise of new multinationals in countries like Brazil provides an opportunity to revisit and carefully construct theories of how firms internationalize, a topic on which extant theory is weak. Brazilian firms are “infant multinationals”, unlike developed country firms that are “mature multinationals”. They are also internationalizing in a very different global context, and can do so on the basis of different competitive advantages than multinationals that came before. Therefore, this study aims at creating subsidies for theory building about early-stage internationalization. Emerging country firms have Production competences as main competitive asset to internationalize, what reflects their competitive positioning in home markets and their entry strategy in international markets. In the case of early-entrants – Western multinationals in the 1950s and Japanese in the 1980s – the Production competence played a key role for successful internationalization. Thus, the focus of the study is the role that the Production competence plays in the internationalization of late-entrants, the emerging country multinationals. The research design considers not only the position of the headquarters but also the initiatives of the subsidiaries and the dynamic interplay between both. The paper allows a better understanding of internationalization processes and the role of Production, when firms start building their own international networks. It brings relevant insights about the paths that are being followed by emerging country multinationals, the difficulties they find, the solutions they develop. These are important inputs not only for new theory building but also for managerial practice.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Journal of Production Economics.

    Volume (Year): 140 (2012)
    Issue (Month): 1 ()
    Pages: 439-449

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    Handle: RePEc:eee:proeco:v:140:y:2012:i:1:p:439-449

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    Web page: http://www.elsevier.com/locate/ijpe

    Related research

    Keywords: International operations management; International production management; Competence management; Emerging country multinationals; Brazilian multinationals; Subsidiary role;

    References

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    1. Nagesh Kumar & Alka Chadha, 2009. "India's outward foreign direct investments in steel industry in a Chinese comparative perspective," Industrial and Corporate Change, Oxford University Press, vol. 18(2), pages 249-267, April.
    2. Nagesh Kumar & Alka Chadha, 2009. "India’s Outward Foreign Direct Investments in Steel Industry in a Chinese Comparative Perspective," Trade Working Papers 22784, East Asian Bureau of Economic Research.
    3. Federico Bonaglia & Andrea Goldstein, 2007. "Strengthening Productive Capacities in Emerging Economies through Internationalisation: Evidence from the Appliance Industry," OECD Development Centre Working Papers 262, OECD Publishing.
    4. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan, vol. 38(4), pages 481-498, July.
    5. Farok J. Contractor & Vikas Kumar & Sumit K. Kundu & Torben Pedersen, 2010. "Reconceptualizing the Firm in a World of Outsourcing and Offshoring: The Organizational and Geographical Relocation of High-Value Company Functions," Journal of Management Studies, Wiley Blackwell, vol. 47(s2), pages 1417-1433, December.
    6. Young, Stephen & Tavares, Ana Teresa, 2004. "Centralization and autonomy: back to the future," International Business Review, Elsevier, vol. 13(2), pages 215-237, April.
    7. Holweg, Matthias & Reichhart, Andreas & Hong, Eui, 2011. "On risk and cost in global sourcing," International Journal of Production Economics, Elsevier, vol. 131(1), pages 333-341, May.
    8. Fleury, Afonso & Leme Fleury, Maria Tereza, 2009. "Understanding the strategies of late-movers in International Manufacturing," International Journal of Production Economics, Elsevier, vol. 122(1), pages 340-350, November.
    9. Gary A Knight & Daekwan Kim, 2009. "International business competence and the contemporary firm," Journal of International Business Studies, Palgrave Macmillan, vol. 40(2), pages 255-273, February.
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    Cited by:
    1. Lorentz, Harri & Kittipanya-ngam, Pichawadee & Singh Srai, Jagjit, 2013. "Emerging market characteristics and supply network adjustments in internationalising food supply chains," International Journal of Production Economics, Elsevier, vol. 145(1), pages 220-232.
    2. Fleury, Afonso & Fleury, Maria Tereza Leme, 2014. "Local enablers of business models: The experience of Brazilian multinationals acquiring in North America," Journal of Business Research, Elsevier, vol. 67(4), pages 516-526.

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