Revisiting Institutional Voids: Advancing the International Business Literature by Leveraging Social Sciences

Dieleman, Marleen; Markus, Stanislav; Rajwani, Tazeeb; White, George O.

doi:10.1016/j.intman.2022.100935

Cited by 17 publications

(19 citation statements)

References 95 publications

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“…), hence prescribing different NMS responses. Indeed, ‘institutional voids’ as such are often identified by comparing developing markets, featuring voids, against a Western institutional template, assumed to be institutionally intact (for a critique, see Dieleman et al, 2022). Our framework suggests that such sharp conceptual division can break down under populism, since populist ideology can puncture holes in the institutional fabric of advanced and developing democracies alike.…”

Section: Discussionmentioning

confidence: 99%

“…Our inquiry builds on the scholarship on institutional weaknesses and ‘institutional voids’, which examines the macro‐level background conditions, such as poor governance, that generate political risk (Dieleman et al, 2022; Doh et al, 2017; Henisz, 2000; Holburn and Zelner, 2010). We also draw on the nascent legitimacy‐based approach to political risk investigating the appropriateness of the firm's goals in the eyes of the government in a given societal context (Henisz and Zelner, 2005; Stevens et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…While offering the key building blocks for our framework, extant scholarship is insufficient to help firms (and scholars) understand populism for three reasons. First, while past work has examined discrete institutional markers of risk such as political discretion, corruption, or weak rule of law, it often takes a static and compartmentalized view of these institutions (Dieleman et al, 2022). However, we show that populism is multidimensional and entails ongoing institutional change.…”

Section: Introductionmentioning

confidence: 99%

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Populist Syndrome and Nonmarket Strategy

Blake

Markus

Martinez‐Suarez

2022

J Management Studies

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Although recognized as a defining feature of the current political era, populism and its implications for non‐market strategy remain undertheorized. We offer a framework that (a) conceptualizes populism and its progression over time; (b) outlines the risks populism generates for firms; and (c) theorizes effective nonmarket strategies under populism. Our framework anchors the political risk profile of populism in three interdependent elements: anti‐establishment ideology, de‐institutionalization, and short‐term policy bias. These elements jointly shape the policymaking dynamics and institutional risks for firms under populism. Our analysis shows how firms can calibrate two nonmarket strategies – political ties and corporate social responsibility – to mitigate populism‐related risks. We specify how particular configurations of political ties and CSR activities, aimed at the populist leadership, bureaucrats, political opposition, and societal stakeholders, minimize risk under populism. Further, we theorize how the effectiveness of specific attributes of political ties and CSR – namely their relative covertness (more vs. less concealed) and their relative focus (narrowly vs. widely targeted) – varies as a function of firm type (insiders vs. outsiders) and the probability of populist regime collapse. Finally, we address how motivated reasoning may bias firms' assessments of regime fragility and resulting strategy choices.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Populist Syndrome and Nonmarket Strategy

Blake

Markus

Martinez‐Suarez

2022

J Management Studies

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“…Institutional voids occur when market-supporting institutions are absent or inefficient (Khanna and Palepu, 1997, 2010). In other words, it refers to the idea that institutions may fail to support markets (Dieleman et al. , 2022) and, consequently, undermine the success of firms (Liedong et al.…”

Section: Introductionmentioning

confidence: 99%

“…Institutional voids occur when market-supporting institutions are absent or inefficient Palepu, 1997, 2010). In other words, it refers to the idea that institutions may fail to support markets (Dieleman et al, 2022) and, consequently, undermine the success of firms (Liedong et al, 2020). It is worth noting that institutional voids increase the likelihood of corruption, excessive rents for some actors and market power (Areneke et al, 2022;Doh et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

Board diversity and systematic risk: evidence from emerging markets

Daniel‐Vasconcelos

Crisóstomo

Ribeiro

2023

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Purpose This study aims to investigate the association between board diversity and systematic risk. The theoretical framework used in this study is based on agency and resource dependency theories.Design/methodology/approach Using a panel data set of 788 firms listed in the Morgan Stanley Capital International (MSCI) Emerging Markets index from 2015 to 2020, the authors apply Panel-Corrected Standard Error estimation method to test the three proposed hypotheses and the two-stage least squares method is adopted for the endogenous test.Findings The results suggest that board-specific skills diversity (BSSD) and board independence (BIND) have a negative impact on systematic risk. On the other hand, board gender diversity does not affect systematic risk. The findings reinforce the relevance of board diversity for reducing systematic risk and offer valuable insights for policymakers and investors, suggesting that the presence of directors with specific skills and independent directors could reduce firms’ systematic risk.Research limitations/implications The study extends the scope of agency and resource dependency theories by suggesting that the BSSD and BIND reduce agency costs and bring critical resources to the firm’s survival.Practical implications The findings support policymakers and managers in reducing systematic risk. In addition, the results demonstrate the importance of policies that encourage board diversity and BIND.Social implications The study demonstrates how companies can reduce systematic risk through board diversity and BIND.Originality/value To the best of our knowledge, this is the first study to investigate the association between board diversity and systematic risk only in emerging markets.

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Toward an institution-based paradigm

et al. 2022

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As part of the broader intellectual movement throughout the social sciences that is centered on new institutionalism, the institution-based view has emerged as a leading perspective in the strategic management literature. This article (1) traces the emergence of the institution-based view, (2) reviews its growth in the last two decades, and (3) responds to three of its major criticisms. We also identify four promising research directions-deglobalization and sanctions, competitive dynamics, hybrid organizations, and corporate social responsibility. Overall, we demonstrate that the thriving research on institutions has culminated in an institution-based paradigm, which has significant potential for future growth.

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Revisiting Institutional Voids: Advancing the International Business Literature by Leveraging Social Sciences

Cited by 17 publications

References 95 publications

Populist Syndrome and Nonmarket Strategy

Populist Syndrome and Nonmarket Strategy

Board diversity and systematic risk: evidence from emerging markets

Toward an institution-based paradigm

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