Recent years have seen a steady increase in outward foreign direct investment (OFDI) from emerging markets and the attendant rise of new MNEs. Asia, and especially China, has played a central role in this development. From the end of the Cold War in 1990 to 2013, annual OFDI flows from Asian developing economies grew from USD 11 billion to USD 326 billion (UNCTAD). While Asian emerging markets in 1990 accounted for less than 5 percent of worldwide OFDI, by 2013, almost a quarter of world OFDI originated there.
A lively debate has developed whether existing theory can account for the characteristics of emerging market OFDI, including aspects such as timing, drivers, industries involved, location choices, modes of entry abroad, and economic consequences. For instance, much of the expansion has happened at earlier stages of economic development than commonly expected, and it is often not clear what firm-specific advantages emerging market MNEs bring with them.
Part of this debate has occurred, naturally, in journals with a geographic focus, such as Asian Business and Management. To make the insights of these works more widely available to the IB community, we have collated this Virtual Collection of ABM articles on the topic. The main focus is on China, but it also includes perspectives from Korea, Taiwan, and Thailand, as well as insights from late-coming R & D internationalization in Japan.
Michael A. Witt
Outward Foreign Direct Investment: an ABM Collection: Table of Contents