The Interactions of Institutions on Foreign Market Entry Mode

SH Ang, Mirko Benischke, JP Doh

Research output: Contribution to journalArticleAcademicpeer-review

111 Citations (Scopus)

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
Original languageEnglish
Pages (from-to)1536-1553
Number of pages18
JournalStrategic Management Journal
Volume36
Issue number10
DOIs
Publication statusPublished - 2 Jul 2014

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