Overcoming institutional voids via arbitration

Brian C Pinkham () and Mike W Peng
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Brian C Pinkham: Western University
Mike W Peng: University of Texas at Dallas

Journal of International Business Studies, 2017, vol. 48, issue 3, No 4, 344-359

Abstract: Abstract Extending the literature on institutional voids, we introduce theory from law that highlights the ability of firms to choose the laws and enforcement mechanisms that govern their international joint ventures (IJVs). Specifically, firms may overcome institutional voids by borrowing institutions via binding international commercial arbitration (BICA) rather than relying on host-market institutions. Leveraging an institution-based view, we develop a theoretical framework to articulate the conditions under which IJV partners may choose BICA as opposed to domestic courts to overcome institutional voids in host markets.

Keywords: institutional voids; institution-based view; binding international commercial arbitration (BICA); international joint ventures (IJVs); transaction cost economics; contracts (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (37)

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DOI: 10.1057/s41267-016-0026-z

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