Indian Multinationals in the Automotive and the Pharmaceutical Sectors: Competitive Advantages and Strategies
78 Pages Posted: 14 Oct 2009
Date Written: June 3, 2009
Abstract
Multinational companies (MNCs) from emerging markets (EMs) are new and very dynamic actors on the global scene. Starting from the late 1970s a strand of literature flourished on Third World multinationals (Lall, 1983a). More recently, the increasing expansion abroad by multinationals based in the emerging countries, targeting also OECD countries, led scholars to take again an interest in the subject. (Goldstein, 2006). Some contributions called for a re-thinking of the conventional wisdom concerning foreign direct investment (FDI) (Mathews, 2002). These new trends have also given rise to protectionist reactions, extended to multinational production. India represents an emerging country whose recent performance in terms of outward FDI has been noteworthy. Following a case study methodology, this chapter aims at illustrating the internationalization process of four Indian companies operating in two sectors highly representative of the Indian successful entry on the global market: the automotive and the pharmaceutical industry. We focus our attention on what kind of ownership advantages (if any) the case study firms possess, what role their ability in establishing linkages with third parties and leveraging resources plays, what the motivations driving this process are. In so doing, we try to assess whether the process in question calls for an interpretation complementary to the conventional one, or whether a new theory is needed. So for instance out of 100 companies based in the “rapidly developing economies” that are “at the leading edge of globalizing their businesses” (Boston Consulting Group, 2006: 7) 20 are Indian, and out of them 5 are in the automotive and 3 in the pharmaceutical sector.
Keywords: multinational corporations, India, automotive industry, pharmaceutical
JEL Classification: F21, F23, O32, L62, L65
Suggested Citation: Suggested Citation
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