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Investing abroad from the bottom of the productivity ladder – BRICS multinationals in Europe

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  • Sanfilippo , Marco

    ()
    (BOFIT)

Abstract

This paper analyses differences in total factor productivity and other competitiveness indicators of emerging multinationals (EMNEs) from Brazil, Russia, India, China and South Africa (BRICS) against their counterparts from developed countries and domestic MNEs. The current literature suggests that early internationalisation strategies by EMNEs are characterised by a lack of experience in diverse economic and cultural contexts and are explicitly driven by asset-exploration strategies. If true, this should translate into significant differences in performance, especially when they invest in developed countries. Based on a large database on foreign affiliates in Europe, results find EMNEs at the bottom of the productivity ladder, with a productivity gap around 20-30 percentage points compared to more established competitors. Moreover, the paper points to high heterogeneity among EMNEs that affects their relative performance according to their current levels of productivity or to differences in their sectorial and geographic patterns.

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File URL: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/2013/dp2613.pdf
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Bibliographic Info

Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 26/2013.

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Length: 31 pages
Date of creation: 02 Oct 2013
Date of revision:
Handle: RePEc:hhs:bofitp:2013_026

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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
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Web page: http://www.suomenpankki.fi/bofit_en/
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Keywords: emerging market multinationals; total factor productivity; foreign direct investment;

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References

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  1. Christian Fons-Rosen & Sebnem Kalemli-Ozcan & Bent E. Sorensen & Carolina Villegas-Sanchez & Vadym Volosovych, 2013. "Quantifying Productivity Gains from Foreign Investment," Tinbergen Institute Discussion Papers 13-058/IV, Tinbergen Institute.
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  22. A. Amighini & R. Rabellotti & M. Sanfilippo, 2010. "The Outward FDI from Developing Country MNEs as a Channel for Technological Catch-Up," Working Papers Prin 012, Dipartimento Scienze Economiche, Universita' di Bologna.
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Cited by:
  1. Sanfilippo , Marco, 2013. "Investing abroad from the bottom of the productivity ladder – BRICS multinationals in Europe," BOFIT Discussion Papers 26/2013, Bank of Finland, Institute for Economies in Transition.

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