As a consequence of the internationalization of logistics services into emerging markets, incumbent companies find themselves in foreign environments to which they have to adapt. The purpose of this study is to enhance understanding of how new institutional environments affect logistics service providers (LSPs) and how they adapt in terms of resources and capabilities. Combining the institutional environment perspective with the resource‐based view, we analyze the impact of institutions on foreign LSPs in the case of Russia. The case‐study‐based results suggest that the institutional environment, namely the political and social systems, as well as market liberalization, carries major implications in this context. Foreign LSPs need to adapt to the host market environment during internationalization in order to develop the capabilities associated with competitive logistics services. Further, the complexity of the offered services determines the degree of required adaptation.

Emerging markets and transition economies challenge established business theories. In this paper, we conceptualise a framework incorporating the institution-and resource-based view to analyse how institutions impact the operations of western companies in a transition economy context: foreign third party logistics service providers (3PLs) in Russia. Our case study's findings center on the question of how institutions affect foreign 3PLs' local operations in Russia along six resource and six institutional dimensions.