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The purpose of this paper is to contribute to the ongoing and unresolved debate in the international business (IB) literature with respect to what drives or impedes multinational company (MNC) success in emerging markets, focusing specifically on the impact of institutional conditions on subsidiary performance.

In the understanding that greater attention to different institutional settings and their diversity has much to offer theory-building in the IB area, this panel study examines the influence of institutional distance on the return on assets (ROA) of 399 foreign subsidiaries in a previously understudied host market, that of Brazil during the period from 2008 to 2011. Regression analysis was carried out on panel data using weighted least squares as estimator.

Similar to research conducted in other national contexts, results revealed significant correlation between institutional distance and firm performance measured by ROA. Unlike previous research, however, these correlations were positive: the greater the institutional distance, the better the performance. Both normative distance and regulatory distance positively influenced ROA, raising questions with regard to the concept of institutional distance, its operationalization and influence.

The paper is of value in showing the institutional distance and the performance of foreign subsidiaries with a positive relationship in an emerging market (Brazil) using a panel perspective rather than the more usual sectional perspective.

The purpose of this paper is to identify and describe the drivers of trading company strategy that explain trading company success in international business.

The strategy tripod that results from combining the industry-, resource- and institution-based views, each of which proposes specific drivers of strategic success, was used as the framework for investigating, in a longitudinal perspective, the drivers of the strategy of a trading company and its success in emerging economies. Data were collected using in-depth interviews, document analysis and non-participant observation and analyzed using content analysis techniques.

Rather than a single driver, the authors found that strategic choices were driven at times by the demands of industrial competitiveness, at times by firm resources and capabilities, and at times by institutional conditions. There was evidence neither of a linear chronological order for these drivers, nor of driver obsolescence. On the contrary, findings suggest that drivers are cumulative and interactive. Changes in organizational resources and capabilities or in competitive or institutional environments can force review and re-thinking of strategic objectives.

Generalization is affected by the fact that the study focusses on the experience of one individual trading company.

From a pragmatic, managerially oriented perspective, the findings show the importance to be alert to all the tripod legs over time, and not belittle the institutional context. This fact is noted by the data, which not realize a timeline or order between the drivers and the strategies adopted by the firm.

The paper is of value in showing the drivers of trading company strategy and the determinants of trading company success in emerging economies using a longitudinal perspective rather than the more usual sectional perspective. In addition, the study is original in simultaneously investigating all three legs of the strategy tripod and providing empirical evidence about how the respective drivers interact over time.