Particularly, the support of local state is another advantage enjoyed by EMNCs. On the one hand, EMNCs may not encounter financial risks faced by private multinationals since they are provided with specific incentives like tax reduction and lower interest loads (Contractor, 2013). Take China as an example, firms who operate abroad are privileged under single corporate income tax principle, which reduce half of the original double taxation. In addition, Bank of China offer discounted bank loans to those who investing overseas (Luo, Xue, & Han 2010). On the other hand, state can prevent EMNCs from suffering information asymmetry and political risk in host country. On some occasions, mutual protection agreements are established between or among countries, enabling companies in certain industries to entry with favorable terms. Additionally, government, instead of firms, takes the responsibility of collecting and publishing information on investment risks, which is a competitive advantage compared with AMNCs (Amighini et al 2015)
EMNCs are growing up in environment with inefficiency government and high political risks; as a result, they are no longer afraid of instability of external environment in the process of internationalization. Compared with AMNCs, managers in EMNCs can endure ambiguity and catch up opportunities ignored by their advanced counterparts. At the same time, decisions can be made faster and the work efficiency will be improved (Luo, Xue, & Han 2010). Also, Cuervo-Cazurra, & Genc, (2008) argue that the weakness of home country like imperfect market mechanism and intellectual property rights can turn to be strengths for EMNCs. In other words, AMNCs who used to operate in developed country with sound market mechanism may find it difficult to invest in developing countries.