IDEAS home Printed from https://ideas.repec.org/p/pre/wpaper/201623.html
   My bibliography  Save this paper

Emerging Multinational Corporations: A Prominent Player in the Global Economy

Author

Listed:
  • Mustafa Sakr

    (Department of Economics, University of Pretoria)

  • Andre Jordaan

    (Department of Economics, University of Pretoria)

Abstract

As emerging market multinational corporations (EMNCs) tend to remarkably expand their global presence, it is of the utmost importance to explore the salient attributes of such unfolding phenomenon. One of the key findings is that top EMNCs are displaying a leapfrogging internationalisation process. Moreover, natural resources related sectors, in particular energy, have been proven to dominate the non-financial industry structure of EMNCs. In addition, various interesting findings have been concluded by this article. Regarding the preferred destination for their outward foreign direct investment (OFDI), EMNCs currently tend to invest more in developing markets. However, the relevance of developed markets is growing over time. Available statistics furthermore exhibit that greenfield is often preferred above mergers and acquisitions (M&As) as an entry mode into developing markets. The opposite is true in developed markets. EMNCs are domiciled predominantly in BRICS countries which account collectively for most of the OFDI getting from EMs. Emerging African MNCs are dramatically losing ground in the EMNC landscape. Regarding internationalisation, ownership, industry and geographical structure and preferred entry modes, remarkable differences are easily seen in the salient features of EMNCs compared to those based in developed markets.

Suggested Citation

  • Mustafa Sakr & Andre Jordaan, 2016. "Emerging Multinational Corporations: A Prominent Player in the Global Economy," Working Papers 201623, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201623
    as

    Download full text from publisher

    File URL: http://www.up.ac.za/media/shared/61/WP/wp_2016_23.zp83752.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lenn Gomes & Kannan Ramaswamy, 1999. "An Empirical Examination of the Form of the Relationship Between Multinationality and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(1), pages 173-187, March.
    2. Przemyslaw Kowalski & Max Büge & Monika Sztajerowska & Matias Egeland, 2013. "State-Owned Enterprises: Trade Effects and Policy Implications," OECD Trade Policy Papers 147, OECD Publishing.
    3. Daniel Sullivan, 1994. "Measuring the Degree of Internationalization of a Firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 325-342, June.
    4. Miguel Fonseca & António Mendonça & José Passos, 2007. "The Investment Development Path Hypothesis: Evidence from the Portuguese Case – A Panel Data Analysis," Working Papers Department of Economics 2007/21, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    5. Rajneesh NARULA & José GUIMÓN, 2010. "The investment development path in a globalised world: implications for Eastern Europe," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 1, pages 5-19, December.
    6. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    7. Giovanni Balcet & Silvia Bruschieri, 2010. "Acquisition of Technologies and Multinational Enterprise Growth in the Automotive and the Pharmaceutical Industries: Drivers and Strategies," Palgrave Macmillan Books, in: Karl P. Sauvant & Jaya Prakash Pradhan & Ayesha Chatterjee & Brian Harley (ed.), The Rise of Indian Multinationals, chapter 5, pages 111-165, Palgrave Macmillan.
    8. Rajneesh Narula & John Dunning, 2000. "Industrial Development, Globalization and Multinational Enterprises: New Realities for Developing Countries," Oxford Development Studies, Taylor & Francis Journals, vol. 28(2), pages 141-167.
    9. Silvio Contessi & Hoda S. El-Ghazaly, 2010. "Multinationals from emerging economies: growing but little understood," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jul, pages 16-17.
    10. Karl P. Sauvant & Jaya Prakash Pradhan & Ayesha Chatterjee & Brian Harley (ed.), 2010. "The Rise of Indian Multinationals," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-11475-3, August.
    11. Alvaro Cuervo-Cazurra & Andrew Inkpen & Aldo Musacchio & Kannan Ramaswamy, 2014. "Governments as owners: State-owned multinational companies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(8), pages 919-942, October.
    12. Federico BONAGLIA & Andrea GOLDSTEIN & John MATHEWS, 2006. "Accelerated Internationalisation by Emerging Multinationals: the Case of White Goods Sector," Working Papers 270, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    13. Gabor Hunya & Roman Stöllinger, 2009. "Foreign Direct Investment Flows between the EU and the BRICs," wiiw Research Reports 358, The Vienna Institute for International Economic Studies, wiiw.
    14. Wladimir Andreff & Giovanni Balcet, 2013. "Emerging countries’ multinational companies investing in developed countries: at odds with the HOS paradigm?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 10(1), pages 3-26, April.
    15. Tolentino, Paz Estrella, 2008. "The determinants of the outward foreign direct investment of China and India: Whither the home country?," MERIT Working Papers 2008-049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. World Bank, 2011. "Global Development Horizons 2011 : Multipolarity - The New Global Economy," World Bank Publications - Books, The World Bank Group, number 2313, April.
    17. Moon, Hwy-Chang & Roehl, Thomas W., 2001. "Unconventional foreign direct investment and the imbalance theory," International Business Review, Elsevier, vol. 10(2), pages 197-215, April.
    18. Yadong Luo & Rosalie L Tung, 2007. "International expansion of emerging market enterprises: A springboard perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 38(4), pages 481-498, July.
    19. Kueh, Jerome Swee-Hui & Puah, Chin-Hong & Abu Mansor, Shazali, 2009. "Empirical analysis on emerging issues of Malaysia outward FDI from macroeconomic perspective," MPRA Paper 37680, University Library of Munich, Germany.
    20. Sethi, Deepak, 2009. "Are multinational enterprises from the emerging economies global or regional?," European Management Journal, Elsevier, vol. 27(5), pages 356-365, October.
    21. John H Dunning, 1995. "Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(3), pages 461-491, September.
    22. Aggarwal, Raj & Berrill, Jenny & Hutson, Elaine & Kearney, Colm, 2011. "What is a multinational corporation? Classifying the degree of firm-level multinationality," International Business Review, Elsevier, vol. 20(5), pages 557-577, October.
    23. Dilek Aykut & Andrea Goldstein, 2006. "Developing Country Multinationals: South-South Investment Comes of Age," OECD Development Centre Working Papers 257, OECD Publishing.
    24. Kayam, Saime Suna, 2009. "Home market determinants of FDI outflows from developing and transition economies," MPRA Paper 16781, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marat Z. Kurbangaleev & Victor A. Lapshin & Zinaida V. Seleznyova, 2018. "Studying The Replicability Of Aggregate External Credit Assessments Using Public Information," HSE Working papers WP BRP 71/FE/2018, National Research University Higher School of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mustafa Sakr & Andre Jordaan, 2016. "Emerging Multinational Corporations: Theoretical and Conceptual Framework," Working Papers 201604, University of Pretoria, Department of Economics.
    2. Mustafa Sakr & Andre Jordaan, 2017. "Push Factors of Emerging Multinational Corporations: Evidence from South Africa and Egypt," Working Papers 201709, University of Pretoria, Department of Economics.
    3. Mustafa Sakr & Andre Jordaan, 2017. "Foreign Market Selection of Emerging Multinational Corporations: Evidence from South African and Egyptian Corporations," Working Papers 201734, University of Pretoria, Department of Economics.
    4. Alessia Amighini & Claudio Cozza & Elisa Giuliani & Roberta Rabellotti & Vittoria Scalera, 2015. "Multinational enterprises from emerging economies: what theories suggest, what evidence shows. A literature review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 343-370, September.
    5. Andreff Wladimir & Balcet Giovanni, 2011. "Emerging multinational companies investing in developed countries: at odds with the HOS theorem?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201107, University of Turin.
    6. Ronaldo Parente & Ke Rong & José-Mauricio G. Geleilate & Everlyne Misati, 2019. "Adapting and sustaining operations in weak institutional environments: A business ecosystem assessment of a Chinese MNE in Central Africa," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(2), pages 275-291, March.
    7. Manish Popli & Ashutosh Sinha, 2014. "Determinants of early movers in cross-border merger and acquisition wave in an emerging market: A study of Indian firms," Asia Pacific Journal of Management, Springer, vol. 31(4), pages 1075-1099, December.
    8. Bhargavi Jayanthi & S.N.V. Sivakumar & Arunima Haldar, 2016. "Cross-border Acquisitions and Host Country Determinants: Evidence from Indian Pharmaceutical Companies," Global Business Review, International Management Institute, vol. 17(3), pages 684-699, June.
    9. Hitt, Michael A. & Li, Dan & Xu, Kai, 2016. "International strategy: From local to global and beyond," Journal of World Business, Elsevier, vol. 51(1), pages 58-73.
    10. Damijan, Jože & Kostevc, Crt & Rojec, Matija, 2014. "Outward FDI and company performance in CEECs," Working Paper Series in Economics and Institutions of Innovation 381, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    11. Ramírez-Alesón, Marisa & Fleta-Asín, Jorge, 2016. "Is the Importance of Location Factors Different Depending on the Degree of Development of the Country?," Journal of International Management, Elsevier, vol. 22(1), pages 29-43.
    12. Conti, Claudio Ramos & Parente, Ronaldo & de Vasconcelos, Flávio C., 2016. "When distance does not matter: Implications for Latin American multinationals," Journal of Business Research, Elsevier, vol. 69(6), pages 1980-1992.
    13. Balcet Giovanni & Bruschieri Silvia, 2009. "Indian multinationals in the automotive and the pharmaceutical sectors: competitive advantages and strategies," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200906, University of Turin.
    14. Navin Kumar Saxena & Satyasiba Das, 2022. "Competitive Pressure and the Moderating Role of the Knowledge Network on Internationalization Intent of Indian State-owned Enterprises," IIM Kozhikode Society & Management Review, , vol. 11(1), pages 47-61, January.
    15. Satta, Giovanni & Parola, Francesco & Persico, Luca, 2014. "Temporal and Spatial Constructs in Service Firms' Internationalization Patterns: The Determinants of the Accelerated Growth of Emerging MNEs," Journal of International Management, Elsevier, vol. 20(4), pages 421-435.
    16. Jaya Prakash Pradhan, 2010. "Strategic Asset-Seeking Activities of Emerging Multinationals: Perspectives of Foreign Acquisitions by Indian Pharmaceutical MNEs," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 1(2).
    17. Cuervo-Cazurra, Alvaro & Ciravegna, Luciano & Melgarejo, Mauricio & Lopez, Luis, 2018. "Home country uncertainty and the internationalization-performance relationship: Building an uncertainty management capability," Journal of World Business, Elsevier, vol. 53(2), pages 209-221.
    18. Borda, Armando & Geleilate, José-Mauricio G. & Newburry, William & Kundu, Sumit K., 2017. "Firm internationalization, business group diversification and firm performance: The case of Latin American firms," Journal of Business Research, Elsevier, vol. 72(C), pages 104-113.
    19. Xiao, Simon Shufeng & Jeong, Insik & Moon, Jon Jungbien & Chung, Chris Changwha & Chung, Jaiho, 2013. "Internationalization and Performance of Firms in China: Moderating Effects of Governance Structure and the Degree of Centralized Control," Journal of International Management, Elsevier, vol. 19(2), pages 118-137.
    20. Shufeng Simon Xiao & Yong Kyu Lew & Byung Il Park, 2019. "‘2R-Based View’ on the Internationalization of Service MNEs from Emerging Economies: Evidence from China," Management International Review, Springer, vol. 59(4), pages 643-673, August.

    More about this item

    Keywords

    Emerging MNCs; BRICS MNCs; African MNCs; emerging markets’ OFDI; differences between EMNCs and DMNCs;
    All these keywords.

    JEL classification:

    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pre:wpaper:201623. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Rangan Gupta (email available below). General contact details of provider: https://edirc.repec.org/data/decupza.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.