Institutional distance influences on the multinational enterprises (MNES) ownership strategies of their affiliates operating in an emerging market

摘要

Building on Scott’s (1995, 2001) three pillars –cognitive, normative and regulative–, this paper examines how the institutional differences between the home and host country influence the entry strategies of the multinational enterprises (MNEs). Based on a dataset of 3716 foreign affiliates in an emerging market, this paper explores the entry mode (ownership structure) of the MNEs from 49 different home countries over the period 1995 to 2003. The effect of the institutional distance on the entry strategies of the MNEs is tested through binominal logistic regression analysis in which a series of the indigenous and endogenous control variables are taken into account. The findings show that the cognitive distance factor is more important than either the normative or regulative distances in influencing entry strategies of the MNEs. Moreover, the results show that the entry mode of the MNEs are explained in light of the economic crisis, the international openness of the home country of the MNE and the size of the foreign direct investment operating in a country as well as the institutional distance.