Search results

I study the relationship between pro-market reforms and the expansion of emerging market multinational companies (EMNCs). Extending institutional economics, I propose a co-evolutionary process, whereby pro-market reforms in emerging markets induce the transformation of domestic firms into EMNCs, and the global expansion of EMNCs in turn facilitates the deepening of pro-market reforms in the home country. Specifically, I first explain how pro-market reforms lead to the emergence of EMNCs via international competitiveness, upgrading needs, and escape; I then explain how the global expansion of EMNCs leads to a deepening of pro-market reforms at home via learning, spillovers, and lobbying. I complement these explanations with a discussion of contingencies at the firm (private vs. state, domestic vs. foreign firms), industry (global vs. local industries), and country (developing vs. transition countries) levels.

This paper questions currently accepted arguments about the impacts of pro-market reforms in the internalization of emerging country firms, through an in-depth analysis of the Brazilian case, thus revealing new dimensions to add to the extant literature.

Historical analysis is the central mode of investigation leading to a commitment of offering historically grounded explanation for pro-market reform impacts in the Brazilian industry.

Outcomes reveal that the impacts of pro-market reforms depend on (a) the purpose of their adoption, (b) the compatibility with the features of the local institutional context, and (c) the relative bargaining power of local firms vis-à-vis foreign multinationals.

The research is based on the Brazilian experience only which is indicative of what may have happened in other Latin American countries; however, the analytical approach may be extended to the study of other emerging countries.

By having a systemic perspective encompassing the different actors and the interdependence among themselves, it allows for an enhanced view of the factors which led to the adoption of pro-market reforms and the forces which acted for its configuration, thus helping policy-makers to better approach industrial policy-making.

A longitudinal perspective within a historical analysis is adopted, focusing on the interplay of macro-level and firm-level factors, resulting in a better understanding of the reasons which led to the adoption of pro-market reforms, the resistance to its implementation and its real outcomes.

The goal of this chapter is to discuss the managerial implications of regulatory reforms in BRICS countries and how those reforms affect the strategy and performance of BRICS multinationals. In particular, we consider (1) how firms may learn from the institutional and competitive changes at home that accompany pro-market reforms and use this knowledge to venture out successfully across borders, (2) how firms may learn through their international operations as a means to enhance their competitiveness and responsiveness to reforms in their home market, and (3) how BRICS multinationals differ from other emerging market multinationals.

The chapter is primarily conceptual and relies heavily on case studies, interviews, and public financial data.

Ultimately, reforms are implemented by the state, but the strategic responses of managers to these reforms are largely what determine whether their firms will survive and thrive under the new and evolving regulatory conditions. BRICS firms are particularly well positioned to take advantage of reforms within their own countries and in other emerging markets, including other BRICS nations.

The chapter underscores the importance of aligning strategy with home and host market policies and environments.

The observations presented are conceptual and have not been verified quantitatively. We rely heavily on historical observation and, therefore, much of the analysis is selective to those firms and may not apply to other firms.

Do multinational enterprises evolve differently in emerging and developed economies? Although one camp argues that emerging economy multinationals are different from their developed country counterparts owing to the underdeveloped institutions in their home countries, another camp counters that they are the same and the existing international business theories can fully explain their strategies. A third camp suggests a more nuanced perspective by finding value in both approaches. In this introductory chapter, we review this debate and offer new perspectives on how to extend existing theories by accounting for four specific aspects of the home country institutional environments of emerging economies: breadth, depth, timing, and duration of exposure to institutional development. We then discuss how the chapters in this volume extend these ideas.

This chapter enquires into the political struggles that have led to the gradual institutionalization of neoliberal policies in India. As India witnessed a surge in democratization since the 1980s, the state sought to implement a policy regime of privatization and liberalization, albeit with mixed success. This chapter's contribution is to focus on the party-movement relationships that were integral to establishing this new political economy. To this end the chapter undertakes an “event-centered” analysis of the failed authoritarian interlude of 1975–1977 (the Emergency) and its aftermath. Subsequent to this turning point, the chapter argues the two key political parties – the Bharatiya Janata Party (BJP) and Congress – converged upon and shaped support for a neoliberal project. In particular, the chapter traces the mechanisms by which the BJP seized the political opportunity opened during the wave of democratization that occurred from the Emergency period onward, gradually constructing a political bloc in opposition to socialism. Together with Congress Party policies “from above,” the populist mobilization led by the Hindu Right sought to embed neoliberalism by eroding the disciplinary power of the middle classes. In making this argument, the chapter offers a theory of neoliberalism as a political project that, even as it is led by particular agents such as sections of the capitalist class, technocrats, and/or organized global interests, nevertheless must be embedded through democratic processes.

The effects of economic liberalization have been subject to academic and political discussion for many decades. The trade war between the United States and China brought new perspectives to this debate and raised the question: do fewer trade barriers and more economic freedom lead to better functioning societies? Following the perspective of the transaction cost theory, we argue that more economic freedom reduces non-productive expenses and allows private companies to improve the allocation of resources. It also allows more competition among companies, which facilitates access to funding. In this research, we use data of 1,248 publicly traded companies in the seven largest Latin American countries to analyze the effect OF increasing economic freedom on administrative expenses and financial. Our results indicate that, on average, increasing economic freedom allows the reduction of transaction costs and facilitates financial leverage for companies.

The purpose of this chapter is to examine how multinational firms have an added incentive to promote corporate social responsibility (CSR) in order to maximize profitability and adapt to the changing normative climate in a post Great Recession economy.

This chapter builds on institutional theory using contextual evidence from Mexican firms to provide insight into the varying pressures facing local and multinational enterprises in emerging markets.

This chapter highlights different sets of pressures faced by emerging market firms, both domestic and multinational. This chapter contends that emerging market multinational enterprises (EMNEs) are incentivized to uphold CSR practices to a greater degree than domestic firms from emerging markets.

Contextual evidence for this chapter was confined to Mexican firms, which provides an opportunity for future research to be carried out from alternative emerging markets.

From a social standpoint, this chapter sheds light on the challenges of globalization and the current rift between national level policies, coinciding behavior, and global expectations. From a practical standpoint, this chapter could inform and alert CEOs and practitioners to the nuances of CSR expectations, contingent upon the sphere in which they choose to operate in.

This chapter contributes to the growing dialogue on EMNEs while highlighting the schism between national and global expectations for CSR. Further, this chapter adds to the literature on institutional theory by connecting it to the in-group and out-group literature from sociology.

The extant research highlights the importance of understanding the micro-level mechanisms for the development of firm-level international business theories. One of them is institution-based view on strategy in emerging markets that highlights the importance of institutional factors for local actors' decision-making. It attracted significant attention of international business scholars, and it is timely to assess existing body of knowledge about how and why managers and entrepreneur respond to institutional forces. I argue that in this context, a better understanding of microfoundations of these responses is extremely useful for unveiling the complexity associated with institutional influence on emerging market firms' strategy. I undertake a problematizing review to critically examine the current state of research in this field. In doing this, I shed light on the role of managers and entrepreneurs from different national, generational and social backgrounds in shaping institution-based strategies and inform the talent management research about the capabilities and strategies that EM managers and entrepreneurs mobilize to address institutional pressures.