Journal of International Business Studies

, Volume 39, Issue 6, pp 957–979

Transforming disadvantages into advantages: developing-country MNEs in the least developed countries

Article

DOI: 10.1057/palgrave.jibs.8400390

Cite this article as:
Cuervo-Cazurra, A. & Genc, M. J Int Bus Stud (2008) 39: 957. doi:10.1057/palgrave.jibs.8400390

Abstract

We analyze the advantages and disadvantages of developing-country multinational enterprises (MNEs) in comparison with developed-country MNEs. Developing-country MNEs tend to be less competitive than their developed-country counterparts, partly because they suffer the disadvantage of operating in home countries with underdeveloped institutions. We argue that this disadvantage can become an advantage when both types of MNE operate in countries with “difficult” governance conditions, because developing-country MNEs are used to operating in such conditions. The empirical analysis shows that, although developing-country MNEs rarely appear among the largest MNEs in the world, they are more prevalent among the largest foreign firms in the least developed countries (LDCs), especially in LDCs with poorer regulatory quality and lower control of corruption.

Keywords

institutionsgovernancemultinational enterprisescompetitive advantagecompetitive disadvantageleast developed countries

Copyright information

© Academy of International Business 2008

Authors and Affiliations

  1. 1.Sonoco International Business DepartmentMoore School of Business, University of South CarolinaColumbiaUSA
  2. 2.Department of ManagementBaruch College, City University of New YorkNew YorkUSA