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The purpose of this paper is to combine notions from the POST Model of Economic Geography and Learning Theory from International Business to study how firms may enhance their responsiveness to institutional processes and changes through different forms of international learning. Focussing on one form of institutional changes, namely pro-market reforms, the paper analyzes how firms may boost the potential benefits from such changes through international strategies that increase their access to knowledge spillovers and absorptive capacity. These strategies include international product diversification, enhancing innovation capabilities, informal institutional exposure, accumulated internationalization knowledge, and overall experiential knowledge.

The hypotheses are tested using generalized least squares models with AR(1) panel-specific autocorrelation and heteroskedasticity correction. Based on the preliminary analyses performed in these studies, the author also executes a Hausman test, Bartlett’s test, and James/Alexander’s test. The results of these analyses indicate that the use of random effects is appropriate; that moderating effects are present; and that multivariate analyses using these moderators are suitable, respectively.

The results indicate that pro-market reforms have a positive and significant effect on the profitability of firms from developing countries. Furthermore, they provide support for the positive moderating effects of international product diversification, innovation capabilities, informal institutional exposure, accumulated internationalization knowledge, and overall experiential knowledge. Together, these findings suggest that through their international strategic decisions, MNEs can enhance their access to knowledge and become more responsive to institutional changes in their home market.

This paper contributes to the economic geography literature by linking the POST Model with the classification of types of knowledge from Learning Theory. The paper analyzes how characteristics of place, organization, space, and time play a different role for each of the three basic types of knowledge that is relevant for international firms: institutional, business, and internationalization. Furthermore, the paper contributes to the literature on reforms and firm profitability by delving deeper into the moderating effect of strategic decisions on the relationship between reforms and firm performance. This allows us to have a deeper comprehension of how various sources of international learning may enhance the responsiveness of firms to institutional changes.

The paper provides several important contributions to the international strategy literature. First, it contributes to Learning Theory by combining it with the POST Model of Economic Geography to study how each of the three sources of knowledge (and their subcomponents) can be further broken down into factors of place, organization, space, and time. Second, it contributes to the literature of institutional change by studying how knowledge acquired through vastly different means can provide firms with sources of competitive advantage over other local competitors when responding to institutional changes in their home market. Third, it contributes to the literature on reforms and profitability by studying five novel moderators of this relationship.

To measure total factor productivity (TFP) growth in industrial manufacturing for 15 major Indian states for the period 1982‐1983 to 2000‐2001.

Uses non‐parametric linear programming methods; TFP growth is decomposed into efficiency and technological changes and also measures for the bias in technical change. The resulting information is used to examine whether the post‐reform period shows any improvement in productivity and efficiency in comparison with the pre‐reform period.

Findings of the present exercise indicate the improvement in TFP. The recent change in TFP is governed by the technical progress in contrast with similar gain caused by the improvement in technical efficiency in the pre‐reform regime. The technological progress in state manufacturing exhibited a capital‐using bias during the study period. Regional differences in TFP persist, although the magnitude of variation has declined in the post‐reform period. Moreover, it is also found that there is a tendency for convergence in terms of TFP growth rate among Indian states during the post‐reform years and only the states that were technically efficient at the beginning of the reforms remain innovative.

Decomposing state level data on manufacturing into technical change and efficiency change helps in identifying the directions biases in favour of labour or capital. Also, this analysis demonstrates the richness of linear programming technique that allows for an investigation of important research questions on the underlying processes that influence TFP growth.

In this paper, the authors have used a systematic literature review methodology of 147 journal articles published in peer-reviewed journals. The analysis includes studies based on country of origin, the periodic proliferation of studies and the methodological design of the studies. As an outcome of the review, the studies are classified on the innovation in family firms under four broad categories – innovation input, family governance mechanisms, innovation output and the external environment. Some fruitful avenues of research are outlined in this domain.

The literature on innovation in family firms – the most dominant and ubiquitous form of organization across the world – is gaining pace. The influence of family by way controlling ownership, management and governance on, and in interaction with business acts as a complex proposition that shapes the strategic decision-making in the family firm including innovation. The purpose of this paper, therefore, is to advance the understanding of innovation in family firms and provide a list of future research questions of theoretical and practical value.

Based on this review, the authors provide future research directions pertaining to innovation in emerging economy family firms, effect of the institutional environment of family firm innovation as well family firms' innovativeness in the wake of pro-market reforms, different classes of ownership in family firms and innovation, family firm goal heterogeneity and innovation, and family firm dynamic capabilities and innovation.

The review provides a comprehensive understanding, trends and future research directions in the domain of innovation in family firms.

The purpose of this paper is to ascertain the impact of family ownership on the entrepreneurial orientation (EO) of firms in an emerging market and the contingencies under which it is likely to be affected.

The paper adopted a panel data multiple regression using ordinary least square methodology on a sample of 51,972 observations belonging to 12,250 firms from India.

The study finds that family businesses have higher EO than non-family firms. However, it is likely to be affected during institutional transition due to environmental uncertainty. Furthermore, during institutional transition, there will be differences in the EO of family business groups and stand-alone family firms due to the former’s ubiquitous network-level resource advantages.

This paper contributes to the literature on family business by reconciling the positive and negative views on the effect of family ownership on EO by arguing that the risk-taking behavior of family firms is contingent on the environmental conditions and the resource position of the firm.

This study will enable managers and other stakeholders to predict the entrepreneurial attitude of family-owned firms during environmentally stable as well as turbulent times.

This study highlights the implication of institutional transition through reforms on a vital part of the economy. Policy makers have to be sensitive to repercussions on family business due to environmental turbulence.

This is one of the first papers that investigate the influence of institutional transition and the resource position of Indian family firms on their EO.

This paper aims to report the findings from a longitudinal study of Indian business groups responding to the pro-market reforms that the government had initiated. It explores their diversification choices at the group level and the group performance consequences of these choices during a period of institutional changes (1990-2008).

Ordinary least squares regressions were used to analyze data spanning the 1988-2008 study period for 98 Indian business groups.

Results show that business groups that focused their portfolios in the early stages of institutional reforms tended to perform worse than their counterparts that did not do so. However, as market reforms became more established, business groups that made the transition from an unfocused to a more focused portfolio experienced superior performance consequences.

The findings underscore the temporal dimension of focusing and suggest that both changing strategy by refocusing business portfolio too early or waiting too long to refocus can hurt performance outcomes.

The purpose of this paper is to study the efficiency of capital allocation, across levels of ownership, in the aftermath of pro‐market reforms in India.

The paper measures investment efficiency using the accelerator principle and examines the effect of ownership type on capital allocation.

No significant improvement in capital allocation during the period studied is found. The findings suggest firms face significant costs in adjusting their capital stock.

The paper uses unique data to estimate the elasticity of capital with respect to output.

The purpose of this paper is to examine differences in property institutions in the USA and India and their effects on agricultural productivity.

This paper undertakes a case study of industrial organization of agriculture, comparing agricultural development in the USA and India, with a focus on changes in farm size over time.

In the USA, unlimited individual land ownership has enabled the gradual, long-term development of scale economies in agriculture through the application of capital and technology. In contrast, land reforms in India, especially land ceilings that limit farm size, have stunted productivity growth in agriculture by limiting achievement of scale economies and capital formation.

The finding that India’s consistently meager agricultural productivity stems largely from legal limitations on land ownership indicates that reforms that create a US-style open-ended land ownership structure would greatly increase farm productivity and total crop output in India.

This paper presents a side-by-side analysis of the USA and India and their radically different paths of agricultural development over time, and connects these divergent outcomes directly to the underlying institutional framework of property rights. Moreover, the paper analyzes the prospects for pro-market reform in light of public choice political economy, specifically applying Tullock’s insights regarding the “transitional gains trap.”

This study aims to draw researchers’ attention to the need to differentiate within the emerging market multinational companies (EMNCs) category. This study focuses on international business in Latin America to argue that the region’s specific institutional characteristics have consequences for within-firm decision-making regarding internationalization strategies. Additionally, the study suggests that to develop a more specific understanding of international business in emerging markets, it is important to consider how decision-makers define value and how they can capture such value.

The approach used in this study draws on the bathtub analogy used in micro-foundations research in international business. It proposes a multilevel analysis in which micro-level variation in within-firm decision-making is considered, while accounting for the conditioning effects of macro-level contextual factors.

The study identifies characteristics of the Latin American institutional context that are relevant to international business strategies and that potentially differ from other emerging market contexts. These include the pendular shifts to and from pro-market economic reform, fragmented government intervention in business, underdeveloped capital markets, low competition among firms and polarized labor markets. The study explains how these characteristics shape the definition of value and firm strategies to capture value in international markets, and provides examples from firms in different industries.

This study applies a value creation and capture perspective to international business in Latin America, allowing for the simultaneous consideration of macrolevel institutional characteristics and microlevel variation in decision-making regarding internationalization strategies. This perspective not only helps to distinguish Latin American EMNCs from companies from other emerging market contexts, but also explains the considerable variation in the internationalization strategies of firms within the region.

This paper examines the origins and the institutions, strategies, and policies of the shift to transition toward capitalism and democracy as the aspired system of political economy of Boris Yeltsin and his supporters in Russia in the early 1990s. The paper argues that this process of radical change is very “rocky”, and that its outcome is not yet clear. The shift from socialist democratization under Gorbachev to capitalist transformation under Yeltsin had multiple origins; but a core element in the process was the very likely abandonment of the ancien régime by party, state, and industrial élites themselves. Key factors in the transition in the early 1990s were: continuity amid change in political leadership and governance institutions; the absence of a developed political party system that could have united Yeltsin and the new Russian parliament; and the underlying socioeconomic conditions and attitudes of the Russian population.

While many studies have investigated the impact of institutional factors (i.e. financial risk factors) in the host country on inward foreign direct investment (FDI), fewer studies have researched on the locational aspects of FDI in relation to the political economy. This paper aims to fill this gap by examining the effects of the political economy on inward FDI in Poland’s regions and in other CEE (Central and Eastern Europe) countries.

The paper develops a theoretical argument postulating that political economy affects locational determinants of FDI inflow. To test this hypothesis empirically, several analyses were performed at the national level (Poland, Bulgaria, Romania, Slovakia and the Czech Republic) and at the subnational level (Poland’s provinces). First, the “footloose” nature of FDI inflows using the time series analysis was examined. Then a fixed-effect panel data regression model and a dynamic adjustment model to quantify the impact of political ideology and agglomeration effects were performed.

After controlling for economic and institutional determinants of FDI, the findings indicate that, in transitional economies, ideology affects the locational choice of multinational corporations (MNCs). At the national level, the results show that political risk, liberalization and economic reforms are important drivers of FDI inflows. At the subnational level, the vote for a liberal party positively affects the distribution of FDI in the provinces. Another finding is that electoral cycles also affect FDI inflows at regional levels in Poland. Finally, this study provides some supporting evidence for the “footloose” nature of FDI in case of external shocks.

This study contributes to the literature on the locational determinants of FDI by showing that ideology constitutes an important factor for locational choices by MNCs. The findings have important implications for public policy decision-makers who are seeking to improve the attractiveness of their country or region as an FDI destination.