Threat or Opportunity?
Studies in International Investment series
Edited by Karl P. Sauvant
Chapter 8: Old Wine in New Bottles: A Comparison of Emerging-Market TNCs Today and Developed-Country TNCs Thirty Years Ago
John H. Dunning, Changsu Kim and Donghyun Park INTRODUCTION Traditionally, the vast majority of transnational corporations (TNCs) that operate across borders have originated from developed countries such as the United States (US), Japan and members of the European Union (EU). Large and well-established TNCs such as Coca Cola, Toyota or Siemens are almost invariably from such countries. In the context of TNCs, we tend to associate the role of emerging markets1 primarily as the destination of TNCs from developed countries, for example, US software companies setting up research facilities in India, Japanese manufacturers establishing production facilities in China, or British banks acquiring ﬁnancial institutions in Brazil. Until quite recently, this widespread perception of developed countries as homes of TNCs, and emerging markets as hosts of TNCs, had been ﬁrmly rooted in empirical reality (Dunning 1993). While there were TNCs from emerging markets in the past, as will be described elsewhere in this chapter, they were nowhere near as active or visible as they are today. In line with their growing relative signiﬁcance in the global economy, many emerging markets are now becoming important outward foreign direct investors (UNCTAD 2006). At a broader level, the growth of TNCs from emerging markets reﬂects their rapid economic development and growth (Dunning and Narula 1996). The four newly industrialized economies of Hong Kong (China), the Republic of Korea, Singapore and Taiwan Province of China now have per capita income levels approaching those of developed countries. In other words, some emerging markets have...
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