Strategy in emerging economies and the theory of the firm

Michael YOUNG, Terence Tsai, Xinran Wang, Shubo Liu*, David Ahlstrom

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

116 Citations (Scopus)

Abstract

Indigenous emerging economy (EE) firms are increasingly competing in global markets or against multinational corporations (MNCs) in their home markets. But their institutional context at the national and local levels often suffers from what has been termed "institutional weakness" which is believed to put them at a competitive disadvantage on the global playing field. Yet little is known about how EE institutional weakness at the national level translates into competitive disadvantage at the firm level. In this perspectives paper, we examine this shortcoming in the literature. We utilize three popular theories of the firm-neoclassical economics, the resource-based view, and the nexus of contracts view-to examine how EE institutional weakness at the national level affects strategic choices at the firm level. We then explain how these strategic choices affect firm boundaries, internal organization, and the nature of competitive advantage for firms in EEs.

Original languageEnglish
Pages (from-to)331-354
Number of pages24
JournalAsia Pacific Journal of Management
Volume31
Issue number2
DOIs
Publication statusPublished - Jun 2014

Scopus Subject Areas

  • Business and International Management
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management

User-Defined Keywords

  • Emerging economies
  • Institutions
  • Strategic choices
  • Theory of the firm

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