The Rise of Transnational Corporations from Emerging Markets
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The Rise of Transnational Corporations from Emerging Markets

Threat or Opportunity?

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.
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Chapter 6: How Global are TNCs from Emerging Markets?

Alan Rugman


Alan Rugman INTRODUCTION The focus of this chapter is to identify and analyze the set of transnational corporations (TNCs) registered and based in the world’s emerging markets. To do this, I take as the relevant population the world’s 500 largest firms, ranked by total revenues, as compiled annually in the Fortune Global 500. This entire set of 500 firms (most of which are TNCs) was analyzed in Rugman (2005). In that study, the focus was on an examination of data on the regional sales of TNCs from the ‘broad’ triad markets of Europe, North America and the Asia Pacific, which account for nearly all of the 500 firms. The total number of TNCs from the ‘core’ triad of the EU, United States and Japan in 2001 was 428 of the 500. In this chapter, attention is paid to TNCs from emerging markets, which numbered 32 in 2001 (and 44 in 2004). The chapter will first proceed to identify the set of 32 (or 44) TNCs from emerging markets. As most of these are from the Asia Pacific region, the substantive theoretical analysis of their performance will focus upon a set of Chinese TNCs. The 16 Chinese TNCs already in the 2004 list of the world’s 500 largest firms provide perhaps the most interesting challenge to theories of international business, international economics and explanations of foreign direct investment. In order to apply the relevant theory, I shall adapt the basic firm and country level matrix (Rugman 1981) to analyze...

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