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1 – 10 of over 69000The study conceptualizes how firms’ strategic motives interact with the heterogeneity of host country institutional environments in determining the subsidiary ownership. The…
Abstract
Purpose
The study conceptualizes how firms’ strategic motives interact with the heterogeneity of host country institutional environments in determining the subsidiary ownership. The author hypothesizes and tests two interaction effects. The study found that firms with market-seeking motives are more affected by the heterogeneity of host country institutional environments, while firms with resource-seeking motives are less affected by the heterogeneity. The empirical findings are based on a sample of overseas subsidiaries reported in the annual reports of listed firms in China.
Design/methodology/approach
In this study, an empirical investigation was conducted using a sample of subsidiaries of listed firms in China. The data were compiled from 2012 annual reports of listed firms in China. The sample consists of 2,270 subsidiaries of these firms.
Findings
The study conceptualizes that firms with market-seeking motives and resource-seeking motives are influenced differently by the heterogeneity of host country institutional environments in determining their subsidiary ownership. We hypothesize two interaction effects. Firms with market-seeking motives are more subject to the heterogeneity of host country institutional environments in determining their FDI ownership level. In contrast, firms with resource-seeking motives are less subject to this heterogeneity. The findings largely supported the study’s hypotheses.
Originality/value
This study fills an important gap in the literature by incorporating the interaction between strategic motives and host country environments in the analysis of subsidiary ownership. The findings of the study suggest that firms with a market-seeking motive are more particular about the host country institutional environments. They will acquire a high level of ownership in host countries with attractive institutional environments. In contrast, firms with resource-seeking motive are less concerned with the host country institutional environments. Their decision on subsidiary ownership is less affected by the variance in host country institutional environments. This study adds to the stream of studies that have examined outward investments of firms from emerging economies, particularly the outward expansion of Chinese firms with different strategic motives.
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The purpose of this paper is to examine how early-stage entrepreneurs' opportunity motivation impacts their choice of market growth strategies as well as the contingent roles of…
Abstract
Purpose
The purpose of this paper is to examine how early-stage entrepreneurs' opportunity motivation impacts their choice of market growth strategies as well as the contingent roles of institutional environments and product market conditions in Africa.
Design/methodology/approach
The study employs hierarchical linear modeling to test multilevel models with nested data empirically.
Findings
The findings show that African early-stage entrepreneurs who are opportunity-driven and from countries with strong institutional environments have a higher tendency to adopt market exploration strategies. African early-stage entrepreneurs from countries with strong product market conditions have a higher tendency to adopt market penetration strategies. Further interaction tests show that both contingency conditions, namely institutional environments and product market conditions, moderate the effects of opportunity motivation on market growth strategies of African early-stage entrepreneurs.
Practical implications
The study shows that policymakers in Africa need to develop flexible, supportive market-related policies based on entrepreneurs' growth paths, institutional environments and product market conditions.
Originality/value
The study is the first to explore multilevel influences on early-stage entrepreneurs' market growth strategies in Africa. It sheds new insights on the entrepreneurial marketing process of early-stage entrepreneurs in Africa.
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Ying Zheng, Chuanming Chen and Hualiang Ren
Studies on China suggest that institutional environment plays a significant role in business activities; however, the issue of how firms attend to institutional environment is…
Abstract
Purpose
Studies on China suggest that institutional environment plays a significant role in business activities; however, the issue of how firms attend to institutional environment is largely under-explored. This paper responds to the oversight by examining the potential ways in which firms can demonstrate heterogeneity in terms of vigilance to government policy. Drawing from the attention-based view of firms and the institutional logic perspective, the authors aim to propose that firms with market logic or non-market logic will show difference in vulnerability to policy change. Further, firm ownership type and policy-leveraging capability would moderate the relationship between institutional logic and attention to policy environment.
Design/methodology/approach
The empirical background of this study is based on Chinese pharmaceutical firms. The new reform on health-care system launched by Chinese government in 2009 provides a fertile context to observe firms’ attention to government policy. The hypotheses are tested by using data of 145 Chinese pharmaceutical public firms from 2009 to 2013.
Findings
The results generally support the hypotheses: market logic has a positive effect on attention to policy, whereas non-market logic has a negative effect. The impact of market logic is weakened when firms have a higher policy-leveraging capability (in terms of getting government subsidies); the non-market logic effect is strengthened both when firms are state-owned enterprises and have a higher policy-leveraging capability.
Originality/value
Instead of focusing on how institutional environment have an influence on firm behavior as previous studies do, this paper examines the interaction between institution and firms by exploring how firms pay attention to government policy. Under the context of China, this study sheds light on how institutional logic plays a role in determining cognitive resource allocation of firms.
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Anuradha Saikia, Sharad Nath Bhattacharya and Rohit Dwivedi
This study reviews the literature on institutional theory in international business and examines the institutional factors behind the success or failure of multinational…
Abstract
Purpose
This study reviews the literature on institutional theory in international business and examines the institutional factors behind the success or failure of multinational corporations (MNCs) in emerging markets.
Design/methodology/approach
This systematic literature review analysed 116 peer-reviewed articles published in leading journals between 2005 and 2022. The R package Bibliometrix and VOSviewer visualization software were used for analysis. A hybrid methodology combining bibliometric and content analyses was utilized to obtain a descriptive evaluation of the publication impact along with a keyword co-occurrence map, context-specific institutional effects and subsidiary strategies.
Findings
The Journal of International Business Studies, along with influential authors such as Mike W. Peng, Klaus Meyer, and Mehmet Demirbag, have taken the lead in advancing institutional theories for MNC internationalization in emerging markets. The clusters from the co-word analysis revealed dominant MNC entry modes, institutional distances and MNC localization strategies. The content analysis highlights how the institutional environment is operationalized across the macro-, micro- and meso-institutional contexts and how the MNC subsidiary responds in emerging markets. Meso-level interactions emphasize the relational aspects of business strategies in emerging markets.
Practical implications
Contextualizing subsidiary strategies and institutional forms can help managers align their strategic responses to the dynamic relationship between subsidiaries and the institutional environment. The review findings will enable policymakers to simplify regulatory policies and encourage MNC subsidiary networks with local stakeholders in emerging markets.
Social implications
Legitimacy strategies such as corporate community involvement in emerging markets are crucial for enhancing societal support and removing stakeholders' scepticism for MNC business operations in emerging markets. Moral legitimacy should be implemented by managers, such as lending support to disaster management efforts and humanitarian crises, as they expand to new business environments of emerging markets.
Originality/value
This study is the first to explore institutional diversity and subsidiary strategic responses in a three-layered institutional context. The findings highlight the relevance of contextualizing institutional perspectives for international business scholars and practitioners as they help build context-specific theoretical frameworks and business strategies. Future research recommendations are suggested in the macro-, micro- and meso-institutional contexts.
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Purpose – This study develops a theoretical argument that social networks are embedded in the macro-level institutional environment. From the perspective of institutional…
Abstract
Purpose – This study develops a theoretical argument that social networks are embedded in the macro-level institutional environment. From the perspective of institutional embeddedness, I investigate the changing patterns and implications of social networks in job search and job earnings after China's overhaul of its employment system in the mid-1990s.Methodology/approach – The empirical evidence is drawn from 2003 Chinese General Social Survey data. I conduct statistical analyses to examine the roles of networks in job search and earning disparity by comparing two groups who obtained the job before and after the emerging labor market in urban China, respectively.Findings –Social networks have become much more popular in job search in the emerging labor market. Use of social networks in job search has also become more differentiated across job positions and employment organizations. While managerial status of the key helper and direct ties yield greater returns to employee earnings, strong indirect ties make less contribution to job earnings in the emerging labor market than that under the state-dominated employment system.Research implications – The findings suggest that we should analyze the concrete institutional environment to appreciate the roles of social networks in job search and social inequality.Originality/value – This study highlights that institutions are the key factor to shape the patterns and significance of social networks. As institutions evolve, network patterns and their significance can change accordingly.
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Linghua Qin, Runtian Jing and Cheryl Long
Purpose – Market‐based theories assume that firms’ different strategic commitments to businesses lead to different strategic positions within the industry. While the institutional…
Abstract
Purpose – Market‐based theories assume that firms’ different strategic commitments to businesses lead to different strategic positions within the industry. While the institutional perspective from organization theory emphasizes the institutional pressures which lead to legitimacy and firm isomorphism, it is not clear yet how intra‐industry organizations behave during institutional transitions. The purpose of this paper is to combine the insights of these theories by examining the role of market and institutional forces in affecting industry strategic variety and its impact on average industry performance in transitional China, based on the strategic view of neoinstitutional theory. Design/methodology/approach – Empirical tests are carried out using industrial enterprise data of China from 2000 to 2006. Findings – Empirical results using industrial enterprise data of China from 2000 to 2006 suggest that: industry competitiveness has a strong positive influence on strategic variety; the weakening relationship between government and market leads to increased strategic variety; and indicators of strategic variety have complicated effects on industry performance. Originality/value – The strategic view of neoinstitutional theory was used to gain a better understanding of intra‐industry strategic variety during the institutional transition of China. Thus this paper combines seemingly contradictory theories in our understanding of how intra‐industry organizations behave in response to institutional change.
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Yue Zhang, Jiang Yu and Yanmei Liu
The purpose of this paper is to explain how institutional elements and market conditions shape and then reshape the development of high‐tech industries in large emerging countries.
Abstract
Purpose
The purpose of this paper is to explain how institutional elements and market conditions shape and then reshape the development of high‐tech industries in large emerging countries.
Design/methodology/approach
This paper develops a new framework to assess the impact of market and institutions on the high‐tech industry evolution in large emerging economies such as China. The qualitative approach based on historical data and interviews are provided to support the framework.
Findings
The framework and empirical research suggest that the institution systems and market dynamics will interact and influence the transformation process of industrial structure and the strategic choice of partnership arrangement between the domestic and foreign firms. The complementary assets which are considered as proxy to the resource accessibility in the market are also identified in the framework and it was verified in the case study.
Practical implications
This study has important implications for business strategy in emerging economies. The authors' observations indicate building close ties with domestic firms is an important asset to minimize the liability of foreignness for multinational firms. The paper has alluded to co‐evolutionary dynamics in the development of high‐tech industry in China by linking market initiative with institutional environment.
Originality/value
First, the study contributes to institutional‐based view of business strategy by explaining the choice of strategic partnerships between indigenous and foreign players arising from institutional and market considerations. Second, the study extends our understanding of technological catch up in newly‐industrializing countries by showing the interrelation between market elements and institutional arrangements and the corresponding changes to meet technological development needs.
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Volkan Yeniaras, Ilker Kaya and Nick Ashill
The purpose of this paper is to offer a theoretical and empirical understanding of how social ties affect innovation behavior and new product performance in Turkey, which is an…
Abstract
Purpose
The purpose of this paper is to offer a theoretical and empirical understanding of how social ties affect innovation behavior and new product performance in Turkey, which is an emerging economy where high levels of economic and political uncertainties exist.The authors examine whether innovation behavior binds the political and business ties of the firm to new product performance. They also examine if these effects are contingent on variations in the institutional environment and market environment.
Design/methodology/approach
Structural equation modeling and mediation analyses were used on a sample of 344 small- and medium-sized enterprises in Istanbul.
Findings
Business ties are positively related to exploratory innovation behavior and political ties hamper such behavior. The authors also show that government support hinders firms’ disruptive innovation while encouraging incremental innovation behavior. The authors further demonstrate that the positive and indirect relation of business ties to new product performance through exploratory and exploitative innovation is largely insensitive to changes in market and institutional environments. Political ties are negatively (positively) and indirectly related to new product performance through exploratory (exploitative) innovation.
Practical implications
Managers should choose the form of their personal interactions (political and/or business) based on the type of innovation that is being pursued. Additionally, managers should consider both the institutional environment and the market environment as important contingencies in their decision of whether to invest resources in developing social ties to build innovation behavior.
Originality/value
The authors offer a deeper perspective of how social ties in emerging economies affect new product performance by considering exploratory and exploitative innovation behavior as mediating mechanisms. These mediating effects are conditional on institutional and market environments.
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Galina Shirokova, Gina Vega and Dmitri Knatko
The purpose of this paper is to bring together a strategic choice perspective and an institutional perspective in order to address the key research questions: how do Russian…
Abstract
Purpose
The purpose of this paper is to bring together a strategic choice perspective and an institutional perspective in order to address the key research questions: how do Russian founder-CEOs perceive the institutional environment when succession issues are taken into consideration?; how do the perceived characteristics of different formal and informal institutions affect the founder-CEO’s decision to delegate authority to a professional CEO?; and what are the main barriers to founder-CEO succession in threshold firms in emerging markets such as Russia?
Design/methodology/approach
Using a data set of 500 entrepreneurial companies from fast growing industries in Russia, the paper defines and studies threshold firms and analyses how various perceived characteristics of the institutional environment in emerging markets influence the likelihood of transition from founder management to professional management.
Findings
Institutional factors such as poor security of property rights and dependence of the business on relationships with government officials have a negative impact on the likelihood of founder-CEO succession in threshold firms in emerging markets. At the same time, the perception of contract law as insecure increases the likelihood of transition from founder management to professional management.
Originality/value
Most research on initial succession deals with internal organisational factors and does not consider external environments and their influence on founder-CEO departure and willingness to exit from company management. This study is unique in its focus on the external environment and institutional factors and their impact on management transitions in threshold firms in emerging economies.
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Nic Robertson and John M. Luiz
This paper aims to explore the delayed, then accelerated, internationalisation of an emerging multinational enterprise (EMNE), with a particular focus on the media technology…
Abstract
Purpose
This paper aims to explore the delayed, then accelerated, internationalisation of an emerging multinational enterprise (EMNE), with a particular focus on the media technology sector, and how it exploited complementarities between emerging markets.
Design/methodology/approach
The research is qualitative in nature and focuses on the expansion of a South African media technology EMNE case study that has a footprint in over 130 countries and has one of the largest market capitalisations of any media company outside the USA and China.
Findings
EMNEs have unique capabilities in navigating uncertain institutional environments in emerging markets and are able to capitalise upon the institutional complementarities between their home and host countries. This may facilitate the recognition of market opportunities and the harnessing of new technologies to meet these opportunities in complementary markets for accelerated internationalisation.
Practical implications
EMNEs must capitalise upon the institutional complementarities between home and host country locations and use this to take advantage of identified market opportunities. This creates the possibility for a process of accelerated internationalisation. New technologies are creating particular market opportunities in emerging markets which can be exploited by EMNEs.
Originality/value
The authors provide a framework which illustrates how an EMNE can exploit complementarities between emerging markets to identify market opportunities, capitalise upon institutional similarities and harness new technologies in the process.
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