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Knee Deep in the Big Muddy: The Survival of Emerging Market Firms in Developed Markets

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Abstract and Key Results

This study of Latin American banks located in the United States employs a resource-based framework to explain how subunits of emerging market firms can overcome the challenges of operating in a developed market.

Our results show that an EMF subunit can draw upon ethnic identity as a valuable and costly-to-imitate resource to achieve competitive parity in the developed market.

Ethnic resources can be generated not only from ethnically similar customers but also from ethnically similar competitors in the local market.

In addition, the parent firm’ level local and non-local resources can help to achieve competitive parity for the EMF subunits in that country, which in turn positively influences survival.

However, over expansion can lead to spreading local and non-local resources too thin, thus adversely affecting survival.

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Notes

  1. We thank an anonymous reviewer for this suggestion.

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Acknowledgements

The authors appreciate the comments and suggestions of Steve Boivie, Mason Carpenter, Andrew Delios, Daniel Indro, Kyle Lewis, Dan Li, Yadong Luo, Jim Westphal, Hong Zhu, and anonymous MIR reviewers.

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Authors and Affiliations

  1. School of Management, University of Texas, San Antonio, USA

    Stewart R. Miller (Associate Professor)

  2. Anderson School of Management, University of New Mexico, Albuquerque, USA

    Douglas E. Thomas (Associate Professor)

  3. Mays Business School, Texas A & M University, College Station, USA

    Lorraine Eden (Professor of Management) &  Michael Hitt (Distinguished Professor)

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  1. Stewart R. Miller
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  2. Douglas E. Thomas
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  3. Lorraine Eden
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  4. Michael Hitt
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Miller, S., Thomas, D., Eden, L. et al. Knee Deep in the Big Muddy: The Survival of Emerging Market Firms in Developed Markets. MANAGE. INT. REV. 48, 645–666 (2008). https://doi.org/10.1007/s11575-008-0101-1

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