Global Value Chain Envelopment: How Do Emerging Multinational Enterprises Innovate and Compete in Green Transitions?

How are emerging market multinational enterprises (EMNEs) able to innovate and compete with developed market multinational enterprises (DMNEs) in green global value chains (GVCs)? Focusing on the rapid growth of the electric vehicle (EV) industry in China, we introduce the novel concept of GVC envelopment. This concept explains how EMNEs strategically integrate into GVCs dominated by DMNEs, forming cooperative relationships with key suppliers and partners to create synergies and achieve economies of scale. Through a three-stage process, EMNEs not only contribute to the global green transition but also challenge traditional global players. The paper offers critical insights for both multinational enterprise managers and policymakers, highlighting the evolving dynamics of competition and collaboration in global green transitions.