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Home government influence on Russian MNEs: balancing control against interest

Home government influence on Russian MNEs: balancing control against interest PurposeThe purpose of this paper is to provide a better understanding of how the government influences the internationalization of emerging MNEs and, more specifically, answer the questions how and to what extent does the combination of the home country government’s control and interest influence Russian MNEs.Design/methodology/approachFirst, the author examined sector-specific factors and institutional forces that affect the development of the Russian economy’s industries. Second, the author has classified the sectors included in this study into four groups according to the following two main criteria: the interest of the government in the development of the sector, and the degree of state control for the firms in the sector. Third, the author has analyzed the forms and types of the government participation in firms’ internationalization in defined groups based on the observation of industries’ legislative acts and state decrees and orders. After that, the author has verified the existence of certain similarities of strategies under the governmental influence, and finally discussed the extent of the control and interest implied by the government toward these firms.FindingsAfter analyzing the patterns of the state involvement in firms’ internationalization in various groups the author found that some of the groups are characterized by similar types of government role and their responses are, also, sometimes similar. The author presents a more detailed look at the above results in Table III, and explain the two-sided role of the government in different groups of firms.Research limitations/implicationsWhile the literature emphasizes that institutional forces shape the internationalization of emerging multinational enterprises, they have not been comprehensively linked to explaining the contradictory role of the government in this process. The author addresses this gap by examining an integrated influence that home government factors (namely, control and interest) exert in enabling firms to compete abroad. In addition, the author contributes to the knowledge about the behavior of Russian firms, which is one of the less researched areas in the field of international management.Practical implicationsThe paper also has value for companies’ strategists as it provides them with understanding of the complexity of government-related determinants influencing the internationalization process of their firms and the types of firms’ abilities to be developed or supported. It also provides a practical tool for modeling their international strategy formation and accounting for different types of state influences on internationalization of EM firms.Originality/valueThis paper highlights the government-related aspects of the internationalization of Russian MNEs. Even when they go abroad with strong product capabilities and a proactive managerial style, they still benefit from home country institutional resources. The author sees the strength of the empirical findings in further extension of the understanding of origins, consequences and prospects of internationalization of emerging market firms with the home government involvement. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Emerging Markets Emerald Publishing

Home government influence on Russian MNEs: balancing control against interest

Panibratov, Andrei
International Journal of Emerging Markets , Volume 11 (4): 23 – Sep 19, 2016
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References (46)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1746-8809
DOI
10.1108/IJoEM-11-2014-0193
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to provide a better understanding of how the government influences the internationalization of emerging MNEs and, more specifically, answer the questions how and to what extent does the combination of the home country government’s control and interest influence Russian MNEs.Design/methodology/approachFirst, the author examined sector-specific factors and institutional forces that affect the development of the Russian economy’s industries. Second, the author has classified the sectors included in this study into four groups according to the following two main criteria: the interest of the government in the development of the sector, and the degree of state control for the firms in the sector. Third, the author has analyzed the forms and types of the government participation in firms’ internationalization in defined groups based on the observation of industries’ legislative acts and state decrees and orders. After that, the author has verified the existence of certain similarities of strategies under the governmental influence, and finally discussed the extent of the control and interest implied by the government toward these firms.FindingsAfter analyzing the patterns of the state involvement in firms’ internationalization in various groups the author found that some of the groups are characterized by similar types of government role and their responses are, also, sometimes similar. The author presents a more detailed look at the above results in Table III, and explain the two-sided role of the government in different groups of firms.Research limitations/implicationsWhile the literature emphasizes that institutional forces shape the internationalization of emerging multinational enterprises, they have not been comprehensively linked to explaining the contradictory role of the government in this process. The author addresses this gap by examining an integrated influence that home government factors (namely, control and interest) exert in enabling firms to compete abroad. In addition, the author contributes to the knowledge about the behavior of Russian firms, which is one of the less researched areas in the field of international management.Practical implicationsThe paper also has value for companies’ strategists as it provides them with understanding of the complexity of government-related determinants influencing the internationalization process of their firms and the types of firms’ abilities to be developed or supported. It also provides a practical tool for modeling their international strategy formation and accounting for different types of state influences on internationalization of EM firms.Originality/valueThis paper highlights the government-related aspects of the internationalization of Russian MNEs. Even when they go abroad with strong product capabilities and a proactive managerial style, they still benefit from home country institutional resources. The author sees the strength of the empirical findings in further extension of the understanding of origins, consequences and prospects of internationalization of emerging market firms with the home government involvement.

Journal

International Journal of Emerging Markets – Emerald Publishing

Published: Sep 19, 2016

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