The Institution-based View of Internationalization of Emerging Market Enterprises (EMEs): Research of Chinese Firms’ Outward FDI Based on Case-studies of Wanda Group’s Internationalization Strategy

This research examines the internationalization activities of emerging market enterprises (EMEs). Through systematically and critically analysing and evaluating one leg of international business strategy tripod (resource-based view, industry-based view, institution-based view), namely institution-based view especially, and the three pillars of institution-based view as well as the influence of three types of institutional pressures in detail, the research enables us to know the drivers, motivations, strategies and challenges of outward FDI from emerging markets especially Chinese private EMEs. Using the multiple cases study of Wanda’s M&A of AMC Entertainment, Sunseeker and Legendary Entertainment, we find that in terms of regulatory pillar of institution-based view, looking back through four main transitions and transformations in the development history of Wanda Group both domestically and internationally, we can find that Wanda’s every big decision and strategies was made under the influence and pressure of regulatory institutions and coercive isomorphism. Compared with SOEs, private EMEs face more challenges and difficulties in domestic environment therefore exploring overseas expansion to secure their assets and seek new opportunities such as Wanda. As for the normative pillar of institutions, Chairman Wang Jianlin’s personal vision and ambition to build a marvellous, desirable and respectable business empire plays the significant role in Wanda’s going global process. On behalf of private entrepreneurs, Wang’s “Chinese dream” to build an international Wanda and a centennial enterprise constantly drives him to expand in the global marketplace. In reference to the cultural-cognitive pillar of institutions and mimetic isomorphism, Wanda use international management team and local talents to decrease cultural-cognitive distance and seek for host-country legitimacy, which efficiently improve and promote Wanda’s internationalization and corporate governance. The flexible application of guanxi culture helps Wang Jianlin walk fast and far. But different from I hypothesized, the influence of mimetic isomorphism on Wanda’s international expansion is not significant since Wanda is the big giant in his industry and always gain first-mover advantage