IDEAS home Printed from https://ideas.repec.org/a/pal/jintbs/v50y2019i1d10.1057_s41267-018-0201-5.html
   My bibliography  Save this article

The dubious role of institutions in international business: A road forward

Author

Listed:
  • Ruth V. Aguilera

    (Northeastern University
    Ramon Llull University)

  • Birgitte Grøgaard

    (BI Norwegian Business School)

Abstract

Our commentary returns to the conundrum of how institutions matter in international business (IB) by revisiting the 2018 JIBS Decade Award article by Jackson and Deeg (2008) on Comparing Capitalisms. We first synthesize their main insights around institutional diversity and track its significant impact within IB and other management fields. We then suggest three main takeaways that could move Jackson and Deeg’s agenda further in terms of developing a more nuanced approach to institutions in IB. We close with suggestions for future research and urge IB scholars to be more cautious when drawing on different strands of institutions theory.

Suggested Citation

  • Ruth V. Aguilera & Birgitte Grøgaard, 2019. "The dubious role of institutions in international business: A road forward," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(1), pages 20-35, February.
  • Handle: RePEc:pal:jintbs:v:50:y:2019:i:1:d:10.1057_s41267-018-0201-5
    DOI: 10.1057/s41267-018-0201-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41267-018-0201-5
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1057/s41267-018-0201-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lorraine Eden, 2010. "Letter from the Editor-in-Chief: Lifting the veil on how institutions matter in IB research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(2), pages 175-177, February.
    2. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    3. Birgitte Grøgaard & Asmund Rygh & Gabriel R. G. Benito, 2019. "Bringing corporate governance into internalization theory: State ownership and foreign entry strategies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(8), pages 1310-1337, October.
    4. Aloysius Newenham-Kahindi & Charles E Stevens, 2018. "An institutional logics approach to liability of foreignness: The case of mining MNEs in Sub-Saharan Africa," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 881-901, September.
    5. Alan M. Rugman & Alain Verbeke, 2005. "Subsidiary Specific Advantages in Multinational Enterprises," Chapters, in: Analysis of Multinational Strategic Management, chapter 6, pages 77-90, Edward Elgar Publishing.
    6. Aya S. Chacar & Sokol Celo & William Hesterly, 2018. "Change dynamics in institutional discontinuities: Do formal or informal institutions change first? Lessons from rule changes in professional American baseball," Business History, Taylor & Francis Journals, vol. 60(5), pages 728-753, July.
    7. William Q Judge & Stav Fainshmidt & J Lee Brown III, 2014. "Which model of capitalism best delivers both wealth and equality?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(4), pages 363-386, May.
    8. Steven Tadelis & Oliver E.Williamson, 2012. "Transaction Cost Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    9. Ioannis Ioannou & George Serafeim, 2012. "What drives corporate social performance? The role of nation-level institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(9), pages 834-864, December.
    10. Elinor Ostrom, 2010. "Beyond Markets and States: Polycentric Governance of Complex Economic Systems," American Economic Review, American Economic Association, vol. 100(3), pages 641-672, June.
    11. Jonathan Doh & Suzana Rodrigues & Ayse Saka-Helmhout & Mona Makhija, 2017. "International business responses to institutional voids," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 293-307, April.
    12. André van Hoorn & Robbert Maseland, 2016. "How institutions matter for international business: Institutional distance effects vs institutional profile effects," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(3), pages 374-381, April.
    13. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December.
    14. Musacchio,Aldo, 2015. "Experiments in Financial Democracy," Cambridge Books, Cambridge University Press, number 9781107514782.
    15. Jean-Luc Arregle & Toyah Miller & Michael Hitt & Paul Beamish, 2016. "How does Regional Institutional Complexity Affect MNE Internationalization?," Post-Print hal-02313366, HAL.
    16. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    17. Zhenzhen Xie & Jiatao Li, 2018. "Exporting and innovating among emerging market firms: The moderating role of institutional development," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(2), pages 222-245, February.
    18. John Geary & Roberta Aguzzoli, 2016. "Miners, politics and institutional caryatids: Accounting for the transfer of HRM practices in the Brazilian multinational enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(8), pages 968-996, October.
    19. Witold Henisz & Anand Swaminathan, 2008. "Institutions and international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 537-539, June.
    20. Verbeke, Alain & Kano, Liena, 2015. "The New Internalization Theory and Multinational Enterprises from Emerging Economies: A Business History Perspective," Business History Review, Cambridge University Press, vol. 89(3), pages 415-445, October.
    21. Jean-Luc Arregle & Toyah L Miller & Michael A Hitt & Paul W Beamish, 2016. "How does regional institutional complexity affect MNE internationalization?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(6), pages 697-722, August.
    22. Fortwengel, Johann & Jackson, Gregory, 2016. "Legitimizing the apprenticeship practice in a distant environment: Institutional entrepreneurship through inter-organizational networks," Journal of World Business, Elsevier, vol. 51(6), pages 895-909.
    23. Harry P Bowen & Dirk De Clercq, 2008. "Institutional context and the allocation of entrepreneurial effort," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 768-768, June.
    24. Heather Berry & Mauro F Guillén & Nan Zhou, 2010. "An institutional approach to cross-national distance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(9), pages 1460-1480, December.
    25. A. Rebecca Reuber & Gary A. Knight & Peter W. Liesch & Lianxi Zhou, 2018. "International entrepreneurship: The pursuit of entrepreneurial opportunities across national borders," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(4), pages 395-406, May.
    26. Alan M. Rugman & Alain Verbeke, 2005. "A Note on the Transnational Solution and the Transaction Cost Theory of Multinational Strategic Management," Chapters, in: Analysis of Multinational Strategic Management, chapter 2, pages 16-26, Edward Elgar Publishing.
    27. Mike W Peng & Denis Y L Wang & Yi Jiang, 2008. "An institution-based view of international business strategy: a focus on emerging economies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(5), pages 920-936, July.
    28. John Cantwell & John H Dunning & Sarianna M Lundan, 2010. "An evolutionary approach to understanding international business activity: The co-evolution of MNEs and the institutional environment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(4), pages 567-586, May.
    29. Renate E. Meyer & Markus A. Höllerer, 2014. "Does Institutional Theory Need Redirecting?," Journal of Management Studies, Wiley Blackwell, vol. 51(7), pages 1221-1233, November.
    30. Gregory Jackson & Richard Deeg, 2008. "Comparing capitalisms: understanding institutional diversity and its implications for international business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 540-561, June.
    31. Ayse Saka-Helmhout & Mike Geppert, 2011. "Different Forms of Agency and Institutional Influences within Multinational Enterprises," Management International Review, Springer, vol. 51(5), pages 567-592, October.
    32. Brian C Pinkham & Mike W Peng, 2017. "Overcoming institutional voids via arbitration," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 344-359, April.
    33. March, James G. & Olsen, Johan P., 1983. "The New Institutionalism: Organizational Factors in Political Life," American Political Science Review, Cambridge University Press, vol. 78(3), pages 734-749, December.
    34. Ziliang Deng & Ruey-Jer “Bryan” Jean & Rudolf R Sinkovics, 2018. "Rapid expansion of international new ventures across institutional distance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(8), pages 1010-1032, October.
    35. Sjoerd Beugelsdijk & Björn Ambos & Phillip C Nell, 2018. "Conceptualizing and measuring distance in international business research: Recurring questions and best practice guidelines," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(9), pages 1113-1137, December.
    36. Royston Greenwood & C. R. Hinings & Dave Whetten, 2014. "Rethinking Institutions and Organizations," Journal of Management Studies, Wiley Blackwell, vol. 51(7), pages 1206-1220, November.
    37. David A Waldman & Mary Sully de Luque & Nathan Washburn & Robert J House & Bolanle Adetoun & Angel Barrasa & Mariya Bobina & Muzaffer Bodur & Yi-Jung Chen & Sukhendu Debbarma & Peter Dorfman & Rosemar, 2006. "Cultural and leadership predictors of corporate social responsibility values of top management: a GLOBE study of 15 countries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(6), pages 823-837, November.
    38. Mike W Peng & David Ahlstrom & Shawn M Carraher & Weilei (Stone) Shi, 2017. "An institution-based view of global IPR history," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(7), pages 893-907, September.
    39. Michael A. Witt & Gregory Jackson, 2016. "Varieties of Capitalism and institutional comparative advantage: A test and reinterpretation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(7), pages 778-806, September.
    40. Elitsa R Banalieva & Alvaro Cuervo-Cazurra & Ravi Sarathy, 2018. "Dynamics of pro-market institutions and firm performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(7), pages 858-880, September.
    41. Hyejun Kim & Jaeyong Song, 2017. "Filling institutional voids in emerging economies: The impact of capital market development and business groups on M&A deal abandonment," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(3), pages 308-323, April.
    42. Miriam Koning & Gerard Mertens & Peter Roosenboom, 2018. "Drivers of institutional change around the world: The case of IFRS," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(3), pages 249-271, April.
    43. Anthony Ferner & Phil Almond & Trevor Colling, 2005. "Institutional theory and the cross-national transfer of employment policy: the case of ‘workforce diversity’ in US multinationals," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 304-321, May.
    44. Hall, Peter A. & Taylor, Rosemary C. R., 1996. "Political science and the three new institutionalisms," MPIfG Discussion Paper 96/6, Max Planck Institute for the Study of Societies.
    45. John Child & David K Tse, 2001. "China's Transition and its Implications for International Business," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(1), pages 5-21, March.
    46. Patrick Regnér & Jesper Edman, 2014. "MNE institutional advantage: How subunits shape, transpose and evade host country institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(3), pages 275-302, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gregory Jackson & Richard Deeg, 2019. "Comparing capitalisms and taking institutional context seriously," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(1), pages 4-19, February.
    2. Luis Alfonso Dau & Aya S. Chacar & Marjorie A. Lyles & Jiatao Li, 2022. "Informal institutions and international business: Toward an integrative research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 985-1010, August.
    3. Sarianna M. Lundan & Jiatao Li, 2019. "Adjusting to and learning from institutional diversity: Toward a capability-building perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(1), pages 36-47, February.
    4. Jane W. Lu & Hao Ma & Xuanli Xie, 2022. "Foreignness research in international business: Major streams and future directions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(3), pages 449-480, April.
    5. Xu, Kai & Hitt, Michael A. & Brock, David & Pisano, Vincenzo & Huang, Lulu S.R., 2021. "Country institutional environments and international strategy: A review and analysis of the research," Journal of International Management, Elsevier, vol. 27(1).
    6. Xiao, Shufeng & Yu, Tianjiao, 2024. "Underperformance duration and R&D internationalization: Institutional contingencies in an emerging economy," International Business Review, Elsevier, vol. 33(4).
    7. Sjoerd Beugelsdijk, 2022. "Capitalizing on the uniqueness of international business: Towards a theory of place, space, and organization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(9), pages 2050-2067, December.
    8. Ji-Won Song, 2022. "Subsidiary Agency in Gender Equality Practice Implementation: The Case of Korean MNE Subsidiaries in Sweden," Management International Review, Springer, vol. 62(1), pages 103-135, February.
    9. Mike W. Peng & Joyce C. Wang & Nishant Kathuria & Jia Shen & Miranda J. Welbourne Eleazar, 2023. "Toward an institution-based paradigm," Asia Pacific Journal of Management, Springer, vol. 40(2), pages 353-382, June.
    10. Daniel L. Bennett & Christopher Boudreaux & Boris Nikolaev, 2023. "Populist discourse and entrepreneurship: The role of political ideology and institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(1), pages 151-181, February.
    11. Saka-Helmhout, Ayse, 2020. "Institutional agency by MNEs: A review and future research agenda," Journal of International Management, Elsevier, vol. 26(2).
    12. Tatiana Kostova & Sjoerd Beugelsdijk & W. Richard Scott & Vincent E. Kunst & Chei Hwee Chua & Marc Essen, 2020. "The construct of institutional distance through the lens of different institutional perspectives: Review, analysis, and recommendations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 467-497, June.
    13. Remzi Gözübüyük & Carl Joachim Kock & Murat Ünal, 2020. "Who appropriates centrality rents? The role of institutions in regulating social networks in the global Islamic finance industry," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(5), pages 764-787, July.
    14. Donnelly, Róisín & Manolova, Tatiana S., 2020. "Foreign location decisions through an institutional lens: A systematic review and future research agenda," International Business Review, Elsevier, vol. 29(4).
    15. Song, Ji-Won, 2021. "How MNE subsidiaries transfer HRM practices in distant environments: A tale of two IKEA subsidiaries," Journal of International Management, Elsevier, vol. 27(2).
    16. Rana, Mohammad B. & Morgan, Glenn, 2019. "Twenty-five years of business systems research and lessons for international business studies," International Business Review, Elsevier, vol. 28(3), pages 513-532.
    17. Miriam Koning & Gerard Mertens & Peter Roosenboom, 2018. "Drivers of institutional change around the world: The case of IFRS," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(3), pages 249-271, April.
    18. Johann Fortwengel, 2017. "Understanding When MNCs can Overcome Institutional Distance: A Research Agenda," Management International Review, Springer, vol. 57(6), pages 793-814, December.
    19. Cheung, Zeerim & Aalto, Eero & Nevalainen, Pasi, 2020. "Institutional Logics and the Internationalization of a State-Owned Enterprise: Evaluation of International Venture Opportunities by Telecom Finland 1987–1998," Journal of World Business, Elsevier, vol. 55(6).
    20. Zattoni, Alessandro & Witt, Michael A. & Judge, William Q. & Talaulicar, Till & Chen, Jean Jinghan & Lewellyn, Krista & Hu, Helen Wei & Gabrielsson, Jonas & Rivas, Jose Luis & Puffer, Sheila & Shukla,, 2017. "Does board independence influence financial performance in IPO firms? The moderating role of the national business system," Journal of World Business, Elsevier, vol. 52(5), pages 628-639.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jintbs:v:50:y:2019:i:1:d:10.1057_s41267-018-0201-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.