The dual effects of home country institutions on the internationalization of private firms in emerging markets : Evidence from China

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Detail(s)

Original languageEnglish
Pages (from-to)128-149
Journal / PublicationMultinational Business Review
Volume25
Issue number2
Publication statusPublished - 2017

Abstract

Purpose
This study aims to examine the dual effects of home country institutional forces (i.e. institutional support and institutional constraints) on the internationalization of private firms in emerging markets. By doing so, this study aims to examine the applicability of the two seemingly paradoxical views (i.e. the governmental promotion view and the institutional escapism view) in explaining private firms’ internationalization. Further, this study investigates how the effect of the home country institutional environment on firms’ internationalization is contingent upon firm characteristics.

Design/methodology/approach
A sample of Chinese private firms is used to examine the effect of home country institutions on internationalization.

Findings
Empirical findings suggest that both institutional support and institutional constraints promote the internationalization of private firms in emerging markets. Moreover, it is found that firm resources strengthen the effect of government support on internationalization. It is also found that firms’ business ties strengthen the effect of institutional constraint on internationalization, whereas firms’ political ties weaken the effect of institutional constraints on internationalization.

Originality/value
By adopting an integrated and comprehensive investigation of the dual effects of home country institutional environment in emerging markets on internationalization, this study provides evidence to the applicability of the two competing views (i.e. the governmental promotion view and the institutional escapism view) in relation to home country institutional effects on internationalization. In addition, this study examines how institutional effects vary across firms with different resources and social ties, thus extends understandings of the boundary conditions of the two institutional effects.

Research Area(s)

  • Emerging market firms, Institutional constraint, Institutional environment, Institutional support, Internationalization

Bibliographic Note

Full text of this publication does not contain sufficient affiliation information. With consent from the author(s) concerned, the Research Unit(s) information for this record is based on the existing academic department affiliation of the author(s).