Session 155

Institutional Transitions and Internationalization Strategies

Track A

Date: Tuesday, October 9, 2012

 

Time: 14:15 – 15:30

Paper

Room: Meeting Hall IV (b)


Session Chair:

  • Aya Chacar, Florida International University

Title: How Institutional Transition Speed Influences Cross-Border Acquisition Performance

Authors

  • Yinuo Tang, University of Hong Kong
  • Ravi Madhavan, University of Pittsburgh

Abstract: Firms from emerging markets increasingly use cross-border acquisitions as a vehicle for international expansion. We examine how institutional distance and institutional transition speed impact value creation from such moves. Bridging heterogeneous institutional contexts through cross-border acquisitions provide acquirers with valuable opportunities to upgrade their capabilities, including the capacity to adjust strategies for different strategy contexts. Rapid changes in institutional environments will increase the value of institutional distance by further strengthening firm capability to sense and seize institutional synthesizing opportunities. Analyzing 1099 international acquisitions by BRIC-based firms between 2001 and 2011, we found that institutional distance positively influences value created through acquisition. In addition, institutional transition speed positively moderates the relationship between institutional distance and CAR.

Title: The Internationalisation of Firms in Frontier Markets: A Structural Model of Performance

Authors

  • Namukale Chintu, University of Cambridge
  • Peter Williamson, University of Cambridge

Abstract: Our paper proposes to conduct a structural model investigation into firm entrepreneurial, entry and supplier strategies associated with successful internationalisation in frontier markets. While the literature continues to develop in uncovering foreign and domestic firm strategies in transition economies, it has focussed on the well-known transition and emerging markets. Little is known about strategies in frontier markets, transition economies that are further down the spectrum of institutional transition and economic development. We propose to extend this literature through the comparison of the successful internationalisation of firms from emerging markets (EMNEs) to those from developed countries in frontier markets. This has strategy implications for firms from developed countries that have traditionally dominated these economies and for potential investors that overlook the opportunities for internationalisation.

Title: The Internationalization of Private and State Firms Under Reforms

Authors

  • Luis Dau, Northeastern University

Abstract: Building on the institution-based view of strategy, we study the impact of pro-market reforms on developing-country firm multinationality. We propose that reforms increase multinationality by reducing institutional imperfections and increasing domestic competition, thus inducing firms to expand internationally. However, we argue that the effect is higher for private firms than state firms because the former are compelled to be more responsive to institutional changes and opportunities in order to survive. The three-level RCM Poisson analyses of a panel of the largest firms in Latin America for the period 1989-2009 provide robust support for the arguments.

Title: The Role of Distance in Status Transfer Across Borders

Authors

  • Isin Guler, Sabanci University

Abstract: To what extent can benefits of social status be transferred across countries? While prior research has suggested that social status might aid market entry as a valuable asset, the contingencies under which firms may benefit from home-country social status in other countries is little known. This study proposes to examine how geographic, institutional, and cultural distances influence the impact of status on foreign market entry. The empirical study examines the entry decisions of venture capital firms in the U.S. in other countries. Preliminary results suggest that institutional and cultural distance, but not geographic distance, reduce the impact of status on entry.

All Sessions in Track A...

Mon: 08:00 – 09:15
Session 147: Emerging Market Firms and Complex Institutional Environments
Mon: 09:30 – 10:45
Session 220: Political Strategies in Transition Contexts
Mon: 13:30 – 14:45
Session 221: National Institutions and Firm Behavior
Mon: 16:30 – 17:45
Session 154: Embeddedness, Networks and Non-Market Strategies
Tue: 08:00 – 09:15
Session 153: Cognition, Bounded Rationality and Strategy
Tue: 11:00 – 12:15
Session 151: Coevolution of Institutions and Firm Strategy
Session 152: Institutional Change and Innovation
Tue: 14:15 – 15:30
Session 155: Institutional Transitions and Internationalization Strategies
Tue: 15:45 – 17:00
Session 219: Strategic Responses to Institutional Change
Tue: 17:30 – 18:45
Session 150: Legitimacy, Liabilities and Institutions


Strategic Management Society

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