Understanding the interplay between brand and innovation orientation: Evidence from emerging multinationals

Drawing on brand and innovation management literature, this article presents the development and testing of a theory about the way strong brands shape innovation orientation under conditions of institutional uncertainty. Using a unique database of sixty-two large Latin American multinationals (multilatinas), we illustrate that the strong brands of emerging multinationals interact with institutional uncertainty in the host market to shape the firms’ innovation orientation. We confirm the robustness of the results, by using secondary data on foreign direct investments, advertising, and R&D investments. The implications of our findings for managers of multinational companies are clear: While strong brands enhance the innovation orientation of emerging multinationals, conditions of institutional uncertainty in host markets weaken this relationship.