Purpose The purpose of this study is to develop a more nuanced understanding of how institutions (home–host contextual influences) impact MNE strategic choices. Although research on real options reasoning (ROR) has grown rapidly over the last 20 years in international business (IB) research, the understanding of how institutions (the influences of home and host countries) impact multinational enterprise (MNE) strategic decision-making remains limited. Most studies have treated the national contexts of MNEs as homogeneous, largely drawing on indices and scores (e.g. Hofstede) while overlooking the wide variety of IB contexts in which MNEs operate and originate. Design/methodology/approach This study proposes a framework-based, systematic literature review based on 96 real options studies published in the last 20 years and provides directions for future research. Findings This review provides a detailed literature review on ROR studies, offering a contextual perspective that highlights how context has been treated as a simple dichotomy of developed vs emerging economies or through an index-based approach, while proposing how different institutional contexts impact decision-making. This is accompanied by an integrated framework resulting from the review findings, which identifies the research gaps and forms recommendations for future research. Originality/value Focusing on home–host contextual influences, this study proposes a holistic perspective on how combinations of home and host environments affect MNE strategic choices. Through the authors’ review, the authors develop an integrated framework that incorporates contextual (home–host) influences into strategic choices. This study also extends the boundaries of the ROR perspective by introducing additional contextual factors from the institutional domains of the economy, grounded in economic sociology (varieties of capitalism) and international political economy (patrimonial capitalism).
Kyriakopoulos et al. (Thu,) studied this question.