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Institutions, resources and entry strategies in emerging economies

Meyer, Klaus E., Estrin, Saul, Bhaumik, Sumon Kumar and Peng, Mike W. (2009) Institutions, resources and entry strategies in emerging economies. Strategic Management Journal, 30 (1). pp. 61-80. ISSN 0143-2095

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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.

Item Type: Article
Official URL: http://www.interscience.wiley.com/jpages/0143-2095...
Additional Information: © 2008 John Wiley and Sons
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HF Commerce
H Social Sciences > H Social Sciences (General)
Sets: Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 14 Apr 2008 14:22
URL: http://eprints.lse.ac.uk/4217/

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