Institutional Explanations of Cross-border Alliance Modes: The Case of Emerging Economies Firms

Using a sample of 628 cross-border alliances established by emerging economies firms across 25 manufacturing and service industries in 64 host countries in the period 1995-2004, we investigate the effect of institutional factors on the adoption of equity alliance mode. The findings of this study contribute to empirical research in institutional theory, institutional explanations of cross-border alliances and strategic behavior of emerging economies firms. We find support for institutional explanations of the adoption of equity alliance mode by emerging economies firms. We also find that institutional effects are contingent on the alliance location. When emerging economies firms establish alliances in developed host countries, their governance choice is most influenced by the normative pillar, followed by the cognitive pillar, with the regulatory pillar having a negligible effect. When the host countries are emerging economies, the regulatory pillar has the strongest influence followed by the cognitive pillar, with the normative pillar having an insignificant effect.