Protective incubators and South African MNEs

Emerging‐market multinational enterprises (MNEs) often lack conventional competitive advantages (high knowledge bases, stable currencies, industry concentrations of foreign direct investment) and, thus, should be disadvantaged in competing globally. A protective environment, however, may help develop firm‐specific advantages in countries with deficiencies in human capital, and market and technological resources. We demonstrate how four such companies from South Africa progressed from their domestic base to become successful MNEs. Contrary to expectations, international expansion of MNEs from less competitive economies may be driven more by the transfer of intangible knowledge across national boundaries than by exporting finished goods. © 2009 Wiley Periodicals, Inc.