IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Extending the internationalization process model: Increases and decreases of MNE commitment in emerging economies

Listed author(s):
  • Grazia D Santangelo

    (Facoltà di Scienze Politiche, Università degli Studi di Catania, Catania, Italy)

  • Klaus E Meyer

    (1] China Europe International Business School, Shanghai, China[2] School of Management, University of Bath, Bath, UK)

The internationalization process model suggests that firms internationalize by building positions in foreign markets and networks, following iterative cycles of learning and changes in commitment. However, as subsidiaries evolve, commitments may be decreased as well as increased, a phenomenon that has rarely been studied. Moreover, it remains an open question why strategic intentions at the outset of an investment project differ from the actual operations established. We address these questions by extending the model and combining it with Mintzberg and Waters’ framework of strategy formation. Specifically, we suggest that commitment decisions correspond to statements of intended strategy, while network positions correspond to realized strategies. The processes of learning, opportunity creation and trust building triggered by commitment decisions are, however, moderated by institutional influences that lead to divergences between realized and intended strategies. We test propositions derived from this framework on a survey data set of subsidiaries of multinational enterprises in Hungary, Lithuania and Poland, and find that institutional voids and institutional uncertainty affect subsidiary strategy implementation, but in opposing directions. Under high institutional uncertainty, investors prefer low commitment but flexible modes that enable later commitment increases, whereas institutional voids increase up-front information search and adaptation costs that reduce the likelihood of early post-entry adjustments. Our analysis reinforces the need for more differentiated theoretical analyses of how institutions affect business strategies over time.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Link to full text PDF
Download Restriction: Access to full text is restricted to subscribers.

File URL:
File Function: Link to full text HTML
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Palgrave Macmillan & Academy of International Business in its journal Journal of International Business Studies.

Volume (Year): 42 (2011)
Issue (Month): 7 (September)
Pages: 894-909

in new window

Handle: RePEc:pal:jintbs:v:42:y:2011:i:7:p:894-909
Contact details of provider: Web page:

Web page:

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pal:jintbs:v:42:y:2011:i:7:p:894-909. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.