IDEAS home Printed from https://ideas.repec.org/a/eee/intman/v14y2008i3p217-231.html
   My bibliography  Save this article

Adapting to market liberalization: The role of dynamic capabilities, initial resource conditions, and strategic path choices in determining evolutionary fitness of Less Developed Country (LDC) firms

Author

Listed:
  • Malik, Omar R.

Abstract

Economic liberalization leads to higher competitive intensity that spurs strategic changes in LDC domestic firms. I apply the dynamic capabilities lens to post-liberalization adaptation of LDC domestic firms. Based upon the logic of fit, I argue that initial resource conditions, strategic paths, and requisite dynamic capabilities must match to enhance evolutionary fitness of firms. I propose that LDC firms with strong core and complementary capabilities will adopt strategies of increasing scale and scope, along with cultivating an acquisition dynamic capability to enhance fitness. LDC firms with weak core but strong complementary capabilities could enhance fitness by forming rent-creating alliances with Multinational Enterprises (MNE), and building relational dynamic capabilities. Finally, LDC firms with weak core and complementary capabilities can gain benefits towards fitness by enacting political strategies supported by political dynamic capabilities.

Suggested Citation

  • Malik, Omar R., 2008. "Adapting to market liberalization: The role of dynamic capabilities, initial resource conditions, and strategic path choices in determining evolutionary fitness of Less Developed Country (LDC) firms," Journal of International Management, Elsevier, vol. 14(3), pages 217-231, September.
    • Handle: RePEc:eee:intman:v:14:y:2008:i:3:p:217-231
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1075425308000483
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James R. Tybout, 2000. "Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 11-44, March.
    2. Louis T. Wells, 1983. "Third World Multinationals: The Rise of Foreign Investments from Developing Countries," MIT Press Books, The MIT Press, edition 1, volume 1, number 026273169x, December.
    3. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    4. Tarun Khanna, 1998. "The Scope of Alliances," Organization Science, INFORMS, vol. 9(3), pages 340-355, June.
    5. Annette L. Ranft & Michael D. Lord, 2002. "Acquiring New Technologies and Capabilities: A Grounded Model of Acquisition Implementation," Organization Science, INFORMS, vol. 13(4), pages 420-441, August.
    6. Oliver E. Williamson, 1991. "Strategizing, economizing, and economic organization," Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 75-94, December.
    7. Richard A. Bettis & C. K. Prahalad, 1995. "The dominant logic: Retrospective and extension," Strategic Management Journal, Wiley Blackwell, vol. 16(1), pages 5-14.
    8. Lecraw, Donald J, 1977. "Direct Investment by Firms from Less Developed Countries," Oxford Economic Papers, Oxford University Press, vol. 29(3), pages 442-457, November.
    9. Stegemann, Klaus, 1989. "Policy rivalry among industrial states: what can we learn from models of strategic trade policy?," International Organization, Cambridge University Press, vol. 43(1), pages 73-100, January.
    10. Michael G. Jacobides, 2006. "The architecture and design of organizational capabilities," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 15(1), pages 151-171, February.
    11. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    12. Christoph Zott, 2003. "Dynamic capabilities and the emergence of intraindustry differential firm performance: insights from a simulation study," Strategic Management Journal, Wiley Blackwell, vol. 24(2), pages 97-125, February.
    13. Sidney G. Winter, 2000. "The Satisficing Principle in Capability Learning," Strategic Management Journal, Wiley Blackwell, vol. 21(10‐11), pages 981-996, October.
    14. David J. Collis, 1994. "Research Note: How Valuable are Organizational Capabilities?," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 143-152, December.
    15. Prashant Kale & Harbir Singh, 2007. "Building firm capabilities through learning: the role of the alliance learning process in alliance capability and firm‐level alliance success," Strategic Management Journal, Wiley Blackwell, vol. 28(10), pages 981-1000, October.
    16. Mahoney, Joseph T., 1995. "The management of resources and the resource of management," Journal of Business Research, Elsevier, vol. 33(2), pages 91-101, June.
    17. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
    18. Juha-Antti Lamberg & Henrikki Tikkanen, 2006. "Changing sources of competitive advantage: cognition and path dependence in the Finnish retail industry 1945--1995," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 15(5), pages 811-846, October.
    19. Yasemin Y. Kor & Joseph T. Mahoney & Steven C. Michael, 2007. "Resources, Capabilities and Entrepreneurial Perceptions," Journal of Management Studies, Wiley Blackwell, vol. 44(7), pages 1187-1212, November.
    20. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
    21. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    22. William P. Wan, 2005. "Country Resource Environments, Firm Capabilities, and Corporate Diversification Strategies," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 161-182, January.
    23. Sidney G. Winter & Gabriel Szulanski, 2001. "Replication as Strategy," Organization Science, INFORMS, vol. 12(6), pages 730-743, December.
    24. Prashant Kale & Harbir Singh & Howard Perlmutter, 2000. "Learning and protection of proprietary assets in strategic alliances: building relational capital," Strategic Management Journal, Wiley Blackwell, vol. 21(3), pages 217-237, March.
    25. Helfat, C.E. & Raubitschek, R.S., 2000. "Product Sequencing: Co-Evolution of Knowledge, Capabilities and Products," Papers 00-1, U.S. Department of Justice - Antitrust Division.
    26. Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(4), pages 725-760, August.
    27. Mike Wright & Igor Filatotchev & Robert E. Hoskisson & Mike W. Peng, 2005. "Strategy Research in Emerging Economies: Challenging the Conventional Wisdom," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 1-33, January.
    28. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-540, September.
    29. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
    30. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply," Management Science, INFORMS, vol. 35(12), pages 1514-1514, December.
    31. Teece, David J., 2006. "Reflections on "Profiting from Innovation"," Research Policy, Elsevier, vol. 35(8), pages 1131-1146, October.
    32. Constance E. Helfat, 1997. "Know‐how and asset complementarity and dynamic capability accumulation: the case of r&d," Strategic Management Journal, Wiley Blackwell, vol. 18(5), pages 339-360, May.
    33. Sidney G. Winter, 2003. "Understanding dynamic capabilities," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 991-995, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oehmichen, Jana & Puck, Jonas, 2016. "Embeddedness, Ownership Mode and Dynamics, and the Performance of MNE Subsidiaries," Journal of International Management, Elsevier, vol. 22(1), pages 17-28.
    2. Dau, Luis Alfonso & Moore, Elizabeth M. & Kostova, Tatiana, 2020. "The impact of market based institutional reforms on firm strategy and performance: Review and extension," Journal of World Business, Elsevier, vol. 55(4).
    3. Xi’na Yuan & Sohyoun Shin & Xinming He & Sang Yong Kim, 2016. "Innovation capability, marketing capability and firm performance: A two-nation study of China and Korea," Asian Business & Management, Palgrave Macmillan, vol. 15(1), pages 32-56, February.
    4. Lee, Po-Yen & Lin, Hui-Tzu & Chen, Hung-Hsin & Shyr, Yi-Hwan, 2011. "Dynamic capabilities exploitation of market and hierarchy governance structures: An empirical comparison of Taiwan and South Korea," Journal of World Business, Elsevier, vol. 46(3), pages 359-370, July.
    5. Stav Fainshmidt & Amir Pezeshkan & M. Lance Frazier & Anil Nair & Edward Markowski, 2016. "Dynamic Capabilities and Organizational Performance: A Meta-Analytic Evaluation and Extension," Journal of Management Studies, Wiley Blackwell, vol. 53(8), pages 1348-1380, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pettus, Michael L. & Kor, Yasemin Y. & Mahoney, Joseph T., 2007. "A Theory of Change in Turbulent Environments: The Sequencing of Dynamic Capabilities Following Industry Deregulation," Working Papers 07-0100, University of Illinois at Urbana-Champaign, College of Business.
    2. Omar R. Malik & Masaaki Kotabe, 2009. "Dynamic Capabilities, Government Policies, and Performance in Firms from Emerging Economies: Evidence from India and Pakistan," Journal of Management Studies, Wiley Blackwell, vol. 46(3), pages 421-450, May.
    3. Schriber, Svante & Löwstedt, Jan, 2015. "Tangible resources and the development of organizational capabilities," Scandinavian Journal of Management, Elsevier, vol. 31(1), pages 54-68.
    4. Pinho, José Carlos & Prange, Christiane, 2016. "The effect of social networks and dynamic internationalization capabilities on international performance," Journal of World Business, Elsevier, vol. 51(3), pages 391-403.
    5. Nicolaï Foss & Nils Stieglitz, 2012. "Modern Resource-based Theory(ies)," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 20, Edward Elgar Publishing.
    6. Cristina Fernandes & João J. Ferreira & Mário L. Raposo & Cristina Estevão & Marta Peris-Ortiz & Carlos Rueda-Armengot, 2017. "The dynamic capabilities perspective of strategic management: a co-citation analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 112(1), pages 529-555, July.
    7. Yuan, Chun & Xue, Doudou & He, Xin, 2021. "A balancing strategy for ambidextrous learning, dynamic capabilities, and business model design, the opposite moderating effects of environmental dynamism," Technovation, Elsevier, vol. 103(C).
    8. Corinne A. Coen & Catherine A. Maritan, 2011. "Investing in Capabilities: The Dynamics of Resource Allocation," Organization Science, INFORMS, vol. 22(1), pages 99-117, February.
    9. Jaideep Anand & Raffaele Oriani & Roberto S. Vassolo, 2010. "Alliance Activity as a Dynamic Capability in the Face of a Discontinuous Technological Change," Organization Science, INFORMS, vol. 21(6), pages 1213-1232, December.
    10. Kraaijenbrink, Jeroen & Spender, JC & Groen, Aard, 2009. "The resource-based view: A review and assessment of its critiques," MPRA Paper 21442, University Library of Munich, Germany.
    11. Giovanni. Gavetti & Daniel A. Levinthal, 2004. "50th Anniversay Article: The Strategy Field from the Perspective of Management Science: Divergent Strands and Possible Integration," Management Science, INFORMS, vol. 50(10), pages 1309-1318, October.
    12. Rakesh B. Sambharya & Jooh Lee, 2014. "Renewing Dynamic Capabilities Globally: An Empirical Study of the World’s Largest MNCs," Management International Review, Springer, vol. 54(2), pages 137-169, April.
    13. Reha Karadag & Laura Poppo, 2023. "Strategic resource decay," Strategic Management Journal, Wiley Blackwell, vol. 44(6), pages 1534-1561, June.
    14. Toshiro Wakayama & Karen LaPierre, 2015. "Dynamic Capabilities In The Presence Of A Strategic Paradox," Working Papers EMS_2015_01, Research Institute, International University of Japan.
    15. Abdulrahman Al–Aali & David J. Teece, 2014. "International Entrepreneurship and the Theory of the (Long–Lived) International Firm: A Capabilities Perspective," Entrepreneurship Theory and Practice, , vol. 38(1), pages 95-116, January.
    16. Makkonen, Hannu & Pohjola, Mikko & Olkkonen, Rami & Koponen, Aki, 2014. "Dynamic capabilities and firm performance in a financial crisis," Journal of Business Research, Elsevier, vol. 67(1), pages 2707-2719.
    17. Mahka Moeen, 2017. "Entry into Nascent Industries: Disentangling a Firm's Capability Portfolio at the Time of Investment Versus Market Entry," Strategic Management Journal, Wiley Blackwell, vol. 38(10), pages 1986-2004, October.
    18. Jean-Philippe Vergne & Colette Depeyre, 2015. "How do firms adapt? A fuzzy-set analysis of the role of cognition and capabilities in U.S. defense firms’ responses to 9/11," Post-Print hal-01274005, HAL.
    19. Nickerson, Jack A. & Yen, C. James & Mahoney, Joseph T., 2011. "Exploring the Problem-Finding and Problem-Solving Approach for Designing Organizations," Working Papers 11-0107, University of Illinois at Urbana-Champaign, College of Business.
    20. Nieves, Julia & Haller, Sabine, 2014. "Building dynamic capabilities through knowledge resources," Tourism Management, Elsevier, vol. 40(C), pages 224-232.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:intman:v:14:y:2008:i:3:p:217-231. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/601266/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.