Country specific advantage, firm specific advantage and multinaitonality-Sources of competitive advantage in emerging markets: Evidence from the electronics industry in China

Research output: Contribution to journalArticlepeer-review

Authors

Colleges, School and Institutes

External organisations

  • Warwick Business School, University of Warwick, United Kingdom
  • University of Sheffield

Abstract

The extant literature on emerging market multinationals (EMNEs) suggest that they derive their advantages from country-specific advantages (CSAs) such as economies of scale, as opposed to traditional firm specific advantage (FSA) such as technology. We use firm level data from the Chinese electronics industry and an empirical methodology that has thus far not been used in the literature to provide clear empirical support for this proposition. Further, we demonstrate that not all emerging market firms can leverage CSAs equally and that EMNEs are better at exploiting CSAs than their non-MNE domestic counterparts. We also demonstrate that developed country MNEs operating in emerging market economies are not as good as leveraging available CSAs as their EMNE competitors, arguably on account of liability of foreignness. Our results have implications for outward investment by emerging market firms as well as for the ability of developed country MNEs to significantly benefit from efficiency-seeking FDI in emerging market economies.

Details

Original languageEnglish
Pages (from-to)165-176
JournalInternational Business Review
Volume25
Issue number1
Early online date21 Jan 2015
Publication statusPublished - Feb 2016

Keywords

  • Competitive advantage, emerging market MNEs, internationalisation, productivity