Institutional distance in international business research

Abstract

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.

Citation

Bae, J.-H. and Salomon, R. (2010), "Institutional distance in international business research", Timothy, D., Torben, P. and Laszlo, T. (Ed.) The Past, Present and Future of International Business & Management (Advances in International Management, Vol. 23), Emerald Group Publishing Limited, Leeds, pp. 327-349. https://doi.org/10.1108/S1571-5027(2010)00000230020