What signals do firms in emerging economies send to stakeholders when they adopt corporate social responsibility (CSR) practices? We argue that in emerging economies, firms that adopt CSR practices ...positively signal investors that their firms have superior capabilities for filling institutional voids. From an institution-based view, we hypothesize that the institutional environment moderates the signaling effect of CSR on a firm's financial performance. Based on a sample of firms from ten Asian emerging economies, we find a positive relationship between CSR practices and financial performance. This positive relationship is stronger in the less developed capital market than in the more developed one. The financial benefits of CSR practices are also more salient in the low information diffusion market than in the high one. We emphasize that signaling theory and the institution-based view can jointly contribute to the CSR literature.
The growth of outward foreign direct investment from emerging markets has led to increased scholarly attention on the internationalization of emerging market firms (EMFs). We break from the recent ...strategic approach on internationalizing EMFs to develop a problematization approach, which permits us to introduce a geographic relational perspective. We use this perspective to highlight process thinking, complex social realities, and relational practice as means by which to better develop theory on the internationalization of EMFs. Our emergent approach emphasizes the need to view EMF internationalization as deeply situated in multifaceted contextual influences, as influenced by path dependence and as manifested in practice. These three relational tenets (contextuality, path dependence, and practice) are central to our geographic relational approach’s ability to generate new challenging research questions for understanding EMF internationalization. Consequently, we add novelty to the international business domain by bringing space and process to the forefront of the EMF research agenda.
In "Probing Theoretically into Central and Eastern Europe: Transactions, Resources, and Institutions," we outlined the contributions of research in Central and Eastern Europe (CEE) to theoretical ...debates in business research. In this retrospective, we reflect upon the evolution of the field over the past decade. With the fading impact of CEE's distinct shared history, we suggest that CEE best be analyzed as emerging economies, rather than as a distinct geographic entity. Emerging economy business research is converging on common themes and shared theoretical ideas, while identifying critical variations that constrain generalizations among and beyond emerging economies. This research thus highlights the need to develop a better understanding of the boundary conditions of scholarly theories of business knowledge. Over the past decade, the institutionbased view has emerged from distinct intellectual traditions in institutional economics, organizational theory, and the analysis of business-government bargaining. Research in these converging lines of theorizing places contextual variations at the center of explanations of business phenomena around the world. We suggest that the institution-based view is evolving toward a paradigm, and offer suggestions on how to advance this research agenda further, in particular by exploring how firms engage with different sets of potentially conflicting institutions at multiple levels and locations.
This paper revisits and extends our earlier work (in 2005) in the pages of this journal. We argue that there is a need for more fine‐grained understanding of the country context along two dimensions: ...(1) institutional development and (2) infrastructure and factor market development. Specifically, we propose an enriched typology of emerging economies with a focus on mid‐range emerging economies, which are positioned between traditional emerging economies and newly developed economies. Then we examine new multinationals from these mid‐range emerging economies that have internationalized both regionally and globally. We outline directions for further research based on this typology in terms of (1) government influence, (2) resource orchestration, (3) market entry, and (4) corporate governance regarding the internationalization strategy of these emerging multinationals from mid‐range economies.
There is a major debate regarding the role of concentrated family ownership and control in large firms, with three positions suggesting that such concentration is (1) good, (2) bad, or (3) irrelevant ...for firm value. Why are there such differences? We theorize that the impact of family ownership and control on firm value is associated with the level of shareholder protection embodied in legal and regulatory institutions of a country. Data from 634 publicly listed large family firms in seven Asian countries (Hong Kong, Indonesia, Malaysia, Singapore, South Korea, Taiwan, and Thailand) are used to test our hypotheses. Overall, this article sketches the contours of a cross‐country, institution‐based view of corporate governance, and leads to a more informed understanding of the crucial role of institutions behind family ownership and control in large firms.
In this study, we theoretically identify three dimensions of expatriate competencies—ability, motivation, and opportunity seeking—for knowledge transfer. Integrating the ...ability-motivation-opportunity framework and the absorptive capacity perspective, we propose that expatriate competencies in knowledge transfer influence a subsidiary's performance through the knowledge received by the subsidiary, but that this indirect effect is stronger when subsidiary absorptive capacity is greater. We collected multi-source, time-lagged data from 162 British subsidiaries of Taiwanese multinational firms. The results support our hypotheses. Overall, we contribute to expatriation theory and research by revealing specific expatriate competencies as well as identifying boundary conditions for successful expatriate knowledge transfer.
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 entry--greenfield, 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.
State-owned enterprises represent approximately 10% of global gross domestic product. Yet they remain relatively underexplored by management scholars. Firms have often been viewed dichotomously as ...either state owned or privately owned. Today, however, we encourage a more nuanced view of state-owned enterprises as hybrid organizations, in which the levels of ownership and control by the state can vary. Drawing on 36 cases from four industries in 23 countries, we lay the groundwork for a richer understanding of state-owned enterprises by management scholars in the future.
Extending the literature on institutional voids, we introduce theory from law that highlights the ability of firms to choose the laws and enforcement mechanisms that govern their international joint ...ventures (IJVs). Specifically, firms may overcome institutional voids by borrowing institutions via binding international commercial arbitration (BICA) rather than relying on host-market institutions. Leveraging an institution-based view, we develop a theoretical framework to articulate the conditions under which IJV partners may choose BICA as opposed to domestic courts to overcome institutional voids in host markets.
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