Tallman, S., & Cuervo-Cazurra, A. 2021. Global strategy. Duhaime, I., Hitt, M., Lyles, M. (eds). Strategic Management: State of the Field and Its Future. Oxford: Oxford University Press.
We provide an overview of research on global strategy and outline suggestions for future studies. The field has generated three critical decisions: (1) expansion (whether to internationalize and how to select countries and entry modes to ensure effectiveness), (2) management (how to structure, coordinate, and control operations dispersed across countries to achieve efficiency) and (3) advantage (how to build an advantage in scale, learning, and arbitrage across locations to guarantee success). Future research can provide novel insights on these decisions by analyzing the impact of changes in three contexts: (1) countries, and the dynamics in cross-border interactions emerging from globalization, emerging markets, and government activism; (2) industries, and the reorganization of firm boundaries arising from digitalization, big data, and global value chains; and (3) and organizations, and the reconsideration of the nature of work derived from global expertise, dispersed collaboration, and the gig economy.
Cuervo-Cazurra, A., Rodriguez, A., and Un, A. 2021. Internationalization of Emerging Markets Multinationals: The role of the underdevelopment of the home country. In Mellahi, K., Meyer, K., Narula, R., Surdu, I., and Verbeke, A. (eds.) Oxford Handbook of International Business Strategy. Oxford: Oxford University Press.
This chapter analyzes the internationalization of emerging-market multinationals to clarify past contributions and outline suggestions for future research. We critically review the novelty of the phenomenon associated with the foreign expansion of firms from emerging markets, the new theoretical concepts introduced from analyzing these firms, and the new explanations related to their internationalization. We propose that future research can advance our understanding of these firms by studying how the underdevelopment of the home country’s economy and institution influences firms’ internationalization. We specifically discuss four areas that can yield promising insights: frugal innovation, contractual innovation, upgrading escape, and institutional escape.
Pananond, P. and Cuervo-Cazurra, A. 2018. The complementarity of foreign and domestic investment by emerging market multinationals. In Castellani, D., Narula, R., Nguyen, Q., Surdu, I. and Walker, J. (Eds) 2018. Contemporary Issues in International Business: Institutions, Strategy and Performance. Palgrave McMillan.
We analyse the impact of foreign direct investment on domestic investment by emerging market firms. This relationship underlies a key policy debate on whether and how home-country governments should support outward foreign direct investment. While some governments are strongly in favour of supporting their firms’ overseas expansion, many are hesitant as outward foreign investment is considered to replace domestic investment and thus harmful to the home economy. We argue that emerging market firms’ foreign expansion complements rather than substitutes their domestic investment because foreign direct investment enables these firms to increase their efficiency and improve their value chain positioning.
Cuervo-Cazurra, A. 2018. Multimexicans: An Introduction. In Cuervo-Cazurra, A. and Montoya, M. (Eds). Mexican Multinationals: Building Multinationals in Emerging Markets. New York: Cambridge University Press. Pages 1-28.
This chapter explains the benefit of analyzing Mexican multinationals, MultiMexicans, as a laboratory for better understanding of the internationalization of emerging market firms. MultiMexicans are increasingly expanding across countries, and some have become leading firms in their industries. The chapter provides, first, a review of the traditional models of the multinational, which have been based on the study of firms from advanced economies: those that explain the existence of multinationals (the OLI framework, the internalization model, and the knowledge-based view) and those that explain the internationalization process (the product lifecycle model, the incremental internationalization model, and the innovation related model). It then presents a review of models introduced to explain emerging market multinationals: the LLL model, the springboard model, the “new” model of the multinational, and the non-sequential internationalization model. Building on these, the chapter then explains how the analysis of MultiMexicans helps better understand the internationalization of emerging market firms by taking into account the influence of the home country on firm internationalization, and the tradeoffs that emerging market firms face as they expand abroad. The chapter concludes with a summary of the contents of the book and the lessons drawn from the comparison of MultiMexicans in multiple industries.
Cuervo-Cazurra, A. 2018. Conclusions: Building Multinationals in Emerging Markets. In Cuervo-Cazurra, A. and Montoya, M. (Eds). Mexican Multinationals: Building Multinationals in Emerging Markets. New York: Cambridge University Press. Pages 677-715.
This chapter explains how the lessons derived from the analysis of Mexican multinationals, MultiMexicans, in a variety of industries contribute to a better understanding of the strategies used by emerging market firms to upgrade capabilities and internationalize. The chapter explains two main lessons. First, the process of upgrading capability to build an emerging market multinational, and the role played by the characteristics of the home country. The underdevelopment of the country and its institutional weakness influence managers’ skills and mindsets and the industry’s regulation and customer characteristics, thus supporting the funds and technologies available to firms. These, in turn, influence the firm’s capability upgrading and their internationalization speed and breadth. Second, the four alternative upgrading strategies for internationalization that emerging market firms use: Improvement, whereby firms upgrade processes at the local level; Integration, whereby firms upgrade processes at the global level; Inspiration, whereby firms upgrade products at the local level; and Innovation, whereby firms upgrade products at the global level.
Cuervo-Cazurra, A. and Montoya, M. 2018. Research strategy for analyzing MultiMexicans. In Cuervo-Cazurra, A. and Montoya, M. (Eds). Mexican Multinationals: Building Multinationals in Emerging Markets. New York: Cambridge University Press. Pages 716-729.
The chapter summarizes the methods used in the analysis of Mexican multinationals, or MultiMexicans. The analysis of these firms is based on the comparison of cases studies. The cases studies were selected on the basis of their ability to provide insights for the analysis of MultiMexicans, covering a wider variety of industries, firm sizes, and level of internationalization. The cases were identified among the leading multinationals in their industries, and data was collected from secondary sources and interviews with company managers. Industry experts analyzed two leading firms in twenty two industries, describing the firms’ capability upgrading and internationalization and drawing conclusions from their comparison.
Cuervo-Cazurra, A. 2016. Emerging market multinationals and theory development: a multi-theoretical approach. In Merchant, H. (Ed.) Handbook of Contemporary Research on Emerging Markets. Northampton, MA: Edward Elgar. Pages 88-116.
I explain how the analysis of emerging country multinationals can be used to help advance theory. I propose that two distinguishing characteristics of emerging economies, their lower level of economic development and their lower level of sophistication of pro-market institutions, can be used to help advance existing theories of the multinational. I discuss how these conditions can be used to modify and undertake a multi-theoretical approach by extending six theories or models that have been used to explain the international expansion of multinational firms: the product life cycle, the incremental internationalization, the eclectic paradigm, internalization theory, neo-institutional theory and the resource-based view. In doing so, I identify some of the assumptions upon which current models and theories are built and extend them by explaining how the study of EMNCs can help identify new arguments.
Cuervo-Cazurra, A. 2015. The co-evolution of pro-market reforms and emerging market multinationals. In Tihanyi, L., Banalieva, E., Devinney, T. M., and Pedersen, T. (Eds) Advances in International Management 28: Emerging Economies and Multinational Enterprises. Emerald.
I study the relationship between pro-market reforms and the expansion of emerging market multinational companies (EMNCs). Extending institutional economics, I propose a co-evolutionary process, whereby pro-market reforms in emerging markets induce the transformation of domestic firms into EMNCs, and the global expansion of EMNCs, in turn, facilitates the deepening of pro-market reforms in the home country. Specifically, I first explain how pro-market reforms lead to the emergence of EMNCs via international competitiveness, upgrading needs, and escape; I then explain how the global expansion of EMNCs leads to a deepening of pro-market reforms at home via learning, spillovers, and lobbying. I complement these explanations with a discussion of contingencies at the firm (private vs. state, domestic vs. foreign firms), industry (global vs. local industries), and country (developing vs. transition countries) levels.
Cuervo-Cazurra, A., Meyer, K. and Ramamurti, R. 2015. Internationalization of emerging economy MNCs: The relative resource specialization of firm and environment. In Demirbag, M. and Yaprak, A. (Eds.), Handbook of Emerging Market Multinationals. Edward Elgar.
We study how the country of origin of a firm influences its internationalization, analyzing emerging economy multinational companies (EMNCs) as a laboratory for extending theory. EMNCs have been observed to vary from advanced economy MNCs (AMNCs), suggesting that the home context is the critical explanation. We propose “resource specialization” as the mechanism explaining differences and argue that firms in emerging economies develop a lower degree of resource specialization and wider sets of resources in response to underdevelopment at home. These more varied sets of resources lead EMNCs to have lower levels of internationalization and different patterns of foreign expansion than AMNCs.
Cuervo-Cazurra, A., and Ramamurti, R. 2014. Introduction. In Cuervo-Cazurra, A., and Ramamurti, R. (eds). Understanding Multinationals from Emerging Markets. Cambridge, UK: Cambridge University Press. Pages 1-11.
We explain the importance of studying emerging market multinationals and their potential contribution to the literature. We also summarize the content of the book, which is organized in three sections on different facets of EMNCs. The first section consists of chapters that take a historical view of EMNCs or argue for more research that extracts the lessons of history. The second section analyzes the mechanisms that facilitate or hinder EMNCs from upgrading their capabilities to international levels to compete in global markets. In the third part, we abstract from these themes and explain how the economic and institutional under-development that characterizes developing countries lead to distinctive internationalization behavior by EMNCs.
Cuervo-Cazurra, A., and Ramamurti, R. 2014. Conclusion: An agenda for future research. In Cuervo-Cazurra, A., and Ramamurti, R. (eds). Understanding Multinationals from Emerging Markets. Cambridge, UK: Cambridge University Press. Pages 271-300.
We provide an overview of the contributions of the papers in the book and add our own analysis of what is theoretically new or interesting about EMNCs, compared to MNCs from the advanced economies. In addition, we propose an agenda for future research on EMNCs that reflects the collective wisdom of our contributors. Specifically, we discuss how the underdevelopment of the economy and institution that characterize emerging markets have a positive and negative effect on firms that induce their internationalization following eight drivers: trickle-up innovation, self-reliant innovation, improvisation management self-reliant management, technological escape, marketing escape, institutional escape and discriminatory escape.
Cuervo-Cazurra, A. 2013. How developing country multinational companies upgrade capabilities using value chain configuration in advanced economies. In Williamson, P., Ramamurti, R., Fleury, A., and Fleury, M. T. (Eds.), The Competitive Advantage of Emerging Country Multinationals. Cambridge, UK: Cambridge University Press. Pages 174-179.
In this commentary I analyze global value-chain configuration by EMNEs, specifically describing four strategies that these firms can use in advanced economies to upgrade their capabilities and solve their developing-country comparative disadvantages: Low-cost and reliable finance, technology, customer intelligence and innovation, brands and marketing. I then illustrate the four strategies using the four country studies in this part of the book.
Cuervo-Cazurra, A., and Genc, M. 2012. Categories of distance and international business research. In Wood, G., and Demirbag, M. (Eds.), Handbook of Institutional Approaches to International Business. Northampton, MA: Edward Elgar. Pages 219-235.
In this chapter we provide depth to the concept of distance and its impact on international business by separating dimensions of the environment and their associated distances into three types: 1) those along which countries cannot be ranked by development, but are merely different from one another, obligating firms to develop non-market resources to operate in a different country (obligating dimensions), 2) those along which countries can be ranked by the extent to which they provide non-market resources that support firms’ operations (supporting dimensions), and 3) those along which countries can be ranked by the extent to which they pressure the firm to continuously improve its non-market resources and capabilities (pressuring dimensions). This classification challenges the assumptions that distance is symmetric and always has a negative impact on the multinational company.
Cuervo-Cazurra, A., and Un, C. A. 2011. Economic integration and the technological capabilities of local firms. In Jovanovic, M. (Ed.), International Handbook of Economic Integration. Northampton, MA: Edward Elgar. Volume II, pages 77-89.
This chapter analyzes the influence of economic integration agreements on the technological capabilities of domestic firms. The review of the literature reveals that most research has focused on how increased competition that accompanies economic integration induces firms to upgrade their technological capabilities. However, economic integration also helps firms upgrade their technological capabilities through the opening of markets, easier access to foreign inputs and intermediate products, and increased public support for R&D. These limitations in existing research result in the identification of two main areas for future research. One is the analysis of the concept of economic integration in more detail, studying how the characteristics of different types of economic integration and the characteristics of countries in the agreement affect the relationship between economic integration and a domestic firm’s technological capabilities. Another is the analysis of the concept of technological capabilities in more depth, studying how different types of firms and alternative mechanisms for technological upgrading react differently to the influence of economic integration on a domestic firm’s technological capabilities.
Cuervo-Cazurra, A. 2011. Internationalization process. In Kellermanns, F., and Mazzola, P. (Eds.), Handbook of Research on Strategy Process. Northampton, MA: Edward Elgar. Pages 432-451.
This chapter reviews the state of knowledge on a firm’s internationalization process, the sequence of events that a firm follows as it expands outside its country of origin. First I review traditional models and organize them around the questions they answer: How to internationalize, how to enter a country, and how to select among countries in which to expand. I then discuss challenges to these models that have emerged in recent times – the rapid internationalization of small high-tech firms and learning through networks – and indicate how these challenges can be integrated with previous arguments. I continue the review by discussing how new phenomena, offshoring and global supply chains and developing-country multinationals, require new explanations. I conclude with a reflection on research areas that need attention: the transformation from a small and simple to large and complex multinational firm, the reduction of internationalization, and the relationship between internationalization process and performance.
Un, A., and Cuervo-Cazurra, A. 2009. Interactions with customers for innovation. In Costanzo, L. A., and MacKay, R. B. (Eds.), Handbook of Research on Foresight and Strategy. Northampton, MA: Edward Elgar. Pages 362-379.
This chapter analyzes the ways in which firms can use their interactions with customers to generate innovations and better foresight future trends in the marketplace. We discuss how the interaction with customers varies depending on the type of innovation the firm is aiming to achieve: Product improvement, product versioning, new product development, and new product discovery. Each of them has distinct knowledge creation challenges in terms of the identification, transfer, and integration of customer knowledge to create innovations that fulfill their needs and preferences.
Cuervo-Cazurra, A., and Un, A. 2007. Types of difficulties in internationalization and their consequences. In Tallman, S. (Ed.), A New Generation in International Strategic Management. Northampton, MA: Edward Elgar. Pages 63-83.
We extend the literature on the difficulties of internationalization by discussing their types and specific consequences associated with each type. The types of difficulties can be separated into three main groups based on their cause and specificity: the inabilities to transfer advantage and to create value, the disadvantages of transfer and of foreignness, and the liabilities of expansion, newness, foreignness, and infrastructure. We discuss how each type has specific consequences associated with it, and suggest strategies for identifying them.
Un, A., and Cuervo-Cazurra, A. 2005. Top managers and the product improvement process. Advances in Strategic Management, 22: 319-348.
We analyze the role of top managers in the process of improving existing products in large established firms. The results of an inductive study reveal two key arguments. First, we find that the process is an “involved” top-down approach, rather than middle-up-down or bottom-up, discussed in previous studies on new product creation. Top managers actively participate throughout the process, taking on four roles: evaluation of product market performance, selection of products for improvement, initiation of the innovation process through delegation to middle managers of the responsibility to organize bottom-level employees to take actions toward product improvement, and monitoring of progress to ensure improvement (ESIM). Top managers become involved as necessary to reduce the resistance of people at the middle and lower levels to change in current routines. Second, we find that in companies that achieve superior product improvement, managers have a well-developed professional absorptive capacity and have routinized frequent interactions to evaluate, select, initiate, and monitor. Other characteristics of managers, such as personal absorptive capacity, incentive system, or mandate from above, are common across both high and low performers.
Cuervo-Cazurra, A., and Un, C. A. 2004. Firm-specific and non-firm-specific sources of advantages in international competition. In Ariño, A., Ghemawat, P., and Ricart, J. (Eds.), Creating Value through International Strategy. New York: Palgrave MacMillan. Pages 78-94.
We build on the resource-based theory (RBT) and the international management literature to analyze the sources of a firm’s advantage in international competition. We propose that the firm can potentially benefit not only from firm-specific sources of advantage –parent, subsidiary, and multinational– but also, contrary to existing RBT arguments, from non-firm-specific ones –home, host, and foreignness. We analyze the conditions under which these provide an advantage to the firm and the location of such advantage. We conclude with a discussion of the use of diverse sources of advantage against different types of competitors.
Cuervo-Cazurra, A., and Ramos, M. 2005. Explaining the process of internationalization by building bridges among existing models. In Floyd, S. W., Roos, J., Jacobs, C., and Kellermanns, F. (Eds.), Innovating Strategy Processes. London: Blackwell. Pages 111-122.
We analyze the internationalization process, clarifying and integrating existing research into a more complete and realistic model. We argue that the theories of organizational change that underlie internationalization process models must be made explicit in order to clarify the models’ boundaries. Furthermore, we integrate valid insights into a comprehensive model with an underlying teleological theory of organizational change, providing a more realistic explanation of the internationalization process.
Cuervo-Cazurra, A., and Un, C. A. 2004. The bald eagle cannot find its way in the rainforest: Sources and solutions to the difficulties in the internationalization of developed country MNEs into developing countries. In Prasad, S. B., and Gauri, P. N. (Eds.), Global Firms and Emerging Markets in the Age of Anxiety. Westport, CT: Praeger. Pages 13-36.
We analyze the sources of and potential solutions to the difficulties that developed country multinational enterprises (DCMNEs) face when they internationalize into less developed countries (LDCs). Despite being highly competitive and having large resource pools, DCMNEs still encounter difficulties when they enter LDCs. We apply the resource-based theory and the related knowledge-based view of the firm to develop the internationalization literature and explain that such difficulties arise from their lack of advantageous resources, the presence of disadvantageous resources, and their lack of neutral complementary resources, which create related but separable difficulties. We discuss the characteristics of firms and the different types of difficulties they face and analyze how such challenges might be solved through the management and development of resources, particularly knowledge.
Cuervo-Cazurra, A. 2002. Transforming the firm through the co-evolution of resources and scope. In Chakravarthy, B., Mueller-Stewens, G., Lorange, P., and Lechner, C. (Eds.), Strategy Process: Shaping the Contours of the Field. London: Blackwell. Pages 18-45.
I study the transformation processes used by firms in their quest to develop a competitive advantage in the experimental setting of firms facing radical changes in the institutional environment. The inductive analysis reveals that firms use the co-evolution of resources and scope, the interactive transformation of resources and activities, to manage their transformation in a changing environment, enabling them to upgrade their resources and alter their activities interactively. Additionally, I provide specific motives and processes that drive the relationships among dimensions of resources and activities and link them to the development of the competitive advantage.