Institutional Complementarity and Substitution As an Internationalization Strategy: the Emergence of an African Multinational Giant

Institutional complementarity and substitution as an internationalization strategy: the emergence of an African multinational giant

Article (Accepted Version)

Luiz, John, Stringfellow, Dustin and Jefthas, Anthea (2017) Institutional complementarity and substitution as an internationalization strategy: the emergence of an African multinational giant. Global Strategy Journal, 7 (1). pp. 83-103. ISSN 2042-5805

This version is available from Sussex Research Online: http://sro.sussex.ac.uk/id/eprint/66973/

This document is made available in accordance with publisher policies and may differ from the published version or from the version of record. If you wish to cite this item you are advised to consult the publisher’s version. Please see the URL above for details on accessing the published version.

Copyright and all moral rights to the version of the paper presented here belong to the individual author(s) and/or other copyright owners. To the extent reasonable and practicable, the material made available in SRO has been checked for eligibility before being made available.

Copies of full text items generally can be reproduced, displayed or performed and given to third parties in any format or medium for personal research or study, educational, or not-for-profit purposes without prior permission or charge, provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way.

http://sro.sussex.ac.uk This article isprotected bycopyright. Allrights reserved. Accepted Article INTERNATIONALIZATION INTERNATIONALIZATION

article as doi: 10.1 differencesbetween version lead to this may been through the copyediting, typesetting, pagination andproofreading process, which This article hasbeen accepted for publication andundergone full peer review but has not INSTITUTIONAL COMPLEMENTARITY INSTITUTIONAL School ofBusiness,Management andEconomics (BMEc) 111/gsj.1143 University ofSussex,JubileeBuildingG08 Brighton, BN1 9SL, MULTINATIONAL GIANT MULTINATIONAL GIANT Email: [email protected] and UniversityofCapeTown STRATEGY: THEEMERGE Fax: +44(0)1273872668 Tel: +44(0)1273872668 John Luiz*

and the Versionof Record. Please cite this

Great Britain; Great AND SUBSTITUTION ASAN ANDSUBSTITUTION NCE OF AN AFRICAN NCE OFANAFRICAN This article isprotected bycopyright. Allrights reserved. Accepted Article Graduate SchoolofBusiness, Graduate SchoolofBusiness, * Pleaseaddresscorrespondence tothisauthor Email: [email protected] Breakwater Campus, PortswoodRoad Breakwater Campus, PortswoodRoad Green Point,8005,SouthAfrica Green Point,8005,SouthAfrica Email: [email protected] Fax: +27(0)214062116 Fax: +27(0)214062116 Tel: +27(0)214061444 Tel: +27(0)214061444 Dustin Stringfellow Anthea Jefthas

University ofCapeTown University ofCapeTown illustrate thevaluegainedfrom initiallycapita ‘weaknesses.’ Usingthecaseof oneAfrica’s mo into asource of advantage astheyinternati We demonstrate thatfirms canexploittheirknowle Technical summary: into developedmarkets. phased international process, itwasabletodevelop itsinternal assets and thisenabled themoves institutional risksawitengageininstitutiona became larger,itsaspirations increased tooanditsover-exposure toemerging market diversification strategywhereby of doingbusinessinenvironments of institutiona different motives. Atfirstitsoughtcountrieswhic see processes of bothinstitutional complementarity andsubstitutionatdifferent phases andwith companies, SouthAfricanBreweries,whileit We examine theinternationalization decisions Plain languagesummary: This article isprotected bycopyright. Allrights reserved. Accepted Article Abstract Key words: firm andcountryspecificadvantages Emerging multinational enterprises; institutional voids;African multinational;

it attempted tominimize itsinst onalize intolocationswithsimilar institutional l substitution into advancedcountries.Through this lizing uponinstitutional complementarity (utilizing underwent aperiodofaggressiveexpansion.We madebyoneofAfrica’smost successful st successful multinational enterprises we l uncertainty,butlater itpursued aninstitutional h playedtoitsstrength,namely theknowledge

; institutionalleveragecapability dge of‘weak’institutiona itutional riskexposure.Asit l settingsandturnit This article isprotected bycopyright. Allrights reserved. Accepted Article leveraging offitsunderstandingofhome advanced countries. We seeanemerging multin country risk,andthiswasassociatedwiththe pressure arosetodiversifytherisklinkedwith home country’s environment intosimilar sett the comparative advantagelinkedtoinstituti countryinstitutiona onal know-how)byexploiting ings. Overtime andthroughlearning-by-doing, process ofinstitutional over-exposuretoinstitutionaluncertaintyand ational learning andbuilding itscapabilities by l environment. substitution intomore the experienceof This article isprotected bycopyright. Allrights reserved. distances betweenitshome and In thispaper,wefocuson howanAfricanMNE strategies and competencies andhowwillthese tr Acceptedthe businessenvironment inAfrica;haveMNEs raised some interesting issueswh and Kundu,2016:629). and howtheyappropriatevaluefromtheirexclusiv may giverisetosituationspecificadvantages institutional environments. Therelativeinst nature oftheadvantagesthatEMNEspossess on intheirprocessofinternationalization(Mat characteristic of theEMNEwherebytheyhave Article(Mathews, 2006; Luoand Tung,2007).Theaccele incremental approachesandhaveoftenbeenpercei theory base.Questionshave beenraisedbecause multinational enterprises (EMNEs)behave inthe same manner aspredicted bythe existing liability offoreignnessastheymove abroad take advantageoftheirhome countryorfirm-s return inuncertainlocations(Johanson and the cautiousincremental routes INTRODUCTION The issuearises,wheredo AfricanMNEsfitin International businessliterature oninternationa of internationalization,asdeci host countriesandhowthis infl ich weseektoaddressinthis itutional underdevelopment of Vahlne, 1977).Multinational enterprises(MNEs) (Dunning,1988).Thequestioniswhetheremerging and may impact upontheir and howthisisaffectedbyhome country hews, 2006).Italsoraisesaquestionaroundthe pecific advantages(CSAs/FSAs)toovercome the committed significant resources andcapital early EMNEsseemtohave adapted toandmanaged institutional voidsand arising from thecontinentadopteddifferent anslate into aglobalcontext outside of Africa? ? Thecallfor papersfor this special edition lization isdominatedbywork thatemphasizes rated expansionhasbeenanimportant ved tobemorerisk-see e assetsinforeignmarkets (Kirca,Fernandez, sion-makers balanceriskand paper. Giventhecomplexity of uenced thedecisionsofwhich adopted lessgradualand international expansion theirhome countries king intheirapproach research onEMNEsfromAfrica.Giventhatthe been agrowing literature onmultinationals from and behaviors of EMNEsincomparison todeveloped multinationals (DMNEs). Whilst there has (Landau constraining economic activity butalsobeinga internationalization experience.We showthat institutions butthatoftheir decisions inamore dynamic manner whichtake layer ofunderstandingtoour an effort todiversify institutionally toabsorb seeking new efficiencies,markets means thattheirdecision tointernationalize minimize itsinstitutionalriskexposure. The but later itpursued aninstitutional portfolio diversification strategy whereby itattempted to strength, namely the knowledgeofdoingbusiness with differentmotives influencingthesephases.At institutional complementar This article isprotected bycopyright. Allrights reserved. 1 Breweries (henceforthreferredtoas SAB),overtime. markets to enter. We ononeofAfrica’sla focus $104 billion bid for SABMiller which was finally wasfinally SABMiller which for bid billion $104 asSABMille it circumstances where be referenced needs became aglobalcompany SABMiller itsto plc. Give name itchanged whereupon in In ofitslargest 2002 SABMiller plc. one transac

Founded in 1895, the South Accepted Article As FDIfromemerging markets increases,itbe et al ., 2016;Martin,2014). and morphed into in and referto SABMiller we it will except particular as SAB throughout African Breweries (SAB)isthe South Africa ity andsubstitution atdifferent phases of itsinternationalization and home countries’too,andrelates existing knowledgebaseofEMNE or assets,butalsoconcerna

approved by shareholders in September 2016. inSeptember 2016. shareholders by approved tions SAB acquired the US in the MillerBrewing Company SAB acquired tions is notonlydrivenbyth unpredictable environment facedbyAfricanMNEs possible future shocksathome. Thisaddsanew n that we are examining the process through which which through the process thatweareexamining n institutions should notonlybethoughtof as r particularly. In October 2015 AB InBev announced a announced 2015 AB InBev r In October particularly. source ofcomparative andcompetitive advantage rgest andmost successfulMNEs,SouthAfrican s intoconsideration continent hasexperience Asia andLatinAmerica, thereisadearth of comes criticaltounderstandthemotivations in environments ofinstitutional uncertainty, firstitsoughtcountrieswhichplayedtoits 1 We showthatitfollowedaprocessof this tothephasesoftheir bout theirhome environment and n subsidiary and historical birthplace of s andseekstoexplaintheir e usualmotivations of not onlyhostcountry d agrowthboom over SAB This article isprotected bycopyright. Allrights reserved. Theory andEmergingMult REVIEW LITERATURE further explore thedevelopment of thisliterature withinanAfrican setting. the past twodecadesthathass capabilities throughlear only asoperationalcapabilitiesbutalso Acceptedprocesses of internationalizati firms havebecome crucial.EMNEscanleverage and statethatduetotheinterrel papers, (JohansonandVahlne,2009;Vahlne Joha the vastlydifferentbusinessenvironments andne proposes thatthereasonfordivergencefrom predict (Contractor,Kumar,andKundu,2007;Kn skipping some oftheUppsalamodel stepsor 2012a, b)areoftheopinionthatthisassumpti García-Canal, 2012;Kalasin,Dussauge,andRivera market, theyslowlybeginincreasingtheirleve Articleinternationalization isusuallya aforementioned knowledgetosuccessfully company tosucceed andthatbyoperatinginagi an incremental process.Themodel isbasedonth The UppsalaModel(JohansonandVahlne,1977) ning andinnovation. inational Enterprises on asthesefirms developandcreatecompetitive advantagesnot een itsgrowthsecond onlytoemer ationships developedininterna slow process.Asfirms gain dynamic ones,whichmodify theseoperational compete anditisforthisreasonthat engaging inthem soonerthanthemodel would on doesnotholdforEMNEs.EMNEsareeither l ofcommitment. Severalscholars(Guillenand the UppsalamodelbyEMNEsmay the bedueto offthesenetworkswhichallowsforfaster ven market, firms areabletoacquire the e assumption that localknowledgeisvitalfora tworks inwhichfirms operatetoday.Inlater ight andCavusgil,2004).Ramamurti (2012b) ‐ Santos, 2014;Mathews,2006;Ramamurti, proposes thatfirms internationalizethrough nson, 2013)theyrevisetheiroriginalthesis more knowledgeabouttheforeign tional business,networksbetween ging Asia,itistherighttime to vis their rivals. emergence thatthe a MNEand undercertainof argue cond This article isprotected bycopyright. Allrights reserved. 2 This struggles, initsoriginalconceptualizati narrative of DMNEsastheywillhave more FSAs CSAs arisefrom ‘better’countryresources andin it implicitly assumes thatFSAsareeasily tran is fairlystaticalthoughthis rules’ (Hillemann andGestrin,2016:768).Thisorig including ‘naturalresources,th transactional advantages’,whilstMNEs levera ‘unique resourcesandresourcecombinations decision (orinternal)factors,andCSAs asenvi matrix developedbyRugman (1981)suggestedth international operationsandcompensate forthe 2008; Dunning,Kim, andPark, and weneedtoconsiderabr knowledge andexperiencest assets asthosefrom developednations,they ‘ordinary resources’.Thecounterviewisthat internationalize butaccordingtoMadhok a premise oftheory isthataMNEmust

HashaiandBuckley(2 Accepted Article MNEs deploytheirFSAswhich,along withCSAs,affect thecompetitiveness of their This raises thequestionof whatsortof comp 014), however,challenge oader definitionoftheseadvant not necessaryasonecaneasilya e localproductdemand, andfavorab 2008; Ramamurti, 2012a,b). hus ownershipadvantagescan havesignificantownershipadvantages the view thatcompetitive advant nd Keyhani(2012: 36),EMNEstendtohave on, toaccountfor thesuccessofEMNEs.Butitis have otherassetssuchasuniqueforms of although EMNEsmay nothavethesame financial ranging from ininnovationto competences sportable across institutionalmilieus, andthat ge theirhome-country advantages,orCSAs ronmental, exogenousfactor etitive advantages EMNEsleverageoff. Akey liability offoreignness.TheoriginalFSA/CSA itions MNEs may emerge without such advantage vis-à- advantage such MNEsmayemerge without itions stitutions. Allthis playsverymuch intothe e differentiationbetwee and betterhome institutions leading toCSAs. inal categorizationhas ages (Cuervo-CazurraandGenc, llow forprocessesoflearning,and take onmany differentforms le politicaland age isa necessary condition for n FSAsasmanagerial several limitations.It s. FSAswereseenas 2 (Hennart,2012)to administrative This article isprotected bycopyright. Allrights reserved. capitalize upon theirresource-based competitive a competitive disadvantages relativeto DMNEs. First, EMNEs useinternationalexpansionas Acceptedlist severalkey‘springboarding’be technology advances,innovationandnewproduct de entry mode dependent,thesefirms aredriven seek outstrategicassetsand to institutional andmarket constraints athome. needed tocompete more effectivelyagainsttheir postulate that EMNEsuseinternational expansion asaspringboard toattain vital resources interpretation of theoriginal matrix whichis this processFSAsarerapidlyac Articleare able toleveragemore outoftheirlimited FSAs the nextsection).ButwhenEMNEsinvestinot environments, whichintheoriginalconceptualiz which allow EMNEstoleverageofftheirunderstandingofhome countryinstitutional can learnandbuildFSAs.Furthermore, theseFSA internal FSAs associatedwith better reflecthowfirms bundletheirassetswi Hillemann and Gestrin(2016:767), for amore diverseinstitutional/c easily remedied withinthisframework without The springboardperspectivetointerna acquire thesefrom DMNEstonegateweaknesses.Notpathnor large balancesheets, cumulated byEMNEs. Ourconceptualizationisamoredynamic ontextual reality.Othershave haviors thatEMNEs manifest andwefocusonthreeofthese. for example, arguing thatth tionalization byLuoandTung(2007:482-487) aspringboardtocompensate forpotential more inlinewiththerealityofnewEMNEs. th CSAs.’EMNEsmay notpossesstheinitial by otherpressuressuchasglobalrivalry, WhilstMNEsfrom theindustrialized world EMNEsfacedwithdist having tochangetheca her emerging markets withsimilar settingsthey ation wouldbeseenas global rivalsandtodimi dvantage tomake animprintglobally, EMNEs s canbeconstructedonthebackofCSAs because oftheirexperience inthis milieus. In innovative technologyandsoforth,butthey velopment anddomesticrestrictions.They raised similar concerns with e FSA/CSAmatrix needs‘to inctive disadvantages tegories butbyallowing ‘inferior’ (discussed in nish their vulnerability This article isprotected bycopyright. Allrights reserved. The roleofinstitutions inemerging markets Acceptedcharacterized byuncerta the importance ofunderstanding they facesimilar challenges.’ Th conclude that‘EMNEspartlyexpandbyexploi organizational forms thatenablethedevelopmen strategic andoperationalflexibil with persistent uncertainty andinstitutional idiosy towards ‘thedevelopment ofcapabilitiesandorga business research state thatthe Articlediversification. We extendthis also the riskprofile andEMNEsseetheirglobal institutional voidsraisesnotonl international expansiontoalleviate domestic institutional constraints. The existenceof resources suchasmanagerial expertise,tec they needtomake bigforeignmoves toleap overcome theirlatecomer disadvantage.Giventh rather thatthey seekadditional advantages. technology andbrands.Thisdoesno invest indevelopedcountries Meyer andPeng (2016:8)discussingtheth inty andinstability. to gainknow-howandstrategic analysisinthediscussionofourcasestudybelow. rise ofEMNEsgavetoa y thetransactioncostsofdoing ity, … develop political and markity, …developpoliticaland ey thereforereinforcetheins business environmentseconomies ofemerging whichare t imply thatEMNEsarebereft hnology, andconsumer mark Second, EMNEsuseintern frog overtheirhandicapsandquicklysecurekey eoretical foundationsofemerging economy ting suchcapabilitiesinothercountrieswhere t andexploitationofsu expansion as partof astrategyof institutional at EMNEsarelatecomers ontotheglobal stage nizational forms fortherelevantcontext.Faced ncrasies, firms developst shift inthescholarlydiscourse titution based viewofEMNEsand assets suchassophisticated business inthesecountriesbut et capabilities,…[and]adapt of relevantadvantagesbut ational expansionto ch capabilities.’ They ets. Third,theyuse ructures that enable This article isprotected bycopyright. Allrights reserved. emerging markets.Thesenon-market that EMNEs arecharacterizedby significant non-mar rewards, isoftenadriverofinternationaliza Acceptedbusiness opportunityandtheirab and Palepu(2006,2013)arguethat EMNEs seethelack Lundan, 2010,Liou,Chao,andYang,2016). essential tothesuccessofanorganization’s assessment ofthedegreeinstitutionaldistan similar, ratherthansuperi institutional environment intheirhome country which markets aremost conducivetothesucces Stewart, 2014). While institutional differences Articlethe motives andbehaviorsofMNEs(DunningLundan,2008;GaurLu,2007,Luiz Institutional differencesbetweenhome andhostc quiver asitstruggles toformulate and implemen and Silverman(2002:20) statethat ‘institutions dire affect the‘rulesofcompetitioninemergi governance structures,impactthe‘efficiencyof economic actors’,‘shapetheincentives facedbyag experience of EMNEshasreinforcedthisemphasis. (Kostova andHult,2016;MeyerPeng, While institutional voids areseen as ariskbymultinationals from developedmarkets, Khanna The roleof institutions ininternationaliza or institutions(Cuervo-Cazurr ility andwillingness tofill th advantagesinvolvethe‘resour ng economies’ (MeyerandPeng,2016:9-11).Ingram 2016; Peng,Lee,andWang, 2005)andthe tion. Cuervo-CazurraandGenc(2011:444)maintain international ventures tion strategy hasreceived increased prominence ce betweenhome andhostmarket istherefore between countriesallowcompanies toassess may resultinthesel s oftheiroperations markets and hencethetransactioncosts’,and t strategy,and tocreatecompetitive advantage’. ountries playsanintegral ents andhence theeffec Institutions affectthe‘uncertaintyfaced by ctly determine whatarrowsafirmhasinits ket advantagesthatf a, 2006).Anunderstandingand ofinstitutions indevelopingnationsasa e void,andthereforereapthe (Cantwell, Dunning,and , thelegacyof ection ofmarkets with ces thatthefirm develops acilitate operating in roleindetermining tiveness ofalternative This article isprotected bycopyright. Allrights reserved. sources ofcompetitive advantage. … When itcome concludes that‘institutions are firms from otherinstitutionalcontextscannot Acceptedcontext itemerges from.ThusanEMNE’shomema can beenabling factorsthatpr that arise indifferent institutional settings. Furthermore, institutionsare not onlyconstraints but that arise inonesortofinstitu this complementarity has implications for how Amable, Hall,andJackson,2005;Guardiancicha historical comparative institutional analys institutional complementarity. Thisnotionofin their liabilityofforeignnessbymo context of institutional uncertainty. What they Articleengage inaprocessofinterna because theirFSAsmay nottranslatewellinto Hennart, 2012;Holbur outcomes with substantialefficiencyeffects required tonavigate theinstitutional voidscharacte other emerging markets because access toresources that wouldothe or understanding oflawsandregulations’.This and usestointeractwithope DMNEs often struggle toadaptdoingDMNEs often business underconditions ofinstitutional voids n andZelner,2010). tionalization thatplays totheir tional settingarelikely ovide MNEswithcapabilities not onlyaforcetoberesisted oradaptedto,butarealso… rate initsenvironment, such these firms alreadypossessmany ofthenon-market advantages ving intoinstitutionally familiar environments. Weterm this rwise beunavailable toforeign MN is (seeAmable, 2016;Crouch,Streeck,Boyer, (Clougherty, Kim,Skousen,andSzücs,2016:9; easily imitate’ (p.17) these milieus. Ontheotherhand,EMNEsmay lack inFSAs,theycompensate for bylimiting MNEs dealwithinstitu institutional, non-market know-howcanenhance stitutional complementarity hasitsroots in nd Guidi,2015).Admadjian (2016)statesthat ristic of these markets andthiscangenerate s tomarket entryandcompeting successfully rket givesita‘comparative advantagethat tolookandcompete differentlyfrom those derived from theinstitutional strengths ofdoingbusinessinthe as knowledgeofthelocalcustoms . Admadjian(2016:25) tional complexity. Firms Es andfacilitateentryinto This article isprotected bycopyright. Allrights reserved. institutional weaknessinto asource of in home countryinstitutionalvoids)intoapositive inefficiencies (Cuervo-Cazurra andGenc,2008:975) and corruptgovernment official more experienceindealingwithhighlevelsof gained from theirhome experience(count country how toimprovise anddobusiness technology orglobalbrandsthat location-based institutional advantages andlevera (ILC). Theyexplaintheheterogeneityamongfirm them effectively into their ownresource base in both theexistence ofhome countryinstitutional be Landau across multiple markets, whereanMNEiscoming of thisriskbydiversifying outofemergingmark minimize transaction costs andensure predictabil exposed toinstitutional uncertainty.Companie Accepted Article EMNEs thusmay nothavetheinternalresource Proposition 1doesnotimplythatEMNEs welcom Proposition 1:EMNEspossessagreatercompara engaging inaprocessofinst country experience ofdoing business underconditions of institutional voids–thereby countries withsimilar institutional conditions et al . (2016:51-52)arguethat thesuccessoffirm and havethedevelopedabilityinmanaging variousmarket their developedmarket counterpartsdobuttheyunderstand itutional complementarity. in unpredictablesettings(exter stitutional advantageinsimilar countries. uncertainty,unpredictableregulatoryagencies, s prefertodobusinessinconditionswhich what theyterm institutional leverage capability by convertingtheirexperienceofgrowingupin ets intomore secureinst ity. Theymay therefore wishtomitigate some ge them intoFSAs of acompetitive nature. ry specificadvantages-CSAs).EMNEshave s withrespecttothei from isasimportant aswhereitisgoing.’ nefits andthecapacityoffirms tointegrate s suchaslarge balanc that leverageofftheir emergingmarkethome . Ineffecttheyhaveturnedanegative(of e thefactthatthei tive advantageininte s internationally partiallyresultsfrom nal). Thisadvantagehasbeen r abilitytoexploit r home countryis e sheets,cuttingedge itutional settings-we rnationalizing into This article isprotected bycopyright. Allrights reserved. emerging countries:‘Byescapingth predictable institutions so astodiversify thei Acceptedresult EMNEsmay engageininstitutionals international competitors. Institutional weaknesse competition forcinghomecountryfirms toincrea their businessplans.Furthermore, globalec dysfunction may become anobstacletotheseas become moresuccessfulandgrowlarger,thei response offirms toavoidthemisalignment inth Such misalignment inflictseconomic painsa become obstaclestofirms,whichcreatesmisa changes intheinstitutional contex ArticleWitt andLewin(2007:582) suggestthatinstitu function sub-optimally tosuchanextentthat associated with anattempt toavoidpoorhome countryconditions. literature positsthattherear Regnér andEdman, 2013;Surroca,Tribó,and that ofinstitutionalarbitr (Song, MakhijaandLee,2014).Thistiesinwithth different institutional contexts, engaginginwhat term thisinstitutional substitution. EMNEs may s Institutional push,asadriverofinternationa age (Cuervo-Cazurra,Narula, e pushfactorsinvolvedandthat t may causeformerly usefulelem e home country,thefirm notonl ubstitution byinvesting inlocales withmore onomic integrationhasresultedingreater nd increasescosts,andmay causeanescape r exposure toinstitutional risk associated with firms toescapethatdysfunctionality. goabroad r aspirationsincrease lignment betweenfirms andtheirenvironment. Zahra, 2013; Witt andLewin,2007).This lization, occurswhere home countryinstitutions tional transition isadynamic processandthat pirations byraisingthecostsofexecutingon hasbeentermed “across-countryswitching” e form ofoutwardforeigninvestment. Asfirms se theirlevelsofefficiencyvis-à-vis eek outverydifferentcharacteristicsin s may limit theirglobal ability todoso. Asa e existingliteratureonth and Un,2015;LuoWang, 2012; outwardinvestment may be ents tolosetheir utilityand too andinstitutional y improves theefficiencyof e ‘escape’motiveor This article isprotected bycopyright. Allrights reserved. milieu. Whilst emerging markets are sourcesof grow costs andgreaterlevelsof uncer consolidation andtherulesofth Acceptedpolitical economies intransition.Inthistransitio these may makemore sense. can beseenasaportfoliodecisionrelatedtoinst internationalize andwhentobuildon yourCSAsandwhentodiversify andriskmitigate. This out theirriskholdings.Intern transaction costs. Firms may therefore optfor aprocessof institutional substitution tobalance institutional voidsinthesecountriesareallied Articlemitigate theirexposuretorisksassociatedwi same timeEMNEsareawarethatastheygrowla their comparative advantageof theability andex they canexploittheinstitutionalsameness betw complementarity. In their case thatmeans intern leverage theirCSAsbyinvesting advantages anddisadvantagesassociatedwith home country’ (Cuervo-Cazurra,Narula,andUn,2015:32). its operationsbyobtainingnewsourcesofadvantage, Emerging marketsneedtobeunderstoodnotonl EMNEs thereforeengageinaninstitutionalpor locational andinstitutionalri Proposition 2:EMNEsinternational ationalization thusentailsma tainty (Luiz,2016).The rise e game arefluid,andthisleads in countrieswithlessinstitutiona sks byengaginginaprocessof ize intolocationswhichdi th their dependence onemerging markets. The their home countryinstit to higherforms ofcountryandcurrencyrisk een home and hostcount ationalizing intootheremergingmarkets where nal phaseinstitutions are itutions andatdifferent perience tooperateinthese milieus. Butatthe rger itbecomes moreim tfolio effectwhereby y asnewcentersofgrowthbutalso th, theyarealso ‘casualties’ of unstable butalsosolvesdiffe king decisionsaboutwhento of EMNEs are productsofthis of EMNEsare to higherriskandtransaction institutionalsubstitution. l distance –thatisinstitutional versify theirportfolioof utional weakness.They they exploitboththe times eitherorbothof ries andcapitalizeupon portant todiversifyand still intheprocessof rent limitations ofthe This article isprotected bycopyright. Allrights reserved. telephone callsorSkype callswereusedasan primarily conducted face-to-facebut inalimite the relevantfieldofresearch. a singlecasestudy,generalizationtoallemergi African companyintoaglobalbehemoth.Alimitati processes of SAB,inordertofind insights into this multinational anditsevolution from aSouth research hasbeenperformed asaretrospective phenomena ofinternationa utilizes aninductiveapproach situations aswelleventsthat METHODOLOGY institutional complement now turntoourcasestudyofhowonesuchEM institutional voids(the institutional push factors) emerging markets, but also engage ininstitutional risk mitigation as they seektoescape exploiting their institutional cap polities andpolicyenvironments. EMNEscanturn Acceptedentries. Oursample wasthuspurposefullyselected population basedontheirdirectinvolvement inst We selectedcurrentandpast executives andmanagers ofSABMillerPlc.,SA Article A qualitative researchapproachwas chosenas The populationconsideredforthisresearchre arity andsubstitution. lization throughthepersp seniormanagement andexecutivesfrom above-mentioned the Interviews wererequestedviaem and acasestudyresearchdesi haveoccurredoverperiodsof ability andcomplementarity tointernationalize intoother alternative.Atotalof17 interviewswere longitudinal casestudyof d number ofcases(whichwenotebelow) ng marketng multinationals isnotpossible. NE internationalizedengaginginprocessesof BMiller LatinAmerica Africa. and SABSouth and‘normalize’ theirinstitutional exposure. We port ismade upofcurrentandpastsenior itisausefulmethod toexamine complex rategic decisionsregard thisexperience into asourceofadvantageby on thebasisoftheirpote on ofthisstudyisthatbecauseitfocuses ectives of thespecif gn inordertoexamine the time (SnapeandSpencer,2013).It ails ortelephonecallsandwere ic participants.The ing newforeignmarket the internationalization ntial tocontribute to This article isprotected bycopyright. Allrights reserved. ensure internalvalidity. In addi from thestudy weretherefore presented tointerv Magilvy (2011)recommendmember checkingasa Acceptedthroughout theprocessfor consistencieswiththe benefit ofhindsightandpost- internal validitythr were usedwhereappropriatetosubstantiateth making ofthedata(seeGioi process ofcodingwasundertakentofindrecurri recorded, codedandthefindings disassembling, reassembling, interpretingandc (2010) asserts thatqualitativedata analysis Articlewere recorded withthepermission of theintervie while stillenabling theintervie The semi-structured interviews allowedfor thegeneral direction of theinterviewtobe controlled and datacollection.Aresearchgu as welltheirposition terms oftheregion(s)inwhichtheyhad/have – seeTable1.Specialconsideratio conducted with varioussenior managers andexec Supplementary forms ofdata(suchascompanyandinternaldocuments) reports Semi-structured, in-depth interviews withopen Insert Table1here ough triangulation.Giventheuseofin within theorganization. a, Corley,andHamilton, 2013). hoc rationalizationbyrespondent wees toexpresstheirownview tion tothis,aniterativeproce then interpreted. Oncetheinterviews weretranscribed, a ide ortemplate wasdraftedand n wasgiventoselectindividua generally moves throughfivephases:compiling, e findingsfrom interviewstherebyenhancingthe experience, thetime ofth oncluding. Thus ourinterviewshavebeen ng themes andengageinaprocessof sense- iewees oncetheyhadbeen compiled inorderto wees andtheresultswere thentranscribed.Yin historical record.Furthermore, Thomas and utives ofSABMiller(both current and former) ended questionsformed thebasisofresearch means ofensuringinternalvalidity.Findings terviews, thereisadangerofthe ss wasfollowedwhich,according to s andopinions.Theinterviews s andwethereforechecked ls from abroadspectrum in used intheinterview process. eir involvement inSAB, markets. markets. significant barriertoentryand embedded product’.Asaresult,theymaintain that Thu Tran(2006: 186)provideareason forthisand remained fragmented untilthe 1960sanddidnot understood. Gammelgaard andDörrenbächer(2013) interesting casestudyinwhichth and acquisitions bymultinational brewers.Asa SAB’s internationalization andtheglobalbrewingindustry OFFINDINGS ANDDISCUSSION PRESENTATION decision-makers intheprocess. relative tothestudywere to thesampleselectionprocessensurethat 2012). Althoughthechosensample wasrelatively the chosenpopulation and conducting theresear This article isprotected bycopyright. Allrights reserved. Accepted Article documentation oftheprocessandresearchdecisi continuously monitored andconfirmed.Reliabili Morse, Barrett,Mayan,Olson,andSpiers(2008) The globalbrewingindustryhasundergonemuch Lastly, transferabilityhasbeen interviewed andthusitrepresents thus preventedtheentranceofforeignbreweries into local e internationalizationstrategies considered throughtheprovisi thosewiththegreates result, thebrewingindustry servesas an ch inareal-lifesetting(Leedy andOrmrod, trulybecome globaluntil the1990s.Meyerand ty offindingswasensuredthroughtheclear ons andthroughtheuseof ensures thatdataa customerloyaltytolocalbrandscreateda small insize,carefulconsiderationwas given state thatbeerisa‘t statethattheglobalbreweryindustry consolidation inrecentyearsduetomergers a substantialproportionofthemajor on ofdetailedinformation about of MNEscanbeexamined and t knowledgeandexperience nd interpretationsare raditional andculturally aninterviewguide. This article isprotected bycopyright. Allrights reserved. (SABMiller, 2014a).Between1956 and1992,SABembarked onadiversification driveand two largest competitors tobecome thelargest br SAB establishingitselfasamajor contenderwi Acceptedproduction anddistributionofbeersbutth America andthreeinNorthAmerica (SABM Africa untilrecently was itsownregion), seven operate inarebrokendownintofiveregions world withoperationsinover80countriesa competitors andinsome instances overtake them. internationalization, EMNEshavetheability Bonaglia ArticleDörrenbächer, 2013).This phenomenon supportsth Scottish and Newcastlefrom theUKhaveb those from largewealthycountriessuchas South AfricaandAmBev from Brazilhaveconduct phenomenon to noteisthatbreweriesfrom thesm Kingway, ABInBev’sacquisitionof SipingGins Mexico, Carlsberg’sfullcontro consolidation. Recentmergersandacquisitionsin The increaseinmarket shareofthelargebrew There arethreedistinctstages SAB wasfoundedin1895SouthAfricaand In 2014,thefourlargestbrewerie et al et . (2007)who claim thatdespitethei l overChongquing,ChinaResourcesSnowBreweriestakeoverof toSAB’shistory.Thefirst s intheworldaccountfor50%ofglobalmarket share. at ofcarbonatedsoftdrinkstoo. Anheuser-Busch andMillerfrom theUSAand ecome takeover targets (Gammelgaard and nd over200products.Countriesinwhichthey with 16countriesintheAfricanregion(South iller, 2013).Not onlyisitinvolvedinthe to catchupwiththeirdevelopedmarket eries isnotduetoorganicgrowthbutrather thin SouthAfrica.In ewery inthecountrywith a98%market share in AsiaPacific,24Europe,11Latin ber, andthenSABin2016.Aninteresting r latecomer statusinterms of clude ABInBev’sfulltakeoverofModeloin aller orpoorercountriessuchasSAB from ed successfulacquisiti e views of Ramamurti andSingh(2009) e viewsofRamamurti 2013wasthesecondlargestbreweryin phase (between1895and1956)saw 1955 theyacquiredtheir on strategieswhereas This article isprotected bycopyright. Allrights reserved. SABMiller whichwasfinallyapproved byshareholders inSeptember 2016. AcceptedInBev (Marketline,2013).InOctober2015 globalmarkbrewery intheworld.In2013,SAB’s became knownasSABMiller.Thisacquisiti 2002, SABacquiredMiller,whichwasthesecond la emerging marketsandmorerecentlyintodevelo companies inLesotho.Post1992,SABbeganinte establishment ofSwazilandBreweries,andthen Namibia. Thiswasfollowedin1969,withanen strengthen theirbrandportfolio.In1965,theyac Black LabelrespectivelyinSouthAfricaa terms ofbeer,in1964,1965and1966SABwasgran Articleretailers, hotelgroups,alargesupermarket chain, within SouthAfrica.Theydivers to make investments inthecorebusinessofb countries andventuringfurthe number ofinvestments andacquisitionsonthe (Hearn, Oxelheim, andRandoy,2016;KhannaYa underdeveloped institutionsandthelesseconomica markets andresearch indicates thatthese stru food retailers.Themove towardsadiversifie made numerous horizontalacquisitionsranging r fromSouthAfricaastime progressed.AlthoughSABcontinued ified intocarbonated soft dr nd therebyexpandtheir AB InBevannounceda$104billionbidfor on saw SABMillerbecome thesecondlargest d businessgroupisnot ctures areoftenrelatedtothe prevalenceof eer, theyalsomademajor non-coreinvestments African continent, star in1981acquiringamajority stakeinbrewing from hotelsandpubstofurniture,clothing try intotheSwaziland beermarket throughthe ped nations through mergers andacquisitions. In quired a25%shareofSouth West Breweriesin a major glasscompany, andevenmatches. In rnationalizing more rapidly,initiallyinto et sharestoodat14.7%,secondonlytoAB lly developedstatusoftheirhome locations rgest breweryintheUSAattime and ted licensestobrewGuinness,Amstel and feh, 2007).Duringthistime, SABmade a inks andfruitjuices,clothing product offeringand unusual withinemerging ting withneighboring This article isprotected bycopyright. Allrights reserved. towards operatingprofitsin2000. Acceptedthe industrializedworldofNort industrialized countriesafterithad built upin internationalization offirstmoving intoemer SAB duringthe1990sandthenacceleratedther volume stoodat11.29%.Thisdemonstrates therapi and by2013itscontributiontoEBITDA hadshr centric company, butby2000SouthAfrica’scontri lower thaninAsiaPacific.Thetableshowsth hand, LatinAmerica istheregionwithgreat their strategic focus inthis region istogainma Articleof volume ofbeerproduced, ithas the lowest operates between1990and2013.Currently,whilsttheAs management controlwithSAB. Nigeria andSouthSudan.Itiswo alliance withCastelgivingdept joint ventureandmanaged byChinaResourceEn on acquisitionsgivingthem management controlw Insert Table3here Table 3presentsSAB’sbeerproductionandprofita Insert Table2here The timeline intable 2highlights h America, Western Europeand h toitsAfricafootprintandgr rthwhile noting thatthejoint venture withMillerCoors leaves the internationalization activities ging anddevelopingcountriesonlyfocusing on EBITDA margin. According toSABMiller(2013), ternational experience from2000onwards.Thus at in1990SABwasstilllargelyaSouthAfrican- rket share despite thelowmargins. Ontheother eafter. Italsorefl est profitabilityalt unk toonly19%,whilstitscontribution terprise. Other exceptions areastrategic ith themajor exception of China,whichisa bution tooperatingprofits d internationalizationthatoccurredwithin bility levels inthe si ia Pacificregionis eenfield breweriesinRussia, Australasia onlycontributed4% ects thepatternof hough productionlevelsare ofSAB.Itfocusedmainly x regionsinwhichit the largestinterms hadfallento68%, indicators. developed countries and encompass state, financial markets, This article isprotected bycopyright. Allrights reserved. 3 distance stimulibetweenthehome country,Sout are usuallyincluded. culture, politicalsystems, level lies outsidetheremit ofthispaper(seeDow various aspectsofdistanceincludi The roleofdistanceininternationalization: by initiallyleveragingoffitsknowledgeofth which weanalyzebelow,revealsacompanygrow gradual, stagedmodel ofintern (2010) whoarguethatthenewEMNEshaveex investing inTanzania,China andEasternEurope.Th of theAfrican continent. International acquisitions increased rapidly in1994, whichsaw SAB these investments precededtheirmo experience. SABinitiallyfocusedonthecountri consistent with acompany thatraiseditsleve distances. The sequenceofeventsevidentinth process involved increasing levelsof investment before moving ontoacquisitionsthatrequired The processofinternationalization

Fainshmidt Accepted Article Distance representsbothchallengesandopportu Initially SABshowedevidenceofinternationa et al . (2016) advance an alternative framework to capture the diverse institutional contexts in less contexts institutional diverse framework tothe alternative capture an . advance (2016) 3 Forourpurposes,Table4providesmu ationalization ofearliertheories of education,levelindustrial ng whatitcapturesandhowto ves intoAfricannationsfurtherafield andthenthose outside and Karunaratna,2006).Differencesinlanguage, ls of commitment asitgained international e businessenvironment ofemerging markets. greater capital investments. Theincremental Institutional complementarity andsubstitution e historyofthecompa panded more rapidlythanpredictedbythe es immediately neighboring SouthAfricaand as well as greater geographical andinstitutional h Africa,andvarioushostcountriesas lizing graduallyandthro human capital, socialcapital, andcorporate governance ing inconfidenceandbui nities forMNEs.Thereisdebateabout is in linewithGuillenandGarcia-Canal ltidimensional measures ofpsychic . Thesequencingoftheprocess, development, andsome others measure itbutafulldiscussion ny istoalargedegree ugh lessriskymethods lding itscapabilities This article isprotected bycopyright. Allrights reserved. 4 with more institutions fragile gi understood howtodobusinessinco entry barriers tocompetitors butalso because riskier environsofemerging markets. Theadvant clearly realizedboththeadvant respondents interviewedfailedto institutions (social,politicalandeconomic) on common theme thatemerged throughcodingofthe more establishedbrands more ofaparadigm shiftinterms dime ofthese up itsFSAswhichthenmade possiblethelaterentr broader socio-economic conditions.Th distance betweenitsfamiliarhome countryenvi closeness inthesetwomultidimensions. countries likeHungary,andthenChina,Indi moves wereintoneighboring development andeducationareparticularlyinsigh the major regional entriesmade developed byDowandKarunaratn more authoritarian system and the post-apartheid transition to to democracy. transition post-apartheid systemthe and more authoritarian ther and another system to frompolitical one transitioning

The political measures are less helpful in this case as they capture a point in time when South timeAfrica South in a was capture when point caseasthey areless inthis helpful measures political The Accepted Article Aspects ofdistancemanifested invariousways Insert Table4here in theirhometerritory. countries likeZimbabwe, followedbyothermiddle income ages anddisadvantagesofdoing bySAB.Themeasures pertai ven itshome countryexperience. raise thisissue.Butitwasno a (2006).Thelistofhostcountries untries atlowerlevelsof ese locationsallowedforitto 4 SABchosetolocateincountrieswhichminimized the they playedtothestrengths ofSABwhich SAB’s internationalization strategies. Onlythree nsions asSABtakestheleapintoconfronting ronment andthehostcountriesinterms of efore SAB would have experience in both the pre 1994 pre efore SAB the 1994 inboth would experience have a. Thesecountriesallde ages wereassociatedwithlowcompetition and tful toouranalysis.SAB’s firstinternational inourdiscussionswithSABrespondents.A y intotheUSAandthenItalywhichreflects collected datawasthat oftheeffects ning todistanceonindustrial economic development andoften t aboutavoidingriskasSAB business intheinstitutionally For example asregards Africa: exercise itsCS providedisillustrativeof monstrate ameasure of As asitbuilt This article isprotected bycopyright. Allrights reserved. Acceptedadvanced economies. economies andenvironments itunderstood(complementarity) beforemoving ontomore ‘foreign’ anddistantto Italy. Moredevelopedinstitutions werenotnecessa industrial development distancemeasure whichaver America –allareasatlowerlevelsofeconomi Thus itmoves intotherestofAfricaandth not onlydetermined bygeographybutinstitutional acquisitions andthisinformed itsstrategy.Thein Articlewords, SABsawsome institutional complement markets andthusSABdidnotnecessarily view traverse difficultpoliticaland economic development. Regardlessofthelangu political reform withsome instability,weak instit targeted afew of theirearlier international activ element of institutional complementarity of s quickly, usingSouthAfricaasabase,move into ‘Africa wasourbackyard.We shouldunderstandt Likewise withitsmove intotheformercomm going’. [15] have ahardtime andwearegoingto learnso that itdidn’t playtotheir st this, butitmay wellbethatthis thing plays underperforming businessinEasternEurope] ofapeptalkfrom[An example anexecu SAB’sexperience.Itfirstwanted socio-economic environments were rengths. So my voteis,wespendthemoney. Wearegoing to en EasternEuropefollowedbyChinaandLatin eeking toexploit the experience of sameness. c development asreflectedinTable4bythe ities. Thesecountrieswerejustemerging from these challenges asunsurpassable. Inother age andculture,theca arity between itshome baseanditsearly tive whenmaking aninvestment intoan unist countriesofEast unist those markets’. [16]Thisrevealsadistinct utions, poorinfrastructu cremental nature ofitsinternationalizationwas hose markets andwewouldbeabletovery to ourstrengthsandtheyknew,theothers, rily seen asbetterbecause they weremore ages 0.47beforethemoveintoUSAand me hardlessonsbutwehavegotto get ‘I know12peoplehavewalked awayfrom similarity asitplayedtotheiradvantages. tocapitalizeupon thesortsof transferableintodifferent pabilities neededto ern Europe whereSAB re, andlowerlevelsof This article isprotected bycopyright. Allrights reserved. to more andmarket democratic basedsystems in America between1986and1988,Deng Xiaoping's re Accepted(centered around1989)whichsawa between themid-1980s andearly1990s.Eastern economic changeswhichoccurredinmany ofth overlooked inexamining lowandmiddle income this strategy astaking advantage of institutiona with middle income countriesandliberalization). Europe, LatinAmerica andChina(allwithinst geographically, economically, andinstitutionally sim manage thechallengesinRussiadue totheir experience inand familiarity of similar markets. control oftheirRussianoperati Articlestrategic alliancewith as goodanexample asever.’[4]SubsequenttoSA you dointhepoliticalworld,don't standachan environment posedtoohighacost:‘Therealityis country withsignificantgrowth dynamics weighedagainstoperationalandmarket Overall wesee aparticular patternemerge as Even withSAB’sexperienceinemerging market [15] those kindofmarkets andwehadmuchmore owners, distributors,pokedupinfrastructure markets. We feltweunderstoodemerging mark ‘We wantedtogetintoLatin America. W the TurkishAnadolu Groupandindoingsorelinquishedmanagement ons. SABfeltthattheAnadoluGroupwerebetterequippedto potential inpercapitaconsump rapid transitionofmarket a l complementarity. Afeat itutional andeconomic similarities associated regardsdistance.SABinitiallymoved into ese countriesoverarelativelyshortperiod SubSaharanAfricainthe 1990s,andofcourse hy? It’snotdissimilarhy? toAfrica,emerging Europe withthecollapseofcommunism therearesome environments thatwhatever countries isthepoliti This playedintoSAB’sstrengthandweterm B’s initialentranceinto factors. TheRussiancasewasgivenofa ce ingettingthem tochangeandRussiawas . We feltweknewthatcouldplayin s, therewereoccasionswhere the political confidencethere,thanmaybe theUSA’. ilar countries (inAfrica),then intoEastern forms inChinathe1980s, thetransition ets, wheelinganddealingwithshebeen tion ofbeerbutthepolitical nd politicalinstitutions,Latin cal, institutionaland ure that issometimes Russia, theyformed a lower theirexposuretothevicissi market statusandexperienceinthoseenvironmen developed markets. Furthermore, whilstprevio provided thatopportunityalongwithabasefr important todemonstrate theirabilitytocomp portfolio oflocationsbyinvestinginadvanced country andcurrencyrisksitwasexposedtothus market companyandbeingexposedtotheseeconom This article isprotected bycopyright. Allrights reserved. Accepted Articlevariance infirms’ abilitiestocultivate di the process of liberalization in conditions andLi,Cui,Lu(2015:2)argueth and politicaldisorderalldesce South Africaduringthe1980swhere experience –onemanager later operating ineconomies intransitionandtheseloca South Africa,itself,between1989and1994. However, SABwasalsoawareofthedisadva could compete inthosetypesof markets. We growth marketbutitwas more toshow that could compete indevelopedmarkets. Idon' ‘We didn't wanttobepurelyadevelopingma market andhavehardcurrencyincome streams.’ [4] Graham Mackay[CEO]came totheconclusion in emerging markets. Sotherewasanega the developingworld.Investor exposed tosoftcurrencies.In1998therewas ‘The underlyingfactor[for theMilleracqui nding like‘biblicalplagues’.It their overseasexpansions in thepaperisquotedtalki tudes ofemerging market risk. it survivedlaborunrest,highin s became skepticalofcomp stinct institutional competitive advantages. SAB wascapitalizinguponitsknowledgeof om whichtolaunchfurtherexpansioninto ete indevelopedmarkets andtheMillerdeal economies suchastheUSAandItaly.Itwas usly theyhadcapitali ntages andrisksofbeingapurelyemerging tive perceptionabout us at EMNEsderiveinstitutionaladvantagesfrom ts, thisacquisitionprovidedtheopportunityto tions wereseenascomplementary toitshome t thinkweboughtthinking itwouldbea sition] wasthatourwholebusiness we weren’tjustaone-t ic vicissitudes.Investorswerewaryofthe also didittouseasabase from which to rket company andwantedtoprovethatwe quite abigcurrencycr itsoughtto‘s that wehadtomove intoadeveloped . These institutional reforms canleadto ng aboutSABbeingtoughenedin understooddoingbusinessinthese anies whoseonlybusinesswas tabilize’ itsin zed upontheiremerging flation andinterestrates, unfortunatelyand rick-pony andthatwe ash thatwentaround stitutional risk complementarity, itfacilitatedthefuture FSAs whichallowittomoveintodevelopedecono international successwhichcapitalizesuponinstit represented byadvancedcountries.However, need may ariseatsome pointtoshiftsome of balance initsperceived institutional risk. When quote above),itengagedininstitu larger andwished tobeseenasaglobalplay markets, thisalsoresultedinitsover-exposure in environmentswithinstitutional voids, and strategy). Whilst itshomecountry (not escapebecauseitremains dominant inemer term itinstitutionalsubstitution. phase andcan beseenasanattempt todiversify theirportfolio of institutional risks and hencewe to Londonin1999.Theforaysintotheseadvanced direction wasmoving itsprimary listingfrom Joha This gaveitaccesstowhatperceived tobemo This article isprotected bycopyright. Allrights reserved. Accepted Article attributed tooursharesfortr currencies. ...We made theacquisitiontoa currency risk,theviewwasthatwehadtonow that inherent intheshare priceisabig fi ‘Investment analystswere into the level of theot grow globallysothatwe her globalplayers.’[7] It isdeliberatelyengagingina tional substitutionintoadvan backgroundprovideditwithth looking atSABsharesandact ren’t justaSouthAfricanco ading indevelopingmarkets.’ [3] processofinstitutional substitution. er notsubjecttodiscountingbytraders(asinthe thereby expandintoother developing and emerging todososuccessfullymay requireprior its investment tomore stablehostcountriesas to emerging market institu to emerging thehome countryisinstitutionally volatile, a nancial risk,acurrencyrisk.Toreducethat re stable institutions. Asignificant step inthis ging markets butadefinite institutional hedging utional complementarity andtherebybuildsup dd valuetooursharebyreducingthediscount nnesburg (whereithadbeenlistedsince1897) mies. Inthiscasebye countries representsa startmoving intocoun ced countries.Thisprovideda form ofinstitutional arbitrage mpany anditwouldcatapultus ually discountingthem, saying e understandingtodobusiness ngaging ininstitutional tional risk.As itgrew switch andadifferent tries thathadhard This article isprotected bycopyright. Allrights reserved. Acceptedexperience inthehome countryenvironment. was relatively small buttheymade upfor itwithalternative competencies related totheir over time whichmay notfitneatlyintoconventi FSAs. InthisprocessFSAs arerapidly accumulated byEMNEs.Thereby, SABdevelopedFSAs and investinotheremerging markets withsimilar CSAs. EMNEscanbenefitfrom theirunderstanding FSA/CSA matrix whichallowsfor the process Earlier wehighlighted the importance ofperm traditional ownership advantages and areable to Articlesuccessfully expandedintoforeignmarkets. has beenargued thatalthough EMNEslacktheow competition. Theparadigm hascome underscruti specific ownership advantages thatcan beexplo firm specificadvantages.TheEclecticPara Country versusfirmspecific advantages The respondentsindicatedthat [3] you canalsousethatscale ofknowledgeor bigger youcangeteconomies ofscale inpr very wellandIthinkisa bigstrategicadva very effectiveattransferringknowledgefrom one they couldactuallyimprove theperformance of knowledge…sothethingsthatwedid gotbigger,oneofourkey strate ‘As SABhas SAB’s internationalizationwas digm (Dunning,1980)suggeststhatfirms require Ramamurti (2012b)arguesthatEMNEshavenon- itting foramore dynamic interpretation ofthe of learningandbuildingFSAs onthebackof ited togainacompetitive advantageover local exploitthese whenentering foreign markets. onal ownershipsadvantages.Theirbalancesheet ny regarding itsapplicability toEMNEsasit settings andleveragemore outoftheirlimited ntage for SAB. People ntage forSAB.People nership advantages ofDMNEs,theyhavestill ocurement whichSABisdoingalot of but diversity ofknowledgeto maximum effect’ ll inPoland,ifyouputthem inColumbia, of home countryinstitutionalenvironments there. Soinadivisionaloffice,wewere gic differentiatorshasbecome ourdiversity countrytothenext.Ithasworkedvery, facilitated bybothcountryand talk aboutasyouget This article isprotected bycopyright. Allrights reserved. Accepteddeveloped market competitors: Respondents arguedthatthislowere markets resulted inCSAsthatgave itacompar Articlethinking. and whichlocationwouldbethebestgiventh mentioned a particularexampletheyasked where others. Respondent5spokeabouthowtheylear that therewas alevel of humility inthatthey strategies totakeadvantageof to seeemerging trendsthatechodevelopments including innovation,marketing, techni teams aroundtheworldlearnfrom eachother’sexpe This viewisalsoexpressedinSABMiller’s( SAB’s understandingoftheinstitutionallysim guys could.’[3] business aroundandproduce goodqualitybeerat investment foryears.SoSABcould goinbe where youhadbusinesses thathadlowlaborcostsandtherebeenno capital thing startedhappeningwithth in Malawi....Andthiswasthesame with comes from Anheuser-Busch from America, th ‘They [Africannations]wereinourbac ‘Obviously inAfrica,wehadtheadvantageth and wethoughtthatwouldbereasonablywelcome.’ [4] where wehadsome comparableexperiencea well. ThesecondwascentralEuropeandthe could playtoourstrengths. ‘We decidedingeneraltofocusonthreepartsof theworldwhere wethoughtthat advantage butwehadtheunderstandi about goingintoEasternEuropeorSouth newopportunities’.Afinalpoint The firstonewastherestof d theirrisksofenteringcompar e collapseofcommunism incentralandEastern Europe cal standards,sourcingandtr 2014b: 10)annualreportinwhich itstates‘Our ng ofthirdworldcountries.’[6] were fine with asking for helpandlearning from eir requirement anditconfirmed theirprior ative edgeoverfirms from dissimilar markets. kyard andweunderstoodAfrica.Ifsomebody we haveseeninothermarkets anddevelop nt andgothelpfrom othercompanies and ilar businessenvironments ofotheremerging the Europeanbrewers....Thesame sortof America, wedidn't havethegeographic Coca-Cola foradviceon theirentry intoChina tter thanourcompet riences aswesharebest operating practices nd inwhichtherewerenogreatcompetitors third wasChina.…Sotheyweremarkets at itwasgeographically ey wouldn’tbetookeenongoingtowork afarlowercapitalcostthan theother Africa,whichweknewvery related toknowledgesharingis able marketsrelativetotheir aining. Ourinsightshelpus itors andturnthat close.Ifyoutalk This article isprotected bycopyright. Allrights reserved. Acceptedoperating inemerging markets: stated that the initial CSAswereslowly bei skills through theirexperiences As such,theypresentlyoftenoperateinthesa evident thatthesefirms arecompeting against each largely free from globalcompetitors suchasAnhe Articleof SAB’sstrengthsandthat internationalization. Therespondents within foreignmarkets asbusinessopportunitie supported byKhannaandPalepu(2006)whoargu opportunities –relatedtoourproposition oninstit that SAB’swillingness tooperateinmarkets with In theearlydaysofconsolidationth Respondents specificallyreferredtoinstitutional benefit forus.’[2] when wewereoriginally m operations aroundtheworld theyhave alsogain emerging marketbackgroundtousor Heineken acquisitions wouldbeABInBevwhoarepartly past. Ithinkitmay bebecoming alittleless ‘We certainlydid[have anadvantage overourcompetitors inemerging markets] inthe [1] out …,ifyoucangeteightofthetenthat the portfolioeffectwhereifyouwereinte to waitsubside. We acceptedtheriskofpo from highriskcountriesunlessofcoursether that wewouldlive withpoliticalrisk and willing totakeontherisk ofpoorinstitutions withheld or wouldn’tinvest, itcreated abe by theinstitutionalenvironment. Apoorlydeve ‘I don’tthinkthereis they werenotdeterredbytheprevalenceofsuchvoids. anycountrythatist in developingmarkets thatriva oving intoEasternEurope a stated thattheyfeltinstitutiona ng erodedbyDMNEsastheylearnttoadapt e beerindustry,SABenteredmarkets thatwere me markets slowlydeveloped asSABandhave s andthattheywereactuallydriversof poor institutions. Wedidn’treallyshyaway oo toughtogointosowe utional complementarity. Thisconceptis n countriesinAfricaandoneortwobombed user-Busch andHeineken. Now,however,itis e thatEMNEsoftenview tter competitive landscape; wewouldbemore institutional voidsrepresented real exploitable otherformany ofthesame targetbreweries. so giventhatour major competitors for voids asasource ofaCSA.Theyindicated wouldworkfromaportfolioperspective.’ . …Tobequitefrank,weactuallyaccepted e was aragingcivilwarthatwewouldhave litical instability andwereliedheavilyon loped environment meant thatcompetitors whoarebasedinHolland butwiththeir ed thatexperience.Buthaving saidthat, Brazilian sotheyhavethe same sortof nd Africa,itcertainly wasa l thoseofSAB.Respondents l voidsplayedintothehands weren’treallyputoff institutionalvoids This article isprotected bycopyright. Allrights reserved. markets. Theassetsalludedto with CSAs.Furthermore, many ofthesedifferent ownership advantagesthatallow in theliteratureneedtobesupplemented when internationalization strategiesemployed byEMNEs. resulted insome disadvantages.This that ithadfewer traditional FSAs andwasente markets were significantly higher for SAB thanfortheir developed market competitors. The fact a and SABnolongerpossessedrelevantCSAs.As greater learningcurveforthefirm. Indeveloped competitors. Developedmarkets wereinstitutionally distant toSABandtherefore represented a possibly inferior abilitytooperate in deve up throughtheexposure ofindividualstoliving used todescribetheabilities ofSABemploy Accepted Article Our findingslendsupporttothegrowi There isacountersidetotheemerging mark a) Employee aptitudes:Wordslikerobust,flexible [4] heritage inemerging markets developed ones.…Youinevitablyplayto ‘We havealsobeenmoresuccessfulindevelopingmarkets thanwehaveinthe strengths haveluckilybeenwh the endof the daybutwe werecertainly more familiar withemerging markets. Our ‘The USandAustraliaaremarkets that wereco of emerging markets whenwewentintotheUSwithMilleracquisition.’[6] probably trueforSABindeve ‘I definitelythinkwehadadvantagesinde by respondentsincludethefollowing. them toexploitpreviouslyun view wasraisedbyalltherespondents: – it’skindofinourDNA loped countriesaswedidnot ere thehighestgrowthinbeer ng bodyofliteratureonthedifferent loped markets incomparison withtheir DMNE ees. Respondents believed thisrobustness wasbuilt dealingwithEMNEsastheyhavedifferent ring aninstitutionally dissimilar environment et capabilities possessed by SAB, namely a et capabilitiespossessedbySAB,namely in anunsteadySouthAfrican environment. markets, the situation was therefore reversed FSAsariseoutoftheirexperienceinemerging veloping markets but I your strengthsthatco result theassociated It suggests that traditional assets discussed , resilient,entreprene mpletely foreigntous. attractive conditionsassociated haveanyexperienceoutside what wereallyaregoodat.’ markets hasoccurred.’[7] me outofyourlong risks ofenteringsuch think theconverseis urial anddiversewere It isstillbeerat disadvantage toSAB.TheirDMNEcompetitors This article isprotected bycopyright. Allrights reserved. 5 helicopter to theirbreweries. wastefulness oftheirDMNE ways toovercome thesechallengeswereembedd significant ruralpopulationandpocketsofpoor and tomanage costsandeliminate waste.Theex breweries andbusinesses,todriveperformance thr investment choicesandbecame a keydifferentiator. employees deployedbySABworldwideallowedit García-Canal, 2009;Ramamurti, 2009). These FSAsdevelopedout of CSAsrelatedto see Luiz, 2015. 2015. see Luiz,

SouthAfricais one of the wo Accepted Article c) Branddevelopment andmarketing: Respondents b) Operational excellence: Thiswasdescri This robustnesscombined withanabili could fixit,ourengine of theworldwouldlookatthatandsetfireto Africa, inSouthernAfricathatourpeople ‘We havingworkedinAfricaand knewthat international drive.Andthatwasvery, given arun-downoldbrewery strong firstclass,wellworldmodels didn’t havethat.Imean HeinekenandABwe ‘And thatskill set …was theunique difference between usand theothers. Theothers democratization whichwasterribleforbusin violence, hadsurvived10biblical survived interestratesat25%,inflation ‘Well Ithink thatthebreed of rld’s most ethnically and linguistically fractionalized countries – for a full discussion a –for full countries discussion fractionalized linguistically mostrld’s and ethnically competitors andtheextravag ers couldfixit’.[11] SABmanagers from the 80shadsurvivedlabortrouble, nd acellphone….Sothatcadre plagues wehadtolivethrough,thepre- ty toconnectwithdifferentcultures bed astheabilitytoturnaroundneglected very differenttoanyoneelse’.[12] political andeconomic inst hadstrongbrands whichhadglobal brand infrastructure meant , andwouldn’tknowwhattodowhenyouare periences facedinthei ed into their DNA. Respondents highlightedthe ed intotheirDNA.Respondents 16-17%, survivedpolitic could fixanybrewery.Nowthemajor brewers ough targets,tofindeffici to be flexible initsrisk,location and refined brokendownbr ess. Thattoughenedyou, it.Wedidn’t.l re brand-ledorganizations[that]hadvery stated thatthiswasbothanadvantageand ance oftheirCEOsflyingby that finding innovative r home countrywitha of peopleestablishedour ooked atitandsaidwe ability (see Guillénand al disorder,political eweries inEastern encies, tofixassets, toughened us’.[11] 5 meant thatthe This article isprotected bycopyright. Allrights reserved. minimized geographicaldistance but expanded intogeographically nearbycountries locational choices,thataddsnuancetoexisting Acceptedthe number twobrewerintheworld.Itfolloweda CONCLUSION October 2015toacquiretheirsign had littleemergingmarket experience.Theywere global brewerconsolidationuntilit to recognizechangeandadaptchange.’[12] how todefinetheriskwasapparentlybeyondthem initially: ‘Theydidn’treallyunders Articleexpansion, particularlyinemerging markets and country risk.Thelatter,they a globallevel. and lateracquiredglobalpremium likePer brands the brewersitboughtand builttheseintostrongna recognition. SABdidnothavethese SAB representsoneofthemost successfulMNEs d) Riskassessment: Respondentscontrastedth brands inourportfolio.’[3] there arealso international premium brands. premium. Nomatter whatc characteristics ofthebeermarket isthat ‘The solereasonforthatwaswewa argued, hadaconservativeapproach ificant emerging market presence. ountry youarein,there tand risk,sotheirabilitytofu was toolate andeventually when alsoinstitutionalandeconomi iconic brandsbutinsteaditlearnt Anheuser-Buschdidnot in Africa.Thecountries theories ofglobalMNEexpansion.SAB initially nted aninternationalbrand.Oneofthe people tendtoviewinte paid littleattentiontoSABasitexpanded e approachofSABandAnheuser-Buschto oni andGrolschtofend thus forcedtomake abidforSABMillerin tional brands.Alsoitdeliberatelywentout . ...Ifyougotoitscore,itwillbetheirfailure very distinctstrategy,es So wecouldnowhavetrulyinternational tocome outofAfricaandrosetobecome domestic premium brandsbut lly appreciatehowtoworkout toriskandinternational c distance.We arguethatit theydid,realized tousethelocalbrandsof selectednotonly reacttothechanging rnational brandsas off thecompetition at pecially asregardsits This article isprotected bycopyright. Allrights reserved. associated with over-exposuretoinstitutional know-how. However,over time and withsuccess, provides ausefulbasistoexpandutilizingth Acceptedand exploitingtheexperienceofhome country risk andanefforttodiversifyinstitutionally motivations ofseekingnewefficiencies,markets by EMNEsmeans thattheirdecision tointe diversification, andcountrycurrency risk of aportfolioeffectinstitu traditional motivessuchasassetse maintain thatthemove todevelopedmarkets institutional environments andvoidsinits Articlepart ofitsoperations,butit institutional substitution.Itis primary listingfrom JohannesburgtoLondon.Thiswemaintain ispartof aprocessof as theNetherlands,USA,Australia,andItaly. transition too),LatinAmerica, andChina. had recently transitioned awayfrom centralplan (proposition 1).Thisisfurther confirmed as strength, namely the knowledgeofdoingbusiness followed astrategyofinstitutional complementarity byseeking countries whichplayedtoits Our casestudy illustrates thevalue of initially capitalizing upon institutional complementarity The nextphaserepresentedadis is aprocessofhedgingagainst tional substitution(proposition 2) notanescapefrom itshome count eking (although clearlythisforms ofit)butalsointerms part tinct shiftwithmajoracquisitions home countryanditsemerging market hosts.We rnationalize isnotonl toabsorbpossiblefutureshocksathome. it movedbeyondAfricainto e comparative advantage linked toinstitutional mitigation. The unpredictableenvironment faced should notonlybeunderstoodinthecontextof uncertainty and,itsas We also seeitrelocati ning andthus wasexperiencinganinstitutional or assets,butalsoan ’s environment intosimilar settings.This pressure may ariseto diversifythe risk in environments ofinstitutional uncertainty its exposuretotheuncertain – anattemptatinstitutional ry asthisremains asignificant y drivenbytheusual sociated countryand ng itsheadquartersand inadvancedcountriessuch anxiety abouttheirhome Eastern Europe(which This article isprotected bycopyright. Allrights reserved. term thisabilityasinstitutional leverage capability (ILC)whichthey state explains the in suchawayastocapitalize uponthese competitive institutionaladvantagein itsprocess Acceptedconstruct furtherdistinctiveresourceadvant institutional uncertainty(dueto combine themwiththeirCSAs,relatedtounderstanding how todobusiness inmilieus of distinctive resourceaccretion’. We showhowSA undertakes activitieswhich‘pro institutional competitive advantageoccurs when advantages and Moreover, whilst othersareunabletodoso? but question country institutionsasasourceofcomparative Articleinternationalization. both asourceofadvantageanddisadvanta case method isthatweareable country institutionsthroughour internationalization patternsofEMNEsandthed environments. We progressthe comprehension ofth of CSAswhichallowedittole advanced countries.We provideanexample ofa currency risk, and thisraises thepossibility of Our workbuildsonthatofLandau how when and isthisexploitationof why some companiesare able toleverage off localinstitutional benefits verage offitsunderstandingofhome institutional country theirhome countryknowledgeofsuchinstitutions), and thereby to illustratehowthehome countr mpt thelocalinstitutionalenvironment toenablefurther notions ofcomplementarity and et al advantages atdis ge toSABatdifferentphasesofits . (2016)andMartin(2014)whoexamine home particular relevance? Mar particular relevance? ages. Thisgaveitbothacomparative and how aprocessof institutional substitution intomore and competitive advantage ininternationalization the firm utilizesitspreexisting resources and ynamics ofhowandwhenthisrelatestohost firm learningandbuildingitsFSAsontheback dofirms exploitdomestic institutional of internationalization and itchose itlocations B wasabletobuildonitsinitialFSAs and e roleofhome countryinstitutionsinthe tinct phases.Landau y institutionalenvironment was substitution. Thebenefitofthe tin (2014:66)proposesthat et al . (2016:52) This article isprotected bycopyright. Allrights reserved. also beawareofpotential institu internationalizing firms shouldconsider notonly Acceptedadvantages betweenhome andhostcountries. and howitchose itslocational pattern for internationalization onthebasis of theseinstitutional to explore.Werespondthiscallbydemonstra between home andhostcountryinstitutionalcompet operating inmultipleand diverseinstitutional institutions inhome andhostcountriesthat advocate thatfutureresearchs location and firm-level ownershipcompetitive advantages (Landau business literaturenamely thecap emerging markets.Like them, we Articleenvironments. Inthiswaywebothcomp construct furtherresourceadvantages andmove internationalize into locations with similar instit perceived as,weakinstitutionalsettingsand demonstrate thatEMNEs canexploit theirknowledge the argument that stable, well run institutions system) which aremore noticeably and traditionally advantageous. Fewwouldtakeissue with German casestodemonstrate favorablehome count benefits andleveragethemintofirm-specifi heterogeneity amongst firms withrespecttotheir In terms ofimplicationsforpr hould explorethepossibilitythat tional benefitsthatitshome count actice, weconcurwithLandau contributebyintegratingtwo abilities-based andin lement andextendtheworkofLandau c competitive advantages. They,however,relyon turn itinto asource ofadvantage asthey areasourceofadvantage.We,however, settings. Theysuggestthat complementarities such capabilitywillbe ofrelevance forfirms utional ‘weakness’.Overti into countrieswithless familiar institutional ting thisinthecaseofanEMNEfromAfrica thehostcountry’sinst ability toexploitthese ry institutions(suchasthedualeducation itive advantageswouldbeanimportant area of,whatwouldininstitutional theorybe stitutional theories ILCmay helpfirms leverage strands of theinternational et al ry could offer. However, these ry couldoffer.However, et al . (2016:64)thatwhen itutional envi ., 2016:63).They domestic institutional or strategyaroundthe me theyare ableto et al . (2016)into ronment but This article isprotected bycopyright. Allrights reserved. (although thisistruefor many emerging economies) Africa withcharacteristics from both the African companiesseekingtointernationalize.This Accepted(Luiz andCharalambous, 2009;Luiz footprint that these African companies possess. arising outofAfricaislikely voids andthis experience willbeput tothesevere test inAfrica. Acquiring nascentMNEs building theircapabilities indoi late 2015.Africa isthusfertil rather thango italone. Likewise,itmayexplain theoffer byABInBevtoacquire SABMiller in to dosobybuyinga51%stakein struggle toadapt.Thismay explainwhywhen Articleparticularly extreme institutionaland busine rise ofMNEsfrom emerging markets asthisgrow emerging countriesitthereforeimplies thatwe capitalize upon theseadvantages inthis envir These DMNEsmay findthemselves asproverbial necessarily translate equally wellinto emerging markets with highlevels of institutional voids. namely home country institutional uncerta leverage capability.We showthatEMNE manage benefits arenotautomatic andtocapitalize upon South AfricanMNEshavedominated interms The workhasimplications forDMNEstrategi e territoryforexpansionof to beagrowingtrendasDMNE ng business inemerging markets inthecontextof institutional Africa’s secondlargestretailer, and Ruplal,2013)thusareli more developedandlesseconomies inty, intoasourceofadvantage. ss environment andthusDMNEsarelikelyto onment. Asgrowthcontinuestodominate in Walmart in2011decidedtoenterAfricaitchose

are likelytocontinues es too.Itsuggests this theyneed todevelop theirinstitutional rs canturnasourceof of companies internati th playstotheirstrengt ‘fish outof water’astheystruggleto istheresult of partic . Onethereforeneedsto be carefulinhow EMNEs. ButDMNEsarerapidly s ‘purchase’ theexpertiseand Massmart from SouthAfrica, that theirFSAsdonot eeing thedisproportionate kely aheadofthecurve potentialdisadvantage, onalizing from Africa ular featuresofSouth hs. Africarepresentsa This article isprotected bycopyright. Allrights reserved. 6 phenomenon. Nonetheless,wearemindful ofthe Brazilian experience may captureboth aLatinAmerican and/oranemerging market Africa fallsintobothcategoriesbutthisargumen question ofwhetherSABiscapturinganAfri brands createschallengesforcompanies looking local nature ofbeerandtheemotional attachme (see Kirca,Fernandez,andKundu,2016foradiscu number ofuniquecharacteristic will allow for thedevelopment of thearguments pr further researchonAfricanMNEswithlarger over time whichcrosssectionalwo has bothstrengthsandweaknesses.Weareable based ontheexperienceofasinglecasewhich, but believeitprovidesaba advantages. canvass forunpackingourunderstandingofEMNE pyramid’ consumer markets characteristicof deteriorating infrastructure (especially incertain where relativelysophisticatedand some good pocketsofmanagerial human capital far oneextrapolatesfromthiscasestudybut

acknowledgeWe the comments from one of the reviewers in making this point. Accepted Article The studyhassome whichalsopres limitations 6 Nonethelesswedonotwishtogenerali sis forfurtherresearch. s that may influence theinterna thick financialmarkets, andthe rk is not able to do. However, thereisaneedtodevelop rk isnotabletodo.However, less developedeconomies providesavaluable can oranemerging market experience.South samples andfrom multiple hostcountrieswhich nts consumers developwiththeirnationalbeer as wehighlightedinthemethodology section, parts),cronycapitalism, to focusin-depth ontheexperienceof aMNE ‘curiousintersection’of exist uponalargeunskilledlabormarket base, t wouldbetrueforothercountriestoo–the to exporttheirproducts. unique historyofSouth Africa anditsplacein ent opportunitiesforfutureresearch.Itis esented here. Alsothebrewingindustry hasa s andhowtheyleverageoftheirunique ssion onindustrycontextinthisregard).The ze beyondthatwhichacasestudypermits tionalization stra rule oflaw,co-existwith thesetwoworldswhere andthe‘bottom ofthe Thereisalsothe tegies employed Buckley, PJ,ForsansN,MunjalS.2012.Host–home Bonaglia F,GoldsteinA,Mathews,JA.2007.Accel Amable B.2016.Institutionalcomplementarities in Ahmadjian CL.2016.Comparative institutional This article isprotected bycopyright. Allrights reserved. Research Foundationisherebyacknowle comments. ThesupportofEconomic Research Acknowledgements: makes thecase oftheSABexperience allthemore important. seeing theriseofMNEsfrom otherAfricancoun Africa. SouthAfricancompanies Review Acceptedadvantages asdeterminants of foreign acquisitions byIndian firms. doi:10.1016/j.jwb.2007.06.001 multinationals: Thecaseofthewhitegoodssector. Journal ofInstitutional Economics Management Studies Article REFERENCES

21 (5): 878–890.doi:10.1016/j.ibusrev.2011.10.001

53 We thanktheGuestEditorsandanony (1): 12-27. are thelargest source ofMNEs

12 : 79-103.doi:10.1017/S1744137415000211. analysis and institutionalcomplexity. dged withtheusualdisclaimers. the dynamiccomparative analysis ofcapitalism. erated internationaliza countrylinkagesandhos Southern Africa(ERSA)andtheNational tries particularly into African markets. This Journal ofWorldBusiness mous reviewersfortheirhelpful from Africabut wearerapidly tion byemerging markets’ International Business t–home countryspecific

42 Journal of (4): 369–383. Cuervo Cuervo-Cazurra A,GencM.2008.Transforming disa Cuervo-Cazurra A.2006.Who Crouch C,StreeckW, BoyerR,AmableB, Clougherty JA,Kim JU,SkousenBR,SzücsF.2016.Th Contractor FJ, Kumar V,KunduSK Cantwell J,DunningJH,LundanSM.2010.Anevolutio Cuervo-Cazurra A,Narula R,UnCA.2015.Interna ‐ This article isprotected bycopyright. Allrights reserved. 979. doi:10.1057/palgrave.jibs.8400390 MNEs intheleastdevelopedcountries. 807–822. complementarity andpoliticaleconomy’. Journal ofManagementStudies Border Investment Activitya 417. doi:10.1016/j.jwb.2007.06.003 and performance:Thecaseofemerging market firms. International BusinessStudies business activity:Theco-evolutionofMNEs and escape. Management Studies and thenon

AcceptedCazurra A,GencME.2011.Obligating,pressuri Article ‐ The MultinationalBusiness Review market advantagesofdeveloping

48 cares about corruption? cares aboutcorruption? (2): 441-455. . 2007.Natureoftherelationship nd theBalancebetweenMarket

41 . doi:10.1111/joms.12205. Forthcoming. (4): 567–586. Hall PA,JacksonG.2005.Dialogueon‘Institutional Journal ofInternationalBusinessStudies Socio-Economic Review tionalization motives: sell andtheinstitutionalenvironment. ‐ dvantages intoadvantag country multinational companies.

Journal ofInternationalBusinessStudies 23 nary approachtounders e FoundationsofInterna ng, supportingdimensions oftheenvironment (1): 25-35. Journal ofWorldBusiness ‐ Power andEfficiencyEffects. between interna

3 (2): 359-382. es: Developing-country more, buybetter,upgrade tanding international tional Business:Cross tional expansion Journal of Journal of

42 39 (4): 401– (6): 957–

37 (6): ‐ Ghemawat P.2001.Distance stillmatters. Gaur AS,LuJW. 2007.Ownershipstrategiesandsu Gammelgaard J,DörrenbächerC.2013.Introduction.In Fainshmidt S,JudgeWQ,AguileraRV,Smith A.2016. Dunning JH,LundanSM.2008.InstitutionsandtheOL D.2008.Oldwineinnew Dunning JH,Kim C,Park Dunning JH.1988.Theeclecticparadigm ofinternati Dunning JH.1980.Towardsaneclectictheoryofin Dow D,Karunaratna A.2006.Developingamultidimen

This article isprotected bycopyright. Allrights reserved. Accepteddoi:10.1177/0149206306295203 institutional distance and experience. Dörrenbächer C(eds).Edward El http://dx.doi.or taxonomy ofunderstudiedcountries. Pacific JournalofManagement Articlefrom emergingmarkets, today anddeveloped-country extensions. Journal ofInternationalBusinessStudies stimuli. Journal ofInternationalBusinessStudies Journal ofInternationalBusinessStudies g/10.1016/j.jwb.2016.05.003 Sauvant K(ed). TNCs thirtyyearsago.In

25 gar: Cheltenham,U.K.;1-17. (4): 573–593.doi:10.1007/s10490-007-9074-z Harvard BusinessReview Journal ofWorldBusiness Journal ofManagement

Edward Elgar:

11 ternational production:So (1): 9–31. rvival offoreignsubs bottles: Acomparison ofemerging-market TNCs onal production:Arestatement andsome possible I paradigm ofthemu sional instrument tomeasure psychicdistance Varieties ofinstitutionalVarieties systems: Acontextual The globalbrewery industry

37 (5): 578-602.

The riseoftransna Cheltenham, U.K.;158-180. (1): 1–31.

33 . Forthcoming. (8): 137-147. (1): 84–110. idiaries: Impacts of ltinational enterprise. me empirical tests. tional corporations , Gammelgaard J, Asia Hillemann J,GestrinM.2016.Thelimits offirm-lev Hennart JF.2012.Emerging market multinationalsa Hearn B,Oxelheim L,RandøyT.2016.Theinstitutional Hashai N,BuckleyPJ.2014.Iscompetitiveadvantag Guillen M,García-CanalE.2012. Guillen MF, Garcia-CanalE.2010. Guillén MF, García-CanalE.2009.TheAmerican m Guardiancich I,GuidiM.2015.Formal independen Gioia DA,CorleyKG,Hamilton AL.2013.Seekingqualita

This article isprotected bycopyright. Allrights reserved. International BusinessReview AcceptedStrategy Journal http://dx.doi.or business groups—ThecaseofAfrica. multinational enterprise?. McGraw Hill:NewYork. ArticleCambridge UniversityPress:NewYork. multinationals from emerging economies. doi: 10.1111/rego.12080 Capitalism: A caseof institutional complementarity?. Gioia methodology. g/10.1016/j.jwb.2016.02.002

2 (3): 168–187.doi:10.1111/j.2042-5805.2012.01038.x Organizational ResearchMethods Global StrategyJournal Emerging marketsrule:Growth stra The newmultinationals:Spanish

25 (3): 767-775. Journal ofWorldBusiness Academy ofManagementPerspectives ce ofregulatoryagenci nd the theory ofthemu el globalization: RevisitingtheFSA/CSA matrix. odel ofthemultinational firm andthe‘new’ e anecessaryconditionfortheemergence ofthe determinants ofprivateequityinvolvement in

4 tive rigorininductive (1): 35-48. Regulation andGovernance

16 (1): 15-31. firms inaglobalcontext tegies ofthenewglobalgiants . es andVarietiesof ltinational enterprise. research notesonthe

23 . Forthcoming. (2): 23–36. . Global . Kirca AH,FernandezWD, KunduSK.2016.Anempirical Khanna T,YafehY.2007.Businessgroupsin Khanna T,PalepuK.2013. Khanna T,PalepuK.2006.Emerging giants:Building Kalasin K,DussaugeP,Rivera Johanson J,VahlneJE.1977.Theinternationaliza Johanson J,VahlneJ.2009. TheUppsalainternationa Ingram PL,Silverman BS. 2002.Introduction.In

This article isprotected bycopyright. Allrights reserved. multinationality-performance relationship. Acceptedtheory inemergingmarkets: Theroleoffirm Economic Literature Harvard BusinessPress:Boston. Harvard BusinessReview 4 Advanced Markets:The Infl ArticleStudies development andincreasingfo 1431. doi:10.1057/jibs.2009.24 foreignness toliabilityofoutsidership. Ingram P,SilvermanB(eds).Elsevier:Oxford;1-31. (2): 75-103.

8 (1): 23–32. Winning inemerging markets:Aroadmapforstrategyand execution

45 ‐ (2): 331-372. Santos M.2014.TheExpansionofEmerging EconomyFirms into

84 uence of Intentional Path (10): 60–69. reign market commitments. emerging markets: Para Journal ofInternationalBusinessStudies The newinstitutionalisminstrategicmanagement tion processofthefirm Journal ofWorldBusiness -specific assets andassetdispersion inthe lization processmodel revi world-class companies indevelopingcountries. analysisandextensi ‐ Breaking Change. Journal ofInternationalBusiness gons or parasites?. gons orparasites?. : Amodel ofknowledge

51 on ofinternalization (4): 628-640. Global StrategyJournal sited: From liabilityof

40 Journal of (9): 1411– . ,

Luiz JM,StewartC.2014. Corruption,SouthAfricanmultin Luiz JM,RuplalM.2013. Foreigndirect investment, institutional voids, theinternationalization of Luiz JM,Charalambous H.2009.Factorsinfluencing Luiz JM.2016.Thepoliticaleconomy Luiz JM.2015.Theimpact ofethno-linguisticfr Li MH,CuiL,LuJ.2015.Marketizedstateowne JE.2012. Leedy PD,Ormrod Landau C,KarnaA,RichterUhlenbruckK.2016.In Kostova T,HultGTM.2016.MeyerandPeng's 2005arti Knight G,CavusgilS.2004.Innovation,organi

This article isprotected bycopyright. Allrights reserved. Journal ofBusiness Ethics mining companiesintoAfrica. Acceptedfinancial servicesfirms inSub-SaharanAfrica. Thepathto‘boundedpopulism’.trap? endogeneity andmodernization. Management multinationals: Leveraging institutional competitive advantages. Articleinstitutional advantages Business Studies international businessresearch agenda International BusinessStudies , Forthcoming. 1-28.doi:10.1007/s10490-015-9436-x

47 (1): 23-32. Practical research for internationalization.

124

ofmiddle-income traps:isS (3): 383-398. 35 Emerging MarketsFinanceandTrade Journal ofInternationalBusinessStudies (2): 124–141. : Context,organizations,theories. South AfricanJournalofEconomics zational capabilities, (10thed).Pearson: UpperSaddleRiver,NJ. actionalization on rship andforeignexpansionofemerging market foreign directinvestme International BusinessReview stitutional leveragecapab Global StrategyJournal cle asafoundationforanexpandedandrefined ational enterprisesandinstitutions inAfrica. cultural measures: Dynamics, outh Africainalongrungrowth the born-globalfirm. Asia PacificJournalof

nt ofSouthAfrican 49 (4): 113-129. Journal ofInternational

6 ility: creatingandusing

(1): 50-68. 46

84 (9): 1080-1098.

(1): 3-19. 18 (3): 305-317. Journal of Meyer KE,ThuTranYT.2006.Marketpenetration a Meyer KE,PengMW. 2016.Theoreticalfoundations Mathews JA. 2006.Dragonmultinationals: New Martin X.2014.Institutionaladvantage. Marketline. 2013. Madhok A,KeyhaniM.2012.Acquisitions asentrep Luo Y,Wang SL.2012.Foreigndirectinvestment st Luo Y,TungRL.2007.Internationalexpansionof

This article isprotected bycopyright. Allrights reserved. Long RangePlanning Acceptedof InternationalBusinessStudies Journal ofManagement Gl2ZQ%3d%3d le%3a+Global%22+AND+DT+20130801andbdata=J 1bb8118451e4%40sessionmgr112andvid=9andhid=103a http://web.b.ebscohost.com/bsi/r Article26–40. doi:10.1111/j.2042-5805.2011.01023.x internationalization ofmultinationals from emerging economies. diagnostic modelfordomestic countryeffects. doi:10.1057/palgrave.jibs.8400275 perspective. Marketline industry profile:Globalbeer Journal ofInternationalBusinessStudies

23 (2): 177–197.doi:10.1016/j.lrp.2006.04.004 : 5–27. esults?sid=68b76f2d-5683-48e2-b988-

Global StrategyJournal 47 (1): 3-22. players in21st century globalization. emerging market enterprises:Aspringboard rategies by developing country multinationals: A reneurship: Asymmetries, opportunities,the ofemerging economybusinessresearch. nd acquisitionstrategiesforemerging economies. Global StrategyJournal . London, UK.Retrievedfrom mRiPWJ1aCZ0eXBlPTAmc2l0ZT1ic2ktb

38 ndbquery=JN+%22Beer+Industry+Profi (4): 481–498.

4 (1): 55-69. Global StrategyJournal

2 (3): 244-261. Asia Pacific Journal

2 (1): SABMiller. 2013. Rugman AM.1981. Regnér P,Edman J.2013.MNEinstitutionaladvantage: Ramamurti R,SinghJV.(eds.)2009. Ramamurti R.2012.What isreallydiffere Ramamurti R.2012a.Competing withemerging market multinationals. Ramamurti R.2009.What havewelear Peng MW, WangDYL,JiangY.2008.An Peng M,LeeS,Wang D.2005.What determines th Morse J,BarrettM,MayanOlson K,SpiersJ.

This article isprotected bycopyright. Allrights reserved. Press: NewYork. Acceptedcountry institutions. University Press:Cambridge, U.K. Journal 249. doi:10.1016/j.bushor.2012.01.001 399-426. Articlein EmergingMarkets, doi:10.1057/palgrave.jibs.8400377 economies.focus onemerging institutional relatedness. and validity inqualitative research.

2 (1): 41–47.doi:10.1111/j.2042-5805.2011.01025.x SAB Millerplcannualreport 2013 Inside themultinationals: Journal ofInternationalBusinessStudies Ramamurti R,SinghP(eds.)Cambri Academy ofManagementReview Emerging multinationalsinemergingmarkets Journal ofInternationalBusinessStudies ned aboutemerging-market In MNEs? nt about emerging market multinationals? institution-basedviewofinte International JournalofQualitativeMethods 2008. Verificationstrategiesforestablishing reliability economics ofinternalmarkets e scopeof the firm overtime? Afocuson . London,UK:SABMiller. Howsubunitsshape,transposeandevadehost

30 dge UniversityPress:Cambridge; (3): 622–633.

45 Business Horizons rnational businessstrategy:A (3): 275-302. Emerging Multinationals

39 . Columbia University (5): 920–936. . Cambridge Global Strategy

1 (2): 13–22.

55 (3): 241– Witt MA,LewinAY.2007.Outwardforeign directinve Vahlne J,Johanson J.2013. TheUppsalamodel one Thomas E,MagilvyJK.2011.Qualitativerigoror Surroca J,Tribó JA,ZahraSA.2013.Stakeholderpre Song S,MakhijaM,LeeSH.2014.Within Snape D,SpencerL.2013.Thefounda Sharma V, Erramilli M. 2004.Resource-based explanationof entrymode choice. Salomon R,WuZ.2012.Institutional SABMiller. 2014b. SABMiller. 2014a.

This article isprotected bycopyright. Allrights reserved. institutional constraints. 210. doi:10.1108/02651331311321963 Acceptedfrom internalization to Specialists inPediatricNursing irresponsible practicestosubsidiaries. Options inForeign DirectInvestment. U.K.; 1-23. Articleguide forsocialsciencestudentsandresearchers Theory andPractice Business Studies http://www.sabmiller.com/about-us/history SAB history:Ourstory SAB Millerplcannualreport2014

43 (4): 343–367. doi:10.1057/jibs.2012.3

12 coordination ofnetworks. (1): 1–18. Journal ofInternational Business Studies distance andlocalis tions ofqualitativeresearch.In

16 (2): 151–5.doi:10.1111/j.1744-6155.2011.00283.x . RetrievedAugust06,2014,from ‐ Country GrowthOptionsVersusAcross Academy ofManagement Journal Global StrategyJournal researchvalidityin volution ofthemultinational business enterprise – ssure onMNEsandthetransferofsocially . London,UK:SABMiller. stment asescaperesponsetodomestic country , RitchieJ,LewisJ(eds).SAGE:London, International Marketing Review omorphism strategy.

qualitative research. Qualitative research practice: A 4 (2): 127-142.

38 (4): 579-594. Journal ofInternational

56 Journal ofMarketing (2): 549-572. ‐ Country Switching

30 Journal for (3): 189– Yin RK.2010.

This article isprotected bycopyright. Allrights reserved. Accepted Article Qualitative research fromstartto finish . TheGuildfordPress:NewYork. This article isprotected bycopyright. Allrights reserved. Accepted Article Table 1:SABInterview Respondents * Note:Inthe textrespondents are identif 6 ietro taey Group Group DirectorofManufacturing Group International DirectorofStrategy Former ChiefFinancial Officer Former ManagingDirector EasternEurope 17 16 15 14 LatinAmerica SeniorExecutive 13 Senior 12 11 Executive SeniorExecutive International 10 Senior 9 Group 8 Director International AfricaandAsia 7 International Executive 6 Non-Executive Head FinancialProjectsDirector 5 Senior 4 Senior Region(s) ManagingDirector 3 Senior Director Africa 2 Executive International West Executive 1 Executive Respondent* Position aaigDrco Group Managing Director Former Chairman andGroup ied bythesenumbers [insquarebrackets]. Europe Europe North America Latin America andPreviously Latin America andPreviously Latin America andPreviously ern andEasternEurope and subsequentlyEurope This article isprotected bycopyright. Allrights reserved. Accepted Article 1993 Table 2:Significant international activity SAB 2008 2007 2006 2005 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 Pre- China): China Republic in US,management controlstayswithSABMiller southern Vietnam largest brewer inChinabysale Company's portionofJointVenture and Ecuador(SouthAmerica's secondlargestbrewer) • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

Joint Venture withMolson CoorsBrewingCompany toform MillerCoors License agreement tobrewFoster China Resourcesacquires4more breweries Joint Venture agreement withVinamilk tobuildgreenfields breweryin Acquires Foster's brand CR SnowBreweries,SABMiller's jointventure in China,becomes the China ResourcesacquiresFuyangCitySnowland Brewery Increases footprintinIndiath Acquires acontrollinginterestinBa New JointVentureswithCast Sells HarbinBrewerytoAnheuser-Busch, China Associate China Resourcesincreases footprintinChina Acquires 30%interestinHarbinBrewery,China Acquires controllinginterest Acquires 100% of Miller BrewingCompany andisrenamed SABMiller Joint Venture ElSalvador Beve Acquires CerveceríaHondurñ,Honduras Acquires controllinginterestin Acquires controllinginterestZa Strategic alliancewithth Acquires NarangBreweries,India Moves primary listingtoLondon Acquires controllinginterestinPi Greenfields breweryKa Acquires controllingsharePivovarSaris, Slovakia Acquires Vultural,Ursusand Increases footprint with TyskieBrewery, Poland Acquires controllingshare Re-enters Zambia, Mozambique andAngola Joint Venturewithgovernment, Tanzania Joint VenturewithChinaResources(secondlargestbreweryinmainland Acquires controllingshareof Lesotho, Zimbabwe Controlling Shareholdinginseverals luga Brewery,Moscow and businessinIndia e Castelgroup-Mainly s volume andbybrewingcapacity of LechBrewery,Poland Birra PeroniS.p.A,Italy DreherBrewery,Hungary rough purchasing Shaw Wallacerough purchasingShaw and Pitber breweries, Romania el inMoroccoandAlgeria BereTimisoreana, Romania rages Business,ElSalvador mbia’s nationalbrewery,Zambia s and SpecialBittersintheUSA lsner UrquellandRadegast,Czech varia S.A.,Columbia, Panama, Peru outhern Africancountries:Botswana, Franco Africancountries This article isprotected bycopyright. Allrights reserved. Accepted Article Source: SAB/SABMillerdataad 2012 2011 2010 2009 Central Asia and theMiddle East • • • • • • • •

Acquires KoninklijkeGrol Strategic AlliancewithAnadolu Greenfields brewery,Nigeria Acquires Fosters, Australia Acquires CerveceríaArgentinaS.A.Isenbeck, Greenfields brewery,Angola Acquires CJSCSarmat, Ukraine Greenfields breweryinSouth Sudan apted from SABMiller, 2014a sch N.V,Netherlands Group forTurkey,Russia,theCIS, saPcfc 72 2.9 3 9.10% 15.30% 14.40% 13% 26.10% 20.20% 12% 12% 32% 12% 20.10% 27.79% 18.73% 19% 16.75% 68% 17.78% 7.65% 100%* 11.29% 67.2 48% 45.3 100%* Total 27.3 40.5 Australasia 25.141 20.3 Western Europe& 18.5 43 North America, Europe &China Eastern Rest ofAfrica, South Africa Asia Pacific SA)Africa (Excluding North America Europe Latin America Region 1990 2000 2013 1990 2000 2013 1990 2000 2013 2013 Hl (Millions)

This article isprotected bycopyright. Allrights reserved. Accepted smallvery of contribution the total * The1990 figure isforallofSouthern Africa, Article Annual Source: Company Reports Table 3:SABMillerProduction 4 4% 28% 100.00% 242 52% 27.375

and Profitability Levels 1990-2013and ProfitabilityLevels Hl(%ofTotal) although non South Africancountrieswouldmakeup a

Contribution Operating Profits 100% N/A Contribution EBITDA Margin EBITDA This article isprotected bycopyright. Allrights reserved. scales includingthedifferences inUS$ GDPper 0.667 Differences inthedegree ofindustrialdevel Notes: 0.292 AcceptedSource: DowandKarunaratna,2006 0.401 Italy 2003 0.993 0.023 1.300 0.162 0.250 USA 2002 1.956 2001 1.166 0.167 0.325 El Salvador India 2000 0.526 0.333 0.523 0.238 0.667 Czech 1999 0.177 1.034 0.694 0.250 0.087 Poland 1995 0.520 0.307 0.333 1.079 China 1994 Article 0.333 1.727 0.181 0.419 0.648 0.667 Tanzania 1994 0.333 0.643 0.000 0.452 Zambia 1994 0.174 0.521 0.469 Hungary 1993 0.548 1.026 Zimbabwe Pre 0.205 1993 0.509 Country Host home country,SouthAfrica,andhostcountries Table 4:Multidimensionalinst entry Date of development Industrial ruments of measuresofpsychic distance stimulibetween the Education Democracy Political ideology opment amongst countriesismeasured usingnine capita, energyconsumption, number ofcarsper This article isprotected bycopyright. Allrights reserved. Accepted Articlepopulation enrolledin difference inthe%ofliterateadults, Differences intheeducationlevelsamongstc group inpower. The firstdimension isthedegreeof democracy, Differences inthepoliticalsyst radios andtelevisionsper1,000people. 1,000 people,%non-agriculturallabour,urban 3rd leveleducation. ems amongstcountriesismeasured intwodistinctdimensions. population enrolledin2nd ountries ismeasured us and thesecondispoliticalideologyof population, number ofdailynewspapers, ing threescales:the level education,%of