DOI: 10.

1108/17468801011058415 (Permanent URL) Rajah Rasiah, Peter Gammeltoft, Yang Jiang

Home government policies for outward FDI from emerging economies: lessons from Asia
Abstract
Purpose The purpose of this paper is to examine the drivers of outward foreign direct investment (OFDI) from the emerging economies and if there exists a positive role for home governments to coordinate them. The backdrop is the recent increases in OFDI from emerging economies and the emergence of several emerging economy firms, which have caught up to become global leaders in several industries. The paper focuses particularly on experiences from Asian economies. Design/methodology/approach The paper applies a multi method approach and relies on literature studies, investment statistics, government reports, press reports, company reports, and interviews with public officials. Findings Extending the motive-based business theory, the paper first establishes the pronouncement of a third wave of OFDI from the mid-1990s. Whereas the typical motives have remained important, the technology-seeking motive has become significantly more important during the third wave. Typical policy prescriptions to liberalize government regulations have been called into question. Many home emerging country governments have acted to coordinate their activities by regulating proactively investment outflows. The evidence also shows that the successful investment outflows have benefited significantly from home governments addressing the characteristics and motives of target industries and locations abroad. Practical implications The analysis shows that contrary to mainstream prescriptions many home governments have successfully regulated strongly OFDI from the emerging economies. However, it is important for home governments to consider the broader interest of promoting capital flows to ensure the long-term development of economies rather than narrow national interests. Home and host governments should seek to establish common and specific collaboration platforms to raise information flows and coordinate better the negotiations and execution of investment projects. Originality/value The paper provides a more thorough analysis of the implications for home country policies of the increasing outward investment flows from emerging economies and the increasing competitiveness and capabilities of their transnational firms. It proposes augmentations to prior frameworks of drivers and motives of OFDI and pushes deeper the home policy implications of increasing outward investment flows.

1 Introduction Over the last decade outward foreign direct investment (OFDI) from the emerging economies has expanded dramatically. This aggregate trend is evidence that many transnational corporations (TNCs)[1] from emerging TNCs (ETNCs) economies have built up sufficient capabilities in products, processes, organization, and management to venture successfully abroad. The rapid rise of ETNCs has seen Chinese Haier become the world's leading manufacturer of refrigerators, Brazilian Embraer the world leader in regional passenger jets, Indian Mittal the world's leading manufacturer of steel, and Korean Samsung the world leader in dynamic random access memory (DRAM) microchips[2]. The significant increase of FDI from the emerging economies has given cause to revisit existing theoretical as well as policy constructs. First, most theories of FDI explain flows of capital between developed economies, or from developed to developing economies. The overseas investments and acquisitions by firms that originate from developing economies have added a new challenge to the understanding of FDI flows. In addition, experience from foreign investment projects has contributed significantly to the development of emerging economy TNCs' revenues, capabilities, and global market sales shares (Monkiewicz, 1986; Hobday, 1997; Mirza, 2000; Sachwald, 2001; Mathews, 2002; UNCTAD, 2005). Our agenda here is not to review contemporary empirical trends of FDI from emerging economies. There are significant works on OFDI from the emerging economies (UNCTAD, 2006; Gammeltoft, 2008). Rather, this paper seeks to probe beneath the quantitative surface to explicate the important qualitative changes that have emerged especially from the late 1990s and to capture the key drivers of these developments for generating policy lessons for home countries seeking to stimulate economies synergies. We argue that the empirical evidence points to the emergence of a third wave of OFDI from the emerging economies with the first dominating the period between the 1960s and the mid-1980s, the second becoming important over the period between the late 1980s until the mid-1990s and the third becoming important from the late 1990s (Gammeltoft, 2008). Given the significant expansion of TNCs from the emerging economies, in the following we seek to, first, analytically build the case for establishing three waves of FDI flows, and second identify a set of strategic drivers of OFDI targeted at arguing the case that there is significant room for government measures for facilitating and capturing benefits from OFDI. The rest of the paper is organized as follows: in Section 2, we present the three aforementioned analytical waves. Section 3 examines the drivers of OFDI. Section 4 analyzes the policy implications for home countries. Section 5 concludes. 2 Three waves of FDI from emerging economies Even though the volume still favors heavily the developed economies, FDI from developing economies have become increasingly important from the 1990s. OFDI stocks

from developing countries rose from US$335 billion in 1995 to US$1.4 trillion in 2005 (UNCTAD, 2006, pp. 103-104). The number of developing economies with OFDI stocks exceeding US$5 billion increased from six in 1990 to 27 in 2005. Seven firms from developing economies were among the top 100 TNCs ranked by ownership of foreign asset stocks in 2006. The increase in OFDI has been driven by a variety of factors such as increasing wealth, reforms in trade and investment policies, regional integration, financial liberalization, industrialization, and build-up of firm-specific advantages. Table I documents the evolution of OFDI flows from different country groups. Until the 1980s, emerging economy firms mainly invested abroad to establish trade supporting networks and to access protected markets. Access to natural resources abroad and escape from bureaucratic restrictions at home were other prominent motives. Investments were mainly in other developing countries, especially those with geographical, cultural, ethnic, and institutional proximity. ETNCs typically entered with minority ownership and engaged in greenfield investments and in many countries the companies most active in outward investment were state owned. When investing in developed economies they were mainly active in sunset industries with less competition from developed country counterparts. From the 1990s onwards, there were various shifts in investment motives, modes of ownership, sectoral composition, and typical destinations of OFDI. ETNCs were more frequently privately owned, even though a high degree of state ownership remains among the largest ETNCs, especially in natural resources. They more frequently took on majority ownership in outward investment projects and even though greenfield investments remain the dominant entry mode, international acquisitions became more frequent. Services became the dominant sector in OFDI (e.g. finance and business services) over manufacturing and natural resources. Even though the developing world remains the main destination of OFDI from the emerging economies, there has been a rise in their investment to the developed economies. The latter has been driven by a combination of oligopolistic advantages gained by ETNCs and offensive strategies to acquire technology, brands, and marketing capabilities in the developed economies. While a small number of countries account for the bulk of OFDI from the emerging economies, there has been gradual rise in the number of developing countries participating in OFDI. The most extensive study marked out markets as the dominant motive for OFDI from the emerging economies, particularly where regional and SouthSouth investments are involved (UNCTAD, 2006). The same study reported efficiency seeking OFDI as the second most important driver with asset-seeking investments into the developed economies increasingly becoming important. A number of emerging economy firms have since the late 1990s been acquiring TNCs from the developed economies to seek technology, R&D and marketing capabilities, brands, distribution networks, and managerial and organizational skills. More generally, trends in outward investment from emerging and developing economies can be divided into the aforementioned three broad waves. Any such abstraction and division of time periods into discrete waves must necessarily be crude given the huge

national, industry and firm-level diversity in investment projects and flows. There are also many well-known limitations and inaccuracies associated with official FDI statistics: misclassification of capital flight and portfolio flows, misclassification of indirect outward investment by foreign affiliates, and other reporting and registration problems abound, and the problems are especially severe in developing-country statistics. The three waves are summarized in Table II. Each wave retains most of the features from the previous one but some features are added and others revised. It is also important to note that the waves are broad, ideal typical, and aggregate abstractions. Hence, particular economies may not share the overall trends that characterize the emerging economies as a whole. The extant literature posits that there have been two different waves of OFDI from developing countries (Dunning, 1994; UNCTAD, 2005): from the 1960s until early 1980s, and thereafter. The first-wave firms were driven mainly by market- and efficiency-seeking motives and investments were mainly directed towards other developing countries, most often neighboring countries. In the second wave, driven by a combination of pull and push factors, strategic-asset seeking also became a motive and investments into developed countries and developing countries outside the investor's own region became more important. The first wave of FDI originated predominantly from Latin America where new TNCs emerged from Argentina, Mexico, and Chile, followed by Brazilian, Colombian, and Venezuelan competitors (Andreff, 2003). During a period, which otherwise emphasized industrialization strategies based on import substitution, Latin American TNCs internationalized on the basis of products that had met the needs of their growing domestic markets and OFDI went primarily to neighboring developing countries with similar demand structures. The second wave from the 1980s was dominated by Asian TNCs, spreading from Republic of Korea, Taiwan, Hong Kong, Singapore, and thereafter Malaysia, Thailand, China, India and the Philippines, and accompanied Asian countries' export-oriented industrialization strategies. OFDI from Latin America was less prominent during this period. Asian TNCs expanded mostly in the fast growing foreign markets of other newly industralized economies but they also outward invested to access cheap labor in developing countries that were less developed than their home countries. In the 1990s, a third wave of OFDI emerges. At this stage, the largest Asian TNCs already competed with Western TNCs, invested into developed countries, and some countries were becoming net FDI exporters (South Korea, Hong Kong, Taiwan, a position traditionally reserved for developed countries) (Andreff, 2003). The new features of investment flows in this wave were outlined above. 3 Drivers of OFDI from emerging economies Although Dunning (1958) published the earliest substantive work seeking to explain TNC investment and to capture the benefits the UK economy would benefit from American investment, it was Hymer (1960) who attempted the first systematic work to

explain the emergence of these firms. Hymer offered an incisive account of the emergence of TNCs to take advantage of oligopolistic control of markets and the choice of particular locations (Rasiah, 2004). Lall and Streeten (1977) provided a detailed account of the rationale for relocation, and the benefits and obstacles developing economies face from the activities of TNCs. Dunning (1974, 1981) went on to explain in detail the drivers of OFDI using his eclectic framework of ownership, location, and internalization. Behrman's (1972) early works and Dunning's (1973, 1981) eclectic framework are the starting material used to capture the motives behind OFDI from the emerging economies in this paper, which has been refined subsequently by Narula and Dunning (2000), Cantwell and Mudambi (2001), Rasiah (2000a, b) and Gammeltoft (2006). Taking account of these theories and further adaptations made to absorb new developments this paper seeks to explain changes in the drivers of OFDI from the emerging economies with a view towards assisting home governments to stimulate relocation, as well as, appropriate maximum synergies from their operations. As indicated in Table II, the drivers of OFDI has evolved over the course of the three waves towards and have progressively taking on more organizationally and technologically complex forms. In the following, we will discuss six sets of strategic drivers: markets, labor, natural resource, value chain control, financial incentive, and technology. 3.1 Market seeking Market seeking has been the dominant motive throughout the three waves. Over time ETNCs have sought markets progressively further away from home. By and large TNCs from the emerging economies still use the two approaches pursued by firms from developed economies to seek market access, viz., directly participate in production and sales or to access third markets through preferential trade access. Home governments have not only assisted firms from the emerging economies in their overseas investment activities, but also engaged in bilateral negotiations to reduce red tape. OFDI not only national but also regional markets: for example, the creation of regional trading arrangements such as the Association of Southeast Asian Nations (ASEAN), ASEAN Free Trade Area (AFTA), the North Atlantic Free Trade Area (NAFTA), and the European Union (EU) has expanded further common markets. Although these regional trading platforms were planned to eventually give way to a global one under the coordination of the World Trade Organization (WTO), ETNCs have relocated in the regional centers to circumvent and benefit from fiscal and monetary barriers and incentives. For example, automotive firms located in the AFTA region enjoy preferential access to export components and parts throughout the ASEAN Industrial Cooperation scheme. Automotive firms also enjoy similar market access under the Mercusor agreement in Latin America (Bernat, 2008). Firms such as Hyundai from Korea, Sime Darby from Malaysia, and Castle Beer from South Africa have acquired existing firms or invested in new plants abroad to access

foreign markets. Hyundai assembles and sells cars in North America, Europe, India, China, Thailand, Indonesia, and Malaysia. Sime Darby acquired palm oil processing plants from Unilever in Rotterdam, and set up plants in India and China. The Taiwan Semiconductor Manufacturing Corporation (TSMC) has sales outlets in New York. Castle Beer spread into many parts of Africa by acquiring previously state-owned breweries to supply domestic and regional markets. Since China's WTO accession, because of over-capacity in some sectors (e.g. electronics and labour-intensive products) in the domestic market and trade barriers beyond the WTO level in overseas markets, Chinese manufacturers have started to invest in developed countries in order to capture domestic markets, as well as in developing countries where Chinese products (such as machinery, apparel and shoes, motorbikes, and electronic appliances) cater to local needs. In order to expand their markets and achieve scale economies, the Shanghai Automobile Industry Corp. bought over 50 percent stake in Korean Ssangyong Motor Co. in 2004, and TCL acquired the colour TV manufacturing from French Thomson in 2004[3]. China Mobile Communications Corp. (China Mobile) purchased 88.9 percent stake in Pakistani wireless operator Paktel from Millicom International cellular in 2007 for the local market and as a trial for further internationalization. In the same year, CDC Software, a wholly owned subsidiary of Chinese CDC Corporation, acquired American Catalyst International to seek global supply chain execution solutions services. In Indian OFDI, the market seeking motive is also prominent. Before 1990, Indian TNCs mostly located in developing countries in low and medium technology manufacturing sectors, and utilised their ownership advantages of low labour cost and natural resources such as iron, wood, and paper. After 1991, service sectors emerged as another important outward investor and developed countries attracted increasing Indian OFDI (Pradhan, 2008; Pradhan and Singh, 2009). In particular, after 2003, Indian acquisitions increased dramatically to gain market access to developed countries. They are dominated by IT, telecommunications, and manufacturing sectors (pharmaceutials, automotive, steel, chemicals, and consumer goods) (Gopinath, 2007; Nayyar, 2008). An important factor behind this trend is the increased level of technology that can be utilised and adopted in international markets. Of course, the limited size of the domestic market is another reason for Indian companies to venture out in order to pursue sales and global competitiveness. Examples include Tata Steel's 100 percent acquisition of British Corus Steel in 2007, Dr Reddy's 100 percent acquisition of German pharmaceutical and health care company Betapharm Arzneimittel GmbH in 2006, and Videocon International's acquisition of Thomson SA in 2005. Another set of firms where scale economies have not been important, e.g. software, has also witnessed a strong penetration of operations by ETNCs in both developed and developing economies. Indian enterprises have grasped advanced technology and strong innovative ability to adapt to local markets. IT, software, and pharmaceutical enterprises are representative of this trend. It is notable that much of Indian OFDI after 2000 is in manufacturing sectors and in industrialised countries (Nayyar, 2008). TCS, Wipro, and

Infosys have expanded into both the developed large market of the USA as well as the smaller markets of Malaysia and Singapore. The conditions involving FDI of large retailers seeking market access require an understanding of host-country regulatory environment. It will help home governments to provide through their embassies such information. Since supermarkets are engaged in sales in domestic markets some host-governments typically impose conditions that prevent total foreign ownership. In Indonesia and Malaysia, host-governments require a certain percentage of local ownership when sales are almost entirely targeted at the domestic market (Rasiah, 1995; Hill, 1997). In some cases TNC decisions are based on using particular sites to access third country markets. Although much of the generalized system of preferences (GSP) was removed following the formation of the WTO the introduction of the everything but arms clause by the European Union and the bilateral trading arrangement by the USA, Japan, and Canada have offered privileged access to their markets from least developed countries. Hence, China has become the largest investor in garment manufacturing in Cambodia, Laos, Lesotho, and Madagascar with the actual target being exports to North America, Europe, and Japan (UNCTAD, 2007; Rasiah, 2006). There is also sizable investment in garment manufacturing into these countries from Taiwan, Hong Kong, Korea, Singapore, Malaysia, and Mauritius to access the developed markets. Some home governments have played a crucial role to ensure that national firms provide benefits abroad through training and observance of labor standards:, e.g. Malaysian, Taiwanese, Korean, and Singaporean offer training to local employees in their garment firms (Rasiah, 2007). Such developments have been important to reduce local pressures and claims of exploitation by local pressure groups. Chinese companies have been criticized for their violation of international labour standards in Africa and the Chinese Government for lending money to those companies (Sauntman and Yan, 2008). After his visit to Africa in June 2006, Chinese premier Wen Jiabao instructed the government bureaucracies to strengthen regulation on Chinese investment behavior in Africa to prevent problems of labour standards, work environment safety and product quality. 3.2 Labor seeking In the first wave seeking of cheap labor and other sources of efficiency abroad was not very prevalent among ETNCs. In the second wave, more affluent emerging economies began pursuing careful strategies with the assistance of their governments to relocate low value added labor-intensive manufacturing operations as rising production costs encouraged upgrading into higher value-added activities in their home sites. TNCs from Taiwan and Korea for example invested in China and Southeast Asia to access cheap and abundant labor. With rising cost of Chinese labour, some Chinese manufacturers of labour-intensive products or those in sectors of over-capacity within China, such as garments and electronics, have moved factories to Southeast Asia for cheap labour and local market (Frost, 2004).

In the USA, the enactment of customs items 806.3 and 807.0 lowered the value added tax on labor-intensive imports and helped the relocation of low value-added items to low cost sites (Scibberas, 1977; Rasiah, 1988). Korea, Taiwan, Philippines, Singapore, and Malaysia attracted low-end light manufacturing activities from the developed countries in the 1960s and 1970s (Lim, 1978; Rasiah, 1988). In Asia, the withdrawal of the GSP and the floating of the New Taiwan Dollar, Won and the Singapore dollar following the Plaza Accord of 1985 pressured the relocation of low value-added assembly and processing activities to neighboring economies. Low value adding firms from Singapore, Taiwan, and Korea continue to have manufacturing operations in Malaysia and Thailand, but the focus has shifted more to the low cost countries of China, the Philippines, Vietnam, and Indonesia. ASE, Acer and Chunghwa Picture tubes from Taiwan, and Samsung and LG Electronics from Korea are some examples of firms that relocated operations to low wage sites in Southeast Asia and China to lower manufacturing costs. 3.3 Natural resource seeking Although resource seeking investment drivers existed in all three waves, it has become more prevalent in the third wave following growth in the number of emerging economies and the quest to secure industrial inputs. A third of the 30 largest mergers and acquisitions (MAs) in the primary sector over the period 1995-2005 were in the crude petroleum and natural gas (UNCTAD, 2006, p. 161). Government involvement has been particularly strong in the pursuit of natural resources. Soaring commodity prices since 2005 has driven the rapidly growing economies of China and India aggressively to seek supplies from Central Asia and Africa. China's expansion into extracting petroleum and natural gas began to grow strongly from 1993 when it began to experience a net trade deficit in these commodities. India's rapid growth since 1991 has generated the same growth effects with growing demand-supply deficits in oil and gas. Both governments have been at the forefront supporting the state-owned firms' efforts to seek new sources of oil and gas supplies from Africa and Asia. Whereas the developed countries supported their private oil investments abroad, Chinese and Indian oil and gas firms investing abroad are all state owned (UNCTAD, 2006). China's OFDI was largely in natural resources in Southeast Asia in the 1990s. The accumulation of foreign reserves from the late 1990s helped China to aggressively pursue natural resources overseas for energy security. Although some products from overseas operations are traded in the global market, they are mainly shipped back to China. Although the volume of natural resource investment is relatively small compared with services, the former is an important element of the government's economic strategy given China's limited resources and the need to sustain economic growth. The CEO of China National Offshore Oil Corporation (CNOOC) described its acquisition of the North West Shelf Gas Project in Australia as a significant step in realizing CNOOC's strategy of supplying natural gas to the rapidly growing market in China (CNOOC, 2004). The Brazilian and Chilean state-owned companies of Petrobras and ENAP, respectively, have also invested in West Asia to seek oil and natural gas. Between 2004 and mid 2007

Brazilian owned Petrobras invested US$4.4 billion to mine coal, oil, and natural gas in Nigeria, USA, Argentina, and Portugal. Malaysia's Petronas has petroleum mining interests in Iran, Egypt, Vietnam, Philippines, and Chad. South African oil and gas TNCs only operate in Africa. High rents from soaring oil and gas prices have even attracted ETNCs into highly risky locations. For example, Malaysia's Petronas invested strongly to explore and produce oil in Sudan and Chad both countries are classified among the high risk countries by the United Nations (UNCTAD, 2006, p. 161). Chinese oil firms have invested strongly in oil and natural gas exploration and production in Angola and Sudan both countries are endowed with poor infrastructure. Chinese firms also gained concessions to explore oil in the Mannar Region in war-torn Sri Lanka. Mergers and acquisitions have become popular forms of OFDI for energy ETNCs in recent years. Chinese companies acquired Spanish, American, Canadian, and Norwegian companies, amongst others, for their oil and gas fields in Indonesia, Syria, Kazakhstan, and the Middle East. Chinese and Brazilian companies are both active players in acquiring Western and local companies for minerals and metals in various locations around the globe (ECLAC, 2006; Sauvant, 2008, p. 3; UNCTAD, 2006, p. 162). Compared with China, India's ENTCs in oil and gas are far fewer (Kumar and Chadha, 2009). India had limited investment in natural resources abroad, apart from market seeking activities before 1991 (Pradhan, 2008). For instance, Indian steel producers have expanded abroad to seek markets, scale, and strategic assets. However, the rising demand for steel and other raw materials has resulted in Indian companies increasingly competing for resources overseas. Tata steel has acquired minority share in Carborough Downs coal project in Australia, total ownership of Thai Millenium Steel. Essar Steel acquired part of Minnesota Steel based in the USA (Kumar and Chadha, 2009). Indian oil companies have also acquired foreign assets through acquisitions. O.N.G.C. Videsh acquired petroleum assets in Brazil, Sudan, Angola, and Russia (Nayyar, 2008). 3.4 Value chain control seeking The first wave of OFDI investments were predominantly horizontal, largely replicating similar activities in different countries. However, with time ENTCs have increasingly become vertically integrated, i.e. locating different stages of the value chain in different countries to exploit cost and quality differentials. Both in buyer-driven industries such as apparel, footwear and retail, and in producer-driven industries such as automobiles and telecommunications equipment, the dynamics of coordination and control has changed in the third wave of OFDI. Major transitions from producers to supermarket owners have had widespread ramifications over the control of global value chains in a number of products. Examples include horticulture and fruits where firms such as Chiquita and Del Monte have lost control of decision making on branding and specifications over to supermarkets such as Tesco (Dolan and Humphrey, 2000).

Large retailers started to drive quality improvements by forcing participants in their supplier chains to meet a continuous set of demands. Whereas value chains in horticulture commodities are increasingly driven by retailers from the developed economies, conglomerates have evolved from the emerging economies with a wide ranging structure. The increasing significance of supermarket chains on the production and distribution of vegetables was pointed out by Dolan and Humphrey (2000) and Rasiah (2004). Supermarkets have increasingly taken over control of value chains involving bananas, melons, vegetables, and milk products from producers such as Del Monte and Chiquita. In vegetables, small producers who have not been able to meet the stringent and frequent improvements in quality standards and delivery times have fallen out (Dolan and Humphrey, 2000). Instead of having Del Monte and Chiquita the fruits are increasingly carrying the brand names of Tesco, Safeways, Sainsbury, and Albert Heinz. Supermarkets from the emerging economies such as Giant from Malaysia and Shoprite from South Africa have taken on such roles to control similar value chains from their sales outlets throughout Southeast Asia and China, and Southern Africa. These firms are increasingly adopting the same pattern of control over the production and distribution of merchandise, including the brand names of these items. The actual production of the goods are outsourced but supermarkets exercise control over the chains by defining the procedures, standards and other requirements that suppliers are increasingly required to provide. In February 2006, Beijing Hualian Group, the sixth largest commercial chain retailer of China, acquired Seiyu Singapore, a retail department store operator. The latter is a branch of Japan Seiyu Ltd, a subsidiary of the US retailer giant Wal-Mart. Hualian's move was targeted at the retailing market in Singapore and from there it hoped to expand to other Southeast Asian countries. Lead firms in buyer- and producer-driven chains invest abroad to reduce costs and increase efficiency across the value chain in R&D, manufacturing and sales. In addition to its widespread distribution, sales and support network, Chinese Lenovo operates research centers in China, USA, and Japan. The company inherited a manufacturing plant in India when buying IBM's PC division in 2005. In 2007, an additional plant was opened in northern India to serve the growing Indian market while a factory was opened in Mexico in 2008 to supply customers in the Americas. 3.5 Financial incentive seeking The relocation pattern of OFDI from the emerging economies suggests that incentives have remained important. However, there is also evidence to suggest that both host and home governments end up providing incentives more than what is necessary (Rasiah, 2005). Some of these problems have cropped up because of TNCs' efforts to optimize profits from their bargaining relationships with governments. Doraisami and Rasiah (2003) showed evidence of TNC declaration of profits falling sharply once tax holidays expire suggesting that they practice transfer pricing to evade taxes[4].

In the period 2003-2005, the tax havens of Cayman Islands (42.1 percent) and British Virgin Island (10.0 percent) accounted for the largest and third largest OFDI from China (Morck et al., 2007, p. 5). Hong Kong (27.9 percent) enjoyed the second highest inflow in the same period. Morck et al. (2007) note that a lot of such outflows were targeted at tax benefits from being classified as FDI. Tax havens compete for outward investment from China, and a lot of such money re-enters China as FDI to enjoy preferential policies, a phenomenon called round-tripping. According to UNCTAD (2007), round tripping could account for up to 25 percent of total FDI into China. Considerable Indian investment has also gone to tax havens (30 percent of the 1995-2005 aggregate volume according to available data) including Mauritius, Virgin Islands, and Bermuda (Nayyar, 2008). TNCs from some of the emerging economies also enjoyed tax exemptions from income remitted back. For example, the Malaysian Government offered tax breaks in 1991 in the form of tax abatement on income earned abroad and from 1995 (apart from banking, insurance, and sea and air transport businesses) to Malaysian firms investing abroad (Ragayah, 1999, p. 470). 3.6 Technology seeking Access to technology and strategic assets has been much more important in the third wave of OFDI. This trend has been driven by increased capabilities and affluence of ETNCs along with increasing competitive pressures. Several TNCs from the emerging economies have established horizontal relationships to either share technology through MAs from the developed economies. Home governments have played important roles to assist their national firms to negotiate deals related to MAs targeted to access technology. The governments of Korea and Taiwan assisted their national firms from the 1980s to acquire or merge with high tech TNCs from the developed countries to quicken the acquisition and learning process (Edquist and Jacobssen, 1987; Rasiah, 1988; Rasiah and Lin, 2005). Samsung Electronics acquired Zenith and Zilog in the 1980s to access critical DRAM technology (Rasiah, 1988). The Taiwan Government was directly engaged through the industrial technical research institutes in the acquisition of Radio Company of America's in the late 1970s that led to the opening of United Microelectronics Company (Rasiah and Lin, 2005). Samsung Electronics from Korea and TSMC from Taiwan also invested into R&D plants in the USA to seek technological support from the R&D labs, and human capital from universities and firms. TSMC itself was started as a joint venture between Taiwan capital and Phillips of The Netherlands in 1987. Samsung Electronics has also started the construction of a large wafer fabrication plant in India in 2007 to take advantage of its huge human capital endowments in engineering. IBM, Intel, and Microsoft have expanded in India for similar reasons. China owned Lenovo purchased IBM's computer division for US$1.75 billion in 2005 (Sauvant, 2008, p. 3). In 2007, Chinese Ufida Software Company set up a mobile ecommerce company in Japan called Fidatone jointly with Japan-based telecom company

NTT DoCoMo. Ufida held 66.67 percent share in Fidatone targeted at increasing its competitiveness in mobile e-commerce through obtaining DoCoMo's technology. Proton of Malaysia acquired UK Lotus for US$400 million in 1997 with the purpose of upgrading its engine and body styling technology. Stringent regulations in certain industries, e.g. the US Food and Drug Administration in pharmaceutical and food-based industries, have encouraged TNCs from emerging economies to file patents as well as acquire foreign TNCs already enjoying such rights in the developed economies. Indian, Chinese, and Brazilian firms have been targeting US firms to access both intellectual property rights and markets. For example, in 2000 Brazilian company Politec acquired Washington-based Sinergy to access knowledge and experience in iris recognition. Holley Group, China's largest producer of electric power meters, has made several technology-related acquisitions in the USA, not least to maintain its market share and technological lead in the Chinese market. Indian OFDI have since 1992 pursued technology as an important target in developed countries. The number of acquisitions has risen but also to acquire technology and human skills in the third wave (Pradhan and Abraham, 2005; UNCTAD, 2006; Nayyar, 2008; Gopinath, 2007). Indian TNCs have also been active in takeovers in Europe. For example, Lupin entered into an agreement with Belgium's Artifex Finance to acquire a 51 percent majority stake in Dafra Pharma giving the Indian firm access to 25 African countries. Before being bought by a Japanese company in 2008, Ranbaxy acquired Belgium's Ethimed, Romania's Terapia and GSK's Italian unit in 2006. Dr Reddy's bought Germany's Betapharm and Aurobindo Pharma acquired UK generics firm Milpharma in 2006. In some emerging economies government has encouraged firms to internationalize operations to acquire technological capabilities by giving them incentives. For example, the Malaysian Government introduced incentives in 2003 to encourage firms to acquire foreign owned high tech firms abroad (MASSA News, June 2005; cited in Ariff and Lopez, 2008, p. 21). Such government support through financial subsidies and incentives were included in a MYR1 billion fund to assist local entrepreneurs to invest abroad (Tham, 2005, p. 10). The Indian, Brazilian, Malaysian, Korean, Chinese, and Taiwan Governments have actively encouraged their firms to seek technology from abroad. Home government policies have varied from simply approving such acquisitions to vetting, monitoring and ex-post appraisals to ensure that the technologies sought were appropriated. The latter is particularly undertaken using experts carrying tacit and experiential knowledge (Lin, 2009). 4 Implications for home country policies There have been extensive accounts of host-government efforts to help their national firms, and regimes in which either production or sales take place to optimize economic synergies (Rasiah, 1995; Prasada, 2000; Narula and Dunning, 2000). However, little

work exists to explain the role of home governments in formulating policies to assist their national firms abroad. Yet, many emerging economy governments have devised policies to actively support the internationalization of national firms. National, regional, and local governments are actively promoting the internationalization of their firms. While home governments promote OFDI to seek new opportunities to expand profits and market shares for their firms, they are also concerned with its potential impact on domestic jobs, supply of capital and balance of payments. The typical macroeconomic assessments that investment advisors provide should just be the first step in the screening process as OFDI is likely to face high political risks, transaction costs and inflation when driven by particular motives such as oil and gas. Oil and gas rich Sudan, Angola, Chad, and Nigeria are easily among the high-risk economies. Nevertheless, both home and host governments can play critical roles to reduce such risks so as to stimulate the appropriation of more synergies once the plants are in operation. 4.1 From restrictive to promotive policies Whereas some emerging economies already had liberal promotional policies from the 1960 and 1970s (e.g. Singapore, Malaysia, and Philippines), the deregulation of capital controls from the 1990s opened the way a number of others to stimulate OFDI strongly. The Chinese Government's overall policy position vis--vis OFDI is conventionally divided into five broad phases (Wu and Chen, 2001; Wong and Chan, 2003; Buckley et al., 2007). Policies have shifted from prohibition and discouragement to active and direct promotion, eventually with some consolidation of the go global policy. In the first phase from 1979 to the mid-1980s OFDI was restricted and tightly politically controlled. In the second half of the 1980s, the investment regime was gradually eased and a wider range of enterprises were allowed to invest abroad. In the period 1992-1998 OFDI expanded in magnitude. However, towards the end of the period regulations were tightened again to discourage speculative excesses, particularly investments in Hong Kong real estate and stock markets. In the following few years (1999-2001), the government deregulated to stimulate trade and trade processing networks abroad in anticipation of China's entry into the WTO by launching the go global directive in the tenth five-year plan in 2001. The key government agency in charge of OFDI policies and assessment of investment proposals, the National Development and Reform Commission (NDRC), issued a series of policy notices on the measures in 2004 to support important projects encouraged by the government to invest abroad (China NDRC and Eximbank, 2004). The flow of Chinese outward investment increased dramatically since 2004, from US$5.5 billion in 2004, to 12.3, 21.2, and 26.5, respectively, in 2005, 2006, and 2007 (China MOFCOM, 2009). India's policy regime on OFDI also went through three phases from restriction to promotion as the country liberalized from 1991 (Gopinath, 2007; Nayyar, 2008; Pradhan, 2008). Indian OFDI began in the 1960s when a few invested in Sri Lanka and African countries. Before 1992, the policy was restrictive. Only minority-owned joint ventures were allowed, 50 percent of declared dividends had to be repatriated, and cash

remittances were not allowed. Most OFDI during that period went to developing countries. The government promoted investment in this direction as a tool of South-South cooperation. The objective of the strategy of seeking global competitiveness, was aimed at utilizing India's technology, skill, brand-names and marketing advantages as well as seeking international markets. The ceilings on the total amount and amount for automatic approval of OFDI proposals have been gradually raised, and the sectors Indian companies could invest in were significantly expanded. The first increase in the upper limit for automatic approval since 1992 took place in 1995, the same year as India's accession into the WTO. Indian firms also started to have greater access to financial markets since the early 1990s. All OFDI matters were transferred from an inter-ministerial committee in the Ministry of Commerce to the Reserve Bank of India to provide a single window (Gopinath, 2007). Another important policy change took place in 2003 when Indian companies were allowed to invest up to 100 percent of their net worth. This figure was raised to 200 percent in 2005, which triggered a sharp rise in international acquisitions. The ExportImport Bank of India, Indian commercial banks and the special purpose vehicles in international financial markets were then allowed to fund OFDI (Kumar and Chadha, 2009). Home governments, central as well as local, in the emerging economies have started to coordinate better their promotional strategies by pooling the investors, listing them with their capabilities, and promoting their interests using a web site as well as through their embassies abroad and trade ministries located in foreign countries. The same organizations and mechanisms have been used by home governments to present business opportunities abroad to ETNCs from their own countries. This strategy has worked well in China, Malaysia, Singapore, and Chile. Home governments from the emerging markets offer fiscal incentives by exempting taxes on incomes remitted back. This type of incentive on the one hand, has stimulated the relocation out of labor-intensive stages that are no longer competitive in Korea, Taiwan, Singapore, and Malaysia thereby reducing the demand for imported unskilled foreign labor. Indeed, Korea, Taiwan, and Singapore relocated their low end manufacturing activities to other parts of East and Southeast Asia following the streamlining of investment guarantees and rationalization of profit repatriation. It has encouraged firms to remit their profits back rather than directing them elsewhere. In addition, the Singapore Government has promoted aggressively since 1989 proximate regions such as Johor in Malaysia and Batam in Indonesia for the relocation of its and other foreign enterprises with higher value-added operations in Singapore. In addition to actively promoting their relocation the Singapore Government also sought assurances from both the local and central governments' favorable treatment of foreign businesses (MIDA, 1991; Rasiah, 1994).

Home governments from the emerging economies have been the prime movers of oilbased OFDI. Beijing has pursued good relations with resource-rich countries through granting soft loans, promoting trade, providing aid in engineering and construction of infrastructure and government buildings, medical aid and a policy of non-interference in domestic politics (Hale, 2004; Li, 2007; Sautman and Yan, 2008). In return, the Chinese companies signed contracts with companies in those countries for stable supply of resources. Through resource diplomacy, Chinese companies are actively involved in overseas resource exploration around the globe. The state owned TNCs of China National Petroleum Corporation, China Petroleum and Chemical Corporation (Sinopec), CNOOC, Oil and Natural Gas Company from India, and the Turkish Petroleum Corporation enjoy strong government support in exploring and producing petroleum and gas in other developing economies for export to their own economies. The Chinese Government has invested in development funds in Africa, Venezuela, and ASEAN. Chinese investments abroad is also aimed at selling China's technology and machinery suitable for developing countries and enhancing bilateral diplomatic ties. For example, the Chinese Ministry of Agriculture encourages Chinese companies to invest in overseas agricultural lands in developing countries, where they can use Chinese agricultural technologies and local cheap land. Although such initiatives are also aimed at enhancing bilateral diplomatic relations and they have done so to some degree, there have been concerns over labour and environment standards, product quality, human rights, corruption, and even neo-imperialism (Sautman and Yan, 2008). The reasons for the accelerated promotion of OFDI are multifold. First, the huge foreign reserves that China accumulated through increased export has a high inflationary pressures on the renminbi, which Beijing did not want to see for the sake of social stability. Second, China's industrialization accelerated since the WTO accession, particular with a lot of foreign investment pouring into China's heavy industrial sectors like automobiles. This has increased the need for energy and raw materials, which are quickly being depleted in China. Third, the WTO membership has not brought as fast export expansion as China expected, as trade disputes and non-tariff barriers to trade have remained major obstacles for China's export-oriented industries. Outward investment thus is a way to get around national borders in order to target the local markets and international market whereby linked. Fourth, the competition from foreign companies brought by the WTO has increased the awareness of China to cultivate its national champions, which is considered strategically important for the industrial development and global competitiveness of the country. 4.2 Investment coordination Home governments have also coordinated firms' OFDI. Competing host-governments can streamline incentive and grant packages offered to TNCs from the emerging economies. Governments can coordinate the outlays between groups of their own national TNCs with TNCs from other countries. Home governments can also coordinate with host governments to improve information flows and reduce risks.

The governments of Singapore, Malaysia, South Africa, India, and China actively encourage their OFDI to expand their operations in certain markets Southern Africa by South Africa, China and India, and Southeast Asia by Singapore, the entire South economies by Malaysia, and where strong reserves of oil and natural gas are available by China and India. In Malaysia for example, the government has introduced an explicit policy to promote OFDI and has negotiated investment guarantees with 64 countries (Zainal, 2006; UNCTAD, 2006, p. 216). Where the target is fiscal incentives home governments should coordinate OFDI policies taking account of host-site incentives and where possible establish or strengthen investment and incentive coordination and profit repatriation treaties that are effective. The governments of Singapore and Malaysia are actively engaged in such negotiations and coordination when involving OFDI to Cambodia, Laos, Vietnam, and Myanmar. China and India have signed bilateral investment treaties with over 120 and 70 countries, respectively, to help protect the interests of OFDI (UNCTAD, 2009). Whereas official policy evolved to promote OFDI in countries such as Singapore and Malaysia, in other countries restrictions on OFDI were gradually removed. In South Africa, restrictions were imposed to invest only in Lesotho, Namibia, and Swaziland before 1996 (UNCTAD, 2006, p. 207). Investment ceilings were established from 1997 until 2004 when they were abolished. The Korean Government only allowed OFDI to secure raw material supplies and to facilitate exports until 1968 when OFDI was permitted. However, severe restrictions were maintained to prevent capital flight. The liberalization of OFDI increased from 1981 as Korean firms began to expand into global markets (UNCTAD, 2008, p. 208). Liberalization expanded further in Korea, Taiwan, and Singapore following the Plaza Accord of 1985 (Rasiah, 1988). Improvements in coordination policies by the Chinese Government since 2004 provided a major stimulus to the growth of Chinese OFDI. The Chinese Government viewed the global financial crisis as a good opportunity for Chinese companies to acquire foreign assets and pledged continued financial support for such initiatives (Zhengquan ribao (Securities Daily), 2009; Xue, 2008). With this view, in December 2008, China's banking regulators lifted restrictions making it possible for Chinese commercial banks to help finance MAs of Chinese companies both at home and abroad (Yang, 2009). Investment coordination is also necessary to reduce undue and sometimes xenophobic responses by host-governments and pressure groups. Such responses are often based on the fact that governments have much influence on OFDI. In China, the government may be able to influence OFDI through direct and indirect state ownership of enterprises and through policy inducements. Other ways in which the government can influence OFDI is through control of credit and domestic competition. Most large Chinese companies are owned by central or local government and this applies equally to companies with investment abroad. From the official list of China's 40 largest multinational enterprises as measured by FDI stock, only four of these companies are not state owned and even those four are subject to various forms of government influence (Gammeltoft and Tarmidi, 2010).

Investment coordination can also help as the takeover of firms in the developed economies by ETNCs have raised questions related to national security, fair practice and the risk of losing technology to foreign rivals. The Chinese state owned CNOOC's attempted takeover of the American owned Unocal in 2005 was blocked after strong political opposition. Lenovo from Beijing acquired IBM's personal computer division in 2005 triggering strong investigation in the USA before the deal was actually approved (UNCTAD, 2006, p. 242). Mittal Steel's merger with Arcelor in 2005 met with stiff opposition before the deal went through (UNCTAD, 2006, p. 245). The governments of France and India were strongly involved in the background in this deal. It will help for governments to collaborate especially when dealing with South-South investment flows. Exchange rate fluctuations and government restrictions on the currency flows can have a bearing on OFDI flows. Areas of collaboration can include the installation of preventive financial instruments to restrict capital flights involving large share investments into host-country enterprises (Yilmaz, 1997; Stiglitz, 1998; Rasiah, 2000a). Chile had in place a tax on capital exiting within one year of entry. Malaysia introduced capital controls in 1998 to coordinate a Keynesian-style recovery from the Asian financial crisis (Rasiah, 2000a). Hence, strong coordination among and between home and host countries will help reduce the risks associated with capital flows and provide better information flow. China and India are two of the most active countries in search of oil and gas., They have competed in Angola, Kazakhstan, Ecuador, and Myanmar (Kumaraswamy, 2007). Chinese companies have won more bids than Indian ones, the Indian Government announced plans in 2007 to strengthen their own approach to attract oil-producing countries to offer its state company favorable mining rights. Chinese and Indian oil firms have also worked together to reduce cut-throat competition, in the form of joint bids in places like Columbia, Syria, Iran, and Sudan, where Western companies consider too risky (China Daily, 2006; Mathaba.Net, 2007; Kumaraswamy, 2007). Within the South Commission and the auspices of UNCTAD and United Nations Industrial Development Organization, efforts were made to establish stronger collaboration between members to avert the adverse impact of market power that arises from asymmetric power relations. Existing frameworks for investment coordination still continue to generate little consensus because of concerns caused by asymmetric power structure between foreign investors and the recipient economies. The rapid expansion of OFDI from the emerging economies can offer a different perspective towards coordinating foreign investment flows from emerging economies if coordinated through the aegis of the South Centre (formerly the South Commission). Unlike the overly asymmetric coordination links between developed and developing governments, governments of emerging economies can actually negotiate gains and issues with other developing economies more horizontally within the South front. 4.3 Leveraging bargains

Although characteristics of firms and markets have been the key drivers of ETNC investment patterns, home and host governments have often played an important role in leveraging investments. Leveraging against host-governments by home governments have been critical in raising both the potential of attracting investments, as well as, requiring them to meet the interests of their national firms. Home governments often work with their national firms to attract the best incentives and guarantees from host governments[5]. Under circumstances of multilateral cooperation, the capacity of individual governments to leverage effectively to extract maximum gains from TNCs will be high. However, conditions and the asymmetries between TNCs (e.g. market shares, technological capabilities and source of national support) and governments (e.g. social conditions, labor market conditions, basic and high tech infrastructure, and political stability) differ and it is extremely difficult to predict TNC-government relations. However, TNCs enjoy greater autonomy and hence have greater control over their conduct. Government face domestic pressures from the different constituencies they represent. Moreover, TNCs often enjoy support from their own national governments. Apart from companies seeking equity investment aggressively, ordinary shareholders generally do not shape the activities of TNCs. The chief executive and top management themselves often hold significant number of shares, aimed at resolving principal-agent problems, and hence effectively control the operations of most TNCs. Hence, TNCs rather than governments enjoy greater autonomy. Information asymmetry, variances in technological and market strength of firms, and endowments enjoyed by economies, and the greater complexity of relationships that define the conduct of governments make bargains and outcomes difficult to predict. Nevertheless, an understanding of the circumstances under which TNCs and governments bargain, and the specific objective sought by them, e.g. relocation or industrial upgrading involving existing operation, will help improve the capacity of both TNCs and governments to harness better benefits. Home governments from the emerging economies have strengthened their bid to invest abroad by pooling and organizing carefully the range of benefits that OFDI participants can provide at host-sites. Some home governments such as China, Korea, Taiwan, Singapore, and Malaysia display leveraging strategies to harness better returns for their national firms. These initiatives are largely handled by individual home governments seeking to maximize benefits for OFDI in host economies. Singapore and Malaysia even go as far as to adopt strategies to manage special economic zones abroad to ensure that governance and coordination procedures at host-sites are orderly for TNC operations. Temasik of Singapore manages the special economic zones of Batam in Indonesia and Cyberabad in Andra Pradesh (India) while Malaysian South-South Corporation (MASSCORP) manages the Danang special economic zone in Vietnam, though these zones also host TNC operations from other countries. Both representative state-guided firms from Singapore and Malaysia have a stellar record in both attracting FDI as well as ensuring that economic support in the zones are well managed.

The Singapore Government also negotiated with the governments of Malaysia and Indonesia since 1989 to coordinate a growth triangle to create specializations in high, medium and low tech operations in Singapore, Johor, and Batam, respectively, to facilitate upgrading in Singapore (Rasiah, 1995). With the active encouragement of the Malaysian Government, the MASSCORP Berhad, a consortium with a group of Malaysia's largest companies as shareholders, was formed in 1992 to promote SouthSouth investment and trade. The Malaysian Government also negotiated with Thailand and Philippines to create similar economic arrangements since 1990 to support upgrading and growth in home-country TNCs (Yusof, 1999). Similar arrangements but with different formations have evolved with other emerging economy governments. Capitalization, governance capabilities and the record of having operated export-processing zones successfully have often been used by these TNCs to win bids to operate them abroad. Both Indian and Chinese Governments use their EXIM Banks to support OFDI, and their commercial banks have in recent years set up overseas representative offices or branches to provide services to OFDI. The major Chinese commercial banks are all state owned, and the Indian banks with the dominant share of overseas branches are also in the public sector. The Chinese Government seeks to strengthen diplomatic and trade relations with Australia in order to facilitate energy deals between its national firms and Australian companies (Callick, 2006). However, as the failed Chinalco-Rio Tinto case shows, the Australian Government either does not have as much influence over companies' business decisions as China expected, or Canberra's concern over potential control of national resources by a foreign government outweighed the temptation of an export market. It will certainly help home governments organizing strategies to assist their own national firms to understand the motives behind why particular national firms are seeking to invest abroad as one key role they play has been on attracting OFDI. OFDI motives of ETNCs can evolve to stretch beyond agriculture, manufacturing, banking, and other service activities to include other activities. Some amount of supermarket retailing has already evolved. Each of these activities will require different strategies for home governments to respond with the right strategies to support their operations productively. This will also apply for firms seeking extractive industries, which is determined by the location of the deposits. Because ETNCs from the emerging economies carry with them the South tag efforts should be taken to address the genuine concerns of power squeeze by TNCs so that a more acceptable set of agreements can be established between these countries. Interviews with primary industry and planning officials of Argentina, Brazil, Chile, Costa Rica, Mexico, Sudan, South Africa, Indonesia, Namibia, Nigeria, Laos, China, Malaysia, Philippines, Indonesia, and Cambodia suggest that the conduct of ETNCs from China and India in Africa may have improved to honor national considerations such as the hiring and training of local employees[6]. 5 Conclusions

A deeper probe into the features of OFDI from emerging economies reveals recent shifts in investment motives, ownership modes, sectoral composition, and typical destinations; shifts sufficiently large to warrant the proposition of a new and qualitatively different third wave of OFDI, different from the two previous waves depicted in the received literature. We outlined the features of such a wave. The paper further examined the strategic drivers of OFDI. Understanding better the underlying drivers can assist home governments to construct more effective policies and coordinate better existing operations of their national firms abroad. It is obvious that much of the theorizing of the leading path creators such as Dunning (1981) remains important in explaining OFDI from the emerging economies, which holds even where the FDI from the emerging economies is targeted to the developed economies. Although UNCTAD (2006) reports that expansion of markets and reduction of production costs were the prime drivers of OFDI, the evidence here suggests that all the key drivers of OFDI are important, viz., markets, natural resources, labor, technology, financial incentives, and control of value chains. Further, because the specificity of each of the drivers is critical home governments need to pay attention to the motives and activities of their own TNCs rather than simply to the aggregate picture provided by global surveys. The surge in OFDI from the emerging economies has given a new dimension to the arguments on regulation. Contrary to the official government prescriptions, i.e. to liberalize investment governance structures, many home governments have acted to regulate strongly OFDI from the emerging economies. Although narrow national interests have often driven decision making it is important for home governments to consider the broader interest of promoting capital flows to ensure the long-term development of economies. Given the growing significance of OFDI from the emerging economies it will help if the home and host governments involved seek to establish common and specific collaboration platforms to raise information flows as well as coordinate better the negotiations and execution of investment projects. Being members of the South group and as latecomers having viewed the experience of OFDI flows from developed economies both home and host governments could discuss these issues with less asymmetric problems. A common but loose multilateral investment framework among these economies, one with room for flexibility, could be better achieved among the South economies than the previously failed efforts at the global front. While investor interest will remain the key driver, any common agreement should incorporate elements of corporate social responsibility and national interests. Instead of reinventing the wheel the codes of conduct adopted originally by the United Nations should be the starting point of such deliberations.

Table IFDI outflows by economy group 1970-2008

Table IIThree waves of OFDI from emerging economies

Notes
1. Several terminologies dominate the discussions on TNCs. Neoclassical economists prefer to use the the term MNCs (Dunning, 1974). The United Nations adopted TNCs formally to differentiate ownership by multinational citizens from simply cross-broder direct investment (Jenkins, 1984). 2. Although Arcelor Mittal is registered in Luxembourg and headquartered in London its origin is in India.

3. Both acquisition fared poorly: TCL-Thomson Electronics encountered huge difficulties and performed very poorly; Ssangyong Motor went into receivership in January 2009. 4. The original discourse on transfer pricing involving TNCs from developed countries was undertaken by Lall (1979) and Vaitsos (1974). 5. Interviews show that there is no obvious evidence of home governments from the emerging economies seriously engrossed in seeking corporate social responsibility practices at host-sites. If such practices gain currency in the policies of emerging home governments the same leveraging framework can be used to promote it. 6. The interviews were carried out on March 11-12, 2007 by Rajah Rasiah at an UNCTAD meeting in Geneva.

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