Emerging MNEs Successfully Operating in International Markets: The Cases of Some Mexican MNEs

Background And Literature Review

The increasing participation of companies from emerging markets in the international arena poses new questions and dilemmas for academic and scholars (Wells 2009). This is relevant given that most of the theories that explain the internationalization process have been developed considering mainly firms from developed countries. Thus, the understanding of the motives for MNEs from underdeveloped countries creates an opportunity to enlarge and develop new theories.

Since the 1960s, scholars have tried to explain the internationalization of firms. Hymer (1960) and Johanson & Vahlne (1977) are among the most notorious researchers seeking to explain the internationalization process. Their first theories are about the multinational enterprise and provide elements to understand a particular reality faced by companies mainly from the USA and Western Europe which had operations in international markets. In this context, the international expansion pattern of those companies is mainly explained as a result of the differences in the quality of the institutional environment and markets between the firms’ country of origin and their international destination. Frequently, the countries of destination of such initiatives were developed economies. It was not until the early 1980s that some authors (c.f. Wells 1983) noted the international expansion experienced by a number of companies from developing economies. In that direction, Wells (1983) and Yeung (1994) propose theories explaining how firms born in underdeveloped environments are also able to compete in developed markets. Among the drawbacks they considered for MNEs from developing countries are the problems their own countries face, such as weak regulatory systems, limited rule of law and judicial issues. Other pondered problems faced by those MNEs are credit restrictions, high levels of corruption, and limited technology. Despite all that, MNEs from underdeveloped countries compete in international markets similar to those from developed ones.