EMNEs and Knowledge-seeking FDI

Knowledge is the preeminent resource of firms that wish to become and/or remain globally competitive. This is especially true for emerging market multinationals, whose ability to overcome their inherent disadvantages as latecomers relies heavily on their ability to seek knowledge outside of their home borders through foreign direct investment. Our conceptual framework explores drivers of knowledge-seeking foreign direct investment, the types of functional knowledge sought, and the impact on location choice and entry mode decisions. It is argued that EMNE knowledge-seeking outward FDI is not based on the traditional asset-exploitation model of FDI, but rather tends to be focused on asset-augmentation through the exploitation of EMNE unique circumstances. Specifically, this work posits that an EMNE's strategic orientation predicts its propensity to engage in knowledge-seeking FDI and that the type of knowledge sought predicts location choice and entry mode.