Parsing the growth advantage of emerging-market companies
Surprisingly little of their edge is attributable to starting from a smaller revenue base. They also seem to invest more, allocate resources more fluidly, and spot fast-growing segments.
MAY 2012 • Yuval Atsmon, Michael Kloss, and Sven Smit

https://www.mckinseyquarterly.com/Strategy/Growth/Parsing_the_growth_advantage_of_emerging-market_companies_2969

Some real “food for thought”. Read the full article.

Leaders of multinational companies are by now well aware of the growth potential that emerging-market consumers represent, an opportunity that we estimate could exceed $20 trillion annually by the end of this decade… 

… One striking finding was that companies headquartered in emerging markets grew roughly twice as fast as those domiciled in developed economies—and two and a half times as fast when both were competing in emerging markets that represented “neutral” turf, where neither company was headquartered…. 

…. It is impossible to definitively disaggregate the sources of the remaining growth differential. However, the following three factors appear to be materially different for these two classes of companies: 

Higher reinvestment rates. Emerging-market companies paid dividends at a lower rate than developed-market companies, returning only 39 percent of earnings to shareholders, while developed-market companies returned close to 80 percent…. 

… Agile asset reallocation. Additionally, we found that on average, emerging-market companies have been reallocating capital toward new business opportunities more dynamically than those headquartered in developed economies… 

….. Growth-oriented business models. Emerging-market companies generally serve the needs of fast-growing emerging middle classes around the world with lower-cost products. Developed-economy companies tend to rely more on brand recognition while targeting higher-margin segments, which are relatively smaller and thus less likely to move the needle on the companies’ overall growth rates.