Direct and interaction effects of formal and informal institutions on interorganizational conflicts: evidence from Chinese firms

Abstract

PurposeThis study aims to examine the effects of formal and informal institutional factors (i.e. marketization and guanxi culture) on interorganizational conflicts (IOCs) and their interaction effects.Design/methodology/approachDrawing on IOC literature and an institution-based view, the authors use a sample of 12,022 Chinese firms from the World Bank’s Investment Climate Survey. A zero-inflated negative binomial regression was used to analyze the data.FindingsThe results suggest that guanxi culture has U-shaped effects, but marketization does not negatively affect IOCs. Furthermore, a low level of marketization weakens the U-shaped effect of guanxi culture on IOCs. A moderate level of guanxi culture can enable marketization to reduce IOCs.Practical implicationsThis study provides a better understanding of the management of IOCs. Managers should fully understand the differential effects of the institutional environment in different regions and their interactions by adopting different response strategies.Originality/valueThis study enriches the literature on IOCs’ antecedents and contextual factors by examining the institutions’ direct and interaction effects on IOCs.