First-mover Strategy and Performance of Late Movers among MNEs in an Emerging Market
Authors: Wanxing Jiang, Ji Li, Tao Liu, Xiaolong Tao
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Research shows several effects of first-mover strategy on first movers’ performance. However, the effects of first-mover strategy on late movers’ performance have not been sufficiently studied. Integrating viewpoints from theories of organizational sociology as well as those of business strategy, we predict that the first-mover strategy should have both direct and indirect effects on the performances of later movers. Moreover, the effects are more likely to be significant in emerging markets with more environmental uncertainties. To test these predictions, we develop hypotheses and test them empirically among MNEs in China’s insurance industry. This test shows that, other things being equal, first-mover strategy does cause significantly more imitation among late movers. The imitation, in turn, has significant effects on other dimensions of firm performance, including less deviation from the industry norm and better financial performance. Finally, in the process of imitation, similarity in home-country culture also has a significant and positive effect.