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The influence of institutional voids in emerging markets on entrant firms’ resource commitment

The influence of institutional voids in emerging markets on entrant firms’ resource commitment
The influence of institutional voids in emerging markets on entrant firms’ resource commitment
The existing international management literature has presented inconclusive results about the effect of
institutional voids in emerging economies on the extent to which firms move resources in these markets. With
the lens of institutional theory and transaction-cost theory in international business, this paper examines how
institutional voids in an emerging economy influence the decision of firms based in developed countries to move
Page 292
THURSDAY
AIB 2016 Conference Proceedings
resources in that economy in terms of: 1) the degree of control of the entry strategy employed and 2) the level
of delocalization of business functions. By relying on a sample of 90 Italian firms operating in China between
2001 and 2010, results of this study show that the relationship between institutional voids in an emerging
economy and developed country-based firm’s resource commitment in that emerging economy is invented Ushaped: as institutional voids in the emerging economy increase, firms based in developed countries prefer to
choose entry strategies with higher degree of control as well as increase the number of business functions in
the emerging economy; however, beyond a certain level of institutional voids, firms tend to reduce the entry
mode degree of control and the number business functions within the emerging economy. (
Giachetti, Claudio
2a5ed149-0edb-4350-8b38-8e9213ea6a5d
Peprah, Augustine Awuah
bae898c9-95d3-4010-966a-f06785f645fb
Giachetti, Claudio
2a5ed149-0edb-4350-8b38-8e9213ea6a5d
Peprah, Augustine Awuah
bae898c9-95d3-4010-966a-f06785f645fb

Giachetti, Claudio and Peprah, Augustine Awuah (2016) The influence of institutional voids in emerging markets on entrant firms’ resource commitment. 58th Annual Meeting of the Academy of International Business, , New Orleans, United States. 27 - 30 Jun 2016.

Record type: Conference or Workshop Item (Paper)

Abstract

The existing international management literature has presented inconclusive results about the effect of
institutional voids in emerging economies on the extent to which firms move resources in these markets. With
the lens of institutional theory and transaction-cost theory in international business, this paper examines how
institutional voids in an emerging economy influence the decision of firms based in developed countries to move
Page 292
THURSDAY
AIB 2016 Conference Proceedings
resources in that economy in terms of: 1) the degree of control of the entry strategy employed and 2) the level
of delocalization of business functions. By relying on a sample of 90 Italian firms operating in China between
2001 and 2010, results of this study show that the relationship between institutional voids in an emerging
economy and developed country-based firm’s resource commitment in that emerging economy is invented Ushaped: as institutional voids in the emerging economy increase, firms based in developed countries prefer to
choose entry strategies with higher degree of control as well as increase the number of business functions in
the emerging economy; however, beyond a certain level of institutional voids, firms tend to reduce the entry
mode degree of control and the number business functions within the emerging economy. (

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More information

Published date: 30 June 2016
Venue - Dates: 58th Annual Meeting of the Academy of International Business, , New Orleans, United States, 2016-06-27 - 2016-06-30

Identifiers

Local EPrints ID: 472817
URI: http://eprints.soton.ac.uk/id/eprint/472817
PURE UUID: 0a7b1826-0eb2-421d-87c4-c3273da88ab6
ORCID for Augustine Awuah Peprah: ORCID iD orcid.org/0000-0002-6497-9161

Catalogue record

Date deposited: 19 Dec 2022 17:54
Last modified: 07 Jan 2023 03:09

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Contributors

Author: Claudio Giachetti
Author: Augustine Awuah Peprah ORCID iD

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