Abstract
Using the context of institutional transitions in the emerging economy context of India, we examine the influence of a firm's historical economic policies on its corporate risk-taking. We propose that protectionist and constraining economic policies of the socialist regime inscribe ‘risk-avoidance’ routines on incumbent firms, which continue to persist. Utilizing the data of the Indian economic environment (1956–1991) and analyzing a large sample of Indian firms during 1994–2007, we hypothesize and find the support that level of protectionist imprinting negatively impacts corporate risk-taking in the post-liberalization era. This effect is weakened by the moderating impact of the business group affiliation.
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