Abstract
We review the literature analyzing the impact of pro-market institutions on firms’ global strategy. We propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro-market reforms and reversals that drive changes in firm strategy and performance. Much progress has been made in the analyses of pro-market reforms and their impact on firms’ international strategies and performance. However, there is a need to further learn about four areas: (1) the concept of pro-market institutions, in particular the variety of institutional dimensions, the measures, and the influence of informal institutions on firm strategies; (2) the drivers of changes in pro-market institutions, especially firms’ influences and the co-evolution of firm strategies and institutional changes; (3) the implications of changes in pro-market reforms for the interactions among integration, diversification, and internationalization strategies, the causality chains connecting institutions and strategies, and the reconfiguration of activities globally; and (4) the non-traditional moderators that alter the impact of pro-market institutional dynamics on firms’ strategies, such as country-level political systems, industry-level competitor reactions, and individual-level managerial capabilities and perceptions.
| Original language | American English |
|---|---|
| Pages (from-to) | 598-632 |
| Number of pages | 35 |
| Journal | Journal of International Business Studies |
| Volume | 50 |
| Issue number | 4 |
| DOIs | |
| State | Published - Jun 1 2019 |
ASJC Scopus subject areas
- Business and International Management
- General Business, Management and Accounting
- Economics and Econometrics
- Strategy and Management
- Management of Technology and Innovation
Keywords
- emerging markets
- institutional change
- institutions
- international strategy
- multinationals
- pro-market reforms
- pro-market reversals