Business group internationalization: choosing a host country according to institutional distance

Abstract

Purpose -This research analyzes to what extent committing resources to the internationalization of family business groups is related to the institutional distance of the host country.Design/methodology/approach -We used OLS panel data with fixed effects.Findings -We identified that family business groups decide to internationalize themselves committing fewer resources to countries that present a positive institutional distance, and that are more institutionally developed than the country of origin. On the other hand, when family business groups choose to expand abroad committing more resources, they tend to invest in countries with a negative institutional distance, and that are less institutionally developed than the country of origin.Originality/value -Our main contribution to existing theory on internationalization of family business groups is to test the relationship between the level of resource commitment by family business groups in their international expansion and the institutional distance between the country of origin and the host country.

Tendencias de la Investigación en Negocios Internacionales (2012-2016)

“…En lo que se refiere a los estudios de familia y empresa internacional, se señalan los aspectos relacionados con la formación de Family Business Groups-grupos de negocios familiares (Gama, Lana, Vilasboas & Bandeira, 2016), vinculando el concepto de distancia institucional.…”

Challenges of the Challengers: An Insight into the Internationalization Pathway of Croatian Digital Agencies

“…Institutional distance was also found to be a significant factor when businesses chose a host country for internationalization. In general, evidence support the fact that companies tend to choose host countries for foreign entry which exhibit smaller institutional distance vs. countries which exhibit larger institutional distance [15] [16].…”

Legitimacy Challenges in Terms of Succession Planning and Internationalization in Family Businesses

“…On the one hand, both home and host countries may be more receptive to FBs that may be coming from/moving into neighbouring countries if they share their cultural and institutional values [34]. For example, in 2010, the Gulf Cooperation Council (GCC) passed a set of laws that allowed Gulf companies to expand into other GCC States and be treated equally as local companies [35].…”