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Paper info: Fending off and filling in – shifts in strategy and commitment as reaction to institutional turbulence in emerging markets

Title


Fending off and filling in – shifts in strategy and commitment as reaction to institutional turbulence in emerging markets

Authors


Desirée Blankenburg Holm,
Martin Johanson
Uppsala University
Sweden
Martin Johanson and
Pao Kao
Uppsala University
Sweden
Pao Kao

Place of Publication


The paper was published at the 35th IMP-conference in Paris, France in 2019.

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Abstract


How firms respond to institutional turbulence while entering and expanding in emerging markets has captured growing interest in international business research, but research on how the interaction between the host market’s institutions and the firm’s strategy and commitment unfold over time is scarce. We employ a historical longitudinal case study of three Swedish MNCs in China, covering a period of fifteen years from 1995 to 2010, to reveal the dynamic relation between institutional change, strategy development and commitment. The study finds that internationalization follows a regular path, but that the path is cracked by extensive shifts in strategy and that the chain of incremental and over time inter-related commitments is broken. This in turn, results in periods of institutional turbulence. Nonetheless, evidence of path dependence is observed in the MNCs internationalization process. In addition, the study observes that when firms’ have established a position in the market, they are not only influenced by the institutional development but are also influencing changes in institutions.