Institutions, resources, and entry strategies in emerging economies

Klaus E. Meyer, Saul Estrin, Sumon Bhaumik, Mike W. Peng

Research output: Contribution to journalArticlepeer-review

Abstract

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.
Original languageEnglish
Pages (from-to)61-80
Number of pages20
JournalStrategic management journal
Volume30
Issue number1
Early online date19 Sept 2008
DOIs
Publication statusPublished - Jan 2009

Bibliographical note

This is the pre-peer reviewed version of the following article: Meyer, K. E., Estrin, S., Bhaumik, S., & Peng, M. W. (2009). Institutions, resources and entry strategies in emerging economies. Strategic management journal, 30(1), 61-80, which has been published in final form at http://onlinelibrary.wiley.com/doi/10.1002/smj.720/abstract

Keywords

  • institutional theory
  • emerging economies
  • strategic adaptation to context
  • modes of entry
  • acquisitions
  • joint ventures

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