Governance- and Market-driven Sources of Advantages in Emerging Markets

Abstract

Significant research on emerging markets has been put forth in the past couple of decades. Emerging markets have been defined as geographies with low-income but rapid-pace growth, most of which fueled by recent economic liberalization policies (Hoskisson et al., 2000). Mainstream management research has portrayed these contexts as being subject to significant institutional voids (Khanna and Palepu, 1997), which cause intermediary markets--for inputs, labor, and capital--to fail more often. This conceptual background has led to a significant volume of research on organizational and competitive strategies leveraged by local firms to access key resources, such as vertically integrating more often, and forging business groups (e.g., Khanna and Rivkin, 2001), or adopting non-market strategies (e.g., Henisz and Zelner, 2003). In this symposium we wish to examine more recent research that look beyond the institutional void and the associated transaction costs that give rise to firm strategies emphasizing greater degrees of vertical integration or even accentuating efforts in political markets. Our aim is not to deny this earlier and very important background, but rather supplement it, by lining up new theoretical developments that examine certain qualities in the emerging market context and proposes distinct strategic approaches for handling them. For instance, emerging countries tend to have a greater presence of the State in multiple markets (e.g., Cuervo-Cazurra et al., 2014), which make state ownership of businesses more likely. They also tend to display greater likelihood of economic volatility in these markets that make early and late mover advantages have distinct prospects vis-à-vis those observed in developed countries (e.g., Garcia-Sanchez et al, 2014). Moreover, these contexts also increase the possibility that public and private domains of businesses can be complementary, rather than substitutes, when important contingencies are considered, thereby creating the prospect of hybrid modes of governance (e.g., Cabral et al., 2010). Emerging markets are also known to be attractive locations for MNC subsidiaries, although many of them may find it hard to fight off internal isolation in the global structure of the company (Monteiro et al., 2008). The guiding principle of our symposium is thus to push scholars interested in Emerging Markets and Strategic Management to span beyond current theoretical thinking, and ask themselves what new domains of theory and practice are emerging but have yet to be fully explored, and how are these emerging initiatives in the field handling such opportunities? We hence bring together a collection of papers that outline some of these new theoretical avenues to exploring opportunities in emerging markets. Organizational Isolation and Know How Transfer in MNCs Presenter: Felipe Monteiro; INSEAD State Capitalism on the Rise Presenter: Aldo Musacchio; Harvard U. Strategy through the Business Cycle in Highly Volatile Contexts Presenter: Roberto Vassolo; IAE Business School Argentina Hybrid Governance in Public – Private Partnerships Presenter: Sandro Cabral; Federal U. of Bahia