The impact of institutional void on the internationalization of multinational corporations

Purpose To navigate institutional pressures, emerging market multinational corporations (EMNCs) often adopt various nonmarket strategies to differentiate themselves in global arena, seeking a competitive edge in a highly contested environment. This research examines the impact of nonmarket strategies on the internationalization of EMNCs within low institutionally developed countries. The study leverages neo-institutional theory, the resource dependence perspective and the concept of resilience. Design/methodology/approach This paper identifies ISO-certification and board gender diversity (BGD) as nonmarket strategies adopted by emerging markets multinationals to establish legitimacy in foreign markets. To assess their impact, a two-step system generalized method of moments and a propensity score matching have been endorsed. Findings Adopting ISO certification and enhancing BGD bolsters internal capabilities, enabling the firm to better face sudden changes, crises and challenges in both local and foreign markets. This, in turn, might enable the company to build resilience, particularly within its home country. Accordingly, it is expected that ISO certification and BGD would engender a positive impact on EMCs’ internationalization. Nevertheless, where the empirical inquiry confirms that ISO certification produces a positive impact on the internationalization of EMNCs, surprisingly, BGD tends to mitigate this process. It should be a result of board heterogeneity as well as a consequence of the social dynamics within. Originality/value Given the institutional context, the paper identifies strategies (ISO 14001 certification and BGD) as nonmarket strategies with different effects on the EMNCs’ internationalization. Our findings contribute to the field of international business and offer strategic and managerial implications.