Abstract
We propose that home country institutional environment shapes emerging market firms' foreign expansion. We argue that better-developed home country institutional environment promotes emerging market firms' expansion to foreign markets more advanced than the home country, while institutional instability in the home country reduces this propensity. We further hypothesize that the effects of home country institutional environment are contingent on firm-specific government ownership. Data on the foreign expansion of 921 Chinese firms in the period of 1996-2000 provide strong support for the effects of home country's institutional development and institutional instability. We also find that a high degree of government ownership weakens the positive effect of home country's institutional development on emerging market firms' propensity to expansion to more advanced markets.
| Original language | English |
|---|---|
| Pages (from-to) | 862-872 |
| Number of pages | 11 |
| Journal | International Business Review |
| Volume | 23 |
| Issue number | 5 |
| Early online date | 14 Feb 2014 |
| DOIs | |
| Publication status | Published - Oct 2014 |
Keywords
- China
- Emerging markets
- Foreign expansion
- Home country environment
- Institutional development
- Institutional environment
- Institutional instability
