Institutions, resources, and entry strategies in emerging economies

Abstract

We investigate the impact of market-supporting institutions on business strategies by analyzing the entry strategies of foreign investors entering emerging economies. We apply and advance the institution-based view of strategy by integrating it with resource-based considerations. In particular, we show how resource-seeking strategies are pursued using different entry modes in different institutional contexts. Alternative modes of entrygreenfield, acquisition, and joint venture (JV)-allow firms to overcome different kinds of market inefficiencies related to both characteristics of the resources and to the institutional context. In a weaker institutional framework, JVs are used to access many resources, but in a stronger institutional framework, JVs become less important while acquisitions can play a more important role in accessing resources that are intangible and organizationally embedded. Combining survey and archival data from four emerging economies, India, Vietnam, South Africa, and Egypt, we provide empirical support for our hypotheses.

Redes, inovação e desempenho exportador: uma abordagem institucional

“…Adicionalmente, estudos anteriores relatam uma relação entre a importância das redes de relacionamento e a existência de instituições fortes em um país (Meyer, Estrin, Bhaumik, & Peng, 2009;Zhou et al, 2007). Tais estudos demonstram que as redes de relacionamento amenizam a eventual falta de confiança institucional e podem determinar os padrões de entrada de investimentos estrangeiros.…”

Ownership, Board Compensation and Company Performance in Sub-Saharan African Countries

“…Institutions are considered strong if they support free exchange between different parties in the market but weak if they fail to support an effective market (Meyer et al 2009). We expect strong institutions to support the effective functioning of various corporate governance mechanisms, including helping directors to conduct their duties in the most effective ways possible.…”

Corporate political strategy and liability of foreignness: Similarities and differences between local and foreign firms in the South African Health Sector

“…Foreign firms face a LOF which they seek to overcome through mimicry, alternate modes of entry and attempting to engender themselves to the local networks (Meyer & Estrin, 2013;Meyer, Estrin, Bhaumik, & Peng, 2009;Zaheer, 1995Zaheer, , 2002. This suggests that they are more receptive to imitation and cooperation.…”