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The influence of home-country institutions on servitization

Hamilton Terni Costa (Department of Management, Centro Universitário FEI, São Paulo, Brazil)
Fernanda Ribeiro Cahen (Department of Management, Centro Universitário FEI, São Paulo, Brazil)
Juliana Bonomi Santos (Department of Production Administration and Industrial Operations, Fundacao Getulio Vargas Escola de Administracao de Empresas de Sao Paulo, Sao Paulo, Brazil)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 22 November 2019

Abstract

Purpose

The purpose of this paper is to explore how home-country institutions influence firms’ servitization decisions. Existing studies have mostly neglected differences across countries and implicitly assumed the servitization process and drivers are homogenous across national institutional environments. The authors challenge this assumption.

Design/methodology/approach

Using case-based research, the authors explored the influence of formal institutions of the product, financial and labor markets on the servitization of two firms operating in a developed country and two in an emerging country.

Findings

The absence of robust home-country institutions did not necessarily hinder the servitization process. On the contrary, firms servitizate to overcome the difficulties posed by these institutional voids. The flexibility associated with service offerings enables firms to create viable alternatives to cope with taxes, lack of infrastructure and qualified labor force.

Originality/value

These outcomes contribute to the servitization literature, which has mainly focused on single-country studies and takes for granted the institutional differences between countries. The findings suggest future studies need to consider how and, to what extent, the country where the company is located influences servitization strategies and processes. Such reflections will improve the inferences made concerning firms’ servitization. For practitioners, the results suggest that the move into the provision of services can be a fruitful strategy to overcome the difficulties faced in emerging markets.

Keywords

Citation

Costa, H.T., Cahen, F.R. and Santos, J.B. (2019), "The influence of home-country institutions on servitization", International Journal of Emerging Markets, Vol. 15 No. 4, pp. 809-828. https://doi.org/10.1108/IJOEM-05-2018-0258

Publisher

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Emerald Publishing Limited

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