Innovation In Emerging Markets Readings
Lecture 1................................................................................................................................ 3
Khanna, T. and Palepu, K. G. (2010). The nature of institutional voids in emerging
markets, in T. Khanna and K. G. Palepu (eds), Winning in Emerging Markets: A Road
Map for Strategy and Execution: 13-26. Boston: Harvard Business Press.........................3
Ramamurti, R. (2012). What is really different about emerging market multinationals?
Global Strategy Journal, 2: 41-47......................................................................................4
Lecture 2................................................................................................................................ 5
Doh, J., Rodrigues, S., Saka-Helmhout, A. and Makhija, M. (2017). International business
responses to institutional voids, Journal of International Business Studies, 48: 293-307.. .5
Mair, J. & Marti, I. (2009). Entrepreneurship in and around institutional voids: A case
study from Bangladesh, Journal of Business Venturing, 24: 419-435................................6
Rodrigues, S. B. & Child, J. (2023). The role of corporations in addressing non-market
institutional voids during the COVID-19 pandemic: The case of an emerging economy,
Journal of International Business Policy, 6: 115-132..........................................................7
Lecture 4................................................................................................................................ 9
Alvarez, S. A., & Barney, J. B. (2014). Entrepreneurial opportunities and poverty
alleviation. Entrepreneurship theory and practice, 38 (1), 159-184....................................9
Robson, P. J., Haugh, H. M. & Obeng, B. A. (2009). Entrepreneurship and innovation in
Ghana: Enterprising Africa. Small Business Economics, 32(3): 331-350.........................11
Zahra, S. A., Gedajlovic, E., Neubaum, D. O., & Shulman, J. M. (2009). A typology of
social entrepreneurs: Motives, search processes and ethical challenges. Journal of
business venturing, 24 (5), 519-532.................................................................................11
Lecture 5.............................................................................................................................. 13
Autio, E., Kenney, M., Mustar, P., Siegel, D., & Wright, M. (2014)...................................13
Entrepreneurial innovation: The importance of context. Research policy, 43 (7), 1097-
1108................................................................................................................................. 13
Mitchell, W., Wu, Z., Bruton, G. D., & Gautam, D. K. (2022). Microlevel analysis of
institutional intermediation in a rudimentary market-based economy: Entrepreneurship in
Kathmandu’s Indrachok market. Organization Science, 33 (6), 2106-2134......................16
Weiss, T., Lounsbury, M., & Bruton, G. (2024). Survivalist organizing in urban poverty
contexts. Organization Science, 35 (5), 1608-1640.........................................................17
Lecture 6: Guest lecture on scaling in BoP markets--Turning waste into wealth by Samantha
Cameron at Eco-Dio............................................................................................................. 18
Lecture 7.............................................................................................................................. 21
Aulakh, P., Kotabe, M. and Teegen, H. (2000). ‘Export strategies and performance of
firms from emerging economies: Evidence from Brazil, Chile and Mexico’, Academy of
Management Journal, 43: 342-361..................................................................................21
Luo, Y. and Tung, R. L. (2007). ‘International expansion of emerging market enterprises:
A springboard perspective’, Journal of International Business Studies, 38: 481-498.......23
Elia, S. and Santangelo, G. D. (2017). ‘The evolution of strategic asset seeking
acquisitions by emerging market multinationals’, International Business Review , 26: 855-
866................................................................................................................................... 25
McKague, K., Zietsma, C. and Oliver, C. (2015). ‘Building the social structure of a market’,
Organisation Studies, 36: 1063-1093...............................................................................27
Lecture 8.............................................................................................................................. 28
, Lessard, D. (2014). ‘The evolution of EMNCs and EMNC thinking: A capabilities
perspective’, in A. Cuervo-Cazurra and R. Ramamurti (eds), Understanding Multinationals
from Emerging Markets: 108-128. Cambridge: Cambridge University Press...................28
Dieleman, M. and Widjaja, H. (2019). ‘How powerful political ties appropriate resources
and how weaker organisations protect themselves: A case study from Indonesia’, Asia
Pacific Journal of Management, 36: 61-86.......................................................................30
Carney, M., Dieleman, M. and Taussig, M. (2016). ‘How are institutional capabilities
transferred across borders?’, Journal of World Business, 51: 882-894............................32
Lecture 9.............................................................................................................................. 33
Chliova, M. & Ringov, D. (2017). Scaling impact: Template development and replication
at the base of the pyramid. Academy of Management Perspectives, 31(1): 44-62...........33
Tidhar, R., Hallen, B. L., & Eisenhardt, K. M. (2025). Measure twice, cut once: Unit
profitability, scalability, and the exceptional growth of new firms. Organization Science,
36(1), 88-120................................................................................................................... 34
McDonald, R. M., & Eisenhardt, K. M. (2020). Parallel play: Startups, nascent markets,
and effective business-model design. Administrative science quarterly, 65(2), 483-523.. 38
Lecture 11............................................................................................................................ 40
Bhuiyan, M. F., & Ivlevs, A. (2019). Micro-entrepreneurship and subjective well-being:
Evidence from rural Bangladesh. Journal of business venturing, 34 (4), 625-645............40
Chliova, M., Brinckmann, J., & Rosenbusch, N. (2015). Is microcredit a blessing for the
poor? A meta-analysis examining development outcomes and contextual considerations.
Journal of Business Venturing, 30 (3): 467-487...............................................................41
Simba, A., Ogundana, O. M., Braune, E., & Dana, L. P. (2023). Community financing in
entrepreneurship: A focus on women entrepreneurs in the developing world. Journal of
Business Research, 163, 113962....................................................................................42
Lecture 12............................................................................................................................ 44
Su N., Zhu R., Zhong S., Rovner J., Chari R., Sun L. (2025) M-Pesa: designing an
ecosystem for socio-economic development in Africa, Ivy Publishing, case number
W44288........................................................................................................................... 44
,Lecture 1
Khanna, T. and Palepu, K. G. (2010). The nature of institutional voids in emerging
markets, in T. Khanna and K. G. Palepu (eds), Winning in Emerging Markets: A Road
Map for Strategy and Execution: 13-26. Boston: Harvard Business Press.
Institutional voids = the absence or weakness of market-supporting institutions that provide
information, enforce contracts, and reduce transaction costs.
● These institutions include intermediaries such as credit bureaus, courts, rating
agencies, market research firms, capital markets, and professional standards bodies.
They argue that emerging markets differ from developed economies primarily because of
these institutional gaps, not because of geography or income level. Institutional voids arise
when rules, norms, and intermediaries that connect buyers and sellers efficiently are missing
or underdeveloped.
These voids appear across several market contexts:
● Product markets - where weak distribution systems, logistics, and consumer data
limit market efficiency
● Capital markets - where developed banks, equity markets, and credit systems restrict
access to finance
● Labour markets - where limited training, certification, and employment intermediaries
make hiring and skill verification difficult
● Political and social systems - where unpredictable regulation, corruption, and weak
law enforcement distort market functioning
Because of institutional voids, assumptions of efficient markets, such as reliable information,
enforceable contracts, and low transaction costs, often do not hold in emerging economies.
For firms, institutional voids create constraints and opportunities. They increase risk and
cost, but firms that can adapt their business models, bypass missing institutions, or actively
fill these voids can gain competitive advantage. Consequently, managers are encouraged to
assess not just market size or growth, but where institutional voids exist and how firms can
respond to them strategically.
, Ramamurti, R. (2012). What is really different about emerging market multinationals?
Global Strategy Journal, 2: 41-47.
Ramamurti examines whether emerging market multinational EMNEs represent a
fundamentally new type of multinational enterprise requiring new theory, or whether existing
international business theories remain largely applicable.
EMNEs = firms that originate in developing or emerging economies and engage in foreign
direct investment
The paper positions the argument between two extremes: one claiming EMNEs are
completely new species of firm, and another arguing they can be fully explained by
established models such as Dunning’s OLI paradigm (Ownership, Location, Internalisation
advantages) and stages models of internalisation.
Puzzle 1:
The article highlights two apparent ‘puzzles’ about EMNEs. The first concerns ownership
advantages = firm-specific assets such as superior technology, brands, or managerial know-
how that enable firms to compete abroad. EMNEs seem puzzling because they internalise
aggressively despite originating in relatively poor, late-industrialising economies and lacking
these classic advantages.
Puzzle 2:
The second puzzle relates to internationalisation patterns, meaning the speed, direction, and
mode of foreign expansion. EMNEs often internationalise rapidly, invest South-North (from
developing into developed economies), and rely heavily on mergers and acquisitions rather
than gradual, incremental entry - behaviors that appear to contradict stages models and
product-cycle theory.
Ramamurti argues that these puzzles arise largely because existing theories were
developed from the historical experience of developed-country multinationals. He contends
that EMNEs do possess ownership advantages, but of a different kind: deep understanding
or emerging-market customers, ability to operate in institutional voids (defined as weak or
missing market-supporting institutions), strong cost efficiencies, and capabilities in producing
‘good-enough’ products.
Similarly, EMNEs’ internationalisation patterns can be explained by changing global
conditions, including the integration of large low-cost economies, new opportunities for
cross-border vertical integration, and the chance to acquire and restructure mature industries
in advanced economies. In this context, South-North investment and M&A-led expansion are
strategic responses rather than anomalies.
Overall, Ramamurti concludes that EMNEs do not require entirely new theory. Instead,
existing frameworks should be refined and extended to better account for home-country
context, industry structure, and historical timing. EMNEs are not wholly unique, but they
reveal the limits of theories built primarily on developed-country experience and help
distinguish universal principles from context-specific assumptions.
Lecture 1................................................................................................................................ 3
Khanna, T. and Palepu, K. G. (2010). The nature of institutional voids in emerging
markets, in T. Khanna and K. G. Palepu (eds), Winning in Emerging Markets: A Road
Map for Strategy and Execution: 13-26. Boston: Harvard Business Press.........................3
Ramamurti, R. (2012). What is really different about emerging market multinationals?
Global Strategy Journal, 2: 41-47......................................................................................4
Lecture 2................................................................................................................................ 5
Doh, J., Rodrigues, S., Saka-Helmhout, A. and Makhija, M. (2017). International business
responses to institutional voids, Journal of International Business Studies, 48: 293-307.. .5
Mair, J. & Marti, I. (2009). Entrepreneurship in and around institutional voids: A case
study from Bangladesh, Journal of Business Venturing, 24: 419-435................................6
Rodrigues, S. B. & Child, J. (2023). The role of corporations in addressing non-market
institutional voids during the COVID-19 pandemic: The case of an emerging economy,
Journal of International Business Policy, 6: 115-132..........................................................7
Lecture 4................................................................................................................................ 9
Alvarez, S. A., & Barney, J. B. (2014). Entrepreneurial opportunities and poverty
alleviation. Entrepreneurship theory and practice, 38 (1), 159-184....................................9
Robson, P. J., Haugh, H. M. & Obeng, B. A. (2009). Entrepreneurship and innovation in
Ghana: Enterprising Africa. Small Business Economics, 32(3): 331-350.........................11
Zahra, S. A., Gedajlovic, E., Neubaum, D. O., & Shulman, J. M. (2009). A typology of
social entrepreneurs: Motives, search processes and ethical challenges. Journal of
business venturing, 24 (5), 519-532.................................................................................11
Lecture 5.............................................................................................................................. 13
Autio, E., Kenney, M., Mustar, P., Siegel, D., & Wright, M. (2014)...................................13
Entrepreneurial innovation: The importance of context. Research policy, 43 (7), 1097-
1108................................................................................................................................. 13
Mitchell, W., Wu, Z., Bruton, G. D., & Gautam, D. K. (2022). Microlevel analysis of
institutional intermediation in a rudimentary market-based economy: Entrepreneurship in
Kathmandu’s Indrachok market. Organization Science, 33 (6), 2106-2134......................16
Weiss, T., Lounsbury, M., & Bruton, G. (2024). Survivalist organizing in urban poverty
contexts. Organization Science, 35 (5), 1608-1640.........................................................17
Lecture 6: Guest lecture on scaling in BoP markets--Turning waste into wealth by Samantha
Cameron at Eco-Dio............................................................................................................. 18
Lecture 7.............................................................................................................................. 21
Aulakh, P., Kotabe, M. and Teegen, H. (2000). ‘Export strategies and performance of
firms from emerging economies: Evidence from Brazil, Chile and Mexico’, Academy of
Management Journal, 43: 342-361..................................................................................21
Luo, Y. and Tung, R. L. (2007). ‘International expansion of emerging market enterprises:
A springboard perspective’, Journal of International Business Studies, 38: 481-498.......23
Elia, S. and Santangelo, G. D. (2017). ‘The evolution of strategic asset seeking
acquisitions by emerging market multinationals’, International Business Review , 26: 855-
866................................................................................................................................... 25
McKague, K., Zietsma, C. and Oliver, C. (2015). ‘Building the social structure of a market’,
Organisation Studies, 36: 1063-1093...............................................................................27
Lecture 8.............................................................................................................................. 28
, Lessard, D. (2014). ‘The evolution of EMNCs and EMNC thinking: A capabilities
perspective’, in A. Cuervo-Cazurra and R. Ramamurti (eds), Understanding Multinationals
from Emerging Markets: 108-128. Cambridge: Cambridge University Press...................28
Dieleman, M. and Widjaja, H. (2019). ‘How powerful political ties appropriate resources
and how weaker organisations protect themselves: A case study from Indonesia’, Asia
Pacific Journal of Management, 36: 61-86.......................................................................30
Carney, M., Dieleman, M. and Taussig, M. (2016). ‘How are institutional capabilities
transferred across borders?’, Journal of World Business, 51: 882-894............................32
Lecture 9.............................................................................................................................. 33
Chliova, M. & Ringov, D. (2017). Scaling impact: Template development and replication
at the base of the pyramid. Academy of Management Perspectives, 31(1): 44-62...........33
Tidhar, R., Hallen, B. L., & Eisenhardt, K. M. (2025). Measure twice, cut once: Unit
profitability, scalability, and the exceptional growth of new firms. Organization Science,
36(1), 88-120................................................................................................................... 34
McDonald, R. M., & Eisenhardt, K. M. (2020). Parallel play: Startups, nascent markets,
and effective business-model design. Administrative science quarterly, 65(2), 483-523.. 38
Lecture 11............................................................................................................................ 40
Bhuiyan, M. F., & Ivlevs, A. (2019). Micro-entrepreneurship and subjective well-being:
Evidence from rural Bangladesh. Journal of business venturing, 34 (4), 625-645............40
Chliova, M., Brinckmann, J., & Rosenbusch, N. (2015). Is microcredit a blessing for the
poor? A meta-analysis examining development outcomes and contextual considerations.
Journal of Business Venturing, 30 (3): 467-487...............................................................41
Simba, A., Ogundana, O. M., Braune, E., & Dana, L. P. (2023). Community financing in
entrepreneurship: A focus on women entrepreneurs in the developing world. Journal of
Business Research, 163, 113962....................................................................................42
Lecture 12............................................................................................................................ 44
Su N., Zhu R., Zhong S., Rovner J., Chari R., Sun L. (2025) M-Pesa: designing an
ecosystem for socio-economic development in Africa, Ivy Publishing, case number
W44288........................................................................................................................... 44
,Lecture 1
Khanna, T. and Palepu, K. G. (2010). The nature of institutional voids in emerging
markets, in T. Khanna and K. G. Palepu (eds), Winning in Emerging Markets: A Road
Map for Strategy and Execution: 13-26. Boston: Harvard Business Press.
Institutional voids = the absence or weakness of market-supporting institutions that provide
information, enforce contracts, and reduce transaction costs.
● These institutions include intermediaries such as credit bureaus, courts, rating
agencies, market research firms, capital markets, and professional standards bodies.
They argue that emerging markets differ from developed economies primarily because of
these institutional gaps, not because of geography or income level. Institutional voids arise
when rules, norms, and intermediaries that connect buyers and sellers efficiently are missing
or underdeveloped.
These voids appear across several market contexts:
● Product markets - where weak distribution systems, logistics, and consumer data
limit market efficiency
● Capital markets - where developed banks, equity markets, and credit systems restrict
access to finance
● Labour markets - where limited training, certification, and employment intermediaries
make hiring and skill verification difficult
● Political and social systems - where unpredictable regulation, corruption, and weak
law enforcement distort market functioning
Because of institutional voids, assumptions of efficient markets, such as reliable information,
enforceable contracts, and low transaction costs, often do not hold in emerging economies.
For firms, institutional voids create constraints and opportunities. They increase risk and
cost, but firms that can adapt their business models, bypass missing institutions, or actively
fill these voids can gain competitive advantage. Consequently, managers are encouraged to
assess not just market size or growth, but where institutional voids exist and how firms can
respond to them strategically.
, Ramamurti, R. (2012). What is really different about emerging market multinationals?
Global Strategy Journal, 2: 41-47.
Ramamurti examines whether emerging market multinational EMNEs represent a
fundamentally new type of multinational enterprise requiring new theory, or whether existing
international business theories remain largely applicable.
EMNEs = firms that originate in developing or emerging economies and engage in foreign
direct investment
The paper positions the argument between two extremes: one claiming EMNEs are
completely new species of firm, and another arguing they can be fully explained by
established models such as Dunning’s OLI paradigm (Ownership, Location, Internalisation
advantages) and stages models of internalisation.
Puzzle 1:
The article highlights two apparent ‘puzzles’ about EMNEs. The first concerns ownership
advantages = firm-specific assets such as superior technology, brands, or managerial know-
how that enable firms to compete abroad. EMNEs seem puzzling because they internalise
aggressively despite originating in relatively poor, late-industrialising economies and lacking
these classic advantages.
Puzzle 2:
The second puzzle relates to internationalisation patterns, meaning the speed, direction, and
mode of foreign expansion. EMNEs often internationalise rapidly, invest South-North (from
developing into developed economies), and rely heavily on mergers and acquisitions rather
than gradual, incremental entry - behaviors that appear to contradict stages models and
product-cycle theory.
Ramamurti argues that these puzzles arise largely because existing theories were
developed from the historical experience of developed-country multinationals. He contends
that EMNEs do possess ownership advantages, but of a different kind: deep understanding
or emerging-market customers, ability to operate in institutional voids (defined as weak or
missing market-supporting institutions), strong cost efficiencies, and capabilities in producing
‘good-enough’ products.
Similarly, EMNEs’ internationalisation patterns can be explained by changing global
conditions, including the integration of large low-cost economies, new opportunities for
cross-border vertical integration, and the chance to acquire and restructure mature industries
in advanced economies. In this context, South-North investment and M&A-led expansion are
strategic responses rather than anomalies.
Overall, Ramamurti concludes that EMNEs do not require entirely new theory. Instead,
existing frameworks should be refined and extended to better account for home-country
context, industry structure, and historical timing. EMNEs are not wholly unique, but they
reveal the limits of theories built primarily on developed-country experience and help
distinguish universal principles from context-specific assumptions.
