Institutional constraints and exporting of emerging-market firms: The moderating role of innovation capabilities and digital transformation

Abstract

Drawing from institutional arbitrage perspective and the view of organizational capability, we develop arguments showing how emerging-market firms' (EMFs) innovation capabilities and digital transformation facilitate or constrain the importance of domestic institutional quality in their export activities. We use the data of Chinese firms collected from World Bank's Enterprise Survey database to test the research hypotheses. The results indicate that home country institutional constraints relate positively to export intensity. Moreover, this relationship is weakened by innovative capabilities but strengthened by digital transformation. We discuss the implications for theory and practice.