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2014 | Buch

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Multinational Corporations from Emerging Markets

State Capitalism 3.0

herausgegeben von: Andreas Nölke

Verlag: Palgrave Macmillan UK

Buchreihe : International Political Economy Series

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft" , Springer Professional "Technik"

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Über dieses Buch

The rise of multinational corporations (MNCs) from emerging markets has been a major development during the last decade. An important feature of emerging market MNCs is their close relationship with home states. The book investigates this special kind of relationship and explores how it affects the cross-border activities of these corporations.

Inhaltsverzeichnis

Frontmatter

Introduction: Toward State Capitalism 3.0

Abstract

The rise of multinational corporations (MNCs) from emerging markets has been a major development during the last decade. Publications such as the United Nations Conference on Trade and Development (UNCTAD) Global Investment Report, the Fortune Global 500, and the FT Global 500 indicate the increasing share of these companies among the world’s largest multinationals. This development not only relates to the BRICs (Brazil, Russia, India, and China; e.g., Petrobras, Gazprom, Tata, Sinopec) but also comprises companies from countries such as South Korea and Thailand (e.g., Samsung, PTT). Explaining the rather sudden rise of these companies has become somewhat of a growing industry over the last years (Brennan, 2011; Sauvant et al., 2010). Various international business scholars have developed or modified long-established analytical instruments in order to account for the rise of these companies. Theories such as the eclectic paradigm (Dunning, 1986) or the product cycle model (Wells, 1983) have been extended in order to account for the rise of these companies while others such as the Linking, Leverage, Learning-approach (Mathews, 2002b; 2006a) have been proposed to address this novel phenomenon.

Andreas Nölke

General Perspectives

Frontmatter

1. (Multi?)national Corporations and the State in Established Economies

Abstract

It is often claimed that corporations are increasingly multinational, and that they are therefore freed from the territorial ‘shackles’ of national governments. That liberal capitalism is writ large upon the global stage, with multinational corporations (MNCs) in the lead roles and states performing the supporting ones, was celebrated by the likes of Fukuyama (1992) with his much cited, although now modified, prediction of the ‘end of history’ with the end of the Cold War. There was the Washington Consensus of the 1980s and 1990s, through which the Bretton Woods institutions imposed such a neoliberal vision on developing countries. This is said to have since given way to a post-Washington Consensus, which is liberal rather than neoliberal — it is more a matter of principles to be made policies by states, rather than an inevitable ‘blueprint’ of measures to be adopted (see e.g., Headey, 2009). As such, a global vision, as opposed to an inevitable ‘reality’, is now more the case, but it is global nonetheless.

John Mikler

2. Multinationals as an Instrument of Catch-up Industrialization: Understanding the Strategic Links between State and Industry in Emerging Markets

Abstract

Emerging-market multinational corporations (MNCs) rise from rapidly catching-up economies, not from any so-called emerging ones. Their appearance on the world stage is concomitant with their success in initiating and sustaining industrial modernization in their home countries. And a successful catch-up can be planned, promoted, and achieved by a proactive government in an emerging economy that has a strong national determination for economic development. Market forces alone are not enough to spark an industrial takeoff. State involvement is practically a necessity, since market failures and externalities (notably negative ones) are rampant, both prior to, and in the early stages of, industrialization.

Terutomo Ozawa

Country Studies

Frontmatter

3. South Korean Multinationals after the Asian Financial Crisis: Toward Liberal Capitalism?

Abstract

Known as the ‘Miracle of East Asia’, South Korea remains a successful case of late industrialization. South Korea’s rapid economic growth since the 1960s transformed it from one of the world’s poorest countries into an economic powerhouse with per capita income of US$ 23,000 as of 2012. Seen as a highly effective model of industrial catch-up, South Korea’s state-guided capitalism focused on export-oriented manufacturing sectors and was once praised as the hallmark of successful industrialization (see also Ozawa in this volume). Now it is the twelfth-largest economy in gross domestic product (GDP) terms, and its global companies are leading in electronics, car manufacturing, and shipbuilding. At the same time, due to its strong emphasis on exports, it has coped with the global financial crisis of late 2008 better than most developed economies.

Seung-il Jeong

4. Private Chinese Multinationals and the Long Shadow of the State

Abstract

The recent rise of Chinese multinationals is rather remarkable. While Chinese multinationals were completely insignificant in 2003 (Yang and Stoltenberg, 2013, p. 72), they range among the most prominent global companies in 2013. As of the latter year, 89 of the 500 largest global companies measured by total revenues are based in China or Hong Kong, with a further six based in Taiwan (Fortune Global 500, 2013). Although the market value-based listing conducted by the Financial Times tends to underestimate Chinese companies due to its requirement of at least 15 percent of shares being held by dispersed shareholders (thereby, for instance, excluding fully state-owned companies), it still lists 45 of the top 500 global companies by March 28, 2013 as being based in China, Hong Kong, or Taiwan (FT Global 500). Chinese companies did not only acquire prominent Western brands such as Volvo and the IBM personal computer division, but they also have become Western household names on their own, as indicated by cases such as Haier or Huawei.

Andreas Nölke

5. Russia’s Multinationals: Network State Capitalism Goes Global

Abstract

In the last few years, Russian multinationals have been subject to increasing attention, due to the spectacular growth of Russian foreign direct investment (FDI) during the 2000s, which set a new world record (Andreff, 2013). Efforts at explaining this extraordinary growth focused on separating real FDI (productive activities abroad) from its ‘fake’ cousins and on trying to adapt theories of multinationalization by introducing home-country variables. This chapter will build on this literature and ask what drives Russian multinational corporations (MNCs) abroad and what role state actors have in their investment behavior. In analogy to Mikler’s (Chapter 1) concern about the impact of the home-country context on MNCs, this chapter provides a thorough analysis of the domestic politicoeconomic context, of government capacities and policies, and investment behavior of the MNCs. Due to space constraints, the chapter will focus on the oil and gas industries, but will also include some evidence from the ferrous and nonferrous metals industries.

Jonas Grätz

6. Sector Creation and Evolution: The Role of the State in Shaping the Rise of the Indian Pharmaceutical Sectoral Business System

Abstract

The emergence of emerging market multinational companies (EMNCs) as a driving force of change in the political, social, and economic landscape of the world economy has grabbed the attention of policymakers, academics, and the media alike in recent years. While the appearance of multinationals from developing and emerging markets is not a new phenomenon, their bold international expansion into the global economy and the rapid growth of Outward Foreign Direct Investment (OFDI) from their home economies into advanced economies has garnered the attention of many. Consequently, the fact that EMNCs have been making their marks in international commerce by competing successfully in global markets and acquiring assets in both advanced and emerging economies challenges the trend, and in many cases the assumption, that only advanced economies produce such companies. EMNCs are becoming a significant means for the transfer of capital, technology, management, and other assets within and between developing, emerging, and advanced economies, and they are creating new engines of growth in respective emerging markets and being publicly challenged.

Heather L.Taylor

7. Financing the Expansion of Brazilian Multinationals into Europe: The Role of the Brazilian Development Bank (BNDES)

Abstract

The rise of multinational corporations (MNCs) from emerging markets has been a remarkable phenomenon during the last decade (BCG, 2006; 2013; Wright et al., 2005). While total Foreign Direct Investment (FDI) flows grew by 84 percent from 2001 to 2011, those from developing economies grew by 216 percent (UNCTAD, 2013). This is a considerable leap, from 26 percent to 44 percent of the total flows. A series of recent studies have sought to explain the sudden growth of emerging markets MNCs (Brennan, 2011; Sauvant et al., 2010; Ramamurti and Sigh, 2009). To do so, international business scholars have further developed established analytical instruments in order to account for the rise of these multinationals. In some cases, the OLI (Ownership, Location, Internalization) framework (Dunning, 1986), the Uppsala model Qohanson and Vahlne, 1977; 2009), or the product life-cycle model (Vernon, 1966) have been extended (Ramamurti, 2008). In other instances, scholars have contested dominant internationalization theories, insisting on the need for the development of new frameworks (Mathews, 2002a; 2006b).

Gilmar Masiero, Mario H. Ogasavara, Luiz Caseiro, Silas Ferreira Junior

International Institutions

Frontmatter

8. How Policies Shape Foreign Direct Investment from Latin America to the European Union

Abstract

From the 2000s on, foreign direct investment (FDI) from emerging markets has increased significantly: as a consequence, emerging markets multinational corporations (MNC) have come of age. The rise of emerging markets MNC is but one manifestation of the process referred to by Angus Maddison as ‘shifting wealth’ in the world economy, whereby long-term global imbalances in current and capital accounts have increased the economic muscle and the political stature of a number of emerging countries and regions (OECD, 2010; Quah, 2011).

Judith Clifton, Daniel Díaz-Fuentes, Julio Revuelta

9. The Action-Reaction in the Global Trade: Comparing the Cases of the Brazilian Chicken and the Thai Tuna Industries

Abstract

Institutional factors are widely recognized as the underlying force that has shaped the development of various industries and their firms. Institutional factors such as trade policy banking practice, law and regulation, the political and economic background of a country, labor regulation, national culture, and tax policy have shaped the contours of international trade. Several of these institutional factors are the result of either direct or indirect support by the government. Various national governments have taken a proactive role in promoting and nurturing their own national champions in selected industries in order to create spillover benefits to the economy (Scott, 1995; Peng et al., 2008; Oliver, 1997; Nölke and Taylor, 2010; Nölke, 2011a; Bhalla, 1977).

Suthikorn Kingkaew

Conclusion: State Support for Emerging Market Multinationals

Abstract

The contributions to this volume demonstrate in ample ways that home state support measures are crucial for the outward expansion of emerging market multinationals. Some of these support measures are very obvious, like the Brazilian National Developing Bank (BNDES) financial support for the acquisitions of Brazilian multinational corporations (MNCs) (Masiero et al.), while others are subtler, such as the various informal guanxi links between Chinese businessmen and state representatives (Nölke). Interestingly, state support within the international regulatory environment also appears to matter a lot with regard to emerging market MNC activity, as demonstrated for the cases of foreign direct investment (FDI) regulation (Clifton et al.) and trade (Kingkaew). This conclusion chapter maps the various measures in a systematic way. It also highlights commonalities and differences among multinationals based in established and emerging countries (Mikler; Ozawa). Within this context, it will not only be based on the contributions to the volume (references in brackets without year of publication) but will also embed their findings in the existing literature on the topic (for instance, Goldstein, 2007; 2013; Nölke, 2013). Finally it will highlight some conclusions for further research as well as for policymakers.

Andreas Nölke

Backmatter

Titel: Multinational Corporations from Emerging Markets
herausgegeben von: Andreas Nölke
Verlag: Palgrave Macmillan UK
Electronic ISBN: 978-1-137-35950-6
Print ISBN: 978-1-349-47156-0
DOI: https://doi.org/10.1057/9781137359506