Table of Contents

The Rise of Transnational Corporations from Emerging Markets

The Rise of Transnational Corporations from Emerging Markets

Threat or Opportunity?

Studies in International Investment series

Edited by Karl P. Sauvant

This insightful book shows that foreign direct investment (FDI) from emerging markets has grown from negligible amounts in the early 1980s to $210 billion in 2007, with the stock of investment now being well over $1 trillion. This reflects the rise of firms from these economies to become important players in the world FDI market. The contributors to this book comprehensively analyze the rise of emerging market TNCs, the salient features of the transnational activities of these firms, the relationship of outward FDI and the competitiveness of the firms involved, their impact on host and home countries and implications for the international law and policy system.

Chapter 3: The Rise of TNCs from Emerging Markets: Challenges Faced by Firms from India

Ravi Kant

Subjects: business and management, international business

Extract

3. The rise of TNCs from emerging markets: challenges faced by firms from India Ravi Kant INTRODUCTION In the past 50 years, Indian industry has transformed itself from a government-led, license-based and public sector unit-dominated entity into an open, vibrant and globally competitive industry. During these 50 years, Indian companies have overcome many challenges by acquiring unique capabilities. When Indian industry was hit by an economic downturn between 1998 and 2002, with the simultaneous entry of many competitors from abroad and increased customer expectations of quality products and services, many Indian companies enhanced their capabilities to surge above the odds, not only for their own survival but with specific strategies for sustained growth. Indian companies today are becoming very competitive entities. For example, they are currently the lowest cost telephone and internet service providers in the world, and Indian banks have the lowest cost of technology per transaction, which is nearly one-tenth of their Western counterparts. 3.1 INDIAN TNCS MOVE BEYOND SHORES Indian companies are increasingly competing with major global firms for businesses and customers. Outbound investment by Indian companies increased continuously between 2003 and 2006 (Figure 3.1). After tripling to $4.5 billion in one year in 2005, it grew by 60 per cent in the first nine months of the next fiscal year. The average deal size in the 2006 fiscal year also tripled over that of the previous year. Indian companies invested over $10 billion overseas in 2006, which is a substantial amount in view of the...

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