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Journal of International Business Studies

, Volume 50, Issue 4, pp 598–632 | Cite as

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

  • Alvaro Cuervo-Cazurra
  • Ajai GaurEmail author
  • Deeksha Singh
Review Article

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 

Résumé

Nous passons en revue la littérature analysant l’impact des institutions pro-marché sur la stratégie globale des entreprises. Nous proposons que la tension idéologique, entre la question de savoir si le gouvernement ou le marché devrait être le moteur du développement économique, se traduise par un mouvement de balancier de réformes favorables au marché qui entraînent des changements dans la stratégie et la performance des entreprises. De grands progrès ont été réalisés dans l’analyse des réformes favorables au marché et de leur impact sur les stratégies et les performances internationales des entreprises. Toutefois, il est nécessaire d’en apprendre davantage dans quatre domaines : (1) le concept d’institutions pro-marché, en particulier la variété des dimensions institutionnelles, les mesures et l’influence des institutions informelles sur les stratégies des entreprises; (2) les moteurs des changements dans les institutions pro-marché, en particulier les influences des entreprises et la co-évolution des stratégies des entreprises et des changements institutionnels; (3) les répercussions des changements sur les réformes favorables au marché pour les interactions entre les stratégies d’intégration, de diversification et d’internationalisation, les chaînes de causalité reliant les institutions et les stratégies, et la reconfiguration des activités à l’échelle mondiale; et (4) les modérateurs non traditionnels qui modifient l’impact des dynamiques institutionnelles favorables au marché sur les stratégies des entreprises, comme les systèmes politiques nationaux, les réactions des concurrents du secteur, et les capacités et perceptions managériales au niveau individuel.

Resumen

Revisamos la literatura analizando el impacto de las instituciones a favor del mercado en la estrategia global de las empresas. Proponemos que la tensión ideológica entre si el gobierno o el mercado debe impulsar los resultados de desarrollo económico es un péndulo de las reformas a favor del mercado y los retrocesos que impulsan los cambios en la estrategia de la empresa y el desempeño. Se ha avanzado mucho en el análisis de las reformas a favor del mercado y su impacto en las estrategias internacionales de las empresas y el rendimiento. Sin embargo, hay necesidad de aprender más sobre cuatro áreas: (1) el concepto de las instituciones a favor del mercado, en particular la variedad de las dimensiones institucionales, las medidas, y la influencia de las instituciones informales en las estrategias de la empresa; (2) los impulsores de los cambios en las instituciones a favor del mercado, especialmente las influencias de las empresas y la co-evolución de las estrategias de la empresa y los cambios institucionales; (3) las implicaciones de los cambios en las reformas a favor del mercado para las interacciones entre integración, diversificación, y estrategias de internacionalización, y las cadenas de causalidad que conectan las instituciones y las estrategias, y la reconfiguración de las actividades globalmente; y (4) los moderadores no tradicionales que alteran el impacto de las dinámicas institucionales a favor del mercado en las estrategias de las empresas, como los sistemas políticos a nivel país, las reacciones de los competidores a nivel de la industria, y las capacidades gerenciales y las percepciones a nivel individual.

Resumo

Revisamos a literatura analisando o impacto de instituições pró-mercado na estratégia global das empresas. Propomos que a tensão ideológica entre se o governo ou o mercado deve impulsionar o desenvolvimento econômico resulta em um pêndulo de reformas pró-mercado e reversões que impulsionam mudanças na estratégia e no desempenho da empresa. Muito progresso tem sido realizado nas análises de reformas pró-mercado e seu impacto nas estratégias e no desempenho internacional das empresas. No entanto, é necessário aprender mais sobre quatro áreas: (1) o conceito de instituições pró-mercado, em particular a variedade de dimensões institucionais, as medidas e a influência de instituições informais na estratégia de empresas; (2) os impulsionadores de mudanças em instituições pró-mercado, especialmente as influências de empresas e a coevolução das estratégias de empresas e das mudanças institucionais; (3) as implicações de mudanças nas reformas pró-mercado para as interações entre estratégias de integração, diversificação e internacionalização, as cadeias de causalidade que ligam instituições e estratégias e a reconfiguração de atividades globalmente; e (4) os moderadores não tradicionais que alteram o impacto de dinâmicas institucionais pró-mercado nas estratégias das empresas, como sistemas políticos em nível de país, reações dos concorrentes no nível da indústria e capacidades e percepções gerenciais em nível individual.

摘要

我们做了文献综述, 分析了亲市场的制度对企业全球战略的影响。我们提出, 政府还是市场应推动经济发展这两者之间意识形态的紧张导致亲市场改革的摆动以及推动企业战略和绩效变化的逆转。对亲市场改革及其对企业国际战略和业绩的影响的分析取得了很大进展。但是, 有必要进一步了解四个方面:(1)亲市场制度的概念, 特别是制度维度的多样性、措施以及非正式制度对企业战略的影响; (2)亲市场制度变化的驱动因素, 尤其是企业的影响以及企业战略和制度变化的共同演化;(3)亲市场改革的变化对整合、多样化和国际化战略之间的相互作用, 链接制度和战略的因果关系, 以及全球活动重新配置的影响; 和(4)非传统的改变亲市场制度动态性对企业战略影响的调节因素, 如国家层面的政治制度, 行业层面的竞争者反应, 以及个人层面的管理能力和感知。

Notes

Acknowledgements

We thank the detailed guidance from Editor Yadong Luo and the useful suggestions for improvement from three anonymous reviewers. We also appreciate the comments received at the Academy of Management and the Strategic Management Society Conferences. Cuervo-Cazurra thanks the Robert Mullin Fellowship for financial support.

Supplementary material

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Supplementary material 2 (DOCX 82 kb)

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Copyright information

© Academy of International Business 2019

Authors and Affiliations

  • Alvaro Cuervo-Cazurra
    • 1
  • Ajai Gaur
    • 2
    Email author
  • Deeksha Singh
    • 3
  1. 1.D’Amore-McKim School of BusinessNortheastern UniversityBostonUSA
  2. 2.Rutgers Business School - Newark and New BrunswickNewarkUSA
  3. 3.School of BusinessRutgers UniversityCamdenUSA

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