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Do western MNEs bring more benefits to host countries than emerging market MNEs?

Do western MNEs bring more benefits to host countries than emerging market MNEs?. Jing Li Simon Fraser University. Contributions to Developing Countries. Firm benefits and consumer benefits Western MNEs have stronger FSAs in technology and innovation.

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Do western MNEs bring more benefits to host countries than emerging market MNEs?

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  1. Do western MNEs bring more benefits to host countries than emerging market MNEs? Jing Li Simon Fraser University

  2. Contributions to Developing Countries • Firm benefits and consumer benefits • Western MNEs have stronger FSAs in technology and innovation. •  Does this mean they have generated substantial positive spillovers on local firms? •  Many studies have found no or negative impact. • Emerging market MNEs •  More appropriate technologies to absorb •  Healthier competition

  3. Contributions to Developing Countries • EM MNEs provide more suitable and affordable products and services. • Mahindra and Mahindra in China • Chinese construction companies in Africa • Huawei Technologies in developing countries • EM MNEs are more willing to invest in countries with weak institutional environment. Western MNEs EM MNEs

  4. Contributions to Developed Countries • EM MNEs frequently use M&As to enter developed countries and aim to acquire technology and brands. • Among the top 25 foreign acquisitions by Indian firms during 2000-2007, 16 were in the developed countries. • Levono (IBM’s PC segment); Tata (Jaguar) • Are these EM MNEs knowledge seekers but not contributors to developed countries?

  5. Contributions to Developed Countries • Observations from interviews with several Chinese firms that acquired German firms: • Pay higher acquisition prices. • Save nearly bankrupt companies and keep local talents. • Open the Chinese market for German subsidiaries. • Upgrade local industry competitiveness. • Provide capital and stabilize local economy. • Knowledge is location bounded! • EM MNEs contribute more to developing countries. • EM MNEs also make important contributions to developed countries.

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