To understand EMNEs a dynamic IB contingency theory is called for

Abstract

Purpose – This paper argues that international business (IB) theory needs to adapt to the changes that have occurred in the global economy when the world was divided into rich market economies, communist countries and poor economies. Changes in ideologies and technologies has opened up opportunities for emerging market multinational enterprises and the paper offers guidelines for a dynamic IB contingency theory to acknowledge these changes and learning. Design/methodology/approach – This is a conceptual paper which is designed to offer an alternative contingency perspective on IB theory. Findings – IB scholars should recognize the influence of several contingent variables such as the institutional environment, political systems, government-business-NGO relations, social norms-ethical behavior, country size and industry. The structural characteristics of an industry, their importance to the country and the regulatory regime are major variables in understanding how and whether firms can become emerging multinational enterprises (EMNEs). The paper finds that emerging market government and enterprises have strategies for building knowledge intensive industries through mergers and acquisitions and exploit these on a global scale. Research limitations/implications – IB scholars should recognize that multinational enterprises learn and they adapt to the global environment. Scholars should develop strategies or a way of thinking which is different to the status quo to take advantage of the new and changing circumstances where the rules of the game are different to those in the researcher's home country. Practical implications – The removal of trade barriers and government restrictions on trade and technological developments means that EMNEs and governments should not rely on protection and subsidies but should compete on being unique and adopt differentiated strategies in niche but global marketplaces.