Internationalization
By: July • Research Paper • 692 Words • April 26, 2010 • 1,004 Views
Internationalization
1. Motivations, paths and performance
Anumber of the papers in the special issue examine themultinationalizationmotives of emerging
economy firms. There is a current debate among international business researchers which centers
around the “asset seeking” versus “asset exploitation” motivations behind firm internationalization/
multinationalization (Dunning, 1988, 2006; Mathews, 2006; Narula 2006). A fundamental
assumption typical of Western models of international expansion is that the firm already possesses
need to upgrade their technological and scientific know-how so as to be able to offer products
commensurate with the more advanced needs of the international markets. Many times, inward
internationalization can act as a starting point to international activity (Mathews, 2006). Thus,
according to this view, internationalization of firms from emerging economies is also motivated by
learning objectives that allow these firms to overcome the initial resource hurdles arising due to
technological gaps and late mover disadvantages in international markets.
Papers in this special issue by Chittoor and Ray on the Indian pharmaceutical industry, Klein
and Wocke on South African multinationals, Li on the Chinese electronics industry, and Lee andwhile the former expand abroad to create new market opportunities, developing country banks
followed the internationalization of their existing client base. Furthermore, the entry and location
choices also differed between the two groups because of existing capabilities.
Two of the papers in the special issue examine the impact of institutional changes on the
internationalization of emerging economy firms. Pananond examines Thai multinationals
before and after the 1997 Asian financial crisis and finds a shift in the dynamics of their
international expansion: The firms traditionally relied on their network capabilities to expand
abroad but after the crisis, and with greater transparency requirements, their competitive
advantages are increasingly associated with technological capabilities. Similarly, Chittoor and
in the effective implementation of their multinational strategies.
2. Conclusion
I hope that the eight papers in the special issue, individually and collectively, further our
understanding of the globalization paths of firms from emerging economies. These studies identify
some commonalities on the motivations and paths across national and industry contexts, and also
point towards diversity related to the unique national institutional contexts and industry conditions.
Furthermore, they contribute to the current debate in the international business literature on
whether ownership advantages or firm-specific capabilities precede or are a consequence of
multinationality (see Narula, 2006; Mathews, 2006; Dunning, 2006). The general consensus from
the papers in this special issue is that there is a dynamic aspect to these capabilities and there is a
constant interplay of existing and acquired resources and capabilities. Thus, these studies suggest
that emerging economy multinationals (similar to established multinationals) use both some
existing ownership advantages (which could go beyond technological assets and may include such
things as process capabilities, marketing experience in turbulent environments and within the
context of underdeveloped marketing infrastructure,