How Industry Architectures Shape Firm Success when Expanding in Emerging Economies

Abstract

Our article considers how ‘industry architectures’ (i.e., the stable but evolving set of rules and roles through which labor is divided within a sector) shape success in international expansion. We argue that industry architectures differ between countries, are not necessarily technologically determined, shape firms' capabilities and their competitive environment, and constitute a distinct level of analysis. We develop related theory and empirically test its impact with a survey of firms expanding in four CIS countries. We find that separability and similarity of industry architectures across countries are robust and important predictors of success in international expansion. Our results suggest that industry architectures should be added to ‘firm’ and ‘country’ as an intermediate level of analysis that helps explain success in international expansion.