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Pro‐market reforms and developing country multinational corporations
Author(s) -
Dau Luis Alfonso
Publication year - 2012
Publication title -
global strategy journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.814
H-Index - 24
eISSN - 2042-5805
pISSN - 2042-5791
DOI - 10.1111/j.2042-5805.2012.01033.x
Subject(s) - multinational corporation , business , competition (biology) , order (exchange) , institution , latin americans , developing country , international economics , market share , market economy , international trade , industrial organization , economics , economic growth , finance , political science , ecology , law , biology
Building on the institution‐based view of strategy, I study the impact of pro‐market reforms on developing country firm multinationality. I propose that reforms increase multinationality by reducing institutional imperfections and increasing domestic competition, thus inducing firms to expand internationally. However, I argue the effect is higher for private firms than state firms because the former are compelled to be more responsive to institutional changes and opportunities in order to survive. Three‐level RCM Poisson analyses of a panel of the largest firms in Latin America for the period 1989 to 2009 provide robust support for the arguments.