Understanding When MNCs can Overcome Institutional Distance: A Research Agenda

Classic research in international business has emphasized the constraining effects of host institutions on the behavior of foreign Multinational corporations (MNCs). Meanwhile, other research shows why this type of organization may be uniquely positioned to engage in behavior deviating from standard practice in a certain setting, and how it may do so over the course of engaging with host environments in order to overcome the distance between home and host country. We know significantly less about when particular context conditions actually translate into behavior involving MNCs overcoming institutional distance. Drawing on facets of the comparative capitalisms literature, this paper maps out how institutional distance involves four key dimensions: coordination, strength, thickness, and resources. The paper argues that the particular combination of these dimensions forming configurations of institutional distance will influence when MNCs are able to overcome distance, conceptualized as behaving in deviant ways. A research agenda is developed, paying special attention to how complex causal effects can be studied using qualitative comparative analysis and multiple case studies. More broadly, this paper refines and enriches our understanding of the context conditions that make deviant firm behavior possible.