Institutional and economic determinants of transnational retailer expansion and performance: a comparative analysis of Wal-Mart and Carrefour

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Description/Abstract

In the context of a wave of retail foreign direct investment and increasing recognition across
many disciplines of the profound developmental implications of transnational retail within the global
economy, this paper examines the institutional and economic factors determining the performance of
transnational retailers via a comparative analysis of the two global leaders in the industry, Wal-Mart
and Carrefour. A conceptual framework is offered for explaining the heterogeneity of retailer perfor-
mance in international markets, and three types of explanation are considered: the timing and mode
of market entry and subsequent expansion, factors that allow the exercise of upstream market power,
and sensitivity to issues of labour organization and standards. The two retailers are found to be
differentially impacted by those factors, indicating the need to consider a process of institutional
hybridization as central to the explanation of transnational retail performance.