Technological innovation and emerging economy multinationals: the product cycle model revisited

This paper challenges the continuing validity of three distinct propositions of the product cycle model of Vernon (1966, 1979) or its extension to Third World Multinationals by Wells (1983, 1986). This is in light of recent developments in the role of rapidly evolving technological capabilities in the emergence and evolution of MNCs from emerging economies (EMNCs). The model states that EMNCs have a narrow scope for innovation confined to imitating and adapting the innovation of the technologically leading companies as standardisation proceeds in the product life cycle. It also proposes that innovations are almost always located in the home country of national firms. Furthermore, firms exploit through international operations their unique home country-derived technological advantages. In challenging these product cycle propositions, the paper builds the case for the increasing relevance of the concepts of localised technological change and technological accumulation in explaining the rapidly evolving technological capabilities of EMNCs

The determinants of the outward foreign direct investment of China and India: Whither the home country?

The current study examines the relationships between several home country-specific macroeconomic factors and the level of the outward FDI of China and India using multiple time-series data from 1982 to 2006 and from 1980 to 2006, respectively. With the use of a vector autoregressive model assessing the causal relationships of the endogenous variables, the empirical research proves that Chinese national characteristics associated with income per capita, openness of the economy to international trade, interest rate, human capital, technological capability, exchange rate and exchange rate volatility do not Granger cause the level of outward FDI of China. By contrast, the national technological capability of India Granger causes their level of outward FDI. The level of outward FDI of China does not Granger cause any of the home country-specific macroeconomic factors considered, while the level of outward FDI of India Granger causes their national interest rate.outward FDI, home country, FDI determinants, China, India, MNCs, VAR model, foreign direct investment, multinational corporations

The determinants of the outward foreign direct investment of China and India: whither the home country?

The current study examines the relationships between several home country-specific macroeconomic factors and the level of the outward FDI of China and India using multiple time-series data from 1982 to 2006 and from 1980 to 2006, respectively. With the use of a vector autoregressive model assessing the causal relationships of the endogenous variables, the empirical research proves that Chinese national characteristics associated with income per capita, openness of the economy to international trade, interest rate, human capital, technological capability, exchange rate and exchange rate volatility do not Granger cause the level of outward FDI of China. By contrast, the national technological capability of India Granger causes their level of outward FDI. The level of outward FDI of China does not Granger cause any of the home country-specific macroeconomic factors considered, while the level of outward FDI of India Granger causes their national interest rate

Examining strategy diversity and interdependence in the MNC's subsidiaries and their functional activities

The world is witnessing profound change. The economic and geopolitical dominance of the West is being increasingly challenged by the rapid emergence of several developing countries, most conspicuously Brazil, Russia, India and China. The West is also struggling with a financial crisis and the near impotence of traditional policy tools to rekindle growth. How should firms respond? How must International Business scholars change their thinking to both reflect and explain these epochal changes? What advice can they give hard-pressed governments? This volume contains papers which grapple with this challenging agenda. They consider three key themes: How can better understanding of institutions and culture help give analytical grip? How do and should firms adjust their strategies to cope with processes which operate at a range of spatial scales from the very local to the global? How best do firms place themselves both in physical location and within often complex global networks

Home country macroeconomic factors and outward FDI of China and India

The current study examines the relationships between a few home country-specific macroeconomic factors and outward FDI flows of China and India using multiple time-series data from 1982 to 2006, and from 1980 to 2006 respectively. The focus is on the examination of Granger causal relationships through exogeneity analysis as well as the assessment of the short-term dynamic relationships between outward FDI flows and other system variables using vector autoregressive modelling. The research concludes that although China and India share similar inferences about the Granger causal relationships concerning outward FDI flows, the determination of the endogenous structure and dynamics of the multiple time series differ in the two countries

Explaining the competitiveness of multinational companies from developing economies: a critical review of the academic literature

In critically probing the academic literature explaining the emergence and growth of Multinational Companies (MNCs) based in developing economies, the paper argues that neither the 'universalist' approach nor the 'location-bound' approach provides a sufficient basis on their own to explain the distinctive nature of the determinants of international production or the unique features of the business organisation and strategies of MNCs based in developing economies that form the basis of their competitiveness as well as their developmental course over time. A broad-based theoretical approach is required that bridges both approaches through their amalgamation or the broadening of the 'universalist' approach

The role of country of origin and Chinese OFDI

Book synopsis: Chinese International Investments provides authoritative academic and professional insights into Chinese international investments in Europe, Asia, Africa and the Americas. It offers a wide range of up-to-date academic insights and findings, which are rounded off with lessons to be learnt from historical developments (success and failure stories), an evaluation of current trends and the motives and modes of entries used by Chinese companies. Contributions on outward foreign direct investments from China in different regions of the world, specific industry and case studies and theoretical contributions highlight the need for such additional research in this emergent area of international business

Home country macroeconomic factors and outward FDI of China and India

The current study examines the relationships between a few home country-specific macroeconomic factors and outward FDI flows of China and India using multiple time-series data from 1982 to 2006, and from 1980 to 2006 respectively. The focus is on the examination of Granger causal relationships through exogeneity analysis as well as the assessment of the short-term dynamic relationships between outward FDI flows and other system variables using vector autoregressive modelling. The research concludes that although China and India share similar inferences about the Granger causal relationships concerning outward FDI flows, the determination of the endogenous structure and dynamics of the multiple time series differ in the two countries.Outward FDI Home country FDI determinants Chinese MNCs Indian MNCs VAR model