Institutional Distance in International Business Research
ADVANCES IN INTERNATIONAL MANAGEMENT: THE PAST, PRESENT AND FUTURE OF INTERNATIONAL BUSINESS AND MANAGEMENT, Volume 23, Devinney, T.M., Pedersen, T., Tihanyi, L., eds., New York, NY: Emerald, 2010
37 Pages Posted: 17 Apr 2010
Date Written: 2010
Understanding institutional distance, i.e. the difference in institutional context between countries, is critical for firms whose operations span national boundaries. Institutional distance impacts the relative attractiveness of country markets, trade-offs among foreign market entry strategies, the management of subsidiaries abroad, and ultimately, firm performance. Although scholars in various disciplines have made great advances in defining and measuring the institutional characteristics of nations, we contend that many of these advances have occurred in a parallel fashion. Moreover, extant empirical studies focus disproportionately on the impact of different subsets of the identified institutional characteristics. We suggest that it is time to find common ground across the disparate literatures. Doing so would allow us to view differences in institutional contexts more holistically, and refine our understanding of their implications for multinational corporations.
Keywords: Institutional distance, Cultural distance, Economic distance, Political distance, Regulatory distance, International expansion, International management
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