Narrow Results

In this paper we analyze the development of venture capital in Thailand. We use institutional theory in order to better understand the context of developing venture capital investment and operations strategies in a developing country, which lacks fully-developed legal and financial institutions. The major challenges for venture capitalists are maintaining a viable presence and exiting their investments through alternatives other than an IPO.

Most of the organizational theories take the existence of organizations for granted. Thus, attempts to understand success and failure at the nascent firm stage have often been conducted without an underlying theory to explain why some nascent firms succeed in becoming new firms while others do not. This study proposes that institutional theory offers an explanatory framework to explain firm emergence. Specifically, we argue that nascent firm becomes new firm thanks to resource endowments. The reliance on legitimating characteristics will grant a nascent firm an access to critical resources necessary for its emergence. We explore these ideas empirically and find support for our basic arguments.

Prior research on pull entrepreneurship sees opportunity perception as dependent on the individual’s cognitive processes and pays relatively less attention to the role of exogenous factors, which influence and shape our belief structures in the first place. To fill this gap, the main aim of the study is to investigate the relationship between exogenous factors, both positive and negative, and individuals’ opportunity perception. A theoretical framework, based on Institutional Theory, is proposed and empirically tested through panel analysis. The data cover 36 OECD countries observed between 2000 and 2014. The results show that opportunity perception is encouraged by positive exogenous factors, e.g., cultural motivation, social recognition; conversely, it is discouraged by negative exogenous factors, e.g. R&D expenditure and female unemployment. The findings also provide new insights into how exogenous factors impact individuals’ perceptions of opportunities for new business creation, highlighting that positive exogenous factors play a more important role than negative exogenous factors in this process. The empirical results confirm the proposed theoretical framework and allow the formulation of interesting theoretical and managerial implications.

A symbolic innovation is one that stands for something else. Here we will explore eight conditions resulting from a bipolar configuration of stakeholder interests, extrinsic benefits, and intrinsic benefits that have different consequences for the decoupling of innovation adoption and of implementation for symbolic innovations. The underlying forces, or generative motors, that drive these processes are quite different with stakeholder interests and extrinsic social, bandwagon effects much more important in adoption and more immediate, intrinsic benefits coming to the fore in implementation. The degree to which these factors converge produces conditions that are more likely to result in innovations that have positive performance impacts.

This article deals with Triple Helix (university, industry and government cooperation) from an institutional theory perspective. The empirical context is the Western Cape Region in South Africa and the focus is entrepreneurship development. The purpose is two-fold: first, the existing Triple Helix model is adapted to the South African context; and second, facilities and impediments for working according to Triple Helix in South Africa are identified. The empirical material consists of a survey and three longitudinal case studies illustrating the degree of cooperation between the three parties. The article contributes to knowledge about how the Triple Helix model works on a regional level in a developing country. The study draws the following conclusions: when cooperation is to be identified between the three actors, only two of the three are involved; one missing link in the Triple Helix model is the focus on the entrepreneur; cooperation between the three parties are incidental rather than planned and there is lack of structure. In turn, some of these conclusions may be an effect of institutional changes on a national level. For a normative legacy, the article proposes a set of suggestions for incorporating all relevant parties on a practical level.

This study examines a number of proposed relationships between formal and informal institutional factors that impact the entrepreneurial intent (EI) of 477 university business students in Germany, Russia and the United States, as well as similarities and differences in these relationships between countries. This is the first study, of which we are aware, to develop an instrument to measure the impact of formal institutional factors on EI based upon the World Bank's Doing Business Report. Overall, the results give only minor support for the influence of formal institutional factors on EI with the greater impact appearing to come from the informal institutions of need, social norms and parental experience. Theoretical and practical implications are discussed.

What role do institutions play in the development of entrepreneurial ventures? What factors influence whether organizations will engage in entrepreneurial activity? While research has examined the individual and group-level characteristics of entrepreneurs, this paper explores the role of institutions and organizations in the development of entrepreneurial ventures. Using the "Black Church" as an institutional context, we predict entrepreneurial activity patterns of individual congregations based on denomination-specific institutional logics — rules and norms that either facilitate or constrain organizational action.

The current evidence-base regarding the impacts of corruption on firm performance is based largely on studies of individual countries and contains mixed results. Therefore, the aim of this paper is to achieve a better insight into this relationship by reporting the results of a firm-level analysis of the impacts of corruption on firm performance using World Bank Enterprise Survey (WBES) data across 40 African countries. The clear result is that corruption significantly enhances rather than harms annual sales, employment and productivity growth rates. The outcome is to re-theorize participation in acts of corruption as beneficial for the individual firms engaged in such activity, while recognizing the wider evidence that this is not an optimal strategy at the aggregate country level. The outcome will be to advance knowledge about how corruption needs to be tackled. To eliminate corruption, it is shown here to be necessary for public authorities to recognize that corruption is an efficient strategy at the firm level and to adopt measures to alter the cost/benefit ratio confronting individual enterprises, and at the same time, to address the country-level formal institutional deficiencies that characterize many developing countries and result in the prevalence of corruption.

Institutional theory has been widely used to explain entrepreneurship in the informal economy. A first wave of institutionalist theory argued that informal entrepreneurship resulted from formal institutional failures and a second wave that such entrepreneurship results from an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions. This paper evaluates the validity of these two waves of institutionalist explanation and a new third wave of institutional theory explaining informal entrepreneurship in terms of a lack of both vertical and horizontal trust. Reporting data from a 2013 survey in Kosovo involving 500 face-to-face interviews with owners of small and medium-sized enterprises, 35.7 percent of sales are estimated to be unreported and a regression analyses reveals this is significantly higher among smaller and older firms, and firms owned by men. No significant association is found between formal institutional failings and the under-reporting of sales, but there is a statistically significant correlation between sales under-reporting and the level of vertical and horizontal trust. Taking account of the limitations of this single country study, the implications for theory and policy are then discussed.

In recent years, a new institutionalist theory has emerged to explain the prevalence of informal sector entrepreneurship. This argues that formal institutional failures lead to the emergence of an asymmetry between the formal rules (laws and regulations) and the norms, values and beliefs of entrepreneurs regarding the acceptability of participating in the informal sector, which in turn leads to the prevalence of informal entrepreneurship. The aim of this paper is to evaluate this social actor approach by reporting evidence from 453 face-to-face interviews with a nationally representative sample of entrepreneurs in FYR Macedonia. This reveals not only a significant association between participation in the informal economy and the non-alignment of entrepreneurs’ views with the formal rules, but specific formal institutional failings that are significantly associated with the acceptability of informal entrepreneurship, namely poor quality public services, a lack of tax fairness, corruption and instability in the formal institutions. The theoretical and policy implications are then discussed.

This paper evaluates three waves of institutional theory that have variously explained participation in informal sector entrepreneurship. The first wave of institutional theory explains informal entrepreneurship as resulting from formal institutional failures. This second wave of theory explains it as resulting from an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions. Finally, a third wave of theory as resulting from a lack of both vertical and horizontal trust has explained informal entrepreneurship. To evaluate these waves of institutional theory, this study reports evidence from a 2015 survey of businesses in Albania. This finds that 30 percent of turnover of Albanian businesses is under-reported and that this percentage is higher in smaller firms. In terms of the institutional failures that explain participation in informal entrepreneurship, the regression analysis reveals a strong association between annual under-reporting of turnover and the red tape involved in dealing with the tax administration and the frequent visits of tax inspectors. Moreover, it shows both vertical and horizontal trust are strongly associated with participation in informal entrepreneurship. The paper concludes by discussing the theoretical and policy implications.

Why does South Africa underperform on benchmarks for nascent entrepreneurship? We use a contextualization framework to evaluate articles on entrepreneurship in South Africa, which appear in seven leading global entrepreneurship journals for the period 1986–2017. The literature is then discussed using a six-dimension contextualization framework. The historical and institutional dimensions of the contextualization framework unveil the path-dependent nature of entrepreneurial choice for Black South Africans. Understanding entrepreneurship in South Africa requires research designs that focus on where and when entrepreneurship developed in the country to render meaningful the why of entrepreneurial choices made by Black South Africans. This study illustrates the idiosyncratic nature of South Africa and its social, political and economic transitions, and how these have affected entrepreneurship development, particularly among previously disadvantaged Black South Africans. The nature of the South African case has broader impact and importance for developing and transitional economies.

This paper traces the historical developments of accounting regulations in Algeria, Morocco, and Tunisia and uses institutional theory to identify factors affecting International Financial Reporting Standards (IFRS) adoption as the national accounting standards in these countries. We find that the extent of convergence with IFRS in Algeria is higher compared to Morocco and Tunisia. This has been mostly due to greater foreign investor flows from Western countries in Algeria during the last decade, the dominant position of international Big-4 audit firms, and strong trade relationship of Algeria with the European Union (EU) compared with Morocco and Tunisia. We discuss the main challenges faced by these three countries in converging toward IFRS. These are underdeveloped equity markets, switching from French fiscal-oriented accounting systems to Anglo-Saxon accounting systems, and are characterized by lack of knowledge of principles-based IFRS by local professional accountants. Moreover, the convergence with IFRS in these countries is confronted by the prevailing small and medium-sized firms in the economic environment, difficulty in fair-value measurement in these settings, and the cost of convergence for companies. Our study has policy implications for those countries sharing similarities with these settings and have undertaken steps to implement IFRS.

Synopsis

The research problem

This study examines the association between corruption culture and corporate social responsibility (CSR) decoupling.

Motivation

Only a handful of studies have examined the effect of local culture on organizational outcomes. Recent studies shed light on the factors contributing to CSR decoupling, highlighting the value of understanding this disparity; however, few studies have documented the role of societal factors that contribute to this gap. Our study seeks to fill this gap by documenting that corruption culture increases dishonest behavior, reduces social stigma and the likelihood of punishment, promotes managerial rent-seeking, and ultimately affects CSR decoupling.

The hypothesis

Corruption culture is associated with higher CSR decoupling.

Target population

We used a sample of Chinese A-listed firms from 2010 to 2020.

Adopted methodology

We used ordinary least squares, path analysis, two-stage least square (2SLS) regression, generalized method of moment (GMM), and multiperiod difference in difference.

Analyses

By using 5,428 firm–year observations, this study examined the association between corruption culture and CSR decoupling. We employed robustness and mechanism tests to corroborate the findings and proposed mechanisms. Finally, we conducted heterogeneity tests to assess the varied impact of corporate governance, state ownership, and CEO attributes on the relationship between corruption culture and CSR decoupling.

Findings

We documented a positive relationship between corruption culture and CSR decoupling. We also found a less pronounced effect of corruption on CSR decoupling among firms with extensive media coverage and investments from qualified foreign institutional investors. Furthermore, the effect of corruption on CSR decoupling was particularly pronounced for private firms. We also observed that the effect of a corruption culture was especially weak for firms with chief executive officers who have international experience, are nonpolitically connected, and are female.

A growing body of research acknowledges that inter-organizational networks greatly influence a firm's innovation performance. This study extends our understanding of this relationship by considering the effect of inter-organizational networks on innovation in small, knowledge-intensive companies. Based on a literature review, we formulate four propositions regarding the moderating effects of firm size and knowledge intensity on the relationship between inter-organizational networks and innovation, as well as the influence of these factors on the development of the inter-organizational networks themselves.

Business model innovations are recognised as a key to the creation of sustainable business, but their adoption by firms has been slow. Organisations can only be sustainable when the whole societal system is sustainable. Both structural and cultural changes are required to facilitate firm- and system-level sustainability. The central idea of this paper is to examine how societal transition towards sustainable business models (SBMs) can be achieved. Through a qualitative Delphi study, we assess and categorise the key structural and cultural barriers to sustainable business model innovation (SBMI). By applying the innovation system approach, we explain how to overcome existing barriers by strengthening the functions of the innovation system. We analyse how these barriers can be overcome through the activities of governments, firms, and consumers, and discuss the wider implications of our research for practitioners, policy-makers, and researchers.

Green innovation is an essential support to realise sustainable development, while environmental regulation is an influential factor affecting green innovation, and different types of environmental regulation will have differentiated impacts on corporate green innovation. The aim of this paper is to shed light on the relationship between environmental regulation and green innovation and to explore mechanisms based on the institutional theory. Chinese manufacturing enterprises were selected as the study sample and empirically analysed using a multilayer linear regression model. The results show that command-and-control, market-incentive and voluntary environmental regulations all significantly and positively affect firms’ green innovation, but voluntary environmental regulations are more effective; the level of digitalisation technology and the scope of digitalisation application are both conducive to firms’ green innovation and play a partially mediating role between environmental regulations and green innovation. Based on these findings, this paper discusses the implications of regulation and provides an outlook for future research directions.

Achieving success in enterprise systems (ES) implementations is challenging. The success rate is not high in view of the sums invested by many organizations in these companywide systems. The literature is charged with reasons for unsuccessful implementations, such as a lack of top management support and insufficient change management. Contrary to this research, empirical data from an ES re-implementation in a Scandinavian high-tech company shows successful implementation despite many problematic shifts in outsourcing partners. Therefore, it is natural to ask: why was the re-implementation of the ES at SCANDI successful despite the major troubles encountered during the project? Building an analysis based on ten Critical Success Factors (CSFs) combined with an investigation into the institutional structures at play, we present several reasons for the successful implementation. The CSF analysis shows an equivocal result: four fulfilled, three partially fulfilled and three not fulfilled. Even the two top CSFs, top management support and change management, are either not fulfilled or only partial fulfilled. However, the institutional analysis provides additional explanations, such as a few heroes acting as glue in a conflicting multi-sourcing environment and resilience towards ES implementations created over many years. Important implications from this study are that one should be critical of CSFs and that the combined analysis can guide both practitioners and researchers to understand and position factors better for success in ES implementations. The chapter covers mainly the implementation phase in the Global Sourcing Life Cycle.

Ecosystem creation is a form of endogenous strategic action: it creates and shapes new activity systems that exploit new ways of creating value. To be successful, this action requires that future ecosystem stakeholders agree to a shared vision of the ecosystem value proposition. In this chapter, we develop an institutional approach to understanding how firms can facilitate ecosystem creation by manipulating perceptions of value concerning the shared technology platform around which the ecosystem is organized. We discuss four arenas of endogenous strategic action: manipulating cognitive legitimacy, manipulating perceptions of technological instrumentality, manipulating perceptions of economic instrumentality, and manipulating normative legitimacy. We conclude with a discussion of the implications of our model for theory and practice.

This chapter explores the perceptions held about “good” corporate governance (GCG) in three different transforming economies of Central and Eastern Europe [CEE] (East Germany, Estonia, and Hungary). Forty-nine interviews were conducted with corporate governance experts from various institutions in the three countries between 2003 and 2004. They were analyzed with the help of several qualitative techniques, resulting in a typology of GCG perceptions. Our findings show that these perceptions are strongly influenced by the institutional and historical background of the countries. However, they are far from being uniform or shaped along the lines of well-known Western models but take, rather, some hybrid forms. This chapter also highlights the crucial role (native) professionals and experts play in the development process of GCG.