Country Resource Environments, Firm Capabilities, and Corporate Diversification Strategies*

Abstract

 Environmental differences among countries are often assumed away in strategy research. In particular, the unique contexts of the emerging economies have not been considered adequately in extant research. I bring country environmental contexts to the foreground and conceptualize various types of economies (developed economies, emerging economies, institution-driven high growth emerging economies, and factor-driven high growth emerging economies) as dissimilar types of country resource environments that provide firms with country resources: factors and institutions. To compete successfully, firms will find it more optimal to emphasize appropriate firm capabilities (market capabilities and non-market capabilities) and corporate diversification strategy (product and international diversification). By integrating insights from institutional economics and resource-based view, this paper offers a conceptual framework to examine the multifaceted relationships linking firm capabilities and corporate diversification across dissimilar country resource environments.

Internationalization and innovation performance of emerging market enterprises: The role of host-country institutional development

“…scientists, designers and engineers) which can enhance the firm's innovation performance (Florida, 1997;Tung, 2007). In addition, because countries with well-endowed institutional settings are also characterized by dynamic and competitive local business environments they compel foreign subsidiaries to continuously upgrade their capabilities and keep up with the competition to ensure future survival and growth (Birkinshaw & Hood, 1998;Wan, 2005).…”

Drivers of environmental management in the Brazilian context

“…In Brazil, recent growth opportunities have been characterized by the focus on the exploration of factor markets (Wan, 2005), more specifically endowed factors derived from the natural environment. While the recent economic growth has been factor driven, for instance in the case of the expansion of agribusiness and extractive industries, the institutional framework has not advanced as much (Hoskisson et al, 2013;Rodrigues, 2013;Wan, 2005).…”

“…While the recent economic growth has been factor driven, for instance in the case of the expansion of agribusiness and extractive industries, the institutional framework has not advanced as much (Hoskisson et al, 2013;Rodrigues, 2013;Wan, 2005). In terms of environmental protection, Brazilian legislation provides for legal sanctions against polluters, however there is limited enforcement capacity (Brito & Barreto, 2006).…”

Influência governamental e estratégias institucionais na difusão de inovações em economias emergentes

“…Outros destacam a necessidade de elevado grau de proteção jurídica à propriedade intelectual, para que os inovadores tenham a garantia de poder usufruir os eventuais frutos de seu esforço (Keefer e Knack, 1997). Nas economias emergentes, entretanto, o estágio de evolução da infra-estrutura econômica e institucional faz com que muitos desses mecanismos ainda sejam considerados incipientes, frá-geis ou de difícil aplicação (World Bank, 1998Wan, 2005). Em casos extremos, pode ocorrer o que Khanna e Palepu (1997) descreveram como situações de vácuo institucional, caracterizadas pela ineficiência dos mecanismos de ação governamental ou mesmo pela sua pura e simples ausência.…”