Summary: The Global Financial Crisis

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The global financial crisis that started in 2007 and lasted till 2008 led to an economic downturn across the globe. The crisis has indeed changed the global FDI landscape greatly. In 2007, the world’s FDI reached an astounding figure of $4,125 billion but took a plunge to $3, 555 billion in 2008. Outward FDI (OFDI) from developing countries rose from $215 billion in 2006 to $292 billion in 2008 (UNCTAD, 2009). China’s OFDI continued to remain insignificant until 2004 where it starts increasing, shown in Figure 8 (Gugler and Boie, 2008). In 2008, China had doubled its OFDI to $52 billion. The persistent increase has definitely surprised and caught wide media attention (Ning and Sutherland, n.d.). Since the 1990s, the telecommunication industry…show more content…
They then have to adopt a catch-up strategy to achieve the rapid growth to catch up to the more developed countries (Li and Kozhikode, 2008). Alliance and global development became great sources to get profitable assets for many emerging multinationals (Matthews, 2006). Matthews (2006) further argues that the OLI framework is best suited to those firms that are already well established. For those MNEs that are still seeking for the OLI advantages, the LLL framework can better suit their needs since they can build linkages with developed firms and take advantage of their latecomer status and internationalize accordingly (Bonaglia, Goldstein and Mathews, 2007). For a fierce company like Huawei, they realized that they couldn’t keep up with the fast growing economy as a sole company on its own. Instead, they decided to tone down their predatory attitude and start building rapports with established telecom equipment suppliers in return to gain entry to the international markets through them. Following the LLL framework, Huawei has then managed to establish joint R&D with global giant such as Texas Instruments, IBM and Microsoft. As of 2005, Huawei owns ten joint research labs. Being a latecomer in industrialization. Huawei also managed to learn management skills from leading multinational firms to keep in accordance with the best practices in the telecommunication industry (Li Sun,
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