Chapter 13 Stakeholder Responses and the Interplay Between MNE Post-entry Behavior and Host Country Informal Institutions

The purpose of the study is to develop an understanding of the interplay between multinational enterprises (MNEs) and informal institutions on a firm–industry level. “Interplay” here means how responses to institutions develop in a particular context and how this development is interrelated with stakeholders’ reactions and activities. To study this interplay between MNEs and informal institutions, the authors draw on literature on institutional complexity, as well as on a co-evolutionary perspective. Two case vignettes are presented on MNEs’ post-entry strategies and behaviors in their new host markets, with a view to understanding how and under what conditions informal institutions in the host market may compel MNEs to alter their initial strategies and behaviors in the market and, on the other hand, how and under what conditions MNEs’ strategies and behaviors may act as catalysts of change in these informal institutions.