The effect of dynamic change in home-country institutions on emerging market firms’ speed of outward foreign direct investment

Prior research on institutional dynamics has revealed the impact of institutional change on a firm’s internationalization decisions. We investigate institutional irregularity, which denotes the extremes of states of change in institutions. By integrating the dynamic institution-based view with the global factory framework, we examine the impact of COVID-19 institutions’ irregularity on the speed of an emerging market firm’s (EMF) first outward foreign direct investment (OFDI) after the pandemic’s outbreak, as well as the moderating effect of the EMF’s pre-pandemic OFDI scope. Our empirical tests of the first post-pandemic OFDI by EMFs reveal that home-country institutional irregularity accelerates firms’ post-pandemic OFDI, and that this effect is partially conditioned by the firm’s pre-pandemic OFDI scope.