The paradox of knowledge-seeking FDI in emerging countries : The role of value innovation capabilities in resource-constrained markets
ISSN
2078-0435
Type
conference paper
Date Issued
2011-06-24
Author(s)
Editor(s)
Mahino, Shige
Kiyak, Tunga
Abstract
Extant literature on knowledge-seeking foreign direct investment (FDI) argues that multinationals from developed countries establish overseas subsidiaries to acquire new technological know-how. In recent times, this is particularly true for emerging countries which have enjoyed a large amount of inflow FDI caused by the attempts of multinationals from developed countries to expand their business. However, at the same time, literature acknowledges that multinationals from emerging countries still possess underdeveloped technological capabilities relative to developed country multinationals, resulting in a paradoxical perception of knowledge-seeking FDI. This research idea sets out to resolve this paradox by focusing on specific advantages that local multinationals in emerging countries might have over their developed country competitors. We propose that value innovation capabilities - the firm's ability to design 'good-enough', affordable products - are absent in the capability base of developed country multinationals but present vital capabilities in resource-constrained markets. We aim to support our argument by providing empirical evidence.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Book title
AIB 2011: International Business for Sustainable World Development
Publisher
Academy of International Business
Publisher place
East Lansing, MI
Event Title
53rd Academy of International Business (AIB)
Event Location
Nagoya, Japan
Event Date
24.-28.06.2011
Subject(s)
Division(s)
Eprints ID
155913