Comparative Country Studies 2023: Week 2 articles
Article #1
The construct of institutional distance through the lens of
different institutional perspectives: Review, analysis, and
recommendations
Tatiana Kostova, Sjoerd Beugelsdijk, W. Richard Scott, Vincent E. Kunst, Chei Hwee Chua &
Marc van Essen
Published: 20 December 2019
Key points:
1. Institutional distance is the degree to which the institutional environment of one
country differs from that of another country, including differences in formal and
informal rules, regulations, norms, and values.
2. Institutional distance is an important concept in international business research
because it influences the way firms operate and make strategic decisions in
different countries.
3. Different institutional perspectives, including institutional theory, resource-based
view, transaction cost economics, and cultural perspectives, offer unique ways of
understanding institutional distance, and scholars should consider using multiple
perspectives when studying this concept.
4. Institutional distance can be measured across multiple dimensions, including
regulatory, normative, cognitive, and social distance, and scholars should consider
measuring and analyzing each dimension separately.
5. Future research on institutional distance should focus on developing a more
comprehensive and integrated understanding of this concept by using multiple
institutional perspectives, measuring multiple dimensions of institutional distance,
and paying attention to contextual factors that influence institutional distance.
Summary:
The article titled "The construct of institutional distance through the lens of different
institutional perspectives: Review, analysis, and recommendations" provides an in-depth
analysis of the concept of institutional distance, which is used to explain the differences
and similarities between the institutional environments of different countries. The article
is co-authored by Tatiana Kostova, Sjoerd Beugelsdijk, W. Richard Scott, Vincent E. Kunst,
Chei Hwee Chua, and Marc van Essen and was published in the Journal of International
Business Studies in 2018.
The authors begin by providing an overview of the concept of institutional distance and its
importance in international business research. They explain that institutional distance is
the degree to which the institutional environment of one country differs from that of
another country. This can include differences in formal and informal rules, regulations,
, norms, and values. The authors argue that institutional distance is an important concept
because it influences the way firms operate and make strategic decisions in different
countries.
Next, the authors review the different institutional perspectives that have been used to
study institutional distance. These include the institutional theory, resource-based view,
transaction cost economics, and cultural perspectives. The authors argue that each of
these perspectives offers a unique way of understanding institutional distance, and that
scholars should consider using multiple perspectives when studying this concept.
The authors then provide a detailed analysis of the different dimensions of institutional
distance. These include regulatory, normative, cognitive, and social distance. Regulatory
distance refers to differences in formal rules and regulations, normative distance refers to
differences in social norms and values, cognitive distance refers to differences in mental
models and beliefs, and social distance refers to differences in social networks and
relationships. The authors argue that each of these dimensions is important for
understanding institutional distance, and that scholars should consider measuring and
analyzing each dimension separately.
Finally, the authors provide recommendations for future research on institutional
distance. They suggest that scholars should focus on developing a more comprehensive
and integrated understanding of this concept by using multiple institutional perspectives
and measuring multiple dimensions of institutional distance. They also recommend that
researchers should pay more attention to the contextual factors that influence
institutional distance, such as the industry, firm size, and the level of institutional
development in a particular country.
In conclusion, the article provides a comprehensive overview of the concept of
institutional distance and its importance in international business research. The authors
argue that institutional distance is a complex and multifaceted concept that requires a
nuanced understanding and measurement. They provide recommendations for future
research and suggest that scholars should continue to explore this concept in order to gain
a deeper understanding of how institutional environments influence firm behavior and
performance.
Overall conclusion:
The concept of institutional distance is an important and complex topic in international
business research, and requires a nuanced understanding and measurement. The authors
suggest that researchers should use multiple institutional perspectives and measure
multiple dimensions of institutional distance in order to gain a more comprehensive and
integrated understanding of this concept. They also recommend that researchers pay
attention to contextual factors that influence institutional distance, such as industry, firm
size, and the level of institutional development in a particular country. By doing so,
scholars can gain a deeper understanding of how institutional environments influence firm
behavior and performance in different countries.
