Business Administration, Management, and Operations Commons^™

Institutional Distance And Entry Mode: How Do Emerging-Market Multinational Companies Overcome Competitive Disadvantages In A Developed Market?, Ru-Shiun Liou

Graduate Theses and Dissertations

As latecomers to global business competition, emerging-market multinational companies (EMNCs) utilize cross-border merger and acquisitions to swiftly acquire strategic assets, such as brands and distribution channels, compensating for their competency deficiency. Developed markets with well-established firms and well-developed market-supporting institutions become important destinations for EMNCs' strategic asset-seeking investments. Institutional distance, national differences in the institutional environment, constitutes a major source of competitive disadvantage for foreign firms competing with indigenous firms. Foreign firms need to overcome the challenges of unfamiliarity, relational, and discriminatory hazards to establish legitimacy in the host market. Compared to established multinationals that originate from other advanced markets …