Business under adverse home country institutions: The case of international sanctions against Myanmar

Abstract

We expand the institutional perspective of international business by exploring the range of institutions outside the host country that influence international business. We use a critical case, Myanmar, to explore the dynamics of institutional constraints and the reaction of business to such constraints. Our in-depth case analysis focuses on four industries for the period 1996 to 2011. On this basis, we develop the concept of 'low profile strategy' and propose a conceptual framework of home country pressures influencing multinational enterprises' international operation, and the variation of their impact across industries and firms. This framework provides a foundation for future work on the extraterritorial effects of institutions in international business.

Home country institutions and the internationalization of state owned enterprises: A cross-country analysis

“…Second, we contribute to the discussion on how and why institutions of a country influence firms beyond the boundaries of the country (Jackson & Deeg, 2008;Meyer & Thein, 2014). Institutions create incentives and constraints on strategic choices, which in turn influence firms' drive and ability to invest in foreign environments rather than in their home country.…”

“…We contribute to the management literature by advancing the institutional perspective to examine the acknowledged yet rarely systematically investigated relationship between home country institutions and MNE strategies (Meyer & Thein, 2014;Morck et al, 2008;Nielsen & Nielsen, 2010).…”

Theoretical Foundations

“…Strong pressures may arise from home country legal requirements, but normative pressures induce some firms to react ahead of the formalization of new requirements (Meyer & Thein, 2014).…”

“…Some of these pressures discriminate between firms from different countries of origins or in particular organizational forms deemed to lack legitimacy in the host society. For example, SOEs face particular pressures to demonstrate their legitimacy in countries that have few SOEs of their own (Meyer et al, 2014). A lack of legitimacy in the eyes of key stakeholders in the host society thus increases the possibility of government intervention, and hence political risk (Stevens, Xie, & Peng, 2015).…”

Essays on the Effectiveness of Multinational Enterprises in Boosting Corporate Social Responsibility in Host Business Environment

“…To overcome LOF, MNEs may take economic adaptation strategies (e.g., adjust entry mode, avoid asset-specific investments) (Eden & Miller, 2004;Kostova & Zaheer, 1999;Xu & Shenkar, 2002;Meyer & Thein, 2014) with the purpose of enhancing legitimacy, reducing public visibility as a foreign entity and minimizing the likelihood of being challenged. Besides the economic adaptation practices (Zhao, Park & Zhou, 2014), MNEs are also suggested to adopt social adaptation activities (e.g., CSR activities) (Gardberg & Formbrun, 2006;Zhao, Park & Zhou, 2014) which can help MNEs sustain operations in host countries, and significantly improve and change…”