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Country Resource Environments, Firm Capabilities, and Corporate Diversification Strategies

Authors


William P. Wan, Thunderbird, Global Business Department, Glendale, AZ 85306-6000, USA (wanw@t-bird.edu).

Abstract

ABSTRACT Environmental differences among countries are often assumed away in strategy research. In particular, the unique contexts of the emerging economies have not been considered adequately in extant research. I bring country environmental contexts to the foreground and conceptualize various types of economies (developed economies, emerging economies, institution-driven high growth emerging economies, and factor-driven high growth emerging economies) as dissimilar types of country resource environments that provide firms with country resources: factors and institutions. To compete successfully, firms will find it more optimal to emphasize appropriate firm capabilities (market capabilities and non-market capabilities) and corporate diversification strategy (product and international diversification). By integrating insights from institutional economics and resource-based view, this paper offers a conceptual framework to examine the multifaceted relationships linking firm capabilities and corporate diversification across dissimilar country resource environments.

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