Edited by Hamid Etemad
Chapter 7: Explaining the international entry and expansion of firms from developing countries from a capability point of view: test results from Ethiopia, Bolivia, Vietnam and Bangladesh
During 2002–07, world exports grew 4.7 percent, as opposed to a 5.2 percent growth in imports. In the same period, exports and imports from the developed countries grew 4.7 percent and 5.2 percent respectively. On the other hand, the developing countries’ exports and imports grew 10.5 percent and 11.6 percent respectively, during this period, strongly driven by the success of Chinese and Indian firms in the international market (UNCTAD 2008). In parallel with firms from Newly Industrialized Economies (NIE), companies from countries like Brazil, China, India, Mexico and South Africa are also growing and challenging the traditional leaders in some industries, in both their home and foreign markets. Home brands, for example TATA (India) and Haier (China), are quickly appearing as global trademarks. These achievements of the new generation of firms from developing countries have drawn significant interest from academia as well as the popular press, including Chindia (Sheth 2008), Dragon Multinationals (Mathews 2006), Global Latinas (Casanova 2009). These exemplary developments of multinational firms from the developing countries are particularly the outcome of the process of capability accumulation over a period of time (Yeung 1994; Barnett and Burgelman 1996). Li (1998), based on the internationalization process model (Johanson and Vahlne 1977, 1990) and the investment development framework (Dunning 1988), has suggested that the pre-multinationality of a firm includes different phases of development in the firm.
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