How institutional voids influence liability of foreignness for Multinationals operating in emerging markets

Abstract

Multinational corporations operating in emerging markets have to be able to operate within the institutional context of those markets. Emerging markets institutions are mostly in transition or remain undeveloped and create a variety of institutional voids. International Business scholars have also been grappling with understanding how multinational corporations deal with liability of foreignness in the host environments in which they operate. The research canvassed the views from multinationals operating in South Africa as an emerging market. This study relies on institutional theory to understand how the institutional voids in emerging markets create specific liabilities of foreignness for the multinational corporations. How multinational corporations respond to these liabilities of foreignness is investigated.