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The Impact of Home Market Institutional Conditions on Market Entry Strategies of Firms from Emerging Markets
In this chapter the authors report on a study that explores how and to what extent two aspects of the regulatory institutional environment, corruption and a particular market’s legal system strength, influence the overall market expansion patterns of firms from a focal market to other foreign markets. These relationships are viewed using an imprinting theory lens, which suggests that firms’ home market institutions become imprinted on their strategies and behaviors. Using data on international trademark registrations and institutional conditions for several emerging markets over a period of 14 years (1999-2012), corruption is found to be negatively associated with both the overall intensity and scope of market expansion of firms from a particular market. In addition, while the level of strength of the emerging market’s legal system is negatively associated with the scope of international expansion, it is positively associated with the intensity of market expansion.