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infrastructure has prompted many American and European firms to become much less reliant on traditional product-differentiation strategies and vertically integrated structures. To a certain extent, the rise of networked organizations (e.g. Bartlett and Ghoshal 1989) and the extensive shift towards outsourcing represent competitive responses to the challenges faced by established MNEs. Finally, a special type of new MNE is the so-called born-global firm, which resembles the new MNE in many ways but has emerged from developed countries.

Taking all of these developments into account, it is clear that the American model of MNE is fading. In effect, globalization, technical change and the coming of age of the emerging countries have facilitated the rise of a new type of MNE in which foreign direct investment is driven not only by the exploitation of firm-specific competences but also by the exploration of new patterns of innovation and ways of accessing markets. In addition, the new MNEs have expanded in a very rapid way, without following the gradual, staged model of internationalization.

It is important to note, however, that the decline of the American model of the MNE does not necessarily imply the demise of existing theories of the MNE. In fact, the core explanation for the existence of MNEs remains, namely, that in order to pursue international expansion, the firm needs to possess capabilities allowing it to overcome the liability of foreignness; no firm-specific capabilities, no multinationals. Our analysis of the new MNEs has shown that their international expansion was possible due to some valuable capabilities developed in the home country, including project-execution, political and networking skills, among other non-conventional ones. Thus, the lack of the classic technological or marketing capabilities does not imply the absence of other valuable capabilities that may provide the foundations for international expansion. It is precisely for this reason that the new MNEs are here to stay.

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