Dragons with Horsepower: Learning about the Internationalization Process of Emerging Market Firms

  • Anna Jonsson


While there are many examples of large multinational enterprises (MNEs) that have acquired local national firms in markets where they want to enter or further expand, there is less research focusing on how local and national firms choose to acquire large MNEs as a strategy for internationalization. To be able to compete in emerging markets and to internationalize out of these, firms make strategic choices that are different from those prescribed in traditional behavioral models of MNEs (Aulakh and Kotabe 2008; Lu et al. 2014; Meyer et al. 2009). Supposedly new categories of internationalized firms emerge in relation to traditional explanations and the current understanding of international business is challenged (Xu and Meyer 2005). For instance, through the acquisition strategy, where local firms from an emerging market acquire an existing internationalized firm, a new dimension to Johanson and Vahlne’s (2009) concept of “liability of foreignness” and “liability of outsidership” arises. This is especially so when the acquisition relates to an internationalized firm from a developed market.


Internationalization Process Experiential Knowledge Knowledge Flow Develop Market Outward Foreign Direct Investment 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Alvstam, C. G., & Ivarsson, I. (2014). The ‘hybrid’ emerging market multinational enterprise – The ownership transfer of Volvo Cars in China. In C. G. Alvstam, H. Dolles, & P. Ström. (Eds.), Asian inward and outward FDI: New challenges in the global economy (pp. 217–242). Basingstoke: Palgrave Macmillan Asian Business.Google Scholar
  2. Alvstam, C. G., Dolles, H., & Ström, P. (Eds.) (2014). Asian inward and outward FDI: New challenges in the global economy. Basingstoke: Palgrave Macmillian Asian Business Series.Google Scholar
  3. Anderson, H., Havila, V., & Salmi, A. (2001). Can you buy a business relationship? On the importance of customer and supplier relationships in acquisitions. Industrial Marketing Management, 30(7), 575–586.CrossRefGoogle Scholar
  4. Andersson, U. (2003). Managing the transfer of capabilities within multinational corporations: The dual role of the subsidiary. Scandinavian Journal of Management, 19(4), 425–442.CrossRefGoogle Scholar
  5. Aulakh, P. S., & Kotabe, M. (2008). Institutional changes and organizational transformation in developing economies. Journal of International Management, 14(3), 209–216.CrossRefGoogle Scholar
  6. Balcet, G., Wang, H., & Richet, X. (2012). Geely: A trajectory of catching up and asset-seeking multinational growth. International Journal of Automotive Technology and Management, 12(4). doi: 10.1504/IJATM.2012.051361.
  7. Becker-Ritterspach, F., Saka-Helmjout, A., & Hotho, J. J. (2010). Learning in international enterprises as the socially embedded translation of practices. Critical Perspectives on International Business, 6(1), 8–37.CrossRefGoogle Scholar
  8. Birkinshaw, J., Brannen, M. Y., & Tung, R. L. (2011). From a distance and generalizable to up close and grounded: Reclaiming a place for qualitative methods in international business research. Journal of International Business Studies, 42(5), 573–581.CrossRefGoogle Scholar
  9. Benner, M. J., & Tushman, M. L. (2003). Exploitation, exploration and process management: The productivity dilemma revisited. Academy of Management Review, 28, 238–256.Google Scholar
  10. Blomstermo, A., & Sharma, D. D. (2003). Learning in the internationalization process of firms. Cheltenham: Edward Elgar Publishing..Google Scholar
  11. Buckely, P. J., Clegg, L. J., Cross, A. R., Liu, X., Voss, H., & Zheng, P. (2007). The determinants of Chinese outward foreign direct investments. Journal of International Business Studies, 38, 499–518.CrossRefGoogle Scholar
  12. Carlile, P. (2004). Transferring, translating, and transforming: An integrative framework for managing knowledge across boundaries. Organization Science, 15(5), 555–568.CrossRefGoogle Scholar
  13. Cook, S. D. N., & Brown, J. S. (1999). Bridging epistemologies: The generative dance between organizational knowledge and organizational knowing. Organization Science, 10(4), 381–400.CrossRefGoogle Scholar
  14. Cooke, L. F. (2012). The globalization of Chinese Telecom Corporations: strategy, challenges and HR implications for the MNCs and host countries. International Journal of Human Resource Management, 23(9), 1832–1852.CrossRefGoogle Scholar
  15. Crossan, M. M., Maurer, C. C., & White, R. E. (2011). Reflections on the 2009 AMR Decade Award: Do we have a theory of organizational learning? Academy of Management Review, 36(3), 446–460.CrossRefGoogle Scholar
  16. Deng, P. (2009). Why do Chinese firms tend to acquire strategic assets in international expansion? Journal of World Business, 44(1), 74–84.CrossRefGoogle Scholar
  17. Deng, P. (2012). The internationalization of Chinese firms: A critical review and future research. International Journal of Management Reviews, 14(4), 408–427.CrossRefGoogle Scholar
  18. Deng, P. (2013). Chinese outward direct investment research: Theoretical integration and recommendations. Management and Organization Review, 9(3), 513–539.CrossRefGoogle Scholar
  19. Drauz, R. (2013). In search of a Chinese internationalization theory: A study of 12 automobile manufacturers. Chinese Management Studies, 7(2), 281–309.CrossRefGoogle Scholar
  20. Dunning, J. H. (2001). The eclectic (OLI) paradigm of international production: Past, present and future. International Journal of the Economics of Business, 8(2), 173–190.CrossRefGoogle Scholar
  21. Dyer, J., & Wilkins, A. L. (1991). Better stories, not better constructs, to generate better theory: A rejoinder to eisenhardt. Academy of Management Review, 16(3), 613–619.Google Scholar
  22. Dunning, J. A., & Lundan, S. M. (2008). Institutions and the OLI paradigm of the multinational enterprise. Asia Pacific Journal of Management, 25(4), 573–593.CrossRefGoogle Scholar
  23. Edwards, T., Collins, T., & Ferner, A. (2007). Conceptual approaches to the transfer of employment practices in multinational companies: An integrated approach. Human Resource Management Journal, 17(3), 201–217.CrossRefGoogle Scholar
  24. Eriksson, K., Johanson, J., Majkgård, A., & Sharma, D. (1997). Experiential knowledge and cost in the internationalization process. Journal of International Business Studies, 28(2), 337–360.CrossRefGoogle Scholar
  25. Fetscherin, M., & Beuttenmuller, P. (2012). Geely’s internationalization and Volvo’s acquisition. In I. Alon, M. Fetscherin, & P. Gugler (Eds.), Chinese international investments (pp. 376–390). Basingstoke: Palgrave Macmillan.CrossRefGoogle Scholar
  26. Fletcher, R. (2001). A holistic approach to internationalization. International Business Review, 10(1), 25–49.CrossRefGoogle Scholar
  27. Forbes Business. (2013). The Global Auto Forum 2013: Let Volvo be Volvo. 2013-10-23.Google Scholar
  28. Forsgren, M. (2002). The concept of learning in the Uppsala internationalization process model: A critical review. International Business Review, 11(3), 257–277.CrossRefGoogle Scholar
  29. Foss, N. J. (2006). Knowledge and organization in the theory of the multinational corporation: Some foundational issues. Journal of Management & Governance, 10(1), 3–20.CrossRefGoogle Scholar
  30. Foss, N. J., & Pedersen, T. (2004). Organizing knowledge processes in the multinational corporation: An introduction. Journal of International Business Studies, 35(5), 340–349.CrossRefGoogle Scholar
  31. Geely Auto. (2015). Creating something entirely new. Developing a new modular architecture for world-class cars. (consulted 2016-09-01).
  32. Gherardi, S. (2006). Organizational knowledge. Oxford: Blackwell Publishing.Google Scholar
  33. Ghoshal, S., & Westney, D. E. (1993). Organization theory and the multinational corporation. Basingstoke: Palgrave Macmillan.CrossRefGoogle Scholar
  34. Gibson, C. B., & Birkinshaw, J. (2004). The antecedents, consequences, and mediating role of organizational ambidexterity. Academy of Management Journal, 47(2), 209–226.CrossRefGoogle Scholar
  35. Global Times. (2015). Li Shufu commenting on Geely’s strategy towards Volvo: Setting free the tiger back to the mountains. 2015-01-05.Google Scholar
  36. Gupta, A. K., & Govindarajan, V. (1991). Knowledge flows and the structure of control within multinational corporations. Academy of Management Review, 16(4), 768–792.Google Scholar
  37. Gupta, A. K., & Govindarajan, V. (2000). Knowledge flows within multinational corporations. Strategic Management Journal, 21, 473–496.CrossRefGoogle Scholar
  38. Han, C., & Ryhs Thomas, S. (2012). Why are China’s companies doing overseas M&As? The case of Geely and Volvo. Emerald Emerging Markets Case Studies, 2(8), 1–7.CrossRefGoogle Scholar
  39. He, Z. L., & Wong, P. K. (2004). Exploration vs. exploitation: An empirical test of the ambidexterity hypothesis. Organization Science, 15(4), 481–494.CrossRefGoogle Scholar
  40. Heimeriks, K. G., & Duysters, G. (2007). Alliance capability as a mediator between experience and alliance performance: An empirical investigation into the alliance capability development process. Journal of Management Studies, 44(1), 25–49.CrossRefGoogle Scholar
  41. Hurmerinta-Peltomäki, L., & Nummela, N. (2006). Mixed methods in international business research: A value-added perspective. Management International Review, 46(4), 439–459.CrossRefGoogle Scholar
  42. Jack, G., & Westwood, R. (2006). Postcolonialism and the politics of qualitative research in international business. Management International Review, 46(4), 481–501.CrossRefGoogle Scholar
  43. Jensen, R., & Szulanski, G. (2004). Stickiness and the adaptation of organizational practices in cross-border knowledge transfers. Journal of International Business Studies, 35(6), 508–523.CrossRefGoogle Scholar
  44. Johanson, J., & Vahlne, J.-E. (1977). The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8(1), 23–32.CrossRefGoogle Scholar
  45. Johanson, J., & Vahlne, J.-E. (2009). The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40, 1411–1431.CrossRefGoogle Scholar
  46. Johanson, J., & Vahlne, J.-E. (2013). The Uppsala model on evolution of the multinational business enterprise: From internalization to coordination of networks. International Marketing Review, 30(3), 189–210.CrossRefGoogle Scholar
  47. Johanson, J., & Widersheim-Paul, R. (1975). The internationalization of the firm: Four Swedish cases. Journal of Management Studies, 12(3), 305–323.CrossRefGoogle Scholar
  48. Jonsson, A. (2007). Knowledge sharing across borders: A study in the IKEA world, Lund studies in economics and management, 97. Lund: Lund University Press.Google Scholar
  49. Jonsson, A. (2013, July 22). Beyond knowledge management: Understanding how to share knowledge through logic and practice. Knowledge Management Research & Practice, advance online publication. doi: 10.1057/kmrp.2013.28.
  50. Jonsson, A., & Foss, N. J. (2011). International expansion through flexible replication: Learning from the internationalization experience of IKEA. Journal of International Business Studies, 42, 1079–1102.CrossRefGoogle Scholar
  51. Lahiri, S. (2011). India-focused publications in leading international business journals. Asia Pacific Journal of Management, 28(2), 427–447.CrossRefGoogle Scholar
  52. Li, J., Li, Y., & Shapiro, D. (2012). Knowledge seeking and outward FDI of emerging market firms: The moderating effect of inward FDI. Global Strategy Journal, 2, 277–295.CrossRefGoogle Scholar
  53. Lu, J., Liu, X., & Wang, H. (2011). Motives for outward FDI of Chinese private firms: Firm resources, industry dynamics, and government policies. Management and Organization Review, 7(2), 223–248.CrossRefGoogle Scholar
  54. Lu, J., Liu, X., Wright, M., & Filatotchev, I. (2014). International experience and FDI location choices of Chinese firms: The moderating effects of home country government support and host country institutions. Journal of International Business Studies, 45, 428–449.CrossRefGoogle Scholar
  55. Luo, Y., & Rui, H. (2009). An ambidexterity perspective toward multinational enterprises from emerging economies. Academy of Management Perspectives, 23(4), 49–70.CrossRefGoogle Scholar
  56. Luo, Y., & Tung, R. (2007). International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38, 481–498.CrossRefGoogle Scholar
  57. Luo, Y., Xue, Q., & Han, B. (2010). How emerging market governments promote outward FDI: Experience from China. Journal of World Business, 45(1), 68–79.CrossRefGoogle Scholar
  58. Mathews, J. A. (2006). Dragon multinationals: New players in 21st century globalization. Asian Pacific Journal of Management, 23(1), 5–27.CrossRefGoogle Scholar
  59. Mathews, J. A., & Zander, I. (2007). The international entrepreneurial dynamics of accelerated internationalization. Journal of International Business Studies, 38, 387–403.CrossRefGoogle Scholar
  60. Meyer, K. E., & Thaijongrak, O. (2013). The dynamics of emerging economy MNEs: How the internationalization process model can guide future research. Asia Pacific Journal Management, 30(4), 1125–1153.CrossRefGoogle Scholar
  61. Meyer, K. E., Estrin, S., Bhaumik, S. K., & Peng, M. W. (2009). Institutions, resources, and entry strategies in emerging economies. Strategic Management Journal, 30(1), 61–80.CrossRefGoogle Scholar
  62. Orlikowski, W. J. (2002). Knowing in practice: Enacting a collective capability in distributed organizing. Organization Science, 13(3), 249–273.CrossRefGoogle Scholar
  63. Peng, M. W. (2012). The global strategy of emerging multinationals from China. Global Strategy Journal, 2(2), 97–107.CrossRefGoogle Scholar
  64. Peng, M. W., Bhagat, R. S., & Chang, S.-J. (2010). Introduction: Asia and global business. Journal of International Business Studies, 41(3), 373–376.CrossRefGoogle Scholar
  65. Petersen, B., Pedersen, T., & Sharma, D. (2003). The role of knowledge in firms’ internationalization process: Wherefrom and whereto. In A. Blomstermo & D. Sharma (Eds.), Learning in the internationalization process of firms (pp. 36–55). Cheltenham: Edward Elgar Publishing..Google Scholar
  66. Raisch, S., & Birkinshaw, J. (2008). Organizational ambidexterity: Antecedents, outcomes, and moderators. Journal of Management, 34(3), 375–409.CrossRefGoogle Scholar
  67. Ramamurti, R. (2012). What is really different about emerging market multinationals? Global Strategy Journal, 2(1), 41–47.CrossRefGoogle Scholar
  68. Rui, H., & Yip, G. S. (2008). Foreign acquisitions by Chinese firms: A strategic intent perspective. Journal of World Business, 43(2), 213–223.CrossRefGoogle Scholar
  69. Sun, S. L., Peng, M. W., Ren, B., & Yan, D. (2012). A comparative ownership advantage framework for cross-border M&As: The rise of Chinese and Indian MNEs. Journal of World Business, 47(1), 4–16.CrossRefGoogle Scholar
  70. The Economist. (2014). The $11billion Gamble. 2014-09-05.Google Scholar
  71. Vahlne, J.-E., & Ivarsson, I. (2013). The globalization of Swedish MNEs: Empirical evidence and theoretical explanation. Journal of International Business Studies, 45, 227–247.CrossRefGoogle Scholar
  72. Vera, D., Crossan, M., & Apaydin, M. (2011). A framework for integrating organizational learning, knowledge, capabilities, and absorptive capacity. In M. Easterby-Smith, &. M. A. Lyles (Eds.), Handbook of organizational learning and knowledge management (2nd ed., pp. 153–180). Oxford: Blackwell.Google Scholar
  73. Vermeulen, F., & Barkema, H. (2001). Learning through acquisitions. Academy of Management Journal, 44(3), 457–476.CrossRefGoogle Scholar
  74. Williamsson, P. J., Ramamurti, R., Fleury, A., & Fleury, A. T. (2013). The competitive advantage of emerging market multinationals. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  75. Xu, D., & Meyer, K. L. (2013). Linking theory and context: Strategy research in emerging economics after Wright et al. (2005). Journal of Management Studies, 50(7): 1322–1345.Google Scholar
  76. Yamakawa, Y., Peng, M. W., & Deeds, D. L. (2008). What drives new ventures to internationalize from emerging to developed economies? Entrepreneurship Theory and Practice, 32(1), 59–82.CrossRefGoogle Scholar
  77. Yang, H., Sun, S. L., Lin, Z., & Peng, M. W. (2011). Behind M&As in China and the United States: Networks, learning, and institutions. Asia Pacific Journal of Management, 28(2), 239–255.CrossRefGoogle Scholar
  78. Zhou, X., & Zhang, X. (2011). Strategic analysis of synergistic effect on M&A of volvo car corporation by Geely automobile. iBusiness, 3, 5–15. doi: 10.4236/ib.2011.31002.

Copyright information

© The Editor(s) (If applicable) and the Author(s) 2017

Authors and Affiliations

  1. 1.School of Economics & ManagementLund UniversitySE-22007Sweden

Personalised recommendations