The Interactions of Institutions on Foreign Market Entry Mode

Strategic Management Journal, 36(10): 1536-1553, 2015. DOI: 10.1002/smj.2295

36 Pages Posted: 24 May 2019

See all articles by Siah Hwee Ang

Siah Hwee Ang

Victoria University of Wellington

Mirko Benischke

Villanova University

Jonathan P Doh

affiliation not provided to SSRN

Date Written: 2015

Abstract

This paper examines the interaction effects of institutional differences in the cognitive, normative, and regulatory domains on cross-border acquisition and alliance formation. Using a sample of 673 cross-border acquisitions and alliances conducted by multinational corporations (MNCs) from the manufacturing sector of six emerging economies (EEs) over the period 1995–2008, we find significant mimicking (cognitive domain) of local firms’ choice of ownership modes by EE firms. We also find that regulatory distance (regulatory domain) moderates the mimicking of both foreign and local firms while normative distance does not have any moderating effect. These findings contribute to our understanding of how EE MNCs mimic ownership modes in foreign market entry and how the interaction of this mimetic tendency with other institutional pillars affects these decisions.

Keywords: institutions, entry mode, emerging markets, acquisition, alliance

JEL Classification: M16

Suggested Citation

Ang, Siah Hwee and Benischke, Mirko and Doh, Jonathan P, The Interactions of Institutions on Foreign Market Entry Mode (2015). Strategic Management Journal, 36(10): 1536-1553, 2015. DOI: 10.1002/smj.2295, Available at SSRN: https://ssrn.com/abstract=3370709

Siah Hwee Ang (Contact Author)

Victoria University of Wellington ( email )

P.O. Box 600
Wellington, 6140
New Zealand

Mirko Benischke

Villanova University

Villanova, PA 19085
United States

Jonathan P Doh

affiliation not provided to SSRN

No Address Available

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