Download This PaperInstitutional Perspective on MNE Adaptation: An Empirical Approach
Paper presented at AIB Meeting, Washington, July 3, 2012, Session: 3.1.3 - IB Theory, FDI, and Entry Mode. Published as: A.Kuznetsov, M.Jacob “Convergence versus divergence: Testing varieties of capitalism approach on the globalization of business practices” in Institutional Impacts on Firm Internat
38 Pages Posted: 5 Sep 2014
Date Written: July 3, 2012
Abstract
This paper contributes to a better understanding of global corporate and industrial change dynamics triggered at the firm level. Our focus is on convergence vs. divergence of national institutional systems. Data are drawn from a large N survey of German firms in the UK and British firms in Germany. Our results for adaptation behavior of British subsidiaries in Germany suggest that at the firm level the primacy of national institutions and institutional complementarity as determinants of the organizational behavior of MNEs could be overstated. Nonetheless, evidence that German MNEs in Britain strongly seek to opt for the strategic choices for which there is institutional support in the host country suggests that complementarity is functional enough to incite adjustment even in the absence of strong formal pressure. The evidence that both German and British firms seem to prefer practices characteristic of liberal market economies may pose a problem for institutional stability in Germany and generates implications for the likely pathways of institutional change
Keywords: Global Convergence, Complementarity, MNE-host country relations
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