This dissertation examines institutional voids, investment purposes/motives of multinational enterprises (MNEs), and the divestment of foreign subsidiaries. By drawing on insights from multiple theories—including the new institutional economics and industrial organization theory—and integrating data from multiple sources, the dissertation contributes to a better understanding of institutional voids and their economic (transaction-cost) and strategic (market-power) implications. It also advances useful theoretical and empirical insights regarding MNE investment purposes/motives and their interaction with host-country institutional voids to influence foreign subsidiary exit. This dissertation builds a foundation for a broader research agenda that can generate a number of promising research directions.