Pro-market institutions and global strategy: The pendulum of pro-market reforms and reversals

Alvaro Cuervo-Cazurra (), Ajai Gaur () and Deeksha Singh ()
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Ajai Gaur: Rutgers Business School - Newark and New Brunswick
Deeksha Singh: Rutgers University

Journal of International Business Studies, 2019, vol. 50, issue 4, No 6, 598-632

Abstract: Abstract We review the literature analyzing the impact of pro-market institutions on firms’ global strategy. We propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro-market reforms and reversals that drive changes in firm strategy and performance. Much progress has been made in the analyses of pro-market reforms and their impact on firms’ international strategies and performance. However, there is a need to further learn about four areas: (1) the concept of pro-market institutions, in particular the variety of institutional dimensions, the measures, and the influence of informal institutions on firm strategies; (2) the drivers of changes in pro-market institutions, especially firms’ influences and the co-evolution of firm strategies and institutional changes; (3) the implications of changes in pro-market reforms for the interactions among integration, diversification, and internationalization strategies, the causality chains connecting institutions and strategies, and the reconfiguration of activities globally; and (4) the non-traditional moderators that alter the impact of pro-market institutional dynamics on firms’ strategies, such as country-level political systems, industry-level competitor reactions, and individual-level managerial capabilities and perceptions.

Keywords: institutions; institutional change; pro-market reforms; pro-market reversals; international strategy; multinationals; emerging markets (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (68)

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DOI: 10.1057/s41267-019-00221-z

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