How much control do firms exercise over their resources when entering emerging markets?: The influence of institutional voids on entry mode degree of control
How much control do firms exercise over their resources when entering emerging markets?: The influence of institutional voids on entry mode degree of control
The international management literature has presented inconclusive results about the effect of institutional voids in a host country on entrant firms’ resource commitment. With the lens of institutional theory and transaction cost theory, this article examines how institutional voids in an emerging market influence a firm’s decision to move resources in that market. Resource commitment in an emerging market is examined in terms of the degree of control of the entry strategy employed. The theory presented argues that as institutional voids in a firm’s host country escalate, the firm sets out different priority actions to mitigate behavioral and environmental uncertainties in the host country, that in turn affect the degree of control of its entry modes. By relying on a sample of 90 Italian firms operating in China between 2001 and 2010, the results support the hypothesis that the institutional voids–entry mode degree of control relationship displays an inverted U-shape. JEL CLASSIFICATION F23; L1.
Institutional voids, emerging economies, entry strategies, resource commitment, uncertainty
122-142
Giachetti, Claudio
2a5ed149-0edb-4350-8b38-8e9213ea6a5d
Peprah, Augustine Awuah
bae898c9-95d3-4010-966a-f06785f645fb
April 2022
Giachetti, Claudio
2a5ed149-0edb-4350-8b38-8e9213ea6a5d
Peprah, Augustine Awuah
bae898c9-95d3-4010-966a-f06785f645fb
Giachetti, Claudio and Peprah, Augustine Awuah
(2022)
How much control do firms exercise over their resources when entering emerging markets?: The influence of institutional voids on entry mode degree of control.
BRQ Business Research Quarterly, 25 (2), .
(doi:10.1177/2340944420924402).
Abstract
The international management literature has presented inconclusive results about the effect of institutional voids in a host country on entrant firms’ resource commitment. With the lens of institutional theory and transaction cost theory, this article examines how institutional voids in an emerging market influence a firm’s decision to move resources in that market. Resource commitment in an emerging market is examined in terms of the degree of control of the entry strategy employed. The theory presented argues that as institutional voids in a firm’s host country escalate, the firm sets out different priority actions to mitigate behavioral and environmental uncertainties in the host country, that in turn affect the degree of control of its entry modes. By relying on a sample of 90 Italian firms operating in China between 2001 and 2010, the results support the hypothesis that the institutional voids–entry mode degree of control relationship displays an inverted U-shape. JEL CLASSIFICATION F23; L1.
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2340944420924402
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Accepted/In Press date: 9 March 2020
e-pub ahead of print date: 9 July 2020
Published date: April 2022
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We would like to thank Associate Editor José Pla-Barber and the two anonymous reviewers for their invaluable comments and guidance during the review process, which helped strengthen this article. We would also like to thank Elisabet Garrido, Daniele Cerrato and Alessandra Perri for their thoughtful feedback on earlier drafts of this paper. The author(s) received no financial support for the research, authorship, and/or publication of this article.
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© The Author(s) 2020.
Keywords:
Institutional voids, emerging economies, entry strategies, resource commitment, uncertainty
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Local EPrints ID: 469959
URI: http://eprints.soton.ac.uk/id/eprint/469959
ISSN: 2340-9436
PURE UUID: 80e24336-60c0-4177-8239-a5accb0da07f
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Date deposited: 29 Sep 2022 16:38
Last modified: 17 Mar 2024 04:14
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Author:
Claudio Giachetti
Author:
Augustine Awuah Peprah
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