Resources

Sanctions are a common foreign policy tool, but succeed fully in less than 10% of cases. Examining the case of Myanmar after the 2021 coup, Thein, Grosman, Sosnovskikh, and Klarin show that multinational companies' exits are often driven by informal stakeholder pressures rather than legal mandates. While intended to uphold human rights, hasty exits can worsen humanitarian conditions and even strengthen regime-linked actors. To address this, the authors propose a “responsible exit” framework emphasizing due diligence, transparency, and worker protection. For policymakers, the study highlights the indirect and uneven impacts of sanctions, urging more coordinated design and clearer guidance to prevent harm to local populations.

The Spring 2025 issue of Insights @ Center for Emerging Markets examines how multinational corporations engage with local institutions in emerging markets—where growth potential is high but so are the risks. Drawing on research from Northeastern University faculty and international scholars, we examine how companies can transform challenges into opportunities for responsible growth and competitive advantage.

When multinational companies from advanced economies set up operations in emerging markets, they often bring with them higher environmental standards, more efficient technologies, and robust sustainability practices. These aren't just internal improvements—they can create ripple effects throughout the local business ecosystem. For local firms, especially small and medium-sized enterprises (SMEs), this presents a valuable opportunity to learn, adapt, and upgrade their own environmental practices.

Emerging markets offer multinational corporations high growth potential, but these opportunities are frequently beset by challenges such as bribery and other forms of corruption. Although corruption deters foreign investment, Negash Haile Dedho, René Belderbos, and Alvaro Cuervo Cazurra found that the way a company responds to these challenges hinges significantly on its home country experience, creating a divide between “dirty hands” and “clean hands” companies. 

For decades, the innovation pipeline for multinational corporations (MNCs) largely flowed in one direction, from global R&D centers in developed economies to emerging market subsidiaries. The role of local R&D units in emerging markets were typically limited to adapting existing products for local tastes or finding ways to reduce costs. The assumption was that sophisticated “lead customers” and cutting-edge external experts resided primarily in developed markets, making them the natural epicenters of innovation. However, recent research challenges this paradigm, revealing how emerging market R&D units can become powerful engines for global innovation.

Global value chains often rely on labor in low-income countries, where gender inequality persists. Shengwen Li and Anthony Goerzen studied a Village Savings & Loan Association (VSLA) intervention in the Democratic Republic of Congo's artisanal mining communities. The NGO-led project aimed to empower women through financial access, legal gold sales, and leadership opportunities. While the initiative initially improved women's confidence and economic standing, these gains diminished once NGO support ended. The study highlights both the potential and limitations of targeted interventions, emphasizing the need for long-term, sustainable strategies to ensure enduring improvements in gender equality within global value chains.

The decision to expand internationally for emerging market companies is often attributed to a desire to escape the constraints of home environments, particularly weak rule of law, underdeveloped financial markets, inconsistent regulatory enforcement, and limited access to capital. However, recent research by Jialin Du and Eric Yanfei Zhao also reveals that a company's standing within its home country can be significantly enhanced by expanding abroad, particularly to developed markets, such as those in Europe and North America.

Emerging markets offer opportunities, but they also present unique challenges, including political risk and instability. Recent research by Yannick Thams and Luis Alfonso Dau highlights how the personal political ideology of a CEO often determines how companies respond to these challenges. Thams and Dau focused on corporate responses to the 2022 Russian invasion of Ukraine, revealing that a CEO's liberal or conservative leanings significantly impacted the likelihood of a company's decision to exit the Russian market.

The Fall 2024 issue of Insights @ Center for Emerging Markets brings together researchers from Northeastern University and the broader global academic community to delve into transformative strategies and practices shaping global business in emerging markets. From the rise of emerging-market firms as leaders in global value chains to innovative governance structures that address sustainability and human rights challenges, the topics offer fresh perspectives and actionable insights for navigating complex market dynamics.

Global supply chains have recently come under greater scrutiny following several high-profile cases of labor abuses, particularly in the wake of the Rana Plaza factory collapse in Dhaka that claimed over a thousand lives. Although international guidelines such as the UN Universal Declaration of Human Rights and ILO International Labour Standards provide a framework for ethical labor practices, their effectiveness is contingent upon consistent enforcement. This can be a formidable challenge when suppliers operate independently from developed-country buyers, often in regions marked by weaker legal systems.