Understanding Multinationals from Emerging Markets

Multinational enterprises from emerging economies are still relatively recent entrants to the global economy, and they are expanding without the rich international business experience that their counterparts in industrialized economies can draw upon. CEIBS Professor of Strategy and International Business Klaus E. Meyer explores the theoretical implications of this in a chapter he has contributed to the bookUnderstanding Multinationals from Emerging Markets which has recently been published by Cambridge University Press.

In his chapter titled “Process perspectives on the growth of emerging economy multinationals”, Prof. Meyer looks at the unique constraints and opportunities that emerging economy multinationals face as they enter new markets. He also looks at the innovative streams of research on these companies that is being developed, including their strategic asset seeking motivations, the importance of finding the right partner and partnership arrangement ( joint venture vs. outright acquisition), and how home country institutions both drive and constrain these enterprises. He then shows how these perspectives complement the process oriented international business perspective that has commonly been applied to early and small staged multinationals from developed countries. Professor Meyer also discusses how emerging economy multinationals can benefit from further research in this area as they seek better insights into the long term implications of their internationalization practices.

Professor Meyer comments: “The process perspective helps explaining many of the differences that we see between Chinese and Western multinational enterprises (MNEs). Chinese MNEs, despite their huge size within China, are at early stages of internationalization. Therefore, they are at early stages of developing international operations, and their actions are often mainly driven by the desire to learn and build capabilities, rather than to exploit existing capabilities in foreign markets.”

CEIBS Professor of Strategy and International Business