Marketing capabilities, institutional development, and the performance of emerging market firms: A multinational study

Wu, Jie

doi:10.1016/j.ijresmar.2012.07.001

Cited by 75 publications

(78 citation statements)

References 47 publications

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“…Additionally, the inconsistent and unpredictable legal enforcement in less developed institutions can result in improper behavior, such as a lack of a proficient legal system to ensure contract enforcement and to protect property rights (Wu, 2013a(Wu, , 2013b.…”

Section: Host Country Institutionsmentioning

confidence: 99%

“…As a result, the high transaction costs and market information costs leave firms with less incentive to develop new products, as the more resources they allocate to dealing with those unintended matters, the less resources they have to contribute to product innovation (Wu, 2013a(Wu, , 2013b.…”

Section: Host Country Institutionsmentioning

confidence: 99%

“…When firms expand into a host country characterized by weak or under-developed institutions, i.e. lack of reliable market information, an effective legal system or an efficient bureaucracy, this can make transactions costly for the firms doing business there (Chan, et al, 2008;Wu, 2013aWu, , 2013b. Moreover, the costs of searching for relevant information in the host country can be very high because of the inefficient intermediaries (North, 1990;Wu, 2013a).…”

Section: Host Country Institutionsmentioning

confidence: 99%

“…These can then contribute to product innovation and firm performance (Wu, 2013a(Wu, , 2013b. The extant research further suggests that laws and pressure from the government can play a significant role in increasing or reducing firm capacity and effectiveness (Beamish, 1993;Cavusgil & Zou, 1994).…”

Section: Host Country Institutionsmentioning

confidence: 99%

“…lack of reliable market information, an effective legal system or an efficient bureaucracy, this can make transactions costly for the firms doing business there (Chan, et al, 2008;Wu, 2013aWu, , 2013b. Moreover, the costs of searching for relevant information in the host country 18 can be very high because of the inefficient intermediaries (North, 1990;Wu, 2013a).Additionally, the inconsistent and unpredictable legal enforcement in less developed institutions can result in improper behavior, such as a lack of a proficient legal system to ensure contract enforcement and to protect property rights (Wu, 2013a(Wu, , 2013b.Firms must, therefore, commit substantial resources to deal with local governments and non-governmental organizations. As a result, the high transaction costs and market information costs leave firms with less incentive to develop new products, as the more resources they allocate to dealing with those unintended matters, the less resources they have to contribute to product innovation (Wu, 2013a(Wu, , 2013b.…”

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confidence: 99%

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What explains the performance of Chinese exporting firms?

Zheng

2015

Journal of Chinese Economic and Business Studies

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Drawing on the entry mode literature and the strategic tripod framework, we examine whether firm performance is influenced by its outward foreign direct investment (OFDI) mode, controlling other firm-, industry-and institution-specific factors. It is found that employing OFDI does not improve an exporting firm's performance. This is not surprising as anecdotal evidence shows that many Chinese firms with OFDI have been making loss in the host country. This may indicate exporting firms employ OFDI to seek complementary and strategic resources/assets, not to improve immediate firm performance. Furthermore, firm performance is influenced by strategic assets, including technology-based capabilities (TBCs) and brands, at the firm level, industry entry barriers at the industry level and the home and host country institutional support at the country level.Keywords: Performance, Exporting Firm, OFDI, Strategic Tripod Framework 2 IntroductionEntry mode is considered as an important determinant of firm performance (Brouthers, 2002; Brouthers, et al., 2003 Brouthers, et al., , 2008Brouthers & Nakos, 2004;Chen & Hu, 2002;Shaver, 1988;Woodcock, et al., 1994). The rationale is that "firms will select the mode that provides the best return on investment" (Brouthers, 2002, p.207). The existing literature has investigated whether some investment modes provide better performance than others (e.g. Brouthers, 2002;Woodcock, et al., 1994). The entry modes under consideration in these studies are often joint ventures (JVs) and wholly-owned subsidiaries (WOSs). Few research considers the performance impact of exporting only versus a hybrid mode of exporting and outward foreign direct investment (OFDI). Given the increasing trend in OFDI, a question arises: Does an entry mode transformation by exporting firms to include OFDI lead to better firm performance? This research aims to fill this research gap. As part of this investigation, other factors influencing firm performance are accounted for by taking an integrative perspective at the firm, industry and country-level.Exporting is often the first stage of internationalization in emerging market firms (EMFs). However, the continuous marketization and liberation in emerging markets motivate firms to undertake OFDI. Exporting helps firms to gain international experiences and to establish linkages in the international market (Mathews, 2006). Yiu et al., (2007) reveal that exporting firms can benefit from learning in foreign markets, 3 accumulating local knowledge, gaining legitimacy and developing local networks.Furthermore, given the home country specific resources (CSRs) such as low labor costs and low production costs, EMFs may benefit from economies of scale by concentrating production at home and then exporting their products to foreign markets.The learning-curve cost advantages suggest that the costs of production fall with the cumulative volume of production, therefore firms moving along the learning-curve can obtain cost advantages over rivals (Wei, et al., 2014). However,...

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Section: Host Country Institutionsmentioning

confidence: 99%

Section: Host Country Institutionsmentioning

confidence: 99%

Section: Host Country Institutionsmentioning

confidence: 99%

Section: Host Country Institutionsmentioning

confidence: 99%

mentioning

confidence: 99%

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What explains the performance of Chinese exporting firms?

Zheng

2015

Journal of Chinese Economic and Business Studies

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Differentiated Customer Pressures and Environmental Policies in China

2013

Bus Strat Env

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Drawing on the resource dependence theory, the stakeholder perspective and environmental management capabilities, this study examined the relationship between the heterogeneity of customer pressures and the varying levels of environmental policies in China. Data on 1215 Chinese manufacturing firms were analyzed to demonstrate that environmental pressures emanating from different types of customer have different impacts on firm environmental conduct and that the pressures from multinational consumers have a stronger effect on local Chinese suppliers’ propensity to reduce product environmental risks than those from local consumers. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.

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The Antecedents of Corporate Social and Environmental Irresponsibility

2013

Corp Soc Responsibility Env

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This study combines internal and external perspectives to examine the antecedents of corporate social and environmental irresponsibility. In terms of internal factors, we focus on the extent to which a firm incorporates corporate social responsibility (CSR) into its business strategy and the level of firm-specific R&D investment. With respect to external factors, we focus on market cost pressure and local government corruption. We developed hypotheses and tested them using original survey data of 295 Chinese firms covering four years. The results show that incorporating corporate social responsibility into business strategy and investing in R&D both predict less socially or environmentally irresponsible behavior by a firm. In contrast, cost pressures and government corruption correlate with an increased likelihood of irresponsible social and environmental behavior by firms.

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Marketing capabilities, institutional development, and the performance of emerging market firms: A multinational study

Cited by 75 publications

References 47 publications

What explains the performance of Chinese exporting firms?

What explains the performance of Chinese exporting firms?

Differentiated Customer Pressures and Environmental Policies in China

The Antecedents of Corporate Social and Environmental Irresponsibility

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