Institutional forces in adoption of international joint ventures: Empirical evidence from British retail multinationals

In this study, we used institutional theory as a lens to understand the factors that influence the adoption of international joint ventures. Drawing on case evidence from British retail multinationals, we found MNEs adopting IJVs to manage a range of host market institutional pressures and to build legitimacy in foreign markets. Normative institutional legitimacy with customers, property agents and employees emerged as particularly salient for MNEs in our retail cases. The findings further indicated that IJV-derived legitimacy is central to market entry and development objectives. Finally, contrary to institutional theory's central assumption that MNEs seek to conform to institutional pressures, we find IJVs enabling MNEs to practice non-conforming responses, including negotiating and altering local social norms.

► We apply institutional theory to understand why MNEs use IJVs.
► The research is based on three case studies of retail MNEs.
► MNEs adopt IJVs to both conform to and manipulate host market norms and values.
► IJV choice is intentional, proactive and strategic.
► MNEs from certain industries may be sensitive to certain institutional pressures.