Socialist imprints and innovation strategies in a transition economy

This paper contributes to research at the intersection of institutional theory and the emerging literature on institutional imprinting by studying how the persistence and decay of founding institutional imprints affect network-based innovation strategies in small firms during later stages of economic transition. In do so, we are able to investigate both the extent of imprints and the boundary conditions that serve to strengthen or weaken their persistence. We situate our study in a fast-growing but under-studied transition economy, Vietnam, applying multiple estimation methods on a multilevel panel sample of 2644 small entrepreneurs over 6 years. Our major findings are, firstly, that firms launched before transition are influenced by socialist imprints and rely more on small and concentrated informal social networks, while firms launched after transition rely more on newer formal market institutions to generate innovations, and, secondly, that management and industry experience strengthens network-based innovation strategies and, thus, amplifies the persistence of socialist imprinting in firms established prior to transition.