EMNE theories Flashcards
(20 cards)
What challenge do EMNEs present to IB theories?
Several key IB theories help explain—but are also challenged by—the rise of EMNEs.
What does Dunning’s Four Motives for FDI model identify?
Dunning’s model identifies four motives behind FDI: market-seeking, resource-seeking, efficiency-seeking, and strategic asset-seeking.
How do EMNEs demonstrate market-seeking FDI?
Market-seeking: Tata Motors’ acquisition of Jaguar Land Rover (JLR) provided access to premium markets in Europe and North America.
How do EMNEs demonstrate resource-seeking FDI?
Resource-seeking: Malaysian firm Petronas invested abroad to secure oil and gas supplies.
How do EMNEs demonstrate efficiency-seeking FDI?
Efficiency-seeking: Infosys and Wipro established delivery centres globally to optimise costs.
How do EMNEs demonstrate strategic asset-seeking FDI?
Strategic asset-seeking: Tata’s acquisition of JLR enabled the group to gain technological and brand advantages it lacked at home.
How applicable is the Uppsala Model to EMNEs?
The Uppsala model’s incrementalism is less applicable to EMNEs.
How did Tata challenge the Uppsala Model?
Tata did not cautiously expand into similar markets but instead made bold moves like acquiring a premium carmaker in the UK—a mature, competitive market.
What traditional assumption does Tata’s move challenge?
This challenges the traditional assumption that firms should first “learn” in culturally close markets before venturing further
How do EMNEs handle ‘distance’ factors according to the CAGE framework?
EMNEs often possess resilience to ‘distance’ factors highlighted by CAGE.
How do EMNEs develop adaptive strategies?
Growing up in environments characterised by institutional voids and economic volatility, EMNEs like Tata have developed adaptive strategies to navigate diverse foreign environments.
How do EMNEs manage economic and administrative complexities?
EMNEs handle economic and administrative complexities better than their Triad counterparts.
What is Liability of Foreignness (LOF) for EMNEs?
EMNEs typically face higher liability of foreignness due to limited global brand recognition, host country biases, and unfamiliarity with developed market regulations.
How did Tata Motors overcome Liability of Foreignness?
Tata Motors overcame this by maintaining JLR’s British brand identity post-acquisition, thus mitigating foreignness and gaining immediate legitimacy.
What are other strategies EMNEs use to counter LOF?
Other strategies to counter LOF include tapping into diaspora networks and leveraging government-backed international expansion initiatives.
What does UNCTAD’s FCD framework highlight for EMNEs?
UNCTAD’s FCD framework points out that EMNEs gain financial, competence, and developmental advantages.
What financial advantages do EMNEs gain according to FCD?
Financial advantages post-acquisition through access to global capital markets.
What competence advantages do EMNEs gain according to FCD?
Competence advantages through learning advanced technologies and management practices.
What developmental advantages do EMNEs gain according to FCD?
Developmental advantages by strengthening home-country industries through knowledge transfers.
How did Tata Motors benefit from JLR according to FCD?
How did Tata Motors benefit from JLR according to FCD?
