Pro-market institutions and global strategy: The pendulum of pro-market reforms and reversals

Alvaro Cuervo-Cazurra, Ajai Gaur, Deeksha Singh

Research output: Contribution to journalReview articlepeer-review

35 Scopus citations


We review the literature analyzing the impact of pro-market institutions on firms’ global strategy. We propose that the ideological tension between whether the government or the market should drive economic development results in a pendulum of pro-market reforms and reversals that drive changes in firm strategy and performance. Much progress has been made in the analyses of pro-market reforms and their impact on firms’ international strategies and performance. However, there is a need to further learn about four areas: (1) the concept of pro-market institutions, in particular the variety of institutional dimensions, the measures, and the influence of informal institutions on firm strategies; (2) the drivers of changes in pro-market institutions, especially firms’ influences and the co-evolution of firm strategies and institutional changes; (3) the implications of changes in pro-market reforms for the interactions among integration, diversification, and internationalization strategies, the causality chains connecting institutions and strategies, and the reconfiguration of activities globally; and (4) the non-traditional moderators that alter the impact of pro-market institutional dynamics on firms’ strategies, such as country-level political systems, industry-level competitor reactions, and individual-level managerial capabilities and perceptions.

Original languageEnglish (US)
Pages (from-to)598-632
Number of pages35
JournalJournal of International Business Studies
Issue number4
StatePublished - Jun 1 2019

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation


  • emerging markets
  • institutional change
  • institutions
  • international strategy
  • multinationals
  • pro-market reforms
  • pro-market reversals

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