Zusammenfassung
Viewing market-oriented institutional change as a two-staged process,
we propose that the effects of market-oriented institutional change
on two organizational forms- business-group-affiliated and independent
firms- are different, depending on the stage of institutional change.
Specifically, we examine how the two distinct periods of market-oriented
institutional change- that is, institutional friction and institutional
convergence- affect business-group-affiliated firms and independent
firms in their abilities to profit from international diversification.
Using data on 140 Korean manufacturing multinational firms from 1993
to 2003, we find that emerging-economy firms face an international
diversification discount- a negative relationship between international
diversification and firm performance. We also find that business
group affiliation affects the international diversification discount
differently during the two periods of market-oriented institutional
change, particularly when firm performance is measured by the market-to-book
value (MBV). The moderating effect of business group affiliation
on the relationship between international diversification and MBV
is negative during the institutional frictions period, but becomes
positive during the institutional convergence period in the later
stage of institutional change. Our findings warn against viewing
market-oriented institutional change as a discrete event, highlighting
the importance of recognizing the qualitatively distinctive nature
of different periods of market-oriented institutional change in future
research. © 2010 Academy of International Business All rights reserved.
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