Institutional development and firm profitability in transition economies

Kafouros, Mario; Aliyev, Murod

doi:10.1016/j.jwb.2015.06.002

Cited by 77 publications

(65 citation statements)

References 78 publications

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“…Since their analysis was conducted on disaggregated data, the impact of institutional factors on firm performance, represented by their bilateral international trade, might be considered as potentially impacting their ability to survive in the market as well. A similar analogy can be drawn from the empirical evidence presented by Kafouros and Aliyev (2016), who showed that domestic firms in 16 CEE economies benefit from improvements in institutional environments.…”

Section: Institutionssupporting

confidence: 54%

Institutions and determinants of firm survival in European emerging markets

Baumöhl

Iwasaki

Kočenda

2019

Journal of Corporate Finance

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We analyze the impact of institutional quality on firm survival in 15 Central and Eastern European (CEE) countries. We employ the Cox proportional hazards model with a large dataset of firms from 2006-2015 and control for firm-specific determinants and country differences. Our results show that institutional quality (IQ) is a significant preventive factor for firm survival, and the result is robust to different measures of IQ and industry sectors. Furthermore, we document the existence of diminishing productivity of IQ, as the economic effect upon institutions is largest for low-level IQ countries and smallest for high-level IQ countries. In terms of firm-specific controls, ownership structure plays a vital role in strengthening the probability of firm survival. Notably, foreign ownership helps firms survive in all three country groups, and the effect is again larger for countries with low-and mid-level IQs. ROA, profit margin, solvency ratio, and firm age represent additional significant preventive factors, albeit with smaller economic effects.

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Section: Institutionssupporting

confidence: 54%

Institutions and determinants of firm survival in European emerging markets

Baumöhl

Iwasaki

Kočenda

2019

Journal of Corporate Finance

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“…We also interact the different degree of family involvement with the degree of diversity of exposure to PR to test the moderating effect proposed in Hypothesis . Following Aiken and West () and Kafourus and Aliyev (), we mean centered the components of the interaction term.…”

Section: Methodsmentioning

confidence: 99%

Not all family firms are equal: The moderating effect of family involvement on the political risk exposure of the foreign direct investment portfolio. Preliminary evidence from Spanish multinational enterprises

Jiménez

Majocchi

Piana

2018

Thunderbird Intl Bus Rev

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We investigate the effect of political risk (PR) exposure and family control on the internationalization strategy of multinational enterprises (MNEs) using social capital theory. Our results from a negative binomial cross-sectional analysis in 2007 of Spanish MNEs show family ownership or the limited presence of family members on the board has no effect on internationalization.However, when the conceptualization of family firms (FFs) includes majority ownership and board presence, we find a direct negative effect on their internationalization scope but a positive moderating effect on the relationship between the exposure to PR and internationalization scope. FFs have some specific advantages suitable to be employed in their corporate political activity allowing them to develop long-lasting relationships with relevant political actors. By disentangling the effects of family control on internationalization and PR, this article explains how FFs can be simultaneously risk-willing and risk-averse. K E Y W O R D Sexperience by exposure, family firms, foreign direct investments, internationalization, political risk, social capital theory

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“…While our research has provided some evidence of the validity of the VIS taxonomy in explaining firm performance in understudied economies, future researchers may wish to revisit the taxonomy itself to explore whether cluster analysis based on a richer characterization of institutions can provide an equally valid but more fine-grained specification of institutional systems in understudied economies. Also, we have not addressed the question of institutional dynamics and institutional change, which can affect firm performance (Kafouros & Aliyev, 2016) and firm ownership (Driffield, Mickiewicz & Temouri, 2016), and in turn change configuration identity and impact.…”

Section: Institutional Configurations and Foreign Ownershipmentioning

confidence: 99%

National institutional systems, foreign ownership and firm performance: The case of understudied countries

Carney

Estrin

Liang

et al. 2019

Journal of World Business

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We analyse the relationship between institutional systems (configurations of countries with similar institutional characteristics) and firm performance. We use a large sample of firms from understudied countries to explore whether the performance impact of these configurations is the same ("equifinality"), whether this holds across different measures of firm performance ("Tversky effect"), and whether some institutional configurations better support foreign-owned firms. We find that it is possible to rank institutional systems according to their impact on firm performance, but the ranking differs according to the performance measure. Although foreign ownership on average confers performance advantages, the magnitude of the impact depends on the configuration. Our findings contribute to the understanding of the importance of institutional similarities across countries, and to the implications of these similarities for the theory of the MNE.

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Institutional development and firm profitability in transition economies

Cited by 77 publications

References 78 publications

Institutions and determinants of firm survival in European emerging markets

Institutions and determinants of firm survival in European emerging markets

Not all family firms are equal: The moderating effect of family involvement on the political risk exposure of the foreign direct investment portfolio. Preliminary evidence from Spanish multinational enterprises

National institutional systems, foreign ownership and firm performance: The case of understudied countries

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