Institutional Distance and International Business Strategies in Emerging Economies


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Institutional Distance and International Business Strategies in Emerging Economies

Show simple item record Ionascu, Delia en_US Meyer, Klaus E. en_US Estrin, Saul en_US 2009-02-04T10:26:00Z 2009-02-04T10:26:00Z 2004-12-17T00:00:00Z en_US
dc.description.abstract The concept of ‘distance’ has been used by international business scholars to explain variations in international business strategies and operations across countries. The more distant a host country is from the organizational centre of a multinational enterprise (MNE), the more it has to manage cultural, regulatory and cognitive differences, and to develop appropriate entry strategies, organizational forms, and internal procedures to accommodate these differences. Scholarly research has focused on the concept of psychic distance, which has been narrowed down in empirical work to indices based on Hofstede’s work on culture. However, these measures capture only very partially the dimensions of distance of concern to international business. In this paper, we show how the broader theoretical concept of institutional distance, which incorporates normative, regulatory and cognitive aspects, affects entry strategies. Specifically, our theoretical arguments suggest that the impact of distance varies with different aspects of the concept of institutional distance, and that this impact interacts with both the investor’s experience and with the relative importance of the pertinent operation for the investing MNE. Using a unique dataset of foreign direct investment in emerging economies that incorporates multi-host as well as multi-home countries, we find empirical support for our propositions, and provide an explanation for apparently inconsistent results in the previous literature. en_US
dc.format.extent 40 s. en_US
dc.language eng en_US
dc.relation.ispartofseries Working paper;2004-051 en_US
dc.subject.other kep en_US
dc.title Institutional Distance and International Business Strategies in Emerging Economies en_US
dc.type wp en_US
dc.accessionstatus modt04dec17 miel en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Institut for International Økonomi og Virksomhedsledelse en_US
dc.contributor.department Center for Østeuropa en_US
dc.contributor.departmentshort CEES en_US
dc.contributor.departmentuk Department of International Economics and Management en_US
dc.contributor.departmentuk Center for East European Studies en_US
dc.contributor.departmentukshort INT en_US
dc.contributor.departmentukshort CEES en_US
dc.idnumber x656444796 en_US København en_US
dc.publisher.year 2004 en_US

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