Abstracts Category : Other

How Subnational Institutional Contexts Shape Corporate Strategy

by Cuifen Weng

Institutional explanations of corporate strategy in strategic management (SM) and international business (IB) research primarily conceptualize and operationalize institutions at national, supra-national, or field levels. This thesis argues that a subnational perspective addressing within-country institutional variability can enrich this research stream. It focuses on two areas of corporate strategy, corporate political activity (CPA) choices, and outward foreign direct investment (OFDI) decisions, and explores the influences of subnational-level informal and formal institutions in the Chinese context. Two empirical studies form its core. The first examines how a socialist logic legacy shapes contemporary city-level diversity as to the likelihood and degree of Chinese private firms CPA. It draws upon institutional logics, the imprinting literature, and resource dependence theory, and tests hypotheses on a 2012 sample of Chinese private firms in 21 cities. The findings suggest that, where the socialist logic legacy is weaker, firms are more likely to undertake CPA, and to a higher degree. This effect is moderated by firm size. The legacy also interacts with government corruption in influencing firms CPA. This study is among the first efforts to unpack the mechanisms through which city-level historical conditions continue to influence contemporary CPA. The second differentiates between provincial institutional constraints and provincial government support and investigates their respective influences on Chinese firms OFDI decisions. Drawing upon new institutional economics and the resource-based view, it uses a 2007-2013 panel dataset of Chinese firms in 28 provinces to test hypotheses. The results suggest that these two institutional elements shape firms OFDI decisions differently. Private firms and firms with prior OFDI experience are more likely to escape provincial institutional constraints, whereas state-owned enterprises (SOEs) and firms without OFDI experience are less likely to do so. Meanwhile, provincial government support provides incentives for firms with prior OFDI experience to conduct OFDI but not for firms without such experience. This study reconciles the paradoxical support and escape views of home-country institutional effects in the IB literature.In sum, this thesis reveals the importance of subnational-level history and government for richer institutional explanations of corporate strategy. It thus opens new avenues for future research in SM and IB.Advisors/Committee Members: Morgan, David, Management, Australian School of Business, UNSW, Sheldon, Peter, Management, Australian School of Business, UNSW.