How institutions matter for international business: Institutional distance effects vs institutional profile effects
André van Hoorn and
Robbert Maseland
Journal of International Business Studies, 2016, vol. 47, issue 3, 374-381
Abstract:
Extant institutional research has failed to make a distinction between the effects of institutional profile and institutional distance on MNEs. The problem stems from the fact that, due to the use of a single reference country, variation in institutional distance between the reference country and partner countries is essentially equal to variation in the institutional profiles of these partner countries, making institutional distance and institutional profile effects indistinguishable. This research begins by demonstrating that the problem of profile – distance conflation is relevant for virtually all possible countries as reference points, and then showing how this problem is mitigated by using more than one country as reference points from which to calculate institutional distance. We conclude that current institutional research in international business is unable to explain how institutions matter for MNEs and that a more careful theoretical and empirical distinction between the effects of institutions and institutional distance on cross-border business activities is essential for pushing the institutional perspective in international business studies forward. Multiple reference point research designs are required to achieve this.
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (72)
Downloads: (external link)
http://www.palgrave-journals.com/jibs/journal/v47/n3/pdf/jibs20162a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/jibs/journal/v47/n3/full/jibs20162a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:pal:jintbs:v:47:y:2016:i:3:p:374-381
Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/41267/PS2
Access Statistics for this article
Journal of International Business Studies is currently edited by John Cantwell
More articles in Journal of International Business Studies from Palgrave Macmillan, Academy of International Business
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().