Subsidiaries' behavioural responses to volatile local contexts in emerging African markets: evidence from Nigeria

Akiebe Humphrey Ahworegba, Myropi Garri, Christophe Estay

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Abstract

Purpose: We explored subsidiaries’ behavioural responses to volatile institutional pressures in the local context of the emerging Nigerian market.

Design/methodology/approach: We built on institutional and contingency theory to analyse previous literature on developed markets and apply it to African contexts. We used a context-specific volatile local context model to show how porous formal and strong informal institutions constitute international business (IB) as a contested terrain in the host country. We used a qualitative methodology, involving multiple actors, to investigate this phenomenon in practice.

Findings: The findings indicated different types of institutional pressures shaping volatile local contexts, which together or separately impact subsidiaries, depending on their degree of exposure. Subsidiaries behaviourally respond to cope with these pressures through inclusive negotiations involving their home and host countries’ networks.

Originality/value: Previous research has imposed developed markets’ norms on emerging African markets, regardless of their volatility. Since subsidiaries’ responses to local contexts in emerging African markets are poorly understood, we developed a volatile local context model, showing how IB becomes a contested terrain in host countries, and we propose a model that differentiates between informal institutions. We highlight the impact of contextual pressures on subsidiaries, according to their levels of exposure to the local context. We conclude that committed alignment with a local context is necessary for presenting an effective contingent response to its volatilities.
Original languageEnglish
JournalMultinational Business Review
Early online date16 Nov 2021
DOIs
Publication statusEarly online - 16 Nov 2021

Keywords

  • local context
  • emerging markets
  • multinational subsidiaries
  • institutional environments

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