- Title
- Do country-level institutional frameworks and interfirm governance arrangements substitute or complement in international business relationships?
- Creator
- Abdi, Majid; Aulakh, Preet S.
- Relation
- Journal of International Business Studies Vol. 43, Issue 5, p. 477-497
- Publisher Link
- http://dx.doi.org/10.1057/jibs.2012.11
- Publisher
- Palgrave Macmillan
- Resource Type
- journal article
- Date
- 2012
- Description
- Interfirm relationships among partners from institutionally distant environments are subject to governance difficulties, owing to the paucity of shared cognitive and regulatory frameworks. We examine the potential of formal contracting and relational governance developed at the partnership level to overcome the formal and informal institutional gap at the country level. Empirical results from a sample of 184 international partnerships of large US firms support an overall substitutive relationship between informal institutional frameworks and interorganizational relational arrangements whereby the performance benefits of relational governance are reinforced at higher degrees of informal institutional distance. Contrastingly, formal institutional frameworks and contractual governance are found to have a complementary relationship, with performance gains from formal contracting undermined at higher degrees of formal distance.
- Subject
- institutional theory; cultural distance; governance; econometrics; institutional environment; institutional context
- Identifier
- http://hdl.handle.net/1959.13/1317737
- Identifier
- uon:23488
- Identifier
- ISSN:0047-2506
- Language
- eng
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