Multinationals Based in Emerging Markets: The Sources of Their Competitive Advantage

© 2014 Prof. Farok J. Contractor, Rutgers University

When a company goes abroad, it faces the extra hurdle of unfamiliarity with the local market, its culture, its regulations, and its institutions. Sometimes, the national origin of the firm is looked down on. An example is the skepticism and mild hostility toward Chinese products in some nations.

Becoming “multinational” is difficult enough for US and European firms. What explains the success of companies based in emerging nations that face a greater hurdle in doing business in advanced markets? If you bought a Jaguar, you purchased  from an Indian-owned auto company. An American who boards a “regional jet” (under 120 seats) is most likely in an aircraft made by Embraer of Brazil. If you watch a movie in an AMC theater, it is owned by the Wanda Group in Dalian, China. Small refrigerators are produced by Haier of China in their US plant. Volvo and Lenovo, familiar brand names, are Chinese-owned.

So what are the competitive advantages of emerging market multinationals that enable them to overcome not only the ordinary hurdles of global business, but, in addition, the drawbacks of an emerging-nation home base?

Read about such companies in “Punching above their weight”: The sources of competitive advantage for emerging market multinationals. International Journal of Emerging Markets, Vol. 8 No. 4, 2013 (pp. 304–328).*

* This article was named “Outstanding IJOEM Paper 2014” by Emerald Group Publishing. See the announcement here.

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