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Is Chain Affiliation a Strategic Asset or Constraint in Emerging Economies? Competitive Strategies and Performance in the Russian Hotel Industry

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  • Päivi Karhunen

    (Aalto University School of Business)

  • Svetlana Ledyaeva

    (Aalto University School of Business)

Abstract

The purpose of the paper is to find out how chain affiliation, an important strategic choice and a key determinant for hotel performance, influences the strategy-performance nexus in the emerging economy context. It combines the resource- and institution-based views to investigate how chain affiliation moderates the relationship between competitive strategy and performance. This is done by distinguishing between market-based strategies based on differentiation or cost leadership, and non-market strategies that manifest in institutional advantage. The empirical analysis draws from original survey data on 162 hotels located in the Russian cities Moscow and St. Petersburg. The paper finds that first, in emerging economies the competitive edge of chain-affiliated hotels largely arises from market-based advantage, but only in terms of cost advantage. The finding that differentiation advantage is not an important factor of performance for chain-affiliated hotels suggests that firm-level resources derived from chain affiliation would not transform into competitive advantage in the emerging economy context. Second, it is found that institutional advantage is more important determinant of performance for independent hotels, demonstrating the importance of local knowledge and relationships for firms in emerging economies. This finding also suggests that chain affiliation might be rather a strategic constraint than asset for creating superior performance via institutional advantages in the emerging economy context.

Suggested Citation

  • Päivi Karhunen & Svetlana Ledyaeva, 2021. "Is Chain Affiliation a Strategic Asset or Constraint in Emerging Economies? Competitive Strategies and Performance in the Russian Hotel Industry," Management International Review, Springer, vol. 61(3), pages 403-427, June.
  • Handle: RePEc:spr:manint:v:61:y:2021:i:3:d:10.1007_s11575-021-00445-y
    DOI: 10.1007/s11575-021-00445-y
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    Cited by:

    1. Goran Karanovic, 2023. "Exploring the Intrinsic Factors Influencing Return on Assets: A Case Study of the Hotel Industry in Selected EU Countries," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 16(1), pages 54-61, October.

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