Institutional Open Access at Home and Outward Internationalization
Journal of World Business, Forthcoming
41 Pages Posted: 5 Apr 2014
Date Written: April 4, 2010
While voluminous research has focused on the impact of host country institutions on foreign entrants, the rise of outward internationalization of firms from emerging economies is challenging this research stream. Limited work has been done to investigate a crucial question: How do home country institutions influence firms from emerging economies to engage in outward internationalization? Inspired by North’s insights on institutional open access, we develop an institution-based framework highlighting intra-country (sub-national) regional differences within a large emerging economy. Specifically, we argue that greater institutional open access in a particular region of a home country — in the areas of legal environment openness and financial market openness — leads to greater outward internationalization of local firms headquartered in that region. Further, tenure of that region’s governor moderates such relationships in different ways. Our multilevel analysis with 5,239 observations (company-years) finds that institutional open access is indeed behind some Chinese firms’ outward internationalization.
Keywords: Institutional open access, internationalization, institutional transitions, institution-based view
JEL Classification: O17, K40
Suggested Citation: Suggested Citation