Institutions and International Business Research: Three Institutional Approaches and Recommendations for Future Research

Purpose – The purpose of this contribution is to clarify some of the institutional approaches in international business research and to identify opportunities to extend research on the role of institutions in international business. Design/methodology/approach – Building on Douglas North's (1990) analogy of institutions as the rules of the game, we illustrate some of the differences between different institutional approaches in international business (IB) through a discussion of the rules and institutions surrounding the world of association football. We then briefly revisit the recent review by Hotho and Pedersen (2012) and compare and contrast three dominant institutional approaches in international business: new institutional economics, new organizational institutionalism and comparative institutionalism. Findings – Our discussion illustrates that different institutional approaches address and explain different facets of international firm behaviour. The ways in which institutions matter for international business are therefore greatly dependent on how institutions are conceptualized and measured. Originality/value – We highlight two recent developments in the literature on institutions which we believe offer important implications and opportunities for international business research. The first development is a move towards less deterministic approach to institutions. The second development is the recognition of institutional plurality and complexity, in the sense that organizations are often exposed to multiple logics with potentially contradictory prescriptions. These notions, we believe, offer important opportunities to advance our understanding of the relations between institutions and multinational enterprises (MNEs).

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