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Unbalanced Institutions in Market Transition: How Do They Matter for Firm Strategic Choices and Performance in Emerging Economies?

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  • Weiping Liu

    (Shanghai University of Finance and Economics)

  • Jiatao Li

    (Hong Kong University of Science and Technology)

Abstract

The legal and economic institutions in emerging economies normally undergo major changes during the transition to a market economy. The development of legal and economic institutions in such economies is discussed, and two different development paths are analyzed. One relates to economies with relatively better-developed economic institutions, and the other to those with relatively better-developed legal institutions. A series of propositions are developed to explain how different imbalances in institutional development might influence market competition, firms’ strategic choices, and firm performance. A three-stage model of economic development is proposed which attempts to account for the two different situations.

Suggested Citation

  • Weiping Liu & Jiatao Li, 2019. "Unbalanced Institutions in Market Transition: How Do They Matter for Firm Strategic Choices and Performance in Emerging Economies?," Management International Review, Springer, vol. 59(5), pages 675-702, October.
    • Handle: RePEc:spr:manint:v:59:y:2019:i:5:d:10.1007_s11575-019-00393-8
    DOI: 10.1007/s11575-019-00393-8
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