Article
Home country uncertainty and the international-performance relationship: Building an uncertainity management capability
Journal of World Business
(2017)
Abstract
We analyze the impact of home country uncertainty on the internationalization-performance relationship of
emerging market firms. Building on organizational learning theory and the institutional approach, we argue that
internationalization has a positive impact on the performance of emerging market firms, and that this relationship
is strengthened for firms based in emerging countries with higher corruption and political risk. The
reason is that by being exposed to high levels of home country uncertainty in the form of political risk and
corruption, firms develop an uncertainty management capability at home that helps them face the challenges of
internationalization better. We also propose that this uncertainty management capability helps emerging market
firms perform better outside of their home region. We test our arguments on a sample of 536 firms from
Argentina, Brazil, Chile, and Peru.
Keywords
- Internationalization,
- performance,
- uncertainty,
- political risk,
- corruption,
- emerging markets,
- multinational firms,
- Latin America,
- region
Disciplines
Publication Date
December, 2017
DOI
10.1016/j.jwb.2017.11.002
Publisher Statement
Version of record can be found through Elsevier.
Citation Information
Alvaro Cuervo-Cazurra, Luciano Ciravegna, Mauricio A. Melgarejo and Luis Lopez. "Home country uncertainty and the international-performance relationship: Building an uncertainity management capability" Journal of World Business Vol. 53 (2017) p. 209 - 221 ISSN: 1090-9516 Available at: http://works.bepress.com/mauricio-melgarejo/10/