Foreign Market Adaptation and Performance: The Role of Institutional Distance and Organizational Capabilities

Mariola Ciszewska-Mlinarič and Piotr Trąpczyński
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Mariola Ciszewska-Mlinarič: Department of Strategy, Kozminski University, ul. Jagiellońska 57/59, 03-301 Warszawa, Poland
Piotr Trąpczyński: Department of International Competitiveness, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland

Sustainability, 2019, vol. 11, issue 6, 1-19

Abstract: The role and significance of adaptation versus standardization for performance in foreign markets has stirred some important debates among the academic community. In this paper, we aim to contribute to the ongoing debate by applying the logic of institutional theory and organizational capabilities to reconsider the relationship between adaptation and foreign market performance. In particular, we argue based on extant theory and our own mixed-method study that while more accentuated differences in the institutional environment reinforce the role of adaptation in achieving legitimacy, the possession of relational and technological capabilities can reduce the relevance of adaptation. The empirical study is based on a sample of 284 firms in the quantitative study and eight firms in the qualitative study. Our findings reveal that adaptation is positively associated with performance in foreign markets. This relationship is also positively moderated by institutional distance, and negatively moderated by relational and technological capabilities.

Keywords: strategy adaptation; foreign market performance; organizational capabilities; institutional distance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:6:p:1793-:d:216929

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