National institutional systems, foreign ownership and firm performance: The case of understudied countries

Michael Carney, Saul Estrin, Zhixiang Liang and Daniel Shapiro

Journal of World Business, 2019, vol. 54, issue 4, 244-257

Abstract: We analyse the relationship between institutional systems (configurations of countries with similar institutional characteristics) and firm performance. We use a large sample of firms from understudied countries to explore whether the performance impact of these configurations is the same (“equifinality”), whether this holds across different measures of firm performance (“Tversky effect”), and whether some institutional configurations better support foreign-owned firms. We find that it is possible to rank institutional systems according to their impact on firm performance, but the ranking differs according to the performance measure. Although foreign ownership on average confers performance advantages, the magnitude of the impact depends on the configuration. Our findings contribute to the understanding of the importance of institutional similarities across countries, and to the implications of these similarities for the theory of the MNE.

Keywords: Varieties of institutional systems; Comparative corporate governance; Firm performance; World Bank Enterprise Survey; Theory of the MNE; Eclectic paradigm (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:worbus:v:54:y:2019:i:4:p:244-257

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DOI: 10.1016/j.jwb.2018.03.003

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