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Is there an advantage of emergingness? A politico-regulatory perspective

Mark R. Mallon, Orhun Guldiken, Mirko H. Benischke, Feng Dong and Trung Nguyen

International Business Review, 2022, vol. 31, issue 2

Abstract: The source(s) of competitive advantage of emerging-economy multinational enterprises (MNEs) remains a puzzle in international strategy scholarship, with some arguing that such firms are at a disadvantage compared to developed-economy rivals. Drawing on the concept of institutional advantage and using a sample of 233 foreign subsidiaries operating in 25 emerging economies over the period of 2000–2017, we find that foreign subsidiaries of emerging-economy MNEs are more adept than foreign subsidiaries of developed-economy MNEs at deploying their fixed asset management capabilities in emerging-economy host countries, especially when host-country politico-regulatory institutions are underdeveloped. Likewise, we find that subsidiaries of emerging-economy MNEs are more adept at deploying their tax planning capabilities when host-country politico-regulatory institutions become increasingly volatile. We discuss how these findings contribute to scholarly thought regarding the performance of emerging-economy MNEs.

Keywords: Emerging economies; Emerging-economy MNE; Foreign subsidiary; Firm performance; Institutional advantage (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.ibusrev.2021.101940

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