Toward a Renewed Stages Theory for BRIC Multinational Enterprises? A Home Country Bargaining Approach

The recent emergence of a number of high-profile multinational enterprises (MNEs) from emerging markets has triggered considerable research and debate on how to understand and appraise this phenomenon. This is notwithstanding the fact that in relative terms, measured as a share of total international foreign direct investment (FDI), the magnitude of the phenomenon remains relatively modest. The challenge for empirical research includes the question of whether the strategies and motives for the inter-nationalization of these MNEs can be considered fundamentally different from the strategies of firms from developed countries (Luo and Tung 2007), or whether their ownership advantages are fundamentally different from those of developed country MNEs (Mathews 2002; Luo and Tung 2007; Buckley et al. 2007; Li 2007). Increasingly described as “springboarding” (Luo and Tung 2007), the internationalization strategies of emerging market firms are characterized by their high-risk, aggressive, and “boom-and-bust” or radical nature, while targeting many customers in many foreign markets at once, in a strategy of entrepreneurial venturing (Yiu et al. 2007). Comparing developed country MNEs of the 1960s, with emerging market MNEs in the 2000s, Dunning, Kim, and Park (2008) identified a number of additional differences. These include forms of entry (alliances); motivation (asset augmentation); managerial approach (regional and geocentric); role of home governments (more active than in the past); regional destination; institutional triggers of internationalization rather than traditional motives related to neoclassical models; and the lack of firm-specific ownership advantages (177).