A Home Country Institutional Perspective Towards the Internationalization-Performance Relationship

Abstract

Despite the widespread attention on the rise of emerging market multinational enterprises (EMNEs) in recent decades, the relationship between internationalization and performance for EMNEs remains an under-addressed issue in International Business (IB) research field. Drawing from an institution-based view, we suggest that the international strategic decisions of EMNEs can be regarded as the outcomes of their interactions with home country institutional parameters, including home government characteristics (formal institution), and social norms and ideologies (informal institutions). We utilizes a two-decade Meta-analysis and constructs a three-level (firm-, study-, and country-level) hierarchical linear model to identify the internationalization-performance relationship for EMNEs. Our findings confirm the existence of an overall positive relationship, and indicate that the relationship is affected by the home country government characteristics. We also find that these firm-government interactions are moderated by the ideology-induced informal institutions. To sum, our findings help elucidate the puzzle concerning the internationalization-performance relationship of EMNEs, provides additional value for institution-based view in IB area, and opens several avenues for future research.