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Introduction
The identification and classification of investment motives is important for foreign direct investment (FDI) research because the objectives of an action determine how the performance should be assessed. For example, if an FDI project is undertaken in pursuit of foreign markets, then the performance may be assessed by the market share in the relevant markets or by the financial performance of the subsidiary. If the objectives relate to efficiency, then the performance assessment will focus on indicators of productivity and costs. If the objectives relate to natural resource-seeking, then the costs and stability of the sought inputs would be appropriate performance indicators. But what is strategic asset-seeking FDI, and how can we tell if a firm has been successful in its strategic asset-seeking FDI?
First proposed by John Dunning (Dunning, 1993; Dunning and Narula, 1995), the concept of strategic asset-seeking has recently been used by several authors to describe FDI by emerging economy multinational enterprises (MNEs), specifically to highlight what appears unconventional about some of their FDI projects (Deng, 2009; Rui and Yip, 2008; Cui et al. , 2014). Strategic asset-seeking is one of four categories of FDI motives, the others being market-, efficiency- and natural resource-seeking (Table I). However, the concept lacks consistent usage and interpretation, and some may even suggest it would be redundant.
In this commentary, I will first briefly review two lines of argument suggesting that the concept is redundant. Then, I will discuss why this category is important for emerging economy MNEs, as some of their most important FDI projects are not captured by the other three motives. Specifically, these investors acquire assets overseas - often entire firms - with the aim to enhance their capability portfolio in the home country or in third-country markets. While these projects may not be many, they are strategically important to the investing firm, have substantive impact on stakeholders at home and abroad and are often very large. I conclude by offering suggestions on how the concept may be refined to better capture the underlying strategies.
Critiques of the concept
Two lines of theoretical argument suggest that the concept of strategic asset-seeking is, in fact, redundant because all FDI projects can appropriately be captured by the other three categories. The first line...