Interaction of home and host countries' institutional conditions: An analysis of greenfield projects by Latin American firms

Abstract

AbstractStudying firms from emerging economies has been receiving more attention in recent decades. However, the host‐ and home‐country perspectives have allowed understanding, to a significant extent, of the firms' expansion abroad. We argue the necessity of investigating the interaction of home and host‐country institutional conditions to advance the understanding of the internationalization strategies of firms from emerging economies. Employing a sample of 1387 firms from 17 Latin American countries, we examine how their operations expanded from 2003 to 2019 by undertaking 2636 cross‐border greenfield projects in 94 host countries. Results indicate that the interaction of home and host countries' weak institutional conditions drives the decision‐making process for the internationalization of Latin American firms.