Do we need different frameworks to explain infant MNEs from developing countries?

Rajneesh Narula

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International Business and FDI Innovation and Knowledge Management International Student and Expatriate Challenges

Abstract

I argue that the initial set of firm‐specific assets (FSAs) act as an envelope for the early stages of internationalization of multinational enterprises (MNEs) (of whatever nationality) AND THAT there is a threshold LEVEL of FSAs that IT must possess for such international expansion to be SUCCESSFUL. I also argue that the initial FSAs of an MNE tend to be constrained by the location‐specific (L) assets of the home country. However, beyond different initial conditions, there are few obvious reasons to insist that INFANT developing country MNEs are of unique character THAN ADVANCED ECONOMY MNEs, and I predict that as they evolve, the observable differences between the two groups will diminish. Successful firms will increasingly explore internationalization, but there is also no reason to believe that this is likely to happen disproportionately from the developing countries.

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References

1990Absorptive Capacity: A New Perspective on Learning and Innovation 1985Economic Action and Social Structure: The Problem of Embeddedness 1991Exploration and Exploitation in Organizational Learning 1991The Competitive Advantage of Nations 1990The Competitive Advantage of Nations 1977The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments 2009The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership 1995OVERCOMING THE LIABILITY OF FOREIGNNESS.

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