TY - JOUR
T1 - The interplay between home and host country institutions in an emerging market context
T2 - Private equity in Latin America
AU - Mingo, Santiago
AU - Junkunc, Marc
AU - Morales, Francisco
N1 - Funding Information:
We thank the special issue editors, Alvaro Cuervo-Cazurra, Yadong Luo and Ravi Ramamurti, and three anonymous reviewers who guided and supported us during the review process. The authors also thank Mauro Guillén, Mona Makhija, Steve Tallman, Laszlo Tihanyi, and Stephanie Wang, as well as seminar participants at the Academy of Management Annual Meeting, Strategic Management Society Annual International Conference, Academy of International Business-Latin American Conference, and Pontificia Universidad Católica de Chile for their valuable feedback. The authors acknowledge the research assistance of Andrew Grizzle, Camilo Jara, and Michael Roman. The authors are grateful to Eduardo Roman (Latin America Private Equity & Venture Capital Association) for sharing his expertise on the private equity sector in Latin America. Funding for this work was provided by the Center for International Business Education and Research (CIBER) at the University of Miami, FONDECYT through grants 11121592 and 1181764, and Millennium Nucleus in Entrepreneurial Strategy Under Uncertainty (NS130028). This article builds on some of the ideas and data presented by the authors at the 2012 AIB-LAT Conference in Miami that was later included in one of the chapters of a proceedings book associated with the conference (Mingo, Morales, & Junkunc, 2013). Any errors or omissions are those of the authors.
Funding Information:
We thank the special issue editors, Alvaro Cuervo-Cazurra, Yadong Luo and Ravi Ramamurti, and three anonymous reviewers who guided and supported us during the review process. The authors also thank Mauro Guillén, Mona Makhija, Steve Tallman, Laszlo Tihanyi, and Stephanie Wang, as well as seminar participants at the Academy of Management Annual Meeting, Strategic Management Society Annual International Conference, Academy of International Business-Latin American Conference, and Pontificia Universidad Católica de Chile for their valuable feedback. The authors acknowledge the research assistance of Andrew Grizzle, Camilo Jara, and Michael Roman. The authors are grateful to Eduardo Roman (Latin America Private Equity & Venture Capital Association) for sharing his expertise on the private equity sector in Latin America. Funding for this work was provided by the Center for International Business Education and Research (CIBER) at the University of Miami, FONDECYT through grants 11121592 and 1181764 , and Millennium Nucleus in Entrepreneurial Strategy Under Uncertainty ( NS130028 ). This article builds on some of the ideas and data presented by the authors at the 2012 AIB-LAT Conference in Miami that was later included in one of the chapters of a proceedings book associated with the conference ( Mingo, Morales, & Junkunc, 2013 ). Any errors or omissions are those of the authors.
Publisher Copyright:
© 2018 Elsevier Inc.
PY - 2018/11
Y1 - 2018/11
N2 - This study examines how the interplay between home and host country regulatory institutions affects the investment strategy of private equity (PE) firms in an emerging market context. To answer this question, we consider three different mechanisms: (1) the institutional hazard avoidance effect, (2) the institutional escapism effect, and (3) the dysfunctional institutions effect. Contrary to conventional wisdom, we argue that regulatory institutional differences between home and host countries can sometimes have a positive rather than a negative effect on investment likelihood. Our findings show that when a host emerging market has a strong regulatory institutional system relative to other emerging markets, it is more likely that this country will attract PE investments from firms based in home countries with very strong and very weak institutional systems. The empirical analyses, based on a polynomial specification and a dataset covering more than 300 PE firms that made close to 1500 investment transactions in Latin America during 1996–2011, are consistent with our main theoretical arguments.
AB - This study examines how the interplay between home and host country regulatory institutions affects the investment strategy of private equity (PE) firms in an emerging market context. To answer this question, we consider three different mechanisms: (1) the institutional hazard avoidance effect, (2) the institutional escapism effect, and (3) the dysfunctional institutions effect. Contrary to conventional wisdom, we argue that regulatory institutional differences between home and host countries can sometimes have a positive rather than a negative effect on investment likelihood. Our findings show that when a host emerging market has a strong regulatory institutional system relative to other emerging markets, it is more likely that this country will attract PE investments from firms based in home countries with very strong and very weak institutional systems. The empirical analyses, based on a polynomial specification and a dataset covering more than 300 PE firms that made close to 1500 investment transactions in Latin America during 1996–2011, are consistent with our main theoretical arguments.
KW - Emerging markets
KW - Home country institutions
KW - Host country institutions
KW - Latin America
KW - Private equity
UR - http://www.scopus.com/inward/record.url?scp=85045109147&partnerID=8YFLogxK
U2 - 10.1016/j.jwb.2018.03.005
DO - 10.1016/j.jwb.2018.03.005
M3 - Article
AN - SCOPUS:85045109147
SN - 1090-9516
VL - 53
SP - 653
EP - 667
JO - Journal of World Business
JF - Journal of World Business
IS - 5
ER -