Extending theory by analyzing developing country multinational companies: Solving the Goldilocks debate

• Published in: Global strategy journal Vol. 2; no. 3; pp. 153 - 167
• Main Author: Cuervo-Cazurra, Alvaro
• Format: Journal Article
• Language: English
• Published: Malden, USA Blackwell Publishing Inc 01-08-2012
• Subjects: developing countries; emerging markets; international business; multinational companies; theory development
• ISSN: 2042-5791; 2042-5805
• DOI: 10.1111/j.2042-5805.2012.01039.x

I analyze how the study of developing country multinational companies (DMNCs) can help extend theory. The renewed interest in DMNCs has generated a ‘Goldilocks’ debate, with one camp arguing that the analysis of DMNCs is ‘hot’ and requires new theory, another camp arguing that it is ‘cold’ and no new theory is required, and a third camp arguing that it is ‘just right’ and it can be used to extend theory. I follow this third camp and argue that the unique conditions of developing countries influence the internationalization of DMNCs, creating a laboratory for extending theory. I illustrate this idea by reviewing some of the key theories and models of the multinational company and explaining how they can be extended with the study of DMNCs.