International Business Responses to Institutional Voids

For nearly two decades, scholars have explored the implications of “institutional voids” for firm strategy and structure. Although institutional voids offer both opportunities and challenges, they have largely been associated with firms’ efforts to avoid or mitigate institutional deficiencies and reduce the transaction costs associated with operating in settings subject to those institutional shortcomings. This analysis critically surveys the extant research on institutional voids and summarizes the contributions of various articles from a Journal of International Business Studies special issue. Besides identifying an array of institutional voids, these articles highlight four different strategies for responding to them. Drawing upon these findings, this piece offers new insights on the implications of institutional voids for firm behavior.

This piece appeared in Jonathan Doh, Suzana Rodrigues, Ayse Saka-Helmhout, and Mona Makhija. “International Business Responses to Institutional Voids,” Journal of International Business Studies Vol. 48, no. 3 (2017), pp. 293-307.