Journal of International Business Studies

, Volume 35, Issue 4, pp 277–283

Developing countries and MNEs: extending and enriching the research agenda



Foreign direct investment (FDI) through multinational enterprises (MNEs) has emerged in the last decade as the principal source of foreign capital for developing countries. Meyer (this issue) underlines the need for international business (IB) scholars to understand the impact of these investments on host developing countries. He offers a useful assessment of the literature and proposes a rich set of questions for further research. However, his research agenda can be extended and enriched in two ways. First, IB scholars must study, as they always have, causation in the opposite direction—namely, the impact of developing country context on MNE behavior and the co–evolution of these two variables over time. In doing so, they must incorporate into their models contemporary issues, such as the continued inadequacy of rules for FDI in infrastructure sectors, or the clever means by which MNEs are rewriting the global rules under which they operate in developing countries (e.g., on intellectual property rights). Second, IB scholars must pay more attention to topics that are not mainstream within the field but are of great importance to developing countries. Examples include the behavior and performance of a new generation of home-grown MNEs, the role of diaspora in homeland FDI (in countries like China and India), and the implications of global outsourcing of services.


MNE-host country relations MNEs and economic development regulating MNEs third-world MNEs outsourcing diaspora 


  1. Akyuz, Y and Cornford, A (1999) Capital Flows to Developing Countries and the Reform of the International Financial System, UNCTAD: Geneva Discussion Paper No. 143 (OSG/DP/143).Google Scholar
  2. Buckley, PJ, Clegg, J and Wang, C (2002) ‘The impact of inward FDI on the performance of Chinese manufacturing firms’, Journal of International Business Studies 33 (4): 637–655.CrossRefGoogle Scholar
  3. Caves, RE (1996) Multinational Enterprise and Economic Analysis, 2nd edn. Cambridge University Press: Cambridge.Google Scholar
  4. Cheek, ML (2001) ‘The limits of informal regulatory cooperation in international affairs: a review of the global intellectual property regime’, The George Washington International Law Review. 33 (2): 277–324.Google Scholar
  5. Doh, J and Ramamurti, R (2003) ‘Reassessing risk in developing country infrastructure’, Long Range Planning 36 (4): 337–354.CrossRefGoogle Scholar
  6. Economist (2004a) ‘Haier's purpose: Haier shows why China will struggle to build a global brand’, The Economist 370, 20 March 72.Google Scholar
  7. Economist (2004b) ‘Business in Mexico: still keeping it in the family’, The Economist 370, 20 March 63.Google Scholar
  8. Eden, L and Lenway, S (2001) ‘Introduction to the symposium (The Janus face of globalization)’, Journal of International Business Studies 32 (3): 383–400.CrossRefGoogle Scholar
  9. Gillespie, K, Riddle, L, Sayre, E and Sturges, D (1999) ‘Diaspora interest in homeland investment’, Journal of International Business Studies 30 (3): 623–634.CrossRefGoogle Scholar
  10. Guasch, L, Laffont, J-J and Straub, S (2002) ‘Renegotiation of concession contracts in Latin America’, Working paper (May)
  11. Guisinger, SE and Associates (1985) Investment Incentives and Performance Requirements: Patterns of International Trade, Production, and Investment, Praeger: New York.Google Scholar
  12. Heeks, R (1996) India's Software Industry: State Policy, Liberalization, and Industrial Development, Sage: New Delhi.Google Scholar
  13. Henisz, WJ and Zelner, B (1999) ‘Political risk and infrastructure investment’, Paper Prepared for the Conference on Infrastructure for Development: Confronting Political and Regulatory Risks, Organized by the Government of Italy and the World Bank; 8–10 September; Rome
  14. Kapur, D and Ramamurti, R (2001) ‘India's emerging competitive advantage in services’, Academy of Management Executive 15 (2): 20–31.CrossRefGoogle Scholar
  15. Khanna, T and Palepu, P (1997) ‘Why focused strategies may be wrong for emerging markets’, Harvard Business Review (July) 75: 41–51.Google Scholar
  16. Khanna, T and Palepu, K (2002) Emerging Giants: Building World Class Companies in Emerging Economies, Vol. 9 Harvard Business School Publishing: Boston, MA, pp. 703–731.Google Scholar
  17. Kumar, K and Kim, KY (1984) ‘The Korean manufacturing multinationals’, Journal of International Business Studies 15 (1): 45–61.CrossRefGoogle Scholar
  18. Lall, S and Associates (1983) The New Multinationals: The Spread of Third World Enterprises, Wiley: Chichester.Google Scholar
  19. Lall, S and Streeten, P (1977) Foreign Investment, Transnationals and Developing Countries, Macmillan: London.CrossRefGoogle Scholar
  20. Meyer, K (2004) ‘Multinational enterprises in emerging economies’, Journal of International Business Studies, in press.Google Scholar
  21. Nolan, P and Zhang, J (2002) ‘The challenge of globalization for large Chinese firms’, World Development 30 (12): 2089–2107.CrossRefGoogle Scholar
  22. Quinn, LR (2003) ‘Closing the GAAP’, Camagazine, August: 16–22.Google Scholar
  23. Ramamurti, R (2000) ‘A multilevel model of privatization in emerging economies’, Academy of Management Review 25 (3): 525–550.Google Scholar
  24. Ramamurti, R (2001) ‘The obsolescing ‘bargaining model’? MNC-host developing country relations revisited’, Journal of International Business Studies 32 (1): 23–39.CrossRefGoogle Scholar
  25. Ramamurti, R (2003a) ‘Can governments make credible promises? Insights from infrastructure projects in emerging economies’, Journal of International Management 9: 253–269.CrossRefGoogle Scholar
  26. Ramamurti, R (2003b) ‘The rise of internationally competitive clusters in developing countries: India's information technology industry’, Paper presented at the Conference on Multinational Corporations and Global Poverty Reduction; 24–25 October 2003; University of Connecticut: Storrs, CT.Google Scholar
  27. Ramamurti, R (2004) ‘MNCs and global regulatory convergence: Pfizer and intellectual property rights’, Paper presented at the Conference on International Business and Government Relations in the 21st Century, Thunderbird (American Graduate School of International Management); 5 January 2004; Glendale, AZ.Google Scholar
  28. Rimmer, PJ and Comtois, C (2002) ‘China's transport and communications firms: transforming national champions into global players’, Asia Pacific Viewpoint 43 (1): 93–114.CrossRefGoogle Scholar
  29. Root, FR and Ahmed, AA (1978) ‘The influence of policy instruments on manufacturing direct foreign investment in developing countries’, Journal of International Business Studies 9 (Winter): 81–93.CrossRefGoogle Scholar
  30. Santoro, M and Paine, LS (1992) Pfizer: Protecting Intellectual Property in A Global Marketplace, Harvard Business School Publishing: Boston, MA.Google Scholar
  31. Stern, P (1997) ‘New paradigm for trade expansion and regulatory harmonization: the Transatlantic Business Dialogue’, European Business Journal 9 (3): 35–46.Google Scholar
  32. UNCTAD (2003) World Investment Report: FDI Policies for Development: National and International Perspectives, New York and Geneva: United Nations Conference on Trade and Development.Google Scholar
  33. Vernon, R (1971) Sovereignty at Bay, Basic Books: New York.Google Scholar
  34. Vernon, R (1977) Storm over the Multinationals: The Real Issues, Harvard University Press: Cambridge, MA.CrossRefGoogle Scholar
  35. Vernon, R (1998) In the Hurricane's Eye: The Troubled Prospects of Multinational Enterprises, Harvard University Press: Cambridge, MA.Google Scholar
  36. Vogel, D (1999) ‘The dynamics of regulatory convergence’, Paper Presented at a Conference on Regulation in Europe, Sponsored by the London Business School and the Max Planck Institute, Bonn, In Association with the Anglo-German Research Foundation; 4–5 November 1999,
  37. Wells Jr, LT (1983) Third World Multinationals, MIT Press: Cambridge, MA.Google Scholar
  38. Wells Jr, LT (2004) ‘Protecting foreign investors in the developing world: a shift in US policy in the 1990s?’, Paper Presented at the Conference on International Business and Government Relations in the 21st Century, AGSIM (Thunderbird); 5 January 2004; Glendale, AZ.Google Scholar
  39. Wells Jr, LT and Wint, A (2000) Marketing a Country: Promotion as a Tool for Attracting Foreign Investment, World Bank: Washington, DC.Google Scholar
  40. Zahra, SA, Ireland, RD, Gutierrez, I and Hitt, M (2000) ‘Privatization and entrepreneurial transformation: emerging issues and a future research agenda’, Academy of Management Review 25 (3): 509–524.Google Scholar

Copyright information

© Academy of International Business 2004

Authors and Affiliations

  1. 1.College of Business Administration, Northeastern UniversityBostonUSA

Personalised recommendations