Economics 2150A/B Quiz: Institutions, resources, and internationalization of emerging economy firms

• School: Western University
• Department: Economics
• Course: Economics 2150A/B
• Professor: Colin Denniston

Document Summary

Article: institutions, resources, and internationalization of emerging economy firms. Contribution to the literature: integrating resource-based view and institution-based view, clearer understanding of the antecedents of the change from exports to fdi, stage model: resources as enablers of strategic change. The way ee firms rely on their resources differs from that used by developed economy firms. Because ee firms often lack the traditional resources used to overcome the liability of foreignness, they turn to different types of resources, such as an ethnic customer base, cheap labor or a dominant position in their home markets; Ee firms use internationalization to gain competitive advantage in both foreign and domestic markets, acquiring new capabilities as they expand internationally; Underdeveloped institutions create higher transaction costs and make market-based exchanges less efficient: ee firms actively seek to escape stifling regulatory constraints at home; Institutional reforms are opening instrustries to foreign players: competition may drive some ee firms to expand into international markets.