International diversification of the emerging-market enterprises: A multi-level examination

This study develops a cross-level research model based on insights from the capabilities view and institutional theory. We examine the drivers of international diversification for firms from emerging economies, specifically how top managers’ prior experiences and a favorable institutional environment for human capital affects the international diversification of emerging-market enterprises (EMEs). This research demonstrates that firm- and country-level factors collectively influence the international diversification of EMEs. We find that an EME whose top managers have global managerial and technological experiences is more likely to venture into international markets when a favorable institutional environment provides globally competitive, highly skilled human capital. This study demonstrates that for a multidimensional phenomenon such as EMEs’ international diversification, a more complete picture emerges given a theoretical framework that builds on diverse perspectives which are empirically tested across levels.

► We examine the drivers of internationalization for emerging-market enterprises (EMEs).
► We find that both the firm-level and the country-level factors collectively influence internationalization of EMEs.
► Top managers’ having global managerial and technological experiences motivate EMEs’ internationalization.
► Favorable institutional environment adds to managerial and technological experiences in motivating internationalization.
► Global managerial and technological experiences along with favorable institutions produce the strongest relationship.