2018 Emerging Market Multinationals Report: Emerging Markets Reshaping Globalization

By: Eudes Lopes, MA ’16 & PhD candidate (A&S), EMI contributor
People stand in front of a presentation

The authors, Lourdes Casanova and Anne Miroux, presenting the EMI report at the OECD headquarters in Paris on January 21, 2019, with Mario Pezzini, director of OECD Development Center, and Lorenzo Pavone, director of EMnet

The Emerging Market Multinationals Report (EMR) 2018 is the third annual edition of a series published by the Emerging Markets Institute (EMI) at the Cornell SC Johnson College of Business. The publication tracks the evolving international landscape known as emerging markets, of which the report focuses on the largest twenty (E20), selected on the basis of GDP, demographics, and influence in global trade and investment. From Africa and Asia to Latin America and Europe, the markets that fall within the scope of the report are wide ranging in their breadth but share key characteristics related to their recent global immersion.

Each report reveals a lasting insight: the far-reaching realignment of economic activity the world over as emerging multinational corporations (eMNCs) make up a growing share of the global economy. From this point of departure, the EMR homes in on the specifics of how such seminal developments are bearing fruit, as well as on the diversity of pathways being charted among emerging economies. The outsized role of China in this dynamic is afforded particular analytical attention, as well as the relative resilience of the E20 against its global backdrop at each annual stretch.

Convergences and divergences

Like prior editions, the 2018 EMR foregrounds trends that persist and others that shift more fundamentally. Of escalating significance is what has endured: the E20 has consistently made gains in its penetration in the global economy. Growth rates of E20 countries in 2017 exceeded those of advanced economies, and even with a dip in global foreign direct investment (FDI), the E20 enjoyed an increase in FDI inflows. Unsurprisingly, forecasts remained more optimistic for growth for emerging markets in 2019 relative to that of advanced ones.

And yet, the 2018 report departs in important ways from key taken-for-granted developments in past EMRs — most notably stemming from the major disruptions underway in the rules-based trade system, on the heels of the trade war between China and the United States, the world’s largest economies. Indeed, the looming threats of protectionism throw into stark relief the mounting risks embedded in the system, such as record global debt and heightened financial instability. While not unique to this year, the accumulation of volatility and debt only intensify the stakes as the effects of the trade war ripple in unexpected ways through global markets.

The 2018 EMR thus sharpens the picture of the shifting fault lines that have surfaced across global value chains. In this light, U.S.-imposed tariffs inflict new challenges not only to Chinese exports, but also to the enterprises and industries that supply the Chinese manufacturing sectors, particularly Cambodia, Korea, Malaysia, Thailand, and Vietnam. Meanwhile, new opportunities abound as Chinese shipments destined for the United States may be diverted to other markets, such as Europe or Latin America, and as U.S. firms prepare for a partial redesign of their supply chains to short circuit trade risks in Asia.

New beginnings, uncertain ends

As the report makes clear, the realignment underway is not limited to tariff arbitrage across the global market but also extends to the ongoing advancement of eMNCs up and down value chains, irrespective of region. Whereas in previous years, the penetration of the E20 into global markets was attributed almost exclusively to the increased competitiveness of low-cost alternatives to the product lines of G7 MNCs, the 2018 EMR notes early signs of change in global market insertion. The findings suggest that eMNCs, while still mostly cost leaders, are making headway in competitiveness by brand. Even as advanced economies still dominate, eMNCs signal an evolving strategy of moving past a sole focus on price competition.

Of particular relevance to the new balance of power is the increased influence of recently established multilateral development institutions from the Asian Infrastructure Investment Bank (AIIB) to the New Development Bank (NDB). Likewise, other consequential initiatives, such as the Chinese-led One Belt, One Road, promise a major proliferation of investments across a wide landscape of economies, especially the E20. The EMR’s third edition features a detailed analysis of the investment programs planned by these institutions, as well as what they portend by way of lending activity, capitalization, and infrastructure development.

Three people stand in front of the Emerging Markets sign
Authors Lourdes Casanova and Anne Miroux with report data scientist Abdellah Bouhamidi

This decentralization reflects a growing governance role for the E20 as their economic ascension begins to translate into increased responsibility for the management of unprecedented global challenges.


The 2018 report, whose first five chapters were authored by EMI Director, Lourdes Casanova, and EMI Faculty Fellow, Anne Miroux, also relied on extensive collaborations beyond Cornell University:

  • Chapter 6, “The impact of digitalization on businesses in emerging markets,” is owed to the generous contribution of the OECD, and in particular, Lorenzo Pavone, director of the Emerging Market Network at the OECD Development Center.
  • Chapter 7, “Digital transformation in emerging markets: strategies and internationalization of digital companies from Latin America,” is the product of a partnership between Fernanda Ribeiro Cahen, assistant professor of management at FEA (School of Economics, Business and Accounting) at the University of São Paulo, and Moacir Miranda de Oliveira Junior, professor of management at FEA (School of Economics, Business and Accounting) at the University of São Paulo.
  • Chapter 8, “Corporate governance and corporate citizenship in Colombia: a lever for global competitiveness?,” was produced thanks to the collective authorship of Veneta Andonova, Juana Catalina García Duque, and Andrés F. Mejía, associate professors of management at the University of Los Andes.
  • Chapter 9, “Research on the development process of entrepreneurship education in Chinese universities,” is the net result of the contributions of Shi Yongchuan, Wang Hongxin, and Barron Zuo, researchers at Wenzhou University.

Finally, special thanks are owed to Abdellah Bouhamidi, Eudes Lopes, Jennifer Lehman, and the EMI team for their research and editorial assistance.

Link to learn more about the Emerging Markets Institute
Eudes Lopes

Eudes Lopes, MA ’16 & PhD candidate (A&S), EMI contributor

Eudes Lopes, MA ’16 (A&S) is PhD candidate in Cornell’s College of Arts and Sciences Department of Anthropology. His research examines how different currents of economic thought are contested on behalf of evolving state-market arrangements. Eudes holds a bachelor’s degree in anthropology from the Woodrow Wilson School of Public and International Affairs at Princeton University.

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1 Comment

  1. An apt report with good observation, indeed.

    Its difficult for multinationals today to maneuver strategically in highly fragmented and volatile markets. I think one needs to understand and constantly learn the chemistry of macroeconomics and the marketing strategy.

    Best regards

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