On the competition between multinational enterprises within developing countries: developing country MNEs versus developed country MNEs.

Almamari, Awadh (2014) On the competition between multinational enterprises within developing countries: developing country MNEs versus developed country MNEs. Doctoral thesis, University of East Anglia.

[img]
Preview
PDF
Download (2MB) | Preview

Abstract

Over the last two decades, developing countries have experienced a high volume of foreign direct investment (FDI). It is commonly accepted that many multinational enterprises (MNEs) are entering into multiple markets, in order to increase their profitability and to reduce the risk of relying upon one market.

This study aims to provide insight into the internationalisation of MNEs from both developed and developing countries into developing markets. It seeks to test what, if anything, MNEs from developing countries do more effectively than MNEs from developed countries within these emerging markets.

The central thesis of the study is that MNEs from developing countries will have certain advantages over MNEs from developed countries, and will therefore be more prevalent amongst the largest foreign firms within emerging markets. This thesis is based on the assumption that MNEs from developing countries have prior experience of operating within similar emerging markets, and so are better qualified to compete within these types of markets. MNEs from developing countries obtain certain capabilities from operations within their home countries, such as the ability to function in the context of authoritarian regimes, ineffective governments, poorly developed infrastructures, and poorly protected property rights, as well as the ability to provide services within markets which include consumers living in poverty. All of these may allow them more easily to overcome difficulties and setbacks within developing country markets.

The theoretical foundation for this study has been constructed by reviewing the existing business literature. A particular aim of the literature review was to understand and explore the development of knowledge about the investment habits of multinational enterprises. In particular, their behaviour when operating within developing country markets was explored, along with the question of how they may be able to use their resources or capabilities to gain competitive advantage. This produced a set of hypotheses, which were then investigated using two types of data (both quantitative and qualitative).

The results of the analysis show that developing-country MNEs outperform developed-country MNEs when investing in developing countries with poorly protected property rights and pervasive corruption. This is also the case when investing in countries with poorly developed infrastructure. In addition, partial support was found for the hypothesis that developing-country MNEs are likely to have an advantage over developed-country MNEs when investing in developing countries with authoritarian regimes.

The study hopes to assist policy makers in recognising that an MNE’s previous experience impacts on its ability to succeed in developing countries. It also hopes to provide useful guidance for those MNE managers who are seeking to improve their effectiveness when investing in developing countries.

Item Type: Thesis (Doctoral)
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Depositing User: Jonathan Clark
Date Deposited: 25 Jul 2014 09:53
Last Modified: 25 Jul 2014 09:53
URI: https://ueaeprints.uea.ac.uk/id/eprint/49757
DOI:

Actions (login required)

View Item View Item