How Do Emerging Market Multinationals Internationalize? A Fencing Network Perspective

This article presents a fencing network perspective to describe the process and motives of the internationalization of emerging market multinationals. Emerging market multinationals use a fencing network internationalization model, through merge and acquisitions, to strategically redirect acquired firms’ capabilities toward a common purpose and strategic vision. Due to the high differences in capabilities, the acquiring firm focuses on entrepreneurial strategies to create value instead of cost-reduction strategies or transfer of knowledge and capabilities. This focus creates a hybrid form between arm’s-length transactions and internalization as the acquiring firm owns but does not control the acquired firm. Based on an in-depth longitudinal study approach, I identify and discuss the uniqueness of such an internationalization framework by integrating entrepreneurship into MNE theory and explain why highly successful and sustainable operations are achieved over time using this approach. I also explain the risks associated with this framework and lay out future avenues of research deserving further analysis