Template-type: ReDIF-Paper 1.0
Author-Name: Narula, Rajneesh
Author-Email: r.narula@henley.reading.ac.uk
Author-Workplace-Name: Henley Business School, University of Reading
Author-Name: Nguyen, Quyen T.K.
Author-Workplace-Name: Henley Business School, University of Reading
Title: Emerging country MNEs and the role of home countries: separating fact from 
	 irrational expectations
Abstract: This paper takes a look at the research on Emerging country 
	 multinational enterprises (EMNEs) over the last 25 years, and argues 
	 that growth in EMNE activity over the last 10 years continues to be 
	 dominated by Asian Newly Industrialised Countries (NICs), and to a 
	 lesser extent by Brazil, Russia, India and China (the BRICS). Instead of 
	 focusing on the success stories, we ask: Why have so few emerging home 
	 countries failed to fulfil their potential as significant outward 
	 investors, and converged (at least) with the NICs? Many of the EMNEs 
	 from the non-NICs continue to reflect limited O advantages, and unless 
	 they are able to upgrade their firm-specific assets, this trend is 
	 likely to continue. We propose that - in line with extant IB theory - 
	 the extent and intensity of EMNE activity is a function of their O 
	 advantages, which in turn are largely a function of their home country L 
	 advantages. We also call into question the soundness of the idea that 
	 EMNEs are able to utilise asset-seeking foreign direct investment (FDI) 
	 to build up their O advantages. Such asset-augmentation presumes that 
	 the firms have non-location-bound firm-specific assets that have the 
	 potential to be upgraded and augmented.
Classification-JEL: F23, L52, O14, O19
Keywords: FDI, Foreign Investment, MNEs, eclectic paradigm, asset-seeking,
	 knowledge flows, emerging markets
Series: UNU-MERIT Working Papers
Creation-Date: 2011
Number: 021
File-URL: http://www.merit.unu.edu/publications/wppdf/2011/wp2011-021.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2011021