The viability of sustained growth by India's MNEs: India's dual economy and constraints from location assets
Rajneesh Narula
#2014-062
This paper considers the longer-term viability of the
internationalization and success of Indian MNEs. We apply the 'dual
economy' concept (Lewis 1954), to reconcile the contradictions of the
typical emerging economy, where a 'modern' knowledge-intensive economy
exists alongside a 'traditional' resource-intensive economy. Each type
of economy generates firms with different types of ownership advantages,
and hence different types of MNEs and internationalization patterns. We
also highlight the vulnerabilities of a growth-by-acquisitions approach.
The potential for Indian MNEs to grow requires an understanding of
India's dual economy and the constraints from the home country's
location advantages, particularly those in its knowledge infrastructure.
JEL Classification: F23, F68, O32