MNEs as institutional entrepreneurs: A dynamic model of the co-evolutionary process

Abstract

Co-evolutionary theory suggests that firms and their environments interactively influence each other over time due to the interplay between them. However, international business (IB) literature has paid little attention to the study of the co-evolutionary process. Therefore, new research that delves into the process in order to identify how the reciprocal influences between institutions and multinational enterprises (MNEs) take place, and that identifies key variables that determine the extent to which MNEs will affect the environment, is necessary. The current study addresses this call and examines the interplay between institutions and MNEs in order to explain such a coevolution. The paper provides a cohesive theoretical model for the co-evolutionary approach in the IB literature. Some suggestions for lines of inquiry and of methodological challenges for future research in the IB field are provided.