Special issue of the /European Journal of Development Research/

*The Development Effects of Multinational Enterprises from Developing 

Guest editors:

*Ari Kokko, Copenhagen Business School*

*Rajneesh Narula, Henley Business School, University of Reading*

The increasing prominence of MNEs from the developing countries (DC 
MNEs) has triggered an intensive debate in both the academic and popular 
press about its potential to influence growth and development, not just 
in their home and host countries, but also in the global economy at 
large. Despite being the subject of research for three decades, there is 
surprisingly little consensus in this regard.

Nonetheless, the following facts seem to survive scrutiny. First, that 
DC MNEs typically invest less in R&D and have weaker ownership assets 
than 'conventional' MNEs. Second, their internationalization tends to 
rely more on leveraging country-specific advantages and organizational 
innovations than firm-specific ownership assets. Third, the 
institutional environment in the home countries of DC MNEs influences 
their organization and governance. DC MNEs are often organized in 
diversified business groups and aim for more horizontal and vertical 
integration than what would be optimal in a more developed market 
(Khanna and Yafeh 2007; Hemrit 2011). Fourth, long-term linkages and 
networks characterize the relationships between firms. DC MNEs often 
rely on networks with ethnic, linguistic or cultural affinities that 
tend to be relatively closed and built on personalized governance and 
control systems. Fifth, DC MNEs exhibit a more mixed pattern of 
ownership than MNEs from developed countries. Many DC MNEs are either 
privately held (e.g. family-owned business groups) or wholly or partly 
owned by the state. Sixth, home governments support support the 
internationalization of domestic firms in order to strengthen the home 
economy's international competitivenes (Rasiah et al. 2010).

The importance of FDI to development and growth is a much studied area 
(e.g., Lall and Narula 2004, Narula and Dunning 2010).In principle, FDI 
can raise labor productivity, output, employment, and incomes (Blomström 
et al. 1996). In addition, the literature suggests that further gains 
may arise because of the increased competition and discipline generated 
by foreign firms, from technological, managerial, and organizational 
spillovers, and from learning-by-doing effects in local suppliers 
(Hirschman 1958, De Mello Jr. 1997; Blomström and Kokko 1998). Most 
contemporary analyses and national strategies tend to emphasize the 
positive potentials inherent in FDI, but the positive assessment is not 
unanimous and many debates remain unsettled (Narula and Dunning 2010). 
FDI flows may also have negative effects on growth when there is a 
mismatch between the investment projects and the host country's 
socio-economic conditions and absorptive capacity. The net effect of FDI 
also depends on a variety other factors such as the host country's 
policy environment, and the structure of its political and social 
institutions. If DC MNEs do differ from conventional MNEs, it is likely 
that the development effects of DC MNEs are also different.

The purpose of this special issue of the /European Journal of 
Development Research/ is to explore the development effects of MNEs from 
developing economies. Broadly speaking, the literature on DC MNEs has 
taken an Economics, International Business (IB) or Management 
perspective, but /we will deliberately to seek alternative, more 
pluralistic (and cross-disciplinary) approaches, including contributions 
from political economy, sociology and anthropology./ The empirical 
evidence on the developmental effects of outward FDI/DC MNEs remains 
fragmented and inconclusive: What are the developmental effects of DC 
MNEs? Are there tangible differences between DC MNEs and conventional 
MNEs in host countries? Are there important variations across and 
between industries, home countries, and host countries? How have 
geopolitical circumstances shaped their activities? Particular emphasis 
should be placed on the development effects that can be traced from the 
special characteristics and behavior of DC MNEs.

*Key questions*

We welcome papers from a variety of contexts that advance our 
theoretical and empirical understanding of the processes that shape and 
determine the developmental dimensions of DC MNEs, whether from a 
sociological, political, or economic perspective. The special issue 
welcomes a broad range of methodologies in enhancing our understanding 
of the aforementioned processes.These include quantitative studies, 
qualitative and case studies, multi-country comparative studies, 
replication studies and studies of specific projects. Key questions that 
may be addressed include:

·What are the political economy and sociological causes and implications 
of the growth of DC MNE activity?

·How do the operations of DC MNEs in developing countries differ from 
"conventional" MNEs? These differences can refer to technology as well 
as organizational capabilities, marketing, labor relations, and other 
operational dimensions.

·Are the linkages between DC MNEs and local firms different from 
linkages between local firms and conventional MNEs?

·What role do home governments play in supporting to DC MNEs?

·What are political and sociological effects of DC MNE activity, 
relative to conventional MNEs?

·Do DC MNEs affect migration patterns, both within countries and between 

·Do DC MNEs follow different strategies in engaging in resource-seeking 
activities? What are the consequences of DC MNE investments in natural 

·What are the links between FDI and trade for investors from developing 
countries? Do DC MNEs export back to their home countries, or are their 
exports directed towards third countries (e.g. the developed economies)?

·What are the home country effects of FDI from developing countries? Are 
the spillover effects in the home countries, i.e., is technology and 
knowledge diffused from DC MNEs to other firms in the home country?

*Proposed time table*

The time table for the proposed special issue is as follows:

We invite proposals/abstracts/papers to be submitted to the guest 
editors by December 1, 2011. First full drafts of the papers should be 
submitted to EJDR's website by March 2012 for formal review. Revised 
drafts will be presented and discussed at the bi-annual OFDI Conference 
at Copenhagen Business School in November 2012. Final manuscripts will 
be delivered in early 2013, for publication in Volume 24 (2013) of EJDR. 
All submissions need to follow the EJDR guidelines, and will be subject 
to a double-blind review. 
<>for details.

*Selected references*

Blomström, M. and A. Kokko (1998) "Multinational Corporations and 
Spillovers", /Journal of Economic Surveys/, 12(3) 247-277.

Blomström, M., R. Lipsey and M. Zejan (1996), "Is Fixed Investment the 
Key to Economic Growth?" /Quarterly Journal of Economics,/ 111 (1), 

Child, J. and Rodrigues, S, (2005), "The Internationalization of Chinese 
firms: A Case for Theoretical Extension?", /Management and Organization 
Review/, 1(3), 381-410.

De Mello, L.R. (1997), "Foreign Direct Investment in Developing 
Countries and Growth: A Selective Survey", /Journal of Development 
Studies,/ 34, 1--34.

Dunning, J.H., R.V. Hoesel and R. Narula (1998), 'Third World 
Multinationals Revisited: New Developments and Theoretical 
Implications', in J.H. Dunning (ed.), /Globalization, Trade, and Foreign 
Direct Investment/, Amsterdam: Elsevier.

Hemrit, M. (2011), /Beyond the Bamboo Network: The Internationalization 
Process of Thai Family Business Groups/, Stockholm: Stockholm School of 

Hirschman, A.O. (1958), /The Strategy of Economic Development./ New 
Haven, Conn.: Yale University Press.

Khanna, T. and Y. Yafeh (2007), 'Business Groups in Emerging Markets: 
Paragons or Parasites?' /Journal of Economic Literature/, 45(2): 331-72.

Kumar, K. and Mcleod, M.G.. (1981) /Multinationals from Developing 
Countries/, Lexington, MA: Lexington Books.

Lall, S. (1983) /The New Multinationals: The Spread of Third World 
Enterprises/, New York: Wiley.

Lall, S. &Narula, R. (2004) FDI and its Role in economic development: Do 
we need a new agenda, /European Journal of Development Research/, 16(3), 
pp. 447-464.

Lecraw, D.J. (1977), "Direct Investment by Firms from Less Developed 
Countries", /Oxford Economic Papers/, 29(3), 442--457.

Luo, Y. and R.L. Tung (2007), "International Expansion of Emerging 
Market Enterprises: A Springboard Perspective", /Journal of 
International Business Studies/, 38, 481--498

Mohan, G. and Tan-Mullins, M. (2009) Chinese Migrants in Africa as New 
Agents of Development? An Analytical Framework /European Journal of 
Development Research/, 21, 588--605

Mathews, J.A. (2002) /Dragon Multinational: Towards a New Model of 
Global Growth/, New York: Oxford University Press.

Narula, R. (2006), "Globalization, New Ecologies, New Zoologies, and the 
Purported Death of the Eclectic Paradigm", /Asia Pacific Journal of 
Management/, 23, 143--151.

Narula, R. (2010), "Much Ado About Nothing or Sirens of a Brave New 
World? MNE Activity from Developing Countries and its Significance for 
Development", Background Paper for the /Perspectives on Global 
Development 2010: Shifting Wealth/, UNCTAD, Geneva.//

Narula, R., Dunning, J.H. (2010). Multinational enterprises, development 
and globalization: some clarifications and a research agenda. /Oxford 
Development Studies/, 38(3): 263 -- 287.

Narula, R., Q. Nguyen (2011), Emerging country MNEs and the role of home 
countries: separating fact from irrational expectations. University of 
Reading Discussion Paper Series

Ramamurti, R. and J.V. Singh (eds.). (2009) /Emerging Multinationals in 
Emerging Markets/, Cambridge: Cambridge University Press.

Rasiah, R., P. Gammeltoft, and Y. Jiang (2010), "Home Government 
Policies for Outward FDI from Emerging Economies: Lessons from Asia", 
/International Journal of Emerging Markets,/5 (3/4), 333-57.

Rajneesh Narula
Professor of International Business Regulation
Director, John H. Dunning Centre for International Business
Henley Business School
University of Reading, UK

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