Institutional voids and their impact on entry decisions and strategy implementation

Abstract

This research investigates the ways institutional voids affect the process of internationalization of a firm entering an emerging market in the energy sector. More precisely, the study presented aims to draw conslusions about the importance of institutional context for entry decisions and strategy implementation when expanding to an emerging market. To answer this research question, a case study on the internaitonalization process of EDP in Peru was conducted. The results obtained suggest that companies become more and more aware of the importance of institutional voids for the future of the projects in emerging markets. Before the entry decision takes place, company analyzes deeply the institutional context. Entry mode changes accordingly to the perceived risk coming from the insuffcient institutionalization. Overall strategy connected with different areas, for instance capital and labor markets and various stakeholders like government and society is adjusted accordingly to the characteristics of the market. The final conclusion is that the overall strategy has to be tailored to the specific institutional context. Sometimes the difference between the home and host country is rather a matter of nuance and the art of addressing it, makes companies successful.

Date of Award	29 Oct 2015
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Laure Leglise (Supervisor)