Rethinking the literature on the performance of Chinese multinational enterprises

We synthesize the literature on Chinese multinational enterprises (MNEs) and find that much of the prior research is based on as few as a dozen case studies of Chinese firms. They are so case-specific that it has led to a misplaced call for new theories to explain Chinese firms’ internationalization. In an attempt to better relate theory with empirical evidence, we examine the largest 500 Chinese manufacturing firms. We aim to find out the number of Chinese manufacturing firms to be true MNEs by definition, and to examine their financial performance relative to global peers using the financial benchmarking method. We develop our theoretical perspectives from new internalization theory. We find that there are only 49 Chinese manufacturing firms to be true MNEs, whereas the rest is purely domestic firms. Their performance is poor relative to global peers. Chinese MNEs have home country bound firm-specific advantages (FSAs), which are built upon home country-specific advantages (home CSAs). They have not yet developed advanced management capabilities through recombination with host CSAs. Essentially, they acquire foreign firms to increase their sales in domestic market, but they fail to be competitive internationally and to achieve superior performance in overseas operations. Our findings have important strategic implications for managers, public policy makers, and academic research.

The establishment mode choise of German multinational enterprises in Brazil: a comparative approach

We examine the drivers behind the establishment mode choice of German multinational enterprises (MNEs) in the sectors of Automotive, Chemicals and Mechanical Engineering in Brazil for the years 1993-2013 using a novel sample of primary data obtained directly from German MNEs. Based on prevalent theories found in the literature, we test the most common hypotheses on our sample. Firms with high R&D activities and firms with prior market knowledge in Brazil in from of previous sales offices are more likely to enter Brazil by a Greenfield investment. We also show that it is the specific private ownership of the German so-called hidden champions that drive those specific SMEs to enter Brazil by Greenfield, a sneaking suspicion that has been made before. Finally, we show that the establishment mode choice between Brazil and the USA only deviates to a low extent, with German MNEs preferring to enter Brazil by Greenfield and the USA by M&A. Thereby, we provide valuable insights for future research in this field.

Leading brazilian multinational enterprises: trends in an era of significant uncertainties and challenges

Escola de Administração de Empresas de São Paulo

A snapshot of Chile's 20 largest multinational enterprises in 2011: Sustained growth in South America

Includes bibliography

Location choice of multinational enterprises in China : comparison between Japan and Taiwan

This paper examines and compares the location choice of Japanese and Taiwanese MNEs in China. Furthermore, we investigate the relationship between location choice and firm characteristics, specifically firms' productivity. Due to Taiwan's linguistic and cultural advantages in China, it is expected that the location choice mechanics are different between Japanese and Taiwanese MNEs. As a result, our main findings are that, while the less productive Japanese firms prefer a location in an area with a larger agglomeration of Japanese affiliates or in an area closer to Japan, the more productive Taiwanese firms prefer a location in an area with a larger agglomeration of Taiwanese affiliates or in an area closer to Taiwan.

Corporate governance options for the local subsidiaries of multinational enterprises

While the corporate governance literature generally focuses on the parent legal entity, many organisations are now multinational enterprises (MNEs) with subsidiaries that are most often legal entities in their host countries. Despite the strengthening of corporate governance regimes internationally, the boards of these subsidiaries are in many instances perfunctory. This paper examines the question of whether developments in corporate governance theory and practice can add value for the local subsidiaries of MNEs. This paper provides a theoretical basis for evaluating governance models in MNEs. The paper commences with a review of the key concepts from the MNE and conglomerates literature with respect to core MNE strategies. The paper then discusses what the "governance roles" are that must be performed in MNE subsidiaries. We propose four governance frameworks for subsidiary corporations. These frameworks are: (1) Direct Control; (2) Dual Reporting; (3) Advisory Board; (4) Local Board. We consider the strengths and weaknesses of each model in relation to international strategy theory. We conclude with recommendations for the conditions under which the various models may be appropriate and practical guidelines for the utilisation of corporate governance theory to improve MNE performance.

Multinational enterprises and technological effort by local firms:a case study of the Malaysian electronics and electrical industry

It is often assumed that foreign MNEs are the driving force behind technological development in developing economies but it has become evident in recent years that the actions of MNEs in isolation from the domestic economy. The study, therefore, examines the determinants of local firms' decisions to undertake technological effort, not only in isolation, but also in the context of linkages between domestic firms and MNEs. There is evidence that linkages between MNEs and local firms are important in explaining technological effort by local firms but direct technological assistance from MNEs does not seem to play a major role in fostering increased technological effort by local firms.

A multinacionális vállalatok szerepe a hazai klaszterekben (Roles of multinational enterprises in the Hungarian clusters)

A cikk azt a kérdést vizsgálja, hogy milyen szerepet töltenek be a multinacionális vállalatok leányvállalatai a hazai klaszterekben, milyen a kapcsolatuk a klasztertag kis- és középvállalatokkal többek között a közös innovációban, a tudásközvetítésben, a klaszterek reputációjának növelésében. A felderítő kutatás a témát a hazai klaszterfejlesztési program, a Pólus Program által életre hívott három, úgynevezett akkreditált klaszter menedzsereivel, a klasztertag multinacionális vállalatok (MNV-k) hazai leányvállalatainak képviselőivel és a klasztertag KKV-k vezetőivel készült interjúk alapján mutatja be. A téma relevanciáját a program által potenciálisan indukált együttműködési folyamatok adják, mivel a klaszterfejlesztési pályázati konstrukciók úgy lettek kialakítva, hogy a klasztertag KKV-knak érdemes legyen nagyvállalatot is bevonniuk a közös innovációs és kutatás-fejlesztési projektekbe. A kutatási eredmények alapján az MNV leányvállalatainak leginkább a globális trendek és standardok klaszterbeli elterjesztésében van meghatározó szerepük, illetve a KKV-k és leányvállalatok közötti üzleti kapcsolatok alakításában kiemelt szerepe van a klasztermenedzsment szervezet tevékenységének. / === / The paper focuses on the topic which deals with the role of subsidiaries of multinational companies (MNC’s) in Hungarian industrial clusters in the fields of common innovation, knowledge transfer, and increasing the cluster’s reputation. The findings of the paper are based on an explorative research. Interviews were made with cluster managers, representatives of MNC’s subsidiaries, leaders of small and medium size (SME’s) enterprises operating in three accredited clusters created by the Hungarian cluster development program, the Pole Program. The relevance of the topic is given by the Program, which has induced potential cooperation between MNC’s subsidiaries and domestic SME’s in cluster environment in a way so the members of the cluster – SME’s and subsidiaries – were driven to cooperate in common innovation and R+D projects. The author’s research results suggest that MNC’s subsidiaries in Hungarian clusters seem to play a key role in the dissemination of global industrial trends and standards between the cluster members. The national cluster management organization can also play a decisive role in shaping business relationship between MNC’s and SME’s.

Átalakuló emberierőforrás-menedzsment a multinacionális vállalatok magyarországi leányvállalatainál 2008–2009 (Changing HR-practices of the Hungarian subsidiaries of multinational enterprises, 2008-2009)

A Pécsi Tudományegyetem Közgazdaságtudományi Karán sok éve folyó HR-kutatás legújabb eredménye ez a beszámoló, amely 74 Magyarországon is működő multinacionális vállalat helyi leányvállalatának HR-gyakorlatát vizsgálja. Az adatfelvétel (többségében helyszíni interjú) ideje 2010. április-november. Így a megállapítások már a válságból való kilábalás időszakára is vonatkoznak: mit és hogyan tettek a HR-szervezetek, valamint a vonalbeli vezetők a HR-munka hatékonyságának növelésére. A felállított 5, ezzel kapcsolatos hipotézist a szerzők vizsgálataik alapján részben igazolni tudták. A fő megállapítás: a nemzetközi vállalatok – minimális létszámcsökkentéssel – kitartottak Magyarország mellett, megerősítették a helyi leányvállalatoknál folyó HR-munkát. A kutatás nemzetközi keretekben jelenleg is folytatódik: 6 országban készülnek tanulmányok a helyi hasonló vállalati körre, a magyarországiéval azonos HR-vizsgálati szempontok alapján. _________ This article is the result of the several year long HR-research conducted at the Faculty of Business and Management of the University of Pécs, and it analyzes the HR-practices of the Hungarian subsidiaries of 74 multinational enterprises. Data collection (mostly interviews at the subsidiaries) took place during the period of April-November 2010. Hence, the findings also relate to the period of the recovery from the recession: what and how the HR-units/ and line managers did to increase the efficiency of the HR work. The 5 hypotheses in relation with this, could partially be verified by the research of the authors of this paper. The main finding is that the multinational enterprises – with a slight decrease of headcount – stood beside Hungary and strengthened the HR-activities at their subsidiaries. Research is still being continued internationally: studies are being prepared in 6 countries on similar groups of local companies, by using the same HR-research aspects as those used in Hungary.

The direct investments in Latin America and the Caribbean in the 1990s of multinational enterprises headquartered in Spain

This thesis explains why multinational enterprises (MNEs) headquartered in Spain made significant investments in Latin America in the 1990s. Two independent variables are considered: structural reforms in Latin America, and liberalization in Spain. The first independent variable concerns the ways in which Latin American governments adopted a series of reforms that made their economies attractive to foreign investors. The second variable explains how the prospects of liberalization and foreign competition led Spanish firms to invest abroad in order to expand their businesses. The study will also show the competitive advantage of Spanish MNEs, vis-a-vis other foreign and local competitors in Latin America. This thesis takes an international political economy approach. The core of the thesis shows the development of Spanish direct investment in Latin America and the Caribbean in the 1990s. The theoretical perspectives on MNEs are provided by theory of the firm, industrial organizations theory and alliance theory. ^

The advantage of Spanish multinational enterprises in Latin America

Multinational enterprises (MNEs) from Spain made large foreign direct investments (FDIs) in Latin America between 1990 and 2002, making Spain the second largest direct investor in this region since 1998, behind the United States. This dissertation explains the reasons that led Spanish firms to make these FDIs, as well as their operations in Latin America. Seven Spanish MNEs were included in this study, BBVA and SCH (banking), Telefónica (telecommunications), Endesa, Iberdrola and Unión Fenosa (public utilities), and Repsol-YPF (oil and natural gas). Quantitative and qualitative data were used. Data were collected from the firms' annual reports, from their archives and from personal interviews with senior executives, as well as from academic and specialized publications. ^ Results indicate that the large Spanish FDIs in Latin America were highly concentrated in a few firms from five sectors. The FDIs of these firms alone accounted for 70 percent of total Spanish FDI in Latin America in this period. The reasons for these investments were firm-specific and sector specific. A series of institutional conditions existed in Spain between the 1970s and the 1990s that allowed the employees of the firms to develop the knowledge and devise strategies to adjust to that set of conditions. First, the policies of the Spanish state favored the creation of large firms in these sectors, operating under conditions of monopoly sometimes. Secondly, the consumers put pressure on the firms to provide better and cheaper products as the Spanish economy grew and modernized. Thirdly, the employees of the firms had to adjust their services and products to the demands of the consumers and to the constraints of the state and the market. They adjusted the internal organization of the firm to be able to produce the goods and services that the market demanded. Externally, they also adopted patterns of interaction with outside agents and institutions. This patterned behavior was the “corporate culture” of each firm and the “normative framework” in which their employees operated. When the managers of the firms perceived that there were similar conditions in Latin America, they decided to operate there as well by making FDIs. ^