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Accelerated Internationalisation by Emerging Multinationals: the Case of White Goods Sector

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  • Bonaglia, Federico
  • Goldstein, Andrea
  • Mathews, John

Abstract

The emergence of a "second wave" of developing-country multinational enterprises (MNEs) in a variety of industries is one of the characterizing features of globalization. These new MNEs did not delay their internationalisation until they were large, as did most of their predecessors, and often become global as a result of direct firm-to-firm contracting. Many grow large as they internationalise conversely, they internationalise in order to grow large. This is a striking pattern which, if confirmed, indicates that enterprises from developing countries have pursued distinctive approaches to internationalisation. It is a further interesting hypothesis to investigate to what extent such firms, born as suppliers of established incumbents, have leveraged on their "latecomer" status to accelerate their internationalisation. This paper documents how emerging MNEs may follow quite different patterns to reach, or at least approach, global competitiveness. In particular, it investigates how three latecomer MNEs pursued global growth through accelerated internationalisation combined with strategic and organizational innovation. Haier (China), Mabe (Mexico) and Arcelik (Turkey) emerged as Dragon Multinationals in the large home appliances (so-called "white goods") industry. This is a producer-driven global value chain, characterized by mature technology and rapid delocalization to developing countries, where not only input costs are lower, but demand growth rates are higher - giving a decided latecomer advantage to these MNEs. Haier, Mabe and Arçelik leveraged their strategic partnership with established MNEs to upgrade their operations, evolving from the production of simple goods, into new product lines developed through their own design, branding and marketing capabilities. The recipe of their success has been the ability to treat global competition as an opportunity to build capabilities, move into more profitable industry segments, and adopt strategies that turn latecomer status into a source of competitive advantage. At the same time, their experiences show that there are many strategies and trajectories for going global.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 1485.

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Date of creation: Jul 2006
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Handle: RePEc:pra:mprapa:1485

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Keywords: Internationalisation; latecomer; MNEs; white goods; Haier; Arcelik; Mabe;

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Cited by:
  1. repec:dgr:unumer:2008049 is not listed on IDEAS
  2. Milelli, Christian & Le Goff, Joëlle, 2012. "European inroads by BRICs’ firms:The M&A avenue," MPRA Paper 39865, University Library of Munich, Germany.
  3. Alessia Amighini & Roberta Rabellotti & Marco Sanfilippo, 2011. "China's Outward FDI: An Industry-level Analysis of Host Country Determinants," CESifo Working Paper Series 3688, CESifo Group Munich.
  4. 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.
  5. Duysters, Geert & Jacob, Jojo & Lemmens, Charmianne & Hu, Jintian, 2008. "Internationalization and Technological Catching Up of Emerging Multinationals: A Case Study of China's Haier Group," MERIT Working Papers 052, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  6. Fabio FIORILLO & Agnese SACCHI, 2010. "I Want to Free-ride. An Opportunistic View on Decentralization Versus Centralization Problem," Working Papers 346, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  7. Pereira de Carvalho, Flavia & Goldstein, Andrea, 2008. "The making of national giants: technology and governments shaping the international expansion of oil companies from Brazil and China," MERIT Working Papers 021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  8. A. Amighini & M. Sanfilippo & R. Rabellotti, 2009. "The rise of multinationals from emerging countries. A review of the literature," Working Papers Prin 004, Dipartimento Scienze Economiche, Universita' di Bologna.
  9. Sturgeon, Timothy J. & Kawakami, Momoko, 2010. "Global value chains in the electronics industry : was the crisis a window of opportunity for developing countries ?," Policy Research Working Paper Series 5417, The World Bank.
  10. Alvandi , Keyvan & Chaminade , Cristina & Lv, Ping, 2013. "Commonalities and differences between production-related FDI (PFDI) and technology-related FDI (TFDI) in developed and emerging economies," CIRCLE Electronic Working Papers 2013/47, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  11. repec:dgr:unumer:2008052 is not listed on IDEAS
  12. Andrea Goldstein & Fazia Pusterla, 2008. "Emerging Economies’ Multinationals: General Features and Specificities of the Brazilian and Chinese Cases," KITeS Working Papers 223, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Oct 2008.
  13. Ugo FRATESI, 2010. "The National and International Effects;of Regional Policy Choices: Agglomeration Economies, Peripherality and Territorial Characteristics," Working Papers 344, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  14. Luca RICCETTI, 2010. "Minimum Tracking Error Volatility," Working Papers 340, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  15. Francesca Spigarelli, 2011. "Outward Foreign Direct Investments of the Russian Federation," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 1, March.

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