Institutions, Policy, and Economic Geography
Gilbert Kofi Adarkwah, HEC Montreal, Canada; BI Norwegian Business School, Norway
Paul Gooderham, NHH Norwegian School of Economics, Norway; Middlesex University, United Kingdom
At the core of institutional theory is the notion that institutions constitute “rules of the game.” I.e., institutions are humanly devised constraints that structure political, economic, and social interaction and that reduce uncertainty by establishing a stable (but not necessarily efficient) structure and constraints to human interaction. The degree of compliance or violation of institutions depends in part on the effectiveness and enforcement of sanctions by the state. However, even within developed economies, variations across countries in government regulation, judicial procedures in courts, and labor markets create different institutional logics. Scholars have argued that in contexts where the state is unable to impose and enforce institutional structure, as is the case in many developing economies, efficient markets are undermined. It has also been argued that countries escape poverty only when they have appropriate institutions, especially property rights protection and market competition. Countries are more likely to develop the right institutions when they have open pluralistic political and independent judicial systems. Research suggests that a lack of appropriate institutions may be a barrier to multinational enterprises (MNEs) willingness and commitment to entry. However, countries’ experiences in developing appropriate institutions are mixed, meaning a continuation of regional and geographical dissimilarities. Further, the rise of China and other emerging markets suggests that nations can succeed economically while adopting different institutional logics.
Potential topics include, but are not limited to: a) How do MNEs manage in the face of dissimilar institutional logics? b) Are digital born-globals born free of institutional constraints? c) How do MNEs manage in contexts where the state is a strong actor but not a neutral “referee”? d) How do MNEs manage in contexts where the state is weak and unable to impose and enforce institutional structure, as is the case in many developing economies? e) How do public policy choices affect MNEs? f) What strategies do multinational firms use to influence public policy? g) How do institutional explanations interact with economic geography and international business?
Keywords
MNEs, institutions, institutional logics, developing economies, economic growth.