Handbook of Institutional Approaches to International Business
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Handbook of Institutional Approaches to International Business

Edited by Geoffrey Wood and Mehmet Demirbag

Expertly written by leading scholars from a range of different starting points, this compendium presents a synthesis of recent work relating to institutionally-informed accounts from transitional and emerging markets, as well as from mature economies. It specifically focuses on the linkage between institutions and what goes on inside firms, and the relationship between setting, strategic choice and systemic outcomes.
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Chapter 16: Internationalization, Institutions and Economic Growth: A Fuzzy-Set Analysis of the New EU Member States

Matthew M.C. Allen and Maria L. Aldred


Matthew M.C. Allen and Maria L. Aldred 16.1 INTRODUCTION Within the international business literature, the importance of locational differences has recently come to the fore in many studies (Dunning 2009; Meyer et al. 2011; Mudambi and Navarra 2002; Rugman et al. 2011). However, in contrast to studies that are underpinned by a more comparative sociological perspective, many of these analyses within the international business literature adopt a relatively narrow definition of ‘institutions’ when examining the consequences for commercial activities of any locational differences. For instance, within the international business literature, many studies focus on a relatively narrow range of formal, regulatory institutions that shape arm’s-length, impersonal exchange (Henisz 2003; Khanna and Rivkin 2001; Meyer et al. 2011; Young et al. 2008). This definition of institutions is favoured over broader ones that can encompass a greater range of regulationbased ones as well as more informal or, indeed, para-public institutions (Jackson and Deeg 2008). A corollary of this conceptualization of institutions is that several prominent studies in the international business literature refer to ‘institutional voids’ (Khanna and Palepu 2006; Kim et al. 2010; Tan and Meyer 2010; cf. Peng et al. 2008). By this, such analysts mean the lack of strong legal rules that can be enforced, for example to uphold the terms of a contract (Khanna and Palepu 2006, 62; Tan and Meyer 2010). However, in studies that adopt a more sociological – or, perhaps better, organizational sociological – perspective that is common within the ‘comparative capitalisms’ literature, a term such as ‘institutional...

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