Institutional distance, slack resources, and foreign market entry

• 成果类型: Article
• 署名作者: Donnelly, Roisin; Purkayastha, Saptarshi; Manolova, Tatiana S.; Edelman, Linda F.
• 署名单位: Tilburg University; Indian Institute of Management (IIM System); Indian Institute of Management Calcutta; Bentley University; Bentley University
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-023-00647-6
• 发表日期: 2024
• 页码: 194-211
• 关键词: RESOURCE-BASED VIEW; RESOURCE-BASED THEORY; Internationalization theories and foreign market entry; Emerging market multinationals; Institutions and international business; SLACK RESOURCES; Institutional economics; location choice

摘要

Traditional theories from the international business and strategy literatures have posited that institutional distance constrains firm internationalization and that slack financial and managerial resources can be redeployed to help overcome this distance and facilitate growth. However, are slack resources equally effective when entering host markets of different institutional quality? Combining an institutional economics' view of distance with a Penrosean perspective on resources, we argue that financial slack allows firms to pay their way into more institutionally developed markets, whereas managerial slack allows firms to work their way into less institutionally developed markets. From data on the internationalization of 307 Indian computer software companies over 16 years, we find support for our hypotheses when considering formal institutional distance. We also find that managerial slack mitigates informal institutional distance, irrespective of the direction of internationalization. Additional robustness tests, using propensity score matching, and an alternative sample of 3600 manufacturing firms from 49 countries, support our main results. Our findings suggest that slack is not a generic panacea for overcoming institutional distance, in that the effectiveness of each type of slack is dependent on both the direction of entry and the type of institutional distance to be overcome, formal or informal.