How and when do exporters benefit from an international adaptation strategy? The moderating effect of formal and informal institutional distance

Abstract

PurposeDrawing on institutional theory, this study seeks to advance the understanding of how the indirect effect of exporters' adoption of an international adaptation strategy on export performance via enhanced legitimacy is differently moderated by formal and informal institutional distances from the host country market.Design/methodology/approachSurvey data were collected from a sample of 251 exporters in China and analyzed with a multiple regression model to test the hypotheses.FindingsExporters' use of an international adaptation strategy affects their perceived legitimacy, which in turn influences their export performance. Moreover, formal institutional distance strengthens the indirect effect of an international adaptation strategy on export performance via legitimacy, whereas informal institutional distance weakens this indirect effect.Originality/valueThe study contributes to the knowledge of how and when adoption of an international adaptation strategy by exporters benefits export performance from an institutional perspective.