Governors' pro-market ideology as institutional enablement of firm internationalization

Abstract

Purpose

Extant literature has indicated that government support is one of the main drivers of international expansion of Chinese multinational enterprises. However, research on the influence of governors on firm internationalization is still limited. Drawing upon the institution-based view, we theorize a novel concept of institutional enablement to illustrate the influence of a governor's pro-market ideology on Chinese firms' internationalization.

Design/methodology/approach

We analyze the relationship between a governor's pro-market ideology (consisting of a pro-market political ideology, an overseas educational background and a business background) and firm internationalization with a sample of Chinese public companies during 2014–2017.

Findings

We find a direct and positive effect of a governor's pro-market ideology on firm internationalization. We also find an indirect and positive effect of a governor's pro-market ideology through regional, inward foreign direct investment.

Originality/value

To the best of our knowledge, this paper is the first to investigate an underexplored question of the impact of governors on firm internationalization and to develop a novel concept of institutional enablement, based on discursive institutionalism.

Citation

Zhou, W.C. and Sun, S.L. (2021), "Governors' pro-market ideology as institutional enablement of firm internationalization", Cross Cultural & Strategic Management, Vol. 28 No. 4, pp. 894-917. https://doi.org/10.1108/CCSM-09-2020-0182