Firm-specific advantages: a comprehensive review with a focus on emerging markets
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Firm-specific advantages: a comprehensive review with a focus on emerging markets Gilbert Kofi Adarkwah 1
& Tine
Petersen Malonæs 1
Accepted: 3 September 2020/ # The Author(s) 2020
Abstract We consolidate and comprehensively review the international business (IB) literature on the firm-specific advantages (FSAs) of emerging market multinational enterprises (EM MNEs). We do so through a systematic examination of 88 empirical and conceptual articles published in top-ranked IB journals between 2011 and 2018. The results reveal that in the past decades, EM MNEs have acquired several of the same FSAs as their counterparts in developed countries (developed country enterprises or DC MNEs) financial resources, technologies, marketing capabilities, brand equity, R&D intensity, and management competencies. However, more recently, EM MNEs have developed additional unique FSAs in the form of managerial capabilities - to cope with competition in uncertain and constantly changing environments; easy access to cheaper capital; a stronger commitment to networks, such as those with diaspora communities; and, political connections. These additional FSAs have catalyzed the internationalization of EM MNEs. Our study also shows that some hurdles remain in the IB literature on FSAs. For instance, while IB scholars agree that EM MNEs have different investment motives depending on whether they invest in other emerging economies or developed economies, scholars are silent on the exact FSAs necessary to make EM MNEs investments in the respective economies successful. To advance the IB literature, we present some promising future research areas and challenge scholars to pursue further empirical studies on the FSAs of EM MNEs. Keywords Firm-specific advantages (FSAs) . Emerging market MNEs (EM MNEs) . China . Asia Pacific . Africa
* Gilbert Kofi Adarkwah [email protected] Tine Petersen Malonæs [email protected]
1
BI Norwegian Business School, Nydalsveien 37, 0484 Oslo, Norway
G. Adarkwah, T. P. Malonæs
Introduction The advantages derived from multinational enterprises’ (MNEs) possession of specific assets and capabilities has for decades, been the subject of intense scrutiny by international business (IB) scholars, and it continues to be so. Beginning with the seminal works of Dunning (1958), Vernon (1966), and Hymer (1960/1976), the IB field has seen rapid growth in studies examining firm-specific advantages (FSAs; Aharoni, 1993; Birkinshaw, Hood, & Jonsson, 1998; Buckley & Casson, 1976; Dunning, 1988; Dunning, 2000; Erramilli, Agarwal, & Kim, 1997; Hedlund, 1980; Kogut, 1985; Lecraw, 1984; Rugman, 1977, 1980a, b; Rugman & Verbeke, 1988). FSAs come mostly from intangible assets and capabilities, which bring a superior competitive position to the possessing firm (Rugman, Verbeke, & Nguyen, 2011). FSAs include privileged access to information, raw materials, distribution channels, superiority in [digital] technology, and brands, superior corporate governance, and organizational culture. A key tenet of IB theory is that to be
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