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The effect of institutional isomorphic pressure on the internationalization of firms in an emerging economy: evidence from China

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  • Fangrong Li
  • Daniel Z. Ding

Abstract

This study uses institutional theory to explore the driving force for internationalization of firms in emerging economies. It posits that the internationalization practices of firms are driven not only by efficiency consideration, but also by the desire to conform to institutional isomorphic pressures exerted by the social environment. The impact of three types of institutional isomorphic pressures -- coercive pressure, mimetic pressure and normative pressure -- on the intensity of internationalization is investigated. Analysis using survey data collected from 174 Chinese firms shows that all three institutional pressures have positive and significant effects on the intensity of internationalization. We also examine the interaction between institutional pressure and firm capability. Results suggest that firm capabilities enhance the effect of coercive pressure on internationalization, and weaken the effect of normative pressure on internationalization.

Suggested Citation

  • Fangrong Li & Daniel Z. Ding, 2013. "The effect of institutional isomorphic pressure on the internationalization of firms in an emerging economy: evidence from China," Asia Pacific Business Review, Taylor & Francis Journals, vol. 19(4), pages 506-525, October.
    • Handle: RePEc:taf:apbizr:v:19:y:2013:i:4:p:506-525
    DOI: 10.1080/13602381.2013.807602
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    1. Hinrich Voss & Peter J. Buckley & Adam R. Cross, 2009. "An Assessment of the Effects of Institutional Change on Chinese Outward Direct Investment Activity," Palgrave Macmillan Books, in: Ilan Alon & Julian Chang & Marc Fetscherin & Christoph Lattemann & John R. McIntyre (ed.), China Rules, chapter 5, pages 135-165, Palgrave Macmillan.
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    Cited by:

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    11. Li, Jing & Xia, Jun & Shapiro, Daniel & Lin, Zhouyu, 2018. "Institutional compatibility and the internationalization of Chinese SOEs: The moderating role of home subnational institutions," Journal of World Business, Elsevier, vol. 53(5), pages 641-652.
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    13. Kesen Zhang & Zhen Pan & Mukund Janardhanan, 2022. "Relationship between the Degree of Internationalization and Greenwashing of Environmental Responsibilities in China-Based on the Legitimacy Perspective," Sustainability, MDPI, vol. 14(5), pages 1-26, February.
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