Does institutional industry context matter to performance? An extension of the institution-based view

Elango, B.; Dhandapani, Karthik

doi:10.1016/j.jbusres.2020.04.037

Cited by 30 publications

(17 citation statements)

References 36 publications

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“…A firm's home country environment, including its institutional characteristics, set the boundary conditions (or feasibility sleeve) for firm strategy choices and potential outcomes (Elango and Sethi, 2007;Elango and Dhandapani, 2020). Prior literature has used the IBV to explain how home country institutions in EMs might affect FDI by EM firms (Meyer and Peng, 2016;Scalera et al, 2020).…”

Section: Imr 382mentioning

confidence: 99%

Home country institutional impact on the choice of direct vs indirect exports: an emerging markets perspective

Elango

Pangarkar

2020

IMR

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PurposeThis study uses the notions of institutional harshness and uncertainty avoidance in the home country to explain the choice between direct and indirect exporting strategies by emerging market firms.Design/methodology/approachThis study is based on a dataset of 23,256 observations on firms from 32 countries spread over 11 years (2006–2016). Since only some firms undertake exports, the Heckman procedure is used to control for sample self-selection. In the first stage, we predict which firms will choose to export, and, in the second stage, we examine the factors driving the choice made by firms involved in exports between direct and indirect exports strategies.FindingsThe analyses reveal that firms are more likely to choose direct exports when institutional harshness is high and when they are from countries with low uncertainty avoidance. We also find that the strength of the relationship between institutional harshness and the choice of direct exports is moderated at high levels of uncertainty avoidance.Research limitations/implicationsWhile this study's empirical models account for many firm-level factors as well as home country differences discussed in the literature, we acknowledge there could be other temporal, firm or country idiosyncratic factors not included in our analysis driving the key choices examined in the paper.Originality/valueThis study makes three contributions to exporting literature. First, it highlights the drivers of the choice between direct and indirect exports. This choice is an important facet of exporting strategy and has received scant attention in prior IB research. Second, it demonstrates how the choice between direct and indirect exports is impacted by the degree of the home country's institutional harshness and uncertainty avoidance. Third, it offers insights on how the interaction of formal and informal home market institutional factors influences export strategy.

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Section: Imr 382mentioning

confidence: 99%

Home country institutional impact on the choice of direct vs indirect exports: an emerging markets perspective

Elango

Pangarkar

2020

IMR

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“…Therefore, this study defines institutions as an industry-level construct. The standpoint that industryspecific variations in institutional setups can impact industry performance has attracted scant attention from institutional scholars (Elango and Dhandapani, 2020). Thus, this study contributes to the broader discourse on the relationship between institutional contingencies, industry structure and dynamics, and industry outcomes (e.g., North, 1990;Peng, 2002;Porter, 2008;Peng et al, 2009;Chacar et al, 2010;Manikandan and Ramachandran, 2015).…”

Section: Introductionmentioning

confidence: 90%

“…Institutional force being consistent across industries is an implicit premise in the business strategy literature (Elango and Dhandapani, 2020); institutions are thus commonly defined as a nation-level construct. This premise could also be valid for most industries in a seafood value chain, such as fish processing and fish exporting, as these industries are typically exposed to a free market-based institutional framework.…”

Section: Introductionmentioning

confidence: 99%

“…Scholars have recently sought more studies on the impact of institutions on industry performance in the strategic management literature (Peng et al, 2018;Elango and Dhandapani, 2020), as there is a remarkable consensus that institutions matter (North, 1990;Peng, 2002;Peng et al, 2008Peng et al, , 2009. This study however tackles the harder and more interesting issues related to what extent institutions matter and how they matter.…”

Section: Introductionmentioning

confidence: 99%

“…The understanding of how institutions have locked-in profits in a specific industry in a value chain by influencing its competitive forces is considered a significant theoretical contribution of the study. Insights into institutional contingency effects remain rare in the literature, although they are a potent source of future theory building (Elango and Dhandapani, 2020). The study furthermore follows Porter's (2008) advice to systematically examine the antecedents to an industry's competitiveness.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Sustained Competitive Advantage Based on Industry-Specific Institutional Frameworks

Bertheussen

2021

Front. Mar. Sci.

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This study investigates the relationships between industry-specific institutions, industry structure, and industry performance. The Norwegian Pelagic value chain’s harvesting industry and its processing industry comprised the empirical context. The study findings reveal that the harvesters (the fishers), on average, achieved nearly twice the return on assets relative to the processors. Furthermore, the fishers’ cash flow margin was, on average, more than eight times higher, and their annual growth rate was approximately 70% above the corresponding figures of the processing industry. This study argues that the two industries’ performance differences are related to the variations in their institutional setups. The processing industry is subject to the general Norwegian business environment, whereas the fish harvesting industry benefits from a sector-specific framework that supports its relative competitiveness. The fishers have collectively established a legally supported sales organization, thereby strengthening their bargaining power, vis-à-vis the processors (buyers). The fishers’ rivalry is curbed by catch share regulations, and incumbent fishers are protected from intruders through entry barriers, for example, license requirements. Moreover, the processing industry’s potential threat to vertically integrate upstream into the fish harvesting industry is blocked through legislation. Finally, in contrast to the processing industry, the fish input cost is free for the harvesting industry. This study concludes that the fish harvesting industry has gained a sustained competitive advantage over the processing industry, based on a more supportive industry-specific institutional framework.

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How does organizational slack influence firm performance? A replication and extension of Peng, Li, Xie, and Su (2010)

Weng

Yang²

2022

Asia Pac J Manag

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Does institutional industry context matter to performance? An extension of the institution-based view

Cited by 30 publications

References 36 publications

Home country institutional impact on the choice of direct vs indirect exports: an emerging markets perspective

Home country institutional impact on the choice of direct vs indirect exports: an emerging markets perspective

Sustained Competitive Advantage Based on Industry-Specific Institutional Frameworks

How does organizational slack influence firm performance? A replication and extension of Peng, Li, Xie, and Su (2010)

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