Session 34

Emerging Market/Advanced Market Strategic Interactions

Track G

Date: Monday, October 8, 2012


Time: 09:30 – 10:45


Room: Meeting Hall V

Session Chair:

  • Ajai Gaur, Rutgers University

Title: Breaking Out of the Cage? How Institution-Based Critical Resources Prevent Emerging-Economy Firms to Expand into Advanced Economies


  • Kiattichai Kalasin, China Europe International Business School
  • Pierre Dussauge, HEC-Paris

Abstract: This study investigates the impact of critical resources on the international expansion of emerging market firms (EM firms). We argue that institution-based critical resources prevent EM firms from expanding into advanced economies. Institution-based critical resources are resources that firms develop to respond to a country’s institutional environment. EM firms develop this type of resource to fill institutional voids in a country. The differences in the environmental conditions and institutional frameworks between emerging markets and advanced economies raise significant difficulties for EM firms to transfer their institution-based critical resources to advanced economies, and in turn, encourage firms to improve their current paths and remain in their domestic markets or expand into other developing countries, where the institutional environments are similar to those of their home markets.

Title: Home Country Resource Munificence and Firm Internationalization: A Multilevel Analysis of MNEs from Emerging and Developed Economies


  • Bo Nielsen, Copenhagen Business School
  • Sabina Nielsen, Copenhagen Business School
  • Saul Estrin, London School of Economics
  • Klaus Meyer, China Europe International Business School

Abstract: We investigate how the determinants of internationalization differ between multinational enterprises (MNEs) from emerging and developed economies. Extending the resource based view, we develop two arguments. Emerging economies have weaker resource munificence, which reduces emerging economy firms’ ability to develop internationally competitive bundles of resources. This has two consequences: First, firm-level resources are even more important for emerging than for developed economy MNEs in explaining internationalization. Second, emerging economy firms are most likely to internationalize further in industries where they face less intensive global competition. We test these arguments in a multilevel analysis of the internationalization patterns of 1741 firms from both emerging and developed economies. Our evidence shows country-level effects to moderate the firm and industry-level effects consistent with the predictions of our theory.

Title: Innovation Blowback: How Competition Between Advanced Economy MNEs Raises Competitors From Emerging Markets


  • Martin Ihrig, University of Pennsylvania
  • Philip Kappen, Uppsala University
  • Ram Mudambi, Temple University

Abstract: This paper provides an evolutionary explanation to the rise of the emerging market MNE. It does so by presenting the innovation blowback framework which describes how competition between traditional advanced economy MNEs raises tomorrow’s new competitors from emerging markets. In particular, the paper provides a formal model of trade-offs that the advanced economy MNE faces when organizing its R&D activities either concentrated at home or geographically dispersed. Using an agent-based simulation approach, the model is subsequently evaluated in the SimISpace environment. The initial simulations lend support for the innovation blowback framework and the findings provide insights into the evolution of new competition and firm performance.

Title: R&D Internationalization of Emerging-Market Firms: The Influence of the Foreign Managers and Foreign Board Members


  • Kiattichai Kalasin, China Europe International Business School

Abstract: Existing literature suggests that the international exposure of managers frequently influence top management team (TMT) to lead firms to source technological knowledge in foreign countries. Extant research, however, has not examined the role of foreign managers and foreign board members, whose knowledge can influence the TMT decision to setup international R&D units. However, because of the liability of foreignness and the insufficiency of local knowledge, foreign managers and foreign board members may find it difficult to integrate themselves into the institution-void business environments, resulting in a distortion in the individual cognitive structure and in risk perceptivity. Therefore, I argue that the ratio of foreign managers and ratio of foreign board member negatively correlates to the probability to invest in international R&D units by emerging-market firms.

All Sessions in Track G...

Sun: 08:00 – 09:15
Session 129: Strategy Implementation: Global Challenges
Sun: 09:30 – 10:45
Session 130: Practicing Strategy in Transition Economies: Reframing, Rethinking and Renewing
Sun: 11:15 – 12:30
Session 131: Global Strategies in the Service Sector
Sun: 15:15 – 16:30
Session 29: Strategy and Outsourcing
Mon: 08:00 – 09:15
Session 32: The Dynamics of Internationalization
Mon: 09:30 – 10:45
Session 34: Emerging Market/Advanced Market Strategic Interactions
Mon: 13:30 – 14:45
Session 33: Internationalization, Diversification & Performance
Mon: 16:30 – 17:45
Session 35: Entry Modes, Exit and Outcomes
Session 39: Global Strategies
Tue: 08:00 – 09:15
Session 37: Subsidiary Strategy
Tue: 11:00 – 12:15
Session 41: International M&A as an Entry Mode Strategy
Tue: 14:15 – 15:30
Session 30: Politics, Institutions, Political Risk & Global Strategy
Tue: 15:45 – 17:00
Session 40: Knowledge, Innovation and Global Strategy
Session 42: A Q&A with Pilsner Urquell: Strategy from a Small Nation
Tue: 17:30 – 18:45
Session 38: Global Managers and Managing Globally

Strategic Management Society