Institutions, Resources, and Entry Strategies in Emerging Economies

By K. Meyer, Saul Estrin, S. Bhaumik, Mike W. Peng. Multinational Enterprises and Emerging Economies, 2020

1,403 citations recorded by the source corpus.

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.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/f438ac085e702d34d9cd48f1845d1d8dfc74a5da

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Citations in the corpus

Overcoming distrust: How state-owned enterprises adapt their foreign entries to institutional pressures abroad (2014, background): “Finally, we extend the study of entry strategies (Brouthers 2002, Hennart, 2009, Meyer et al., 2009a) by modeling entry strategies as a two-step decision process, first acquisition versus greenfield entry, and second, the choice of ownership level.”
Determinants of women entrepreneurs' firm performance in a hostile environment (2017, background): “Numerous international business scholars repeatedly call for more integration between the RBV and the IBV (e.g., Gaur, Kumar, & Singh, 2014; Meyer et al., 2009), and such integration finds support in research on entrepreneurship (e.”
Entrepreneurs and innovation: The contingent role of institutional factors (2018, background): “Previous literature has associated economic freedom with a regulatory framework that allows the market to function appropriately (Meyer et al., 2009; Dau and Cuerzo-Cazurra, 2014).”
Business under adverse home country institutions: The case of international sanctions against Myanmar (2020, background): “They have primarily been analysed for host economies, especially emerging ones, that constrain the operations of foreign entrants through institutional voids (Khanna & Palepu, 1999), high transaction costs (Meyer et al. 2009), weak intellectual property rights protection (Khoury & Peng, 2011) or hig”
Greasing the Wheels of Change: Bribery, Institutions, and New Product Introductions in Emerging Markets (2019, background): “…progressing towards being advanced in terms of their markets, financial systems, and regulations (Mody, 2004), these countries are characterized by cumbersome regulatory business procedures (Meyer et al., 2009) and a high tolerance for corrupt practices (Ufere, Perelli, Boland, & Carlsson, 2012).”
Country-of-origin and industry FDI agglomeration of foreign investors in an emerging economy (2011, background): “Third, we contribute to the study of foreign entry strategies by explaining the interdependence of different aspects of entry strategies – location and mode choice (McCann & Folta, 2008; Meyer et al., 2009b).”
Mobile phones, institutional quality and entrepreneurship in Sub-Saharan Africa (2017, background): “subject, notably: (i) the relevance of formal institutions in enabling firms to reduce undue costs and risks in the conduct of market transactions (Meyer et al., 2009); (ii) institutional”