Institutional voids as spaces of opportunity

Johanna Mair, Ignasi Marti and Kate Ganly
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Johanna Mair: EM - EMLyon Business School

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Abstract: For multinational companies, doing business in emerging economies often involves overcoming hurdles created by the weakness or complete absence of institutions that support markets. When these supporting institutions do not exist, there is what is known as an "institutional void." In the context of developing countries, social entrepreneurs can be seen as "institutional entrepreneurs," channeling their efforts towards creating and transforming institutions that foster both economic and social development and thus help the excluded to participate in the market economy and in broader society. In developing countries, weak disclosure requirements, information asymmetries and ineffective governance mechanisms all inhibit economic growth. By creating arenas of participation and action, they enable the marginalizes to access parts of social and economic life from which they were previously excluded. Market entry requires a thorough and comprehensive check of the institutional arrangements that enable and constrain market activity

Date: 2007-01-01
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Published in European business forum, 2007, 31, pp.6

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02311879

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