Institutional theory and international market selection for direct selling

Abstract

Purpose

The purpose of this paper is to use a theoretical framework (institutional theory) to predict international market selection (IMS) for the direct selling industry.

Design/methodology/approach

The authors use independent variables taken from institutional theory to predict IMS for the direct selling industry, allowing the authors to show the relationship between institutional theory – defined independent variables and the relative attractiveness of international markets. The model is applied to a broad sample of 51 developed and emerging nations that comprise 91 percent of worldwide GDP.

Findings

The authors found that the hypotheses were confirmed. Institutional theory – defined independent variables did a good job of predicting the relative attractiveness of international markets.

Research limitations/implications

The authors used cross sectional country level data to validate their model. One major implication: institutional theory appears to do an excellent job of predicting IMS in contrast to geographic proximity or cultural similarity for the direct selling industry.

Practical implications

Managers should consider formal and informal aspects of the institutional environment, when selecting new international markets.

Originality/Value

In contrast to most IMS papers, the authors apply a theory to predict IMS outcomes, helping to provide greater potential generalizability. The authors show that selected dimensions of institutional theory do a good job of predicting IMS for the direct selling industry. Future efforts may wish to apply institutional theory to new IMS contexts. The authors conclude with managerial implications.

Citation

Ragland, C.B., Brouthers, L.E. and Widmier, S.M. (2015), "Institutional theory and international market selection for direct selling", Marketing Intelligence & Planning, Vol. 33 No. 4, pp. 538-555. https://doi.org/10.1108/MIP-02-2014-0033