Why exporting is still the main international business mode from emerging economies? evidence from institutional perspectives on the exporting RMG sector of Bangladesh.

Abstract

This study was aimed at evaluating why exporting is still the main mode of international business from emerging economies through investigating the impact of institutional forces. Data were collected from ready-made garments (RMG) industry of Bangladesh. Elements of regulatory, cognitive and normative dimensions of institutions were developed based on Richard W. Scott's institutional dimensions. This study has found that international firms from emerging economies opted for exporting as a mode of international business mainly because of the institutional voids in regulatory dimension. Complexities in regulations and bureaucracies have been identified as major influencing factors. Institutional voids resulting from cultural-cognitive and normative dimensions pose lesser effect in choosing international business modes of exporting. This research has made some apparent contribution to the institutional theory.