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Emerging Market Multinationals
In Focus of Research at TIM/TUHH
[ Rajnish Tiwari ]
The ongoing shift from "internationalization" to "globalization" has created many multinationals in economically emerging countries in the developing "South". Many domestic firms in the "emerging markets" like the BRIC countries (Brazil, Russia, China and India) have started venturing abroad seeking expansion opportunities, market access and technological know-how. In many instances these companies have been able to earn above-average profits due to sustained high economic growth in the domestic market. On the other hand they are feeling to face competitive pressure from global multinationals that are seeking to establish their presence in the emerging markets making use of economic liberalization in those countries where foregin direct investments (FDI) were restricted in the past.
The outward FDI from emerging markets has in the meantime reached significant levels. For instance, India’s outward FDI stock has increased nearly 38-fold in last 10 years, growing from $ 2.6 billion at the end of March 2001 to $ 98.2 billion at the end of March 2011, according to official Reserve Bank of India (RBI) data. Emerging market multinationals, however, generally differ in their choices of FDI destinations and entry mode, which are in turn dependent on the underlying investment motives. For example, state-run Chinese firms have generally focused on securing access to natural resources in Africa and Latin America, whereas mostly private-sector Indian firms have gone on an acquisition spree in industrialized nations in the West. Some of the most prominent examples of Indian outward FDI are the acquisition of Jaguar and Land Rover by Tata Motors, of Corus Steel by Tata Steel, and closer home in Germany of windmill manufacturer REpower Systems by Suzlon Energy.
As one of our main research areas under the Research Project Global Innovation we pay special attention to this emerging phenomenon and continously seek to examine:
We continuously follow overseas investments by Indian firms especially those with relevance to Germany. Additionally, we have initiated a series called "The Emergence of Indian Multinationals" and already conducted two empirical survey of Indian firms in Germany, which to our knowledge are the only of its kind worldwide as far as first-hand survey of overseas operations of Indian firms are concerned:
Some of our publications with a direct relevance to this theme are listed below. Further publications are in the pipeline.