The Evolution of Multinationals from a Small Economy: A Study of Swedish Firms in Asia

Swedish firms have been active in international business for almost a hundred years. Firms like AGA, Alfa Laval, and Ericsson have had manufacturing subsidiaries abroad since the 1890s. Firms like Swedish Match had established manufacturing operations in far away markets such as India, Pakistan, and Thailand as early as the 1920s. Most of the literature on multinational firms tends to focus on the nature and characteristics of traditional multinationals from large countries such as the United States. However, studies of small-country multinationals have burgeoned in recent years and prior studies have examined foreign operations of firms from small developed economies as well as the foreign operations of firms based in the developing countries.1 Few of these studies have focused on the development of a conceptual framework that may be useful in understanding the evolution of multinational firms from a small developed economy such as Sweden. This chapter contributes to this gap in the literature by developing a product life-cycle-based conceptual framework for understanding the evolution of multinational firms from small countries and by applying that framework to examine the evolution of the Asian operations of Swedish firms.2