Abstract
This review article starts from the question: how does the global business system appear to a challenger firm, and how have challenger Multinational Enterprises (MNEs) from formerly peripheral areas such as the Asia Pacific established themselves successfully, against the sometimes fierce resistance of incumbents? To answer this question, the review develops an argument concerning the pluralistic character of the process of globalization, as contrasted with the conventional account that sees global processes creating uniformity and convergence. This alternative account is based on a review of the experiences of latecomer and newcomer MNEs, particularly those from the Asia Pacific—such as Acer, Ispat International, Li & Fung and the Hong Leong Group—that are dubbed “Dragon Multinationals.” I argue that the innovative features that these MNEs share, such as their accelerated internationalization, strategic innovation and organizational innovation, fit particularly well with the characteristics of the emergent global economy as one of complex inter-firm linkages. The core proposition of the review is that this complementarity between the characteristics of the emergent global economy and latecomer and newcomer strategic and organizational innovations is what drives the remarkable success of these Asia Pacific firms in establishing themselves as serious international players. Such a proposition carries implications for the process of globalization as well as for the dominant frameworks utilized in International Business. The review argues that Dragon Multinationals adopt a different perspective to the resources accessed through internationalization, and that this requires a rethink of the criteria normally utilized in resource-based accounts of strategy. The challenger firm internationalizing in order to access resources also poses a challenge to the dominant OLI (ownership, locational, internalization) account of multinational advantage. Thus it is argued that the question posed at the outset goes to the core of the IB frameworks, and thereby counts as one of the ‘big questions’ that should guide research in IB in the 21st century.
Similar content being viewed by others
References
Acs, Z., Morck, R., Shaver, J. M., & Yeung, B. 1997. The internationalization of small and medium-sized enterprises: A policy perspective. Small Business Economics, 9: 7–20.
Andersen, O. 1993. On the internationalization process of firms: A critical analysis. Journal of International Business Studies, 24(2): 209–231.
Andersen, P. H., Blenker, P., & Christensen, P. R. 1997. Generic routes to subcontractors' internationalization. In I. Bjorkman and M. Forsgren (eds.), The nature of the international firm. Copenhagen: Copenhagen Business School Press.
Andersson, U., & Forsgren, M. 1996. Subsidiary embeddedness and control in the multinational corporation. International Business Review, 5(5): 487–508.
Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17: 99–120.
Bartlett, C. A., & Ghoshal, S. 2000. Going global: Lessons from late movers. Harvard Business Review, Mar–Apr.
Bell, J., McNaughton, R., & Young, S. 2001. ‘Born-again global’ firms: An extension to the ‘born global’ phenomenon. Journal of International Management, 7(3): 1–17.
Bloodgood, J. M., Sapienza, H. J., & Almeida, J. G. 1996. The internationalization of new high-potential US ventures: Antecedents and outcomes. Entrepreneurship Theory and Practice, 20(4): 61–76.
Buckley, P. 2002. Is the International Business research agenda running out of steam? Journal of International Business Studies, 33(2): 365–373.
Buckley, P. J., & Casson, M. C. 1976. The future of the multinational enterprise. London: Holmes & Meier.
Calof, J. C., & Beamish, P. 1995. Adapting to foreign markets: Explaining internationalization. International Business Review, 4(2): 115–131.
Caves, R. E. 1996. Multinational enterprise and economic analysis (Second Edition). Cambridge: Cambridge University Press.
Chen H. M., & Chen, T. J. 1998. Network linkage and location choice in foreign direct investment. Journal of International Business Studies, 29(3): 445–468.
Chi, T. L., & McGuire, D. J. 1996. Collaborative ventures and value of learning: Integrating the transaction cost and strategic option perspectives on the choice of market entry modes. Journal of International Business Studies, 27(2): 285–307.
Clark, T., & Knowles, L. L. 2003. Global myopia: Globalization theory in International Business. Journal of International Management, 9: 361–372.
Coviello, N., & McAuley, A. 1999. Internationalisation and the smaller firm: A review of contemporary empirical research. Management International Review, 39(3): 223–256.
Coviello, N., & Munro, H. J. 1997. Network relationships and the internationalization process of small software firms. International Business Review, 6(2): 1–26.
Delios, A., & Beamish, P. 2001. Survival and profitability: The roles of experience and intangible assets in foreign subsidiary performance. Academy of Management Journal, 44(5): 1028–1038.
Dimitratos, P., Johnson, J. E., Slow, J., & Young, S. 2003. Micromultinationals: New types of firms for the global competitive landscape. European Management Journal, 21(2): 164–174.
Dunning, J. H. 1981. The eclectic theory of the MNC. London: Allen & Unwin.
Dunning, J. H. 1988. The eclectic paradigm of international production: A restatement and some possible extensions. Journal of International Business Studies, 19(1): 1–31.
Dunning, J. H. 1995. Reappraising the eclectic paradigm in an age of alliance capitalism. Journal of International Business Studies, 3 rd quarter: 461–491.
Eriksson, K., Johanson, J., Majkgard, A., & Sharma, D. D. 1997. Experiential knowledge and cost in the internationalization process. Journal of International Business Studies, 28(2): 337–360.
Forsgren, M., & Johanson, J. 1992. Managing internationalization in business networks. In M. Forsgren and J. Johanson (eds.), Managing networks in international business. Philadelphia: Gordon & Breach.
Forsgren, M. 1999. Some critical notes on learning in the Uppsala internationalization process model. WP #99/23. Institute of International Business, Stockholm School of Economics.
Fujita, M. 1995. Small and medium-sized transnational corporations: salient features. Small Business Economics, 7: 251–271.
Geringer, J. M., Tallman, S., & Olsen, D. M. 2000. Product and international diversification among Japanese multinational firms. Strategic Management Journal, 21: 51–80.
Gerschenkron, A. 1962. Economic backwardness in historical perspective. Cambridge, MA: The Belknap Press of Harvard University Press.
Hedlund, G. 1993. Introduction. In G. Hedlund (ed.), Organization of transnational corporations. United Nations Library on Transnational Corporations, Volume 6. London: Routledge.
Hoschka, T., & Livingston, J. 2002. McKinsey Quarterly, 1: 6–9.
Hymer, S. 1960/1976. The international operations of national firms: A study of direct foreign investment. Cambridge, MA: MIT Press (1960 PhD Thesis).
Ibeh, K., Johnson, J. E., Dimitratos, P., & Slow, J. 2004. Micromultinationals: Some preliminary evidence on an emergent ‘star’ of the international entrepreneurship field. Journal of International Entrepreneurship, 2: 289–303.
Johanson, J., & Mattsson, L. G. 1988. Internationalization in industrial systems—a network approach. In N. Hood and J. E. Vahlne (eds.), Strategies in global competition. London: Croom Helm.
Johanson, J., & Mattsson, L. G. 1993. Network positions and strategic action–-an analytical framework. In B. Axelsson and G. Easton (eds.), Industrial networks: A new view of reality. London: Routledge.
Kindleberger, C. P. 1970. The international corporation. Cambridge: MIT Press.
Knight, G. A., & Cavusgil, S. T. 1996. The born global firm: A challenge to traditional internationalization theory. Advances in International Marketing, 8: 11–26.
Kohn, T. O. 1997. Small firms as international players. Small Business Economics, 9: 45–51.
Kumar, K., & McLeod, M. G. (Eds.). 1981. Multinationals from developing countries. Lexington, MA: Lexington Books.
Lall, S. 1983. The new multinationals: The spread of third world enterprises. Chichester: Wiley.
Liu, X., Buck, T., & Shu, C. 2005. Chinese economic development, the next stage: Outward FDI? International Business Review, 14: 97–115.
Madsen, T. K., & Servais, P. 1997. The internationalization of born globals: An evolutionary process? International Business Review, 6(6): 561–583.
Magretta, J. 1998. Fast, global and entrepreneurial: Supply chain management, Hong Kong style. An interview with Victor Fung. Harvard Business Review, 76(5) (Sep–Oct): 102–114.
Mathews 2002a. Dragon multinational: Towards a new model of global growth. New York: Oxford University Press.
Mathews, J. A. 2002b. A resource-based view of Schumpeterian economic dynamics. Journal of Evolutionary Economics, 12: 29–54.
Mathews, J. A. 2002c. Competitive advantages of the latecomer firm: A resource-based account of industrial catch-up strategies. Asia Pacific Journal of Management, 19(4): 467–488.
Mathews, J. A. 2003. Competitive dynamics and economic learning: An extended resource-based view. Industrial and Corporate Change, 12(1): 115–145.
Mathews, J. A. 2004. Catchup strategies and the latecomer effect: World industrial development in the 21st century. MGSM Working paper 2004–18. Sydney: Macquarie Graduate School of Management.
Mathews, J. A. 2005. Strategy and the crystal cycle. California Management Review, 47(2): 6–32.
Mathews, J. A. 2006. Strategizing, disequilibrium, and profit. Stanford, CA: Stanford University Press.
Mathews, J. A., & Snow, C. C. 1998. A conversation with The Acer Group's Stan Shih on global strategy and management. Organizational Dynamics, Summer.
McDougall, P. P., & Oviatt, B. M. 2000. International entrepreneurship: The intersection of two research paths. Academy of Management Journal, 43(5): 902–906.
McDougall, P. P., Oviatt, B. M., & Shrader, R. C. 2003. A comparison of international and new ventures. Journal of International Entrepreneurship, 1: 59–82.
McDougall, P. P., Shane, S., & Oviatt, B. M. 1994. Explaining the formation of international new ventures: The limits of theories from international business research. Journal of Business Venturing, 9: 469–487.
Melin, L. 1992. Internationalization as a strategy process. Strategic Management Journal, 13(2): 99–118.
Miles, R. E., Miles, G., & Snow, C. C. 2005. Collaborative entrepreneurship: How communities of networked firms use continuous innovation to create economic wealth. Stanford, CA: Stanford Business Books.
Miles, R. E., Snow, C. S., Mathews, J. A., Miles, G., & Coleman, H. J.1997. Organizing in the knowledge: Anticipating the cellular form. Academy of Management Executive, 11(4): 7–24.
Narula, R., & Sadowski, B. 2002. Technological catch-up and strategic technology partnering in developing countries. International Journal of Technology Management, 23(6): 599–617.
Nolan, P., Sutherland, D., & Zhang, J. 2002. The challenge of the global business revolution. Contributions to Political Economy, 21: 91–110.
Nolan, P., & Zhang, J. 2003. Globalization challenge for large firms from developing countries: China's oil and aerospace industries. European Management Journal, 21(3): 285–299.
Oviatt, B. M., & McDougall, P. P. 1994. Toward a theory of international new ventures. Journal of International Business Studies, 25(1): 45–64.
Oviatt, B. M., & McDougall, P. P. 1997. Challenges for internationalization process theory: The case of international new ventures. Management International Review, 37(2): 85–99.
Oviatt, B. M., & McDougall, P. P. 2005. Retrospective: The internationalization of entrepreneurship. Journal of International Business Studies, 36: 2–8.
Peng, M. 2001. The Resource-Based View and International Business. Journal of Management, 27: 803–829.
Peng, M. 2004. Identifying the big question in international business research. Journal of International Business Studies, 35(2): 99–108.
Peng, M., & Wang, D. 2000. Innovation capability and foreign direct investment: Toward a learning option perspective. Management International Review, 40(1): 79–94.
Perlmutter, H. 1969. The tortuous evolution of the multinational corporation. Columbia Journal of World Business, 4 (Jan–Feb): 8–18.
Pietrobelli, C., & Sverrison, A. (eds.). 2003. Linking local and global economies: The ties that bind. London: Routledge.
Rasmussen, E. S., Madsen, T. K., & Evangelista, F. 2001. The founding of the Born Global company in Denmark and Australia: Sensemaking and networking. Asia Pacific Journal of Marketing and Logistics, 13(3): 75–107.
Rialp, A., Rialp, J., & Knight, G. A. 2005. The phenomenon of early internationalizing firms: What do we know after a decade (1993–2003) of scientific inquiry? International Business Review, 14: 147–166.
Roberts, J., & Podolny, J, with J. Han., & A. Hodge (1999) ‘Cemex S. A. de C. V.: Global competition in local markets’, Stanford GSB case S–IB–17. Palo Alto, CA: Stanford University.
Rugman, A. M. 1980. A new theory of the multinational enterprise: Internationalization versus internalization. Columbia Journal of World Business, Spring: 23–29.
Rugman, A. M. 2003. Regional strategy and the demise of globalization. Journal of International Management, 9: 409–417.
Rugman, A. M., & Verbeke, A. 2004. A perspective on regional and global strategies of multinational enterprises. Journal of International Business Studies, 35(1): 3–18.
Shrader, R. C., Oviatt, B. M., & McDougall, P. P. 2000. How new ventures exploit trade-offs among international risk factors: Lessons for the accelerated internationalization of the 21st century. Academy of Management Journal, 43 (6): 1227–1247.
Simon, H. 1996. Hidden champions: Lessons from 500 of the world's best unknown companies. Boston: Harvard Business School Press.
Sinha, J. 2005. Global champions from emerging markets. McKinsey Quarterly, 2: 26–36.
Sull, D. 1999. Spinning steel into gold: The case of Ispat International N. V. European Management Journal, (Aug).
Turnbull, P. W. 1987. A challenge to the stages theory of the internationalization process. In P. J. Rosson and S. D. Reed (eds.), Managing export entry and expansion. New York: Praeger.
UNCTAD 2004. World investment report 2004: The shift towards services. Geneva: United Nations Conference on Trade and Development.
Vernon, R. 1971. Sovereignty at Bay: The multinational spread of U. S. enterprises. New York: Basic Books.
Vernon-Wortzel, H., & Wortzel, L. H. 1988. Globalizing strategies for multinationals from developing countries. Columbia Journal of World Business, 23(1): 27–36.
Weiss, L. (ed.). 2003. States in the global economy: Bringing domestic institutions back in. Cambridge: Cambridge University Press.
Welch, L. S., & Luostarinen, R. K. 1988. Internationalization: Evolution of a concept. Journal of General Management, 14(2): 34–55.
Wells, L. T. 1983. Third world multinationals: The rise of foreign investment from developing countries. Cambridge, MA: The MIT Press.
Wells, L. T. 1998. Multinationals and the developing countries. Journal of International Business Studies, 29(1):101–114.
World Bank 1993. The east Asian miracle. New York: Oxford University Press.
Yeung, H. 1999. The internationalization of ethnic Chinese business firms from Southeast Asia: Strategies, processes and competitive advantage. International Journal of Urban and Regional Research, 23(1): 88–102.
Yeung, H. W. C (ed.). 2000. The globalization of business firms from emerging economies. Cheltenham, UK: Edward Elgar.
Zander, I. 1999. Whereto the multinational? The evolution of technological capabilities in the multinational network. International Business Review, 8: 261–291.
Zander, I., & Zander, U. 1997. The oscillating multinational firm–-Alfa Laval in the period 1890–1990. In I. Bjorkman & M. Forsgren (eds.), The nature of the international firm. Copenhagen: Copenhagen Business school Press.
Zhang, Y.-J. 2003. China's emerging global businesses: Political economy and institutional investigations. London: Palgrave Macmillan.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Mathews, J.A. Dragon multinationals: New players in 21st century globalization. Asia Pacific J Manage 23, 5–27 (2006). https://doi.org/10.1007/s10490-006-6113-0
Issue Date:
DOI: https://doi.org/10.1007/s10490-006-6113-0