A contingent view of institutional environment, firm capability, and innovation performance of emerging multinational enterprises

Abstract Drawing on the institution theory and the resource-based view of the firm, we propose a contingent view on the relationship between host market's institutional environment, emerging multinational enterprises (EMNEs)’ capability, and their innovation performance in the internationalization process. Specifically, we examine three key aspects of host market's institutional environment: market maturity, intellectual property right protection, and cultural distance, to investigate their distinct impact on innovation performance. We further explore how the effects of institutional environment is contingent upon firm-specific absorptive capability. The analyses of a panel data of 735 Chinese EMNEs provide support for this contingent view, and the findings of this study thus can help advance our understanding of the internationalization process of EMNEs.