MGT521: Knowledge Seeking and Outward FDI Article Review - ADU

This report presents an individual article review of "Knowledge Seeking and Outward FDI of Emerging Market Firms: The Moderating Effect of Inward FDI" by Jing Li, Yong Li, and Daniel Shapiro, published in the Global Strategy Journal. The review covers the article's main concepts, including the strategic importance of inward FDI for emerging market multinational enterprises (EMNEs) in obtaining knowledge and improving technological activities. It explores the underexplored issues of EMNEs' globalization propensity using technological resources and the impact of inward FDI on EMNEs' technological-searching decisions. The article's focus on enhancing firm-centered technological advantages and the application of longitudinal data on Chinese production organizations is highlighted. The review also discusses the Cox framework used, the results related to controlling Chinese organizations' investment experience, and the study's recommendations and implications, including the need to weigh up the chances of safeguarding technical assets through close relations with international companies. Finally, the review assesses the utility and drawbacks of the study, particularly concerning its applicability to organizations in the United Arab Emirates.

INDIVIDUAL ASSIGNMENT PRESENTAION (ARTICLE
REVIEW)
Student’s Name
Course Name
Professor’s Name
University Name
November 6, 2018

Introduction
 Article Title: Knowledge Seeking and Outward FDI of
Emerging Market Firms: The Moderating Effect of Inward
FDI
 Authors: Jing Li, Yong Li, and Daniel Shapiro
 Journal Name: Global Strategy Journal
 Volume Number: 2
 Issue Number: 4
 Year of Publication: 2012

Concepts & Issues
MAIN CONCEPT INCLUDES:
 Explicit consideration of alternative means for emerging organizations to obtain
knowledge
OTHER CONCEPTS INCLUDE:
 Internal FDI in EMNEs’ local markets proposes a strategic framework for
emerging organizations to improvement on technological activities.
 International companies usually deliver comparably enhanced initiatives
considering their investments in developing areas.
 Inward FDI formulates skill spillovers that are beneficial to local companies using
demonstrative linkages with clients, effects, competitors, suppliers and the mobility
of skilled personnel.

Concepts & Issues - Cont.
The issues are underexplored. These include:
A question on if the EMNE have the propensity to globalize to other nations
using technological resources; and
The means why the inward FDI, in EMNE local markers, through the
generation of skill spillover, affects EMNE’s technological-searching over the
framework of FDI’s decisions.

Concepts & Issues – Cont.
The concepts and issues are presented from the baseline of:
EMNEs’ penetration to the international market
How firms can catch-up with established MNEs concerning technological
abilities to enhance their competitive advantages
NB: EMNEs are searching for strategic measures to change from focusing on
low value-centered activities to concentrating on high value-centered
manufacturing activities using
Research and Development (R&D)

Article’s Main Focus
The article focuses on:
Enhancement of a host country’s firm-centered technological advantages on
EMNEs’ propensity to globalize into a host market
Inward FDI in the EMNE local market through the formulation of skill
spillovers in specific global markets
Application of longitudinal information on global investment actions of
Chinese production organizations
Evaluating underlying exterior FDI motives
Research's implication and practice on emergent organizations

Model of Argument
The model of argument used by the authors include:
the Cox framework
Application
Evaluate the implication of comparable technological advantages of an incumbent country on a
Chinese organization in global investments, physical resource searching and market analysis.
Results
Ability to control the Chinese organization’s experience on investment in the incumbent nation
and the firm’s collaboration status with host organizations in China.
The overall experience of organizations in China in the host nation is the organization’s value of
equity joint venture in the host country over the last five years.

Recommendations & Implications of
the Study
Recommendation
Suggested that in an event where there exists a technological opening surrounding the
industrialized market organizations and that of the EMNE within the local markets, a steady
depreciation should result to restrictions in the learning prospects.
Being in a position of weighing up the chances of safeguarding the various technical assets
through the close relation with international companies, which are working in the residential
marketplace.
Implication
Gratifies China's MNE's motivation in seeking higher hi-tech data and facts
EMNEs’ concentration in assembling skills and knowledge from different
nations

Utility
Application by the United Arab Emirates
Organization to create more opportunities for
local enterprises essentially through rivalry
impacts
To facilitate MNEs markets to be
knowledgeable and productive in global
innovation plans

Drawback/Demerits
 The article contended about the effect of the internal FDI,
which produces negligible exhibit impacts in businesses in the
United Arab Emirates (UAE)
 Restrictions on global knowledge to take part in
comprehensive innovation plans proficiently
 Through differentiation, innovation openings within the
developing markets will be substantially low, and internal FDI
in these markets will probably generate constrained learning
openings.

Reference
 Li, J., Li, Y. and Shapiro, D. (2012). Knowledge Seeking
and Outward FDI of Emerging Market Firms: The
Moderating Effect of Inward FDI. Global Strategy
Journal, 2(4), pp.277-295.