Internationalization of hybrid state-owned enterprises from emerging markets: Institutional investors as enablers

Owing to privatization and divestment, State Owned Enterprises (SOEs) in many emerging markets are evolving in their form and function. SOEs, increasingly, are hybrid organizations, where the state is one of the owners along with other ownership groups such as institutional investors. Combining the resource-based view and institutional perspectives, we argue that the different ownership groups within the SOE can be instrumental in promoting/deterring the internationalization efforts of SOE. Empirical results from a sample of 1310 firm year observations of 116 unique firms in the 2011-2019 time-period demonstrate that state and foreign institutional ownership impact SOE internationalization negatively whereas domestic institutional ownership has a positive impact on SOE internationalization. Additionally, we examine interactions between different hybrid ownership groups and find that both foreign and domestic institutional investors can offer resource advantages to enable state owners to invest in internationalization activities. This study contributes towards a deeper understanding of ownership hybridity, internationalization challenges and resource mobilization in SOEs from emerging markets.