Research SummaryWe study how state ownership affects the international expansion of emerging‐market firms. Building on agency theory and the resource‐based view, we propose an S‐curve relationship: Firms with a low level of state ownership have a limited level of international expansion, those with a medium level of state ownership have an increasing level, and those with a high level of state ownership have a decreasing level. This S‐curve is the outcome of the interaction between the “hindering hand” of state ownership, arising from multilevel agency problems, and the “helping hand,” arising from state‐ownership advantages. Analyses of 674 publicly traded firms from 16 emerging markets support these ideas and reveal that the inflection points in the S‐curve appear at state‐ownership levels of 19 and 43%.Managerial SummaryState ownership of emerging‐market firms results in their international expansion following an S‐curve pattern because state ownership has hindering and helping influences. Firms with low state ownership have a limited level of international expansion because they are subject to government interference but receive limited support. Firms with a medium level of state ownership have an increasing level of international expansion because they have greater access to resources while the negative effects of state control are restrained by the dominance of private owners. Finally, firms with a high level of state ownership have a decreasing level of international expansion because the advantage of resource provision is offset by tight state controls. We illustrate these ideas through the analyses of 674 firms from 16 emerging markets.

International audienceExisting literature has investigated the drivers behind the expansion of emerging market firms into other emerging markets, but we are only beginning to understand how emerging market firms expand into more advanced markets. Grounding our arguments in institutional theory and the notions of managerial intentionality and path-breaking strategies, we argue that emerging market firms can intentionally pursue path-breaking changes that set them on an organizational path better suited to advanced market conditions, by listing their stock on advanced financial markets or divesting unrelated business. We test our arguments on a sample of 855 emerging market firms from 18 countries over a six-year period. Our results strongly support our argument that emerging market firms can intentionally change their organizational paths and develop the ability to expand into advanced markets

Purpose This study aims to examine how senior foreign executives in a top management team catalyse strategic change in firms that originated from emerging markets (EMs). It further examines the moderating effects of organisational size and uncertainty avoidance (UA) on the positive relationship between senior foreign manager and strategic change in an organisation. Design/methodology/approach The panel data econometrics and multilevel analyses were adopted to run the model. The author tests hypotheses on 263 emerging market firms (EMFs), originating from nine EMs. Findings Empirical results reveal that senior foreign managers are active agents who can promote and implement strategic change in an organisation. They possess a different set of values, knowledge and experiences that can trigger strategic change. In addition, firm size and UA weaken the relationship between senior foreign manager ratio and strategic change of a firm.. Practical implications This study indicates that recruiting committees of EMFs should consider hiring senior foreign managers to foster a higher degree of strategic change. Nevertheless, firm size and UA may impose implementation difficulties for senior, foreign managers. As a result, the focal firm should be flexible and open to change. Originality/value This study aims to contribute to strategic change and top management team internationalisation literature by promoting the role of senior foreign managers and national culture on strategic change.

Purpose The purpose of this paper is to investigate how within-industry diversification affects the financial performance of small- and medium-sized enterprises (SMEs) in emerging markets (EMs). The authors draw on both the resource-based view and the institutional perspective and argue that within-industry diversification can enhance the financial performance of SMEs in EMs. Due to institutional voids in emerging economies, SMEs can gain additional benefits from scope economies, as well as from market returns, by filling product market voids and gaps in business ecosystems, while also enjoying low input and labor costs that reduce the coordination costs of diversification. This, in turn, enhances benefits of within-industry diversification, thereby resulting in higher financial profitability. Design/methodology/approach This study employs panel data econometrics to estimate the model. The authors test hypotheses on 195 firms, originating from five countries in Southeast Asia, during the period of 2009–2014. Findings The empirical results support the arguments. Within-industry diversification has a positive impact on the performance of SMEs in EMs. These effects become weaker when the institutional contexts are more developed. Nevertheless, such effects become stronger when SMEs in EMs are more efficient. Research limitations/implications The relationship between within-industry diversification and performance is a positive linear pattern, which differs from the pattern in advanced economies. In addition to unrelated diversification, the related diversification is preferable for firms in EMs. Practical implications The paper provides implications for SMEs that aim to enhance their performance by engaging in single product lines and within-industry diversification. Originality/value This paper examines the different ways within-industry diversification can enhance SMEs performance in EM contexts.

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