Outward direct investment by multinational enterprises from emerging economies has witnessed a sudden surge in recent years. In particular, observers have been surprised at the extent of acquisition activity, especially in the advanced economies. Combining concepts from the fields of international business, strategic management and entrepreneurship, I argue that outward internationalization by these firms through acquisition can be explained by a search for advantage creation when firms possess mainly ordinary resources. Here, acquisitions can (a) help these firms overcome what I term as the ‘liability of emergingness’ and (b) serve as a mechanism for competitive catchup through capability upgrading. In making my argument, I postulate acquisition as a form of entrepreneurship which, executed properly, enables the firm to not only seize opportunities but convert them into advantage by integrating them into the very functioning of the organization.
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