Pace of Business-Efficiency Reforms and Firms’ Competitive Responses : A Multi-Country Study of Emerging Economies

A faster pace of business-efficiency reforms in emerging economies creates a hyper-competitive business landscape, with global firms arriving with significantly better resources posing enormous challenges to incumbent firms. Using a data set of 55,068 firm-year observations from 37 nations during 1998-2019, we hypothesize and find support that the pace of business-efficiency reforms positively impacts firms’ engagement in competitive actions of capability augmentation and cross-border acquisitions. Furthermore, we hypothesize and find support that firms will focus more on internal capabilities when they have a performance surplus and will be more likely to go for cross-border acquisitions when facing performance deficit