Can strong home country institutions foster the internationalization of MNEs

Purpose – While many studies on institutional environment have primarily focused on the influence of the host country environment, limited insights have been offered on how the different dimensions of home institutions affect firm internationalization. This paper aims to fill this gap by investigating the effects of regulatory institutions at home.Design/methodology/approach – Using country governance quality to proxy quality of regulatory institutions, this study attempts to reveal how regulatory institutions at home facilitate a multinational enterprise's (MNE's) international expansion and why the influence differs in different country clusters. Using hierarchical linear modeling and cluster analysis, proposed hypotheses were tested with a three‐year panel of 511 firms from 38 countries.Findings – The results provide substantial support for the authors' hypotheses that MNEs with high governance quality at home are more engaged in internationalization than those with low governance quality at home. More...