Thinking about international business, with Mike Wright
Hoskisson, R.E., Wright, M., Filatotchev, I., and Peng, M.W. (2013) Emerging multinationals from mid-range economies: the influence of institutions and factor markets, JMS
In season 3, we have the opportunity to discuss eight classic articles published in the Journal of Management Studies, one of the leading journals in the field. Our first episode of season 3 is devoted to a work by Hoskisson, Wright, Filatotchev & Peng entitled “Emerging multinationals from mid-range economies: the influence of institutions and factor markets”, published in 2013. For this episode we were lucky to be joined by one of the authors of the work, Mike Wright, professor in Entrepreneurship at Imperial College London.
This paper of 2013 extends the authors’ previous work of 2005 in the field of strategy research, also published in the Journal of management studies. The article emphasized the specificities of emerging economies. More specifically, the overarching question addressed by the 2013 paper is: “What is the most important development in both strategy research and practice on emerging economies that has now become a crucial component of the literature that deserves our attention?” (Hoskisson et al., 2013, p. 1295).
In the 2005 work, which was the starting point for the paper of this episode, the authors openly acknowledged the importance of emerging economies both in terms of contributions to GDP and to foreign direct investment. For this reason, they carried out a review of the strategy papers on emerging markets published in the previous 5 years with a focus on theories and methods, to address the issue of suitability “to the unique social, political and economic contexts as well as firm characteristics of emerging economies (Wright et al., 2005, p. 2). From this review, a framework of four strategic options emerged (foreign firms entering emerging economies, domestic firms competing within emerging economies, firms from emerging economies entering other emerging economies, firms from emerging economies entering developed economies) to which four conceptual approaches were related (transaction cost theory, agency theory, resource-based theory and institutional theory).
The 2013 work builds on these considerations and looked at the variety in the development of emerging economies. In particular, the focus of this paper is represented by emerging multinationals from mid-range economies. The authors concluded that it is necessary to look beyond the separation between emerging and developed economies, by taking into greater account the finer distinctions between institutional contexts, given differences in institutional development, infrastructure and factor market development. They asseerted that this can be accomplished from a theoretical point of view by integrating institutional theory with other frameworks. In terms of practical implications, this would increase our understanding of how MNEs can successfully compete in economies which are more or less developed than their home countries, given the variations in transaction costs which are due to differences in institutional factors.
Read with us:
Hoskisson, R.E., Wright, M., Filatotchev, I., and Peng, M.W. (2013) Emerging Multinationals in Mid-Range Economies: The Influence of Institutions and Factor Markets, Journal of Management Studies, 50(7)
Wright M., Filatotchev I., Hoskisson R.E., Peng M.W. (2005) Strategy research in emerging economies: challenging the conventional wisdom, Journal of management studies, 42, 1-33.
Xu, D., and Meyer, K.E. (2013). Linking Theory and Context: 'Strategy Research in Emerging Economies' after Wright et al. (2005), Journal of Management Studies, 50(7)