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Article
Publication date: 5 June 2017

Sheng Huang, Guangyu Ye, Jinbo Zhou and Tiantian Jin

This paper aims to reveal the influencing mechanism of the interaction between institutional environments in the home and host country on the accelerated…

Abstract

Purpose

This paper aims to reveal the influencing mechanism of the interaction between institutional environments in the home and host country on the accelerated internationalization of entrepreneurial enterprises from emerging economies (EE). The authors want to open the black box of home-country institutional environments’ moderating mechanism on the relationship between host-country institutional environments and accelerated internationalization.

Design/methodology/approach

The authors chose a massive interview method and case study method to answer this question. According to our standards, the authors chose four high-tech companies in Guangdong and Guangxi provinces as case study samples. During investigation in the four case companies, the authors collected print data of 150 pages and electric data of 3 pages. Then, the authors excavated concepts in data through open coding, axial coding and select-type coding and identified concepts’ dimensions and connections between them.

Findings

Well-developed home-country institutions can reduce the inhibitory effect of under-developed host-country institutions on the accelerated internationalization of entrepreneurial enterprises from emerging economies. Under-developed institutional environments in the home country are beneficial for entrepreneurial enterprises from EE to develop the institutional capability for entrepreneurial enterprises with stronger institutional capability from emerging economies. The inhibitory effect of under-developed institutional environments in the host country on their accelerated internationalization is weaker. The positive moderating role played by institutional voids in the home country on the relationship between institutional voids in the host country and the accelerated internationalization are mediated by the institutional capability of entrepreneurial enterprises from emerging economies.

Research limitations/implications

The authors just refined the definition of institutional capability and divided its dimensions. Issues such as operationalization of institutional capability and the development of measurement scale are also worthy for future quantitative research. Considering the inherent defect of case study and that these four case companies are from Chinese high-tech industry, the external validity our research may be limited. The theoretical model that was constructed generally captured the relationships between dual institutional environments, institutional capability and EE entrepreneurial firms’ accelerated internationalization decision. Future studies may use a large-scale sample to verify the all propositions the authors introduced to draw more steady and reliable empirical study results.

Practical implications

The conclusions have significant implications for governments in EE to construct friendly institutional environments for international entrepreneurship and for entrepreneurial firms to implement internationalization strategies.

Social implications

Policy makers should establish well-developed normative and cognitive institutional environment by cultivating global-orientated and open national culture and organizing experience exchange conference, thereby speeding up the implementation of internationalization strategies and further improving international competitiveness for a country.

Originality/value

First, the authors defined institutional capability as firms’ ability of establishing relationships with institution actors, adapting to institutional contexts, changing existing institutions or creating new ones to gain potential interests and suggested that it consists of three dimensions. Second, institutional voids in the home country positively moderate the relationship between under-developed institutional environments in the host country and the accelerated internationalization of entrepreneurial firms from EE. At last, institutional capability of firms negatively moderates the relationship between under-developed institutional environments in the host country and the accelerated internationalization of entrepreneurial firms from EE.

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Book part
Publication date: 21 October 2019

Elizabeth Moore, Kristin Brandl and Luis Alfonso Dau

In the volatile, uncertain, complex, and ambiguous (VUCA) contemporary business environment intergovernmental organizations (IGOs) play a central role. Their objective is…

Abstract

In the volatile, uncertain, complex, and ambiguous (VUCA) contemporary business environment intergovernmental organizations (IGOs) play a central role. Their objective is to align member countries for collective global problem solving activities under the guidance of the organization. They aim at providing global stability and security through the creation of supranational institutions. While political sciences have studied IGOs from a global political perspective, little is known about the influence of these IGOs and their supranational institutions on country institutional environments and business environments. Thus, the purpose of this chapter is to understand how IGOs influence these national institutional environments, especially considering the countries’ development levels. By using regime and institutional theory we are able to conceptualize the relation of supranational and national institutions within the differently developed countries. We identify two interconnected factors that impact this analysis, the strength of the national institutional environment of member countries and their power in the IGO. Using these factors, we identify a clash and misalignment of national and supranational institutions in emerging countries, which is leading to enhanced VUCA business environments. We provide an exemplary case that discusses institutional schisms created by the International Monetary Fund’s (IMF) influence in Argentina. Moreover, the impact of IGOs is significant in least developed countries and has little to no impact in highly developed countries.

Details

International Business in a VUCA World: The Changing Role of States and Firms
Type: Book
ISBN: 978-1-83867-256-0

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Article
Publication date: 22 October 2018

Gunjan Kumar and Saundarjya Borbora

The purpose of the paper is to contribute to the understanding of regional entrepreneurial development by constructing an institutional environment index in India, where…

Abstract

Purpose

The purpose of the paper is to contribute to the understanding of regional entrepreneurial development by constructing an institutional environment index in India, where high heterogeneity is found in the economic development and entrepreneurial activities across its states. It tries to fill the gap of research which hampers the effectiveness of policy efforts to promote job growth through entrepreneurship development in India and contributes in understanding the phenomenon why the relative contribution of entrepreneurship varies across states.

Design/methodology/approach

The paper uses a composite index of institutional quality based on the Penalty for Bottleneck (PFB) methodology to capture the institutional environment differences across the states of India. The relationship between the institutional environment and the measures of entrepreneurship is established through various statistical and econometric techniques such as correlation and regression.

Findings

The paper finds the regional and contextual institutional environment differences in India starker and more varied than is generally viewed. The empirical evidence suggests that the differences in institutional quality scores can play a significant role in explaining the variations in the extent of entrepreneurial activities across the Indian states. The findings of this paper demonstrate a differential influence of the local institutional environment on the entrepreneurial activities at a regional level in a developing economy like India.

Research limitations/implications

This study is limited by the data sources and index design; therefore, it cannot completely specify all institutional factors and their combined influences on entrepreneurial activities at the regional level. However, it makes a significant contribution to expanding the current body literature of institutional environment reform and entrepreneurship development in developing countries.

Practical implications

The policy implication of the paper highlights the need of policymakers to think outside the individual policy silos and consider the institutional environment as a whole. Priority attention of the policymakers should be on the institutional reform for any type of entrepreneurship development. A corollary implication of the O-ring theory of development and the PFB methodology is that the policy effort is allocated most effectively when it seeks to alleviate bottlenecks.

Social implications

The main implication of this paper for the policymaking is that it is necessary to focus more on the weak institutional factors (bottlenecks) and on the general environment improvement for any entrepreneurship development.

Originality/value

The study contributes to study the problem of entrepreneurship discrepancy in India through the lens of institutions and institutional environment. This study is an improvement over the previous studies by testing the statistical significance of the institutional environment on the entrepreneurship.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 11 no. 2
Type: Research Article
ISSN: 2053-4604

Keywords

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Article
Publication date: 22 March 2013

Lanlan Cao and Daniele Pederzoli

The purpose of this paper is to analyze the international retailers' strategic responses to the institutional environment in emerging markets.

Abstract

Purpose

The purpose of this paper is to analyze the international retailers' strategic responses to the institutional environment in emerging markets.

Design/methodology/approach

Based on in‐depth interviews with top managers from a grounded‐theory perspective, the research provides a comprehensive analysis of the implications of the institutional environment for the strategic choices of international retailers in an emerging market, especially in China.

Findings

The international retailer's strategic choices are often identified as pragmatism, dynamism, public policy‐orientation, seeking lead position in the market and decentralization if the institutional distance between the home country and host country is high. Moreover, when international retailers can commit to cultivating local markets and creating shared added value, they are better able to respond proactively to an institutional environment that is geared to a collective social network and still in a phase of transition.

Research limitations/implications

This paper focuses on only one country, China.

Originality/value

The major value of this paper is to highlight the specificities of international retailers' strategic responses to the institutional environment of an emerging market. Attention to these specificities would enable researchers to analyze better the reality of retail internationalization process in an emerging market.

Details

International Journal of Retail & Distribution Management, vol. 41 no. 4
Type: Research Article
ISSN: 0959-0552

Keywords

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Article
Publication date: 29 November 2018

Lasse Torkkeli, Olli Kuivalainen, Sami Saarenketo and Kaisu Puumalainen

The purpose of this paper is to examine the impact of institutional environment on the international performance of small- and medium-sized enterprises (SMEs) and how this…

Abstract

Purpose

The purpose of this paper is to examine the impact of institutional environment on the international performance of small- and medium-sized enterprises (SMEs) and how this relationship is influenced by network competence.

Design/methodology/approach

This study uses a quantitative approach. In total, 119 internationally operating Finnish SMEs from five industry sectors are sampled via a cross-sectional survey. Data are analysed through regression modelling.

Findings

The international performance of SMEs is influenced directly and indirectly by institutional drivers. The results show that network competence mediates the positive relationship between institutional drivers and international performance.

Research limitations/implications

Network capability development can help SMEs leverage more or less favourable institutional environments for successful internationalisation. Perceived institutional drivers directly result in higher performance, but the effect can be partially mediated by dynamic capabilities. The limitations of the study include its single-country context and the cross-sectional nature of the data.

Practical implications

SMEs should take their home countries’ institutional environments into account, but for long-term success, they should develop the ability to manage their business networks. A conducive institutional environment may help develop competence, which in turn can enable more successful internationalisation in terms of scale, scope and satisfaction.

Social implications

Decision-makers may benefit from knowing that, in addition to capabilities, an institutionally conducive environment that drives domestic SMEs towards international markets may be an antecedent of successful internationalisation in the SME sector.

Originality/value

This is one of the few studies to illustrate how network capabilities can mediate the influence of institutional factors on entrepreneurial internationalisation. It combines institutional theory and the dynamic capabilities view to explain successful SME internationalisation.

Details

International Marketing Review, vol. 36 no. 1
Type: Research Article
ISSN: 0265-1335

Keywords

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Article
Publication date: 15 October 2010

Matthew C. Mitchell

Using an institutional theory perspective this paper aims to examine the influence of multinational corporations (MNCs) on host country institutional environments.

Abstract

Purpose

Using an institutional theory perspective this paper aims to examine the influence of multinational corporations (MNCs) on host country institutional environments.

Design/methodology/approach

This is a conceptual piece that introduces the concept of the country institutional profile (CIP) as a useful theoretical framework for analyzing the host country institutional environment.

Findings

The existing model that describes the MNC as a social change agent within host country institutions is extended. This is accomplished by utilizing the CIP as a more formal conception of the host country institutional environment. The model is then used to examine a specific case of the MNC impact on the host country level of environmentalism.

Originality/value

The value of the contribution lies in the application of the CIP for analyzing the host country institutional environment. Furthermore, this framework is applied to the case of the MNC's impact on host country environmentalism.

Details

Journal of Global Responsibility, vol. 1 no. 2
Type: Research Article
ISSN: 2041-2568

Keywords

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Book part
Publication date: 15 December 2016

Karen D. W. Patterson, Michelle Arthur and Marvin Washington

Rigid environments, those with exceptionally strong cultural and traditional barriers to change, present unique challenges for institutional entrepreneurs attempting to…

Abstract

Rigid environments, those with exceptionally strong cultural and traditional barriers to change, present unique challenges for institutional entrepreneurs attempting to initiate change. We utilize such a setting to examine what support mechanisms, both individual and contextual, have been utilized when attempting change in rigid environments. We examine the case of successful and unsuccessful attempts to make golf more inclusive to women. Our research supports the claim that rigid environments require more complex combinations of support mechanisms than other settings, illustrating the importance of institutions in both enabling and constraining change in such settings.

Details

How Institutions Matter!
Type: Book
ISBN: 978-1-78635-429-7

Keywords

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Article
Publication date: 28 August 2020

Shijiao Chen, Malcolm J. Wright, Hongzhi Gao, Huan Liu and Damien Mather

Industry-wide crises involving consumer products place consumers at risk. Consumers rely on institutions that constrain corporate practice and control product quality to…

Abstract

Purpose

Industry-wide crises involving consumer products place consumers at risk. Consumers rely on institutions that constrain corporate practice and control product quality to reduce risk. As institutions vary by country, country-of-origin (COO) acts as a salient cue for consumers to identify institutional quality and thus evaluate risk when making purchase decisions. However, in the era of globalisation, identification of institutional quality becomes complex as global value chains involve different countries such as brand origin (BO) and country-of-manufacture (COM). Therefore, this research investigates how BO and COM individually and jointly affect consumers' institutional perceptions and subsequent purchase decision-making in the presence of systemic risk.

Design/methodology/approach

This research includes three studies (n = 764) employing surveys and choice modelling experiments with samples from China and the USA.

Findings

The results show that BO and COM relate to different institutional perceptions. BO evokes perceptions of legitimacy and the regulatory environment, while COM evokes perceptions of the normative and the regulatory environment. The combination of BO and COM determines how institutional quality is communicated and further affects consumers' legitimacy perceptions, preferences and willingness to pay a price premium.

Originality/value

This research contributes to understanding the effect of BO and COM in the context of complex value chains from an institutional perspective. It also provides implications for leveraging complex COO cues with BO and COM information to improve consumers' institutional perceptions.

Details

International Marketing Review, vol. 38 no. 2
Type: Research Article
ISSN: 0265-1335

Keywords

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Article
Publication date: 1 June 2010

Yu‐Ching Chiao, Fang‐Yi Lo and Chow‐Ming Yu

The purpose of this paper is to examine the impact that three sets of variables – derived from transaction cost theory (TCT), the resource‐based view (RBV), and…

Abstract

Purpose

The purpose of this paper is to examine the impact that three sets of variables – derived from transaction cost theory (TCT), the resource‐based view (RBV), and institutional environment – have on choice of entry strategies of multinational corporations (MNCs) from an emerging market.

Design/methodology/approach

The sample consisted of 819 Taiwanese firms which were investigated using a national survey, and logistic regression analysis was used for testing the hypotheses.

Findings

The empirical findings confirm that the following factors affect this decision: firm‐specific assets, international experience, whether a firm is investing abroad in pursuit of a particular customer, whether a firm seeks complementary assets abroad, and the perceived institutional differences (PEDs) between a firm's home country and the host country. The findings also suggest that PEDs have a moderating effect on foreign market entry.

Research limitations/implications

As MNCs from emerging markets make the decision of entry mode strategies, they must carefully consider not only the related variables in terms of TCT and the RBV, but also the influence of institutional factors in host countries.

Originality/value

This paper explores the modes of entry chosen by Taiwanese firms investing in China on the basis of TCT, institutional environment, and the RBV.

Details

International Marketing Review, vol. 27 no. 3
Type: Research Article
ISSN: 0265-1335

Keywords

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Article
Publication date: 23 August 2013

Zijie Li, Yi Li and Chang Liu

This study aims to investigate the influence of various categories of institutions on international joint ventures' (IJV) strategic mutation behavior from an institutional

Abstract

Purpose

This study aims to investigate the influence of various categories of institutions on international joint ventures' (IJV) strategic mutation behavior from an institutional perspective.

Design/methodology/approach

The authors test their hypotheses using a sample of 494 Chinese small and medium IJVs over a three‐year period (2006‐2008). They conducted empirical result with Cox hazard models.

Findings

Changes in law environment will increase the likelihood of IJVs' strategic mutation. Changes in governmental policy will increase the likelihood of IJVs' strategic mutation. The positive correlativity between the variance of law environment and the propensity of IJVs' strategic mutation will be positively moderated by the distance of normative institutional pillar. The positive correlativity between the variance of governmental policy and the propensity of IJVs' strategic mutation will be negatively moderated by IJV performance.

Originality/value

Variation of regulatory institutional pillar increases the likelihood of IJVs' strategic mutation. Meanwhile, the effects of law environment and governmental policy, which are two types of regulatory institutional pillar, are moderated by normative institutional pillar and firms' performance, respectively.

Details

Chinese Management Studies, vol. 7 no. 3
Type: Research Article
ISSN: 1750-614X

Keywords

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