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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 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

Subjects: business and management, international business


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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