Forging a comparative institutional advantage in Argentina: Implications for theory and praxis

Abstract

This article argues that the incorporation of a revised version of the varieties of capitalism approach into international business literature and institution-based theory in strategy would enable scholars and practitioners to improve their understanding of how individual institutions and combinations thereof provide a basis for developing human resource practices suited to emerging markets. It elaborates on the varieties of capitalism approach by coining the term recessive institution to describe how firms draw on latent institutions to pursue policies not in accord with the dominant institutional context in which they operate. This article draws on the varieties of capitalism approach for Latin America to demonstrate how an industrial district and a large company in Argentina formed a comparative institutional advantage for producing mid-range, high quality products by using recessive institutions. It concludes by highlighting this article’s implications for human resource scholars and executives while also suggesting avenues for future research.