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International Conference
27th & 28th of November 2008
Venue: Centre Culturel Français de Pékin
Guangcai International Mansion
18, Gongti Xilu 100020 Peking
China
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Emerging Economies’ Multinationals: Global Challengers?
The number of Fortune 500 companies headquartered outside the Triad (the North Atlantic and Japan) and Oceania has risen from 26 in 1988 to 100 in 2007. Another indicator of the increasing importance of large firms from emerging markets is that the ratio of the foreign assets of the largest Emerging Economies’ Multinationals (EEMs) to those of the world’s largest multinationals has risen from less than 6 % in 1999 to almost than 10 % in 2005. It is fair to expect this trend to continue in the years ahead.
EEMs first appeared as a focus of interest about 25 years ago, with the advent of some overseas expansion by companies from a small number of Asian and Latin American countries. It is only since the late 1980s that an increasing number of emerging countries, including Chile, China, India, Malaysia, Mexico, Russia, South Africa, Thailand, and Turkey to name a few, have become significant sources of outward Foreign Direct Investment. Since 2003, the growth rate of investment abroad by firms from emerging markets has outpaced the growth by companies from the industrialized countries.
In their search for new opportunities, EEMs started to invest near their home country and where they had acquired a certain familiarity through trade, ethnic or cultural ties. Large enterprises from emerging economies -often supported by their national government- have now amassed sufficient capital, knowledge and know-how to invest abroad on a global base and their strategy puts them in competition with other multinationals, in their quest for new markets, resources and strategic assets.
With the financial support
Coordination: Jean-François Huchet, Director, French Centre for Research on Contemporary China, Hong Kong; “[email protected]” / Joël Ruet, CNRS Researcher at LATTS & Chair on Global Industry & Emerging Economies, Ecole des mines, Paris ; “[email protected]” / Richard Balme, Professor, SciencesPo Paris “[email protected]” /
program
Thursday November 27th 2008
Registration 8:30 – 9:00
Welcome addresses 9:00 – 9:20
Hubert Testard, Ministre conseiller, Chef des Services Economiques (CSE) pour la Chine
Jean-François Huchet, Director of Centre d’études français sur la Chine contemporaine (CEFC)
Morning – 09:20 – 11:00.
1 - global panorama: foreign direct investment (fdi) from emerging economies
Since early 2000s, not only emerging economies have been leading global growth but they are now in the race to compete through their outward investment which has expanded at an accelerated pace. The session will analyze the major characteristics of investment abroad by emerging economies. The term “Emerging economies” corresponds to several possible country groupings: from the four “BRICs” to the whole category of “developing economies” which in UNCTAD classification includes also economies which have already emerged, such as the Asian NIEs and rich oil exporting countries. Against this backdrop, the pattern and dynamic of outward FDI from emerging economies depend on the grouping under consideration.
What are the factors underlying the rise of emerging economies' FDI and the importance of South-South flows? Does the sectoral distribution differ from that of other FDI? What is the geographic origin and destination? What is the rationale for emerging countries' policy for facilitating outward investment?
Chair: Suman Bery, Director of National Council for Applied Economic Research, New Delhi, India
Cornellia Woll (CERI-Sciences-Po)
Taffere Tesfachew (Chef du Cabinet, Secretary-General, UNCTAD)
Discussion
– 11:00 a.m. 11h15 Coffea Break
Morning – 11:15 – 13:00
2 - who are the emerging economies’ multinationals (EEMs)?
The second part of the session will address the nature and behavior of Emerging Economies’ Multinationals (EEMs). Who are the major EEMs? Where are they located? How do they differ from North multinationals (in size, sectoral specialization)? What is their degree of internationalization? Why are they going global? Do they share the same motivations as their western counterparts: profitability, market share, technology, resource security etc? Are they truly global firms or regional firms? What kind of relationship do they have with their governments? What are the implications of their rise for multinationals from developed economies?
Chair: Patrick Messerlin (Sciences Po, Paris)
Laurent de Vitton (Boston Consulting Group, Beijing)
Jacques Gravereau (HEC- Eurasia)
Jaya Prakash Pradhan (ISID, New Dehli)
Discussion
Lunch 13:00 – 14:30
Afternoon – 14:30 – 13:00
3 - emerging economy manufacturing industries: from low tech to high tech? (part 1)
Multinationals from emerging economies have rapidly gained strong positions in world market in several low technologies sectors or in a few high-tech niches, but they are still lagging behind the biggest multinationals in their capacities to deliver high-tech products. One of the major challenges facing EEMs is to catch up technologically with other multinationals. Internationalisation is a way to get in touch with state of the art technology. There are different possible strategies: acquisitions of foreign firms, entering joint ventures with foreign firms, positioning along the supply chain and becoming a supplier of western multinationals, creating technological hubs within high-tech zones, etc.
In the long run will these emerging multinationals be able to challenge the established hierarchies in some sectors (with focus on electronics, automobile, aeronautics, IT...)? How other multinationals react to the competition from these new comers?
Chair: Richard Balme (Sciences Po, Paris)
Joël Ruet (CNRS-LATTS, Université Paris Est)
Alvaro Artigas (Sciences Po)
Simon Cartledge
Discussion
– 16:00 – 16:15 Coffea Break
Afternoon – 16:15 – 17:45
3 - emerging economy manufacturing industries: from low tech to high tech? (Part 2)
Chair: Joël Ruet (CNRS-LATTS, Université Paris Est)
Antonin Beurrier (Sandvik Mining & Construction, Shanghai)
Dieter Ernst (East-West Centre, Hawai-USA)
Discussion
Dinner 19:00
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Friday November 28th 2008
Morning – 09:00 – 11:00.
4 – banking industry, telecommunications, transport and logistics
Services is an area where rich countries have kept dominant positions in world markets. This session will analyze how EEMs challenge their positions and what are their advantages over other multinationals. EEMs benefit from access to a brand new market -their own one- which has a very high growth potential and is often protected from foreign competition. However rules have to be established, such as prudential rules and transparency, and the playing field is rather unstable. Furthermore, these new players may lack the basic know how necessary to compete in the world market.
In the financial sector, major new players are coming from financial surplus countries: not only from the Gulf Emirates but also from China and Russia, which both are really new comers in this sector. How do they compete with western banks in their domestic markets and in world market? In telecommunication, they benefit from the absence of established networks and from access to the latest technologies. To what extent EEMs already influence technical standards? What is their ability to adopt their own technical standards?
Chair: Dieter Ernst (East-West Centre, Hawai-USA)
Philippe Aguignier (BNP-Paribas, Nanjing)
Hemant Kanoria (MD SREI Finance)
Patrick Messerlin (Sciences Po, Paris)
Discussion
– 11:00 a.m. 11h15 Coffea Break
Morning – 11:15 – 13:00
5 –catching -up: constraints and strategies in finance, Human resources & branding
Globalization facilitates the access of EEMs to high-technologies (through subcontracting, joint-ventures, acquisition). EEMs also need to enhance their own innovation capacities. Human resources as well as the capacity to establish a Brand are critical to these firms. Which kind of financing strategy of their expansion abroad are they implementing? What role sovereign funds established by home country government will play in the foreign expansion of these companies? And finally will Corporate Social responsibility be an issue for them?
Chair: Jean-François Huchet, Director of Centre d’études français sur la Chine contemporaine (CEFC)
Song Hong (Institute of World Politics and Economics – CASS)
Arthur Kroeber (China Economic Quarterly, Beijing)
Wladimir Djurovic (Labbrand, Shanghai)
Michael Dowdle (National University of Singapore).
Discussion
Final discussion
Lunch 13:15