P erhaps one of the most far-reaching developments of the past 20 years has to do with the rise of emerging econo- mies, which once represented no more than 15 percent of the global economy and now have come to account for nearly half of all eco- nomic activity. These economies are growing fast and are located around the world, in Africa, South and East Asia, Latin America and the Middle East. Some have become major exporters of manufac- tured goods, while others sell agricultural, energy or mineral commodities. Emerging countries have also become ma- jor sources of foreign direct investment (FDI) – that is, companies based in emerging econo- mies have expanded throughout the world, making acquisitions and setting up manufac- turing and distribution operations, not just in other emerging economies and developing countries, but in developed ones as well. Overall, emerging market multinational companies (MNCs) are still few and far be- tween. As of the end of 2009, they accounted for around 14 percent of all cumulative FDI in the world, up from 7 percent in 1990. However, the rate at which they are catching up is very fast: In 2009, they generated around a quarter of all new FDI in the world, a proportion that is predicted to surpass 50 percent within a few years. The list of leading MNCs from emerging economies is considerable. Argentina’s Arcor is the largest candy company in the world, and Tenaris is the largest maker of seamless steel By MAURO F. GUILLÉN and ESTEBAN GARCÍA-CANAL The Rise of Emerging Market Multinationals GROWING BY LEAPS AND BOUNDS DEEP insight IESEinsight 13 ISSUE 10 THIRD QUARTER 2011