The effect of institutional ties on knowledge acquisition in uncertain environments

Abstract

Institutional ties can contribute to a firm's performance in emerging economies because of the existence of ambiguous laws and unclear regulations. The main thrust of our argument is that a firm's choice of institutional ties needs to be congruent with the external environment and with industry characteristics. We test our proposed framework with survey data from 308 firms in China. The results indicate that, first, environmental uncertainty has a direct influence on institutional ties and knowledge acquisition, but second, a firm's industry position, although it likewise has an effect on knowledge acquisition, influences institutional ties in a U-shaped manner. Third, we find that institutional ties are positively related to knowledge acquisition.

Cross-listing and the scope of the firm

“…Peng et al (2005) define institutional relatedness as "the degree of informal embeddedness or interconnectedness with dominant institutions." A core proposition is that "the higher the institutional relatedness (number and strength of informal ties with dominant institutions), the greater the scope of the firm" 628; see also Li et al, 2012;Sun, Mellani, & Liu, 2011;Xu, Huang, & Gao, 2012). Extending this stream of research, we can view cross-listing as an effort to increase the institutional relatedness with dominant host-country institutions.…”

Managerial ties, strategic initiatives, and firm performance in Central Asia and the Caucasus

“…Further, in an increasingly market-driven environment, the impact of strategic initiatives aimed at boosting firms' competitive advantage is straightforward (Wu & Chen, 2012;Xu, Huang, & Gao, 2012;Zhou & Li, 2007). From a resource-based standpoint, firms able to embark on strategic initiatives possess valuable, rare, and hard-to-imitate capabilities that may differentiate them from those unable to do so (Barney, 1991).…”

Institutional distance and knowledge acquisition in international buyer-supplier relationships: The moderating role of trust

“…As such, we develop and examine an integrative moderated-mediation model positing regulatory, normative, and cognitive pillars of institutional distance as focal antecedents of knowledge acquisition through the mediating impact of access to knowledge in international buyer-supplier relationships. Specifically, we argue that institutional distance is likely to inhibit knowledge acquisition because of the decreased levels of willingness to transfer knowledge from one partner to the other, but also due to contextual factors that create complexity and ambiguity, undermining the capacity of international buyers and suppliers to source new knowledge bases (Xu et al, 2010).…”

“…Most prior studies argue that high levels of knowledge should be better exploited in an unstable and volatile environment (Kogut & Zander, 1992;Xu, Huang, & Gao, 2010). For instance, in the information and communication technology (ICT) industries-which are characterized by relatively short product life cycles-firms are forced to make a strategic decision to either create valuable knowledge on their own or to acquire this knowledge from external partners, due to the knowledge-based competition.…”