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Does institutional industry context matter to performance? An extension of the institution-based view

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  • Elango, B.
  • Dhandapani, Karthik

Abstract

Conventionally, in papers focusing on the Institution-Based View (IBV), institutions are studied and measured as a nation-level construct, and the assumption is that institutional forces are consistent across industries. This study further develops this notion by demonstrating how the variation in institutional forces within industries impacts outcomes for firms, even after controlling for variations in firm, industry, and nationwide institutional characteristics. Using a new measure, which we refer to as the Institutional-Industry index, on a sample of 3483 firms based in India from 104 unique industry categories for the years 1996–2017, we demonstrate that the institutional context within industries captured through the Institutional-Industry index impacts performance outcomes for firms. Additionally, we find that the Institutional-Industry index impacts outcomes for critical firm-level strategic variables, namely, internationalization, intangible resources, and business group affiliation. This research extends the institution-based view while providing important insights on the determinants of firm performance.

Suggested Citation

  • Elango, B. & Dhandapani, Karthik, 2020. "Does institutional industry context matter to performance? An extension of the institution-based view," Journal of Business Research, Elsevier, vol. 115(C), pages 139-148.
    • Handle: RePEc:eee:jbrese:v:115:y:2020:i:c:p:139-148
    DOI: 10.1016/j.jbusres.2020.04.037
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