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activity, whether the MNE comes from a developed country or not (Lecraw 1977; Lall 1983; Wells 1983; Caves 1996:238-241). The horizontal investments of the new MNEs, however, are harder to explain because they are supposed to be driven by the possession of intangible assets, and firms from developing countries were simply assumed not to possess them, or at least not to possess the same kinds of intangible assets as the classic MNEs from the rich countries (Lall 1983:4). This paradox becomes more evident with the second wave of FDI from the developing world, the one starting in the late 1980s. In contrast with the first wave FDI from emerging countries that took place in the 1960s and 70s, the new MNEs of the 1980s and 90s aimed at becoming world leaders in their respective industries, not just marginal players (Mathews, 2006). In addition, the new MNEs do not come only from emerging countries. Some firms labeled as born-global or born-again born-globals (Bell, McNaughton and Young, 2001) have emerged from developed countries following accelerated paths of internationalization that challenge the conventional view of international expansion.

The main features of the new MNEs, as compared to the traditional ones, appear in Table 1. The dimensions in the table highlight the key differences between new and conventional MNEs. Perhaps the most startling one has to do with the accelerated pace of internationalization of the new MNEs, as firms from emerging economies have attempted to close the gap between their market reach and the global presence of the MNEs from developed countries (Matthews, 2006).

A second feature of the new MNEs is that all of them, no matter the home country, have been forced to deal not only with the liability of foreignness, but also with the liability and competitive disadvantage that stems from being latecomers lacking the resources and capabilities of the established MNEs from the most advanced countries. For this reason, the

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