Do western MNEs bring more benefits to host countries than emerging market MNEs? Jing Li Simon Fraser University

Contributions to Developing Countries  Firm benefits and consumer benefits  Western MNEs have stronger FSAs in technology and innovation.   Does this mean they have generated substantial positive spillovers on local firms?   Many studies have found no or negative impact.  Emerging market MNEs   More appropriate technologies to absorb   Healthier competition

Contributions to Developing Countries  EM MNEs provide more suitable and affordable products and services.  Mahindra and Mahindra in China  Chinese construction companies in Africa  Huawei Technologies in developing countries  EM MNEs are more willing to invest in countries with weak institutional environment. Western MNEs EM MNEs

Contributions to Developed Countries  EM MNEs frequently use M&As to enter developed countries and aim to acquire technology and brands.  Among the top 25 foreign acquisitions by Indian firms during , 16 were in the developed countries.  Levono (IBM’s PC segment); Tata (Jaguar)  Are these EM MNEs knowledge seekers but not contributors to developed countries?

Contributions to Developed Countries  Observations from interviews with several Chinese firms that acquired German firms:  Pay higher acquisition prices.  Save nearly bankrupt companies and keep local talents.  Open the Chinese market for German subsidiaries.  Upgrade local industry competitiveness.  Provide capital and stabilize local economy.  Knowledge is location bounded!  EM MNEs contribute more to developing countries.  EM MNEs also make important contributions to developed countries.