Informal Institutions Research Articles

Informal institutions in accounting research: A structured literature review

We adopt a structured literature review methodology to review the literature on the impact of informal institutions on accounting outcomes. We address three key questions: How is research on the impact of informal institutions on accounting outcomes developing? What is the focus and critiques of the literature on the impact of informal institutions on accounting outcomes? Finally, what is the future for research on the impact of informal institutions on accounting outcomes? We contribute to the international accounting literature by producing a study that reviews this lively research area, enabling valuable and impactful future research in this field.

How planning intervention changes the “price tags” of property rights? Towards a dynamic understanding of China's small property right housing

While studies of property rights have long gone beyond the legal-illegal dichotomy, how to quantify the varying degree of property rights remains a challenging task. Focusing on a special type of informal housing—Small Property Right Housing (SPRH) in China, this study examines how planning intervention affects the pricing mechanism of SPRH through the theoretical lens of graded property rights. A previous study has unravelled the pricing mechanism of SPRH by quantifying the impact of informal institutions inherent to the SPRH market that give different “price tags” to varying degree of property rights, while not being able to capture the impact of external interventions. Drawing on two SPRH datasets before and after a Master Plan of urban villages conservation announced in 2019, we employ difference in difference (DID) estimations to examine how planning intervention affects SPRH prices by way of altering the strength of informal property rights. We also develop spatial error models (SEM) to account for spatial autocorrelation. This research extends and enriches the robust conceptualisation of graded degree of informal property rights by capturing the changes caused by external intervention to offer a dynamic and more accurate understanding of SPRH pricing mechanism. It also demonstrates that planning can go beyond sanctioning and redlining to tolerate and steer informal development.

A sweet burden? The effect of bride prices on parents' health

AbstractThe bride price, as an informal institution originated from traditional culture, is pervasive in many areas of the developing world in a form of a payment from the family of the groom to that of the bride at marriage. We study the effects of bride price on parents' health in China. Using information on bride price payment and various health measures from the China Health and Retirement Longitudinal Study, we find that the bride price significantly reduces self‐reported health among the grooms' parents after addressing the endogeneity issue with average sex ratio within a family computed as an instrumental variable. The reductions are heterogenous across urban and rural areas. Mechanism analysis suggests the negative health outcomes are driven by family debt, heavier psychological stress and longer work hours caused by bride price payments.

Does religious atmosphere affect enterprise digital transformation? Evidence from China

This study examines whether and how religious atmosphere affects enterprise digital transformation. We find religious atmosphere is significantly negatively associated with digital transformation. We also find religion inhibits digital transformation through strengthening risk aversion and weakening innovation consciousness. Additional results show that the effect of religion on enterprise digital transformation is significant primarily in firms with fewer senior executives affiliated with the CPC and managers who possess less conservative personalities. The inhibiting effect is more pronounced for non-state-owned firms and firms with lower institutional ownership. Moreover, the significant effect only exists in areas with lower market competition and weaker government intervention. Moreover, indigenous religious tradition attenuates the positive impact of digital transformation on firm productivity. Overall, our findings provide insights for understanding the role of religion, as an informal institution, in firms’ decision-making in emerging markets.

Rule of Informal Institutions in Democracy: Implications for Regional Disparity in an Indian State

This article attempts to understand and theorize the issue of persistent regional disparity within democratic structures using an institutional perspective. Institutional economists widely acknowledge the role of democratic institutions in improving redistribution and reducing inequalities. However, persistent regional disparity within democratic nations has become a cause of concern for both developed and developing nations. There is hardly any study that either attempts to develop a separate institutional framework to explain regional variation or to examine the applicability of these frameworks in the regional context. Our article is an attempt to fill this gap. In this article, we have taken the case of Odisha, a low-income state within the largest democracy in the world, India, and tried to theorize its wide and persistent regional disparities. The novelty of this article is conceptualizing the interactions between formal and informal institutions and drawing implications of their interactions for regional disparity and economic growth.

Informal Institutions and Audit Pricing: Cross-Country Evidence of National Culture and Audit Fees

Synopsis The research problem In this study, we examined the effect of an important informal institution, namely, national culture, on audit fees in an international context. Motivation In recent years, extant literature has increasingly focused on country-level differences in the audit environment, as these might have a significant influence on how financial statement audits are conducted across the globe. We contribute to this stream of literature by investigating the impact of national culture on audit fees. The test hypotheses Based on the demand- and supply-side perspectives of audit fees, we hypothesized that national culture dimensions — namely, uncertainty avoidance, power distance, individualism versus collectivism, and masculinity versus femininity — affect audit fees. Target population We used a sample of 27,670 firm-year observations across 22 countries over the 2002–2019 period. Adopted methodology We used ordinary least squares (OLS) regressions as baseline technique and entropy-balanced method (EBM) and system-generalized method of moments (GMM) to address endogeneity concerns. Analyses We examined the impact of Hofstede’s four national culture dimensions — uncertainty avoidance, power distance, individualism versus collectivism, and masculinity versus femininity — on audit fees. We also tested the robustness of results using alternative measures of national culture, subsample analyses, and additional firm-level factors. Findings Consistent with our hypotheses, we find that audit fees are higher (lower) in countries with higher uncertainty avoidance, individualism, and masculinity (power distance) scores. Our further analyses reveal that earnings management proxied by abnormal accruals does not impact the relationship; however, country-level creditor rights influence audit fees in high power distance and masculine cultures. We also note that national culture influences auditor choice and audit opinion. Our main findings are robust to alternate proxies and subsample analysis, as well as to address potential endogeneity concerns. Overall, our findings offer important implications for firms operating in global markets and for the audit profession.

The Effects of Mandatory ESG Disclosure Around the World

ABSTRACTWe compile a novel data set on mandatory environmental, social, and governance (ESG) disclosure around the world to analyze the stock liquidity effects of such disclosure mandates. We document a positive effect of ESG disclosure mandates on firm‐level stock liquidity. The effects are strongest if the disclosure requirements are implemented by government institutions, not on a comply‐or‐explain basis, and coupled with strong enforcement by informal institutions. Firms with weaker information environments benefit more from ESG disclosure mandates. Our results support the view that ESG disclosure regulation improves the information environment and has beneficial capital market effects.

The impact of flexi-time uptake on organizational outcomes and the moderating role of formal and informal institutions across 22 countries

Viewing the acceptance of flexi-time as a social norm, and drawing on the notion of flexibility stigma, we theorize and test the effect of institutional context on the uptake of flexi-time and its impact on organizational outcomes. Specifically, we assess the explanatory power of formal institutional arrangements via the prevailing legislative framework governing flexi-time, as well as the impact of the informal institutional context via prevailing norms arising from the extent of cultural tightness or looseness. We then test our ideas using data from 22 countries. We found curvilinear relationships between flexi-time uptake, absenteeism, and employee turnover. These relationships were moderated by country-level formal and informal institutions. Thus, in culturally tight countries, and in those with no labour legislation related to flexi-time, the relationship between flexi-time uptake and organizational outcomes was curvilinear (i.e. an inverted U-shape) whereby when flexi-time uptake was 0% or >50%, absenteeism and turnover were at their lowest. Conversely, in culturally loose countries, and in those with labour legislation related to flexi-time, the relationship between flexi-time uptake and organizational outcomes was linear (i.e. the higher the flexi-time, the lower the absenteeism and turnover). Our findings underscore the importance of organizations taking account of the cultural and legislative aspects of their respective operating contexts when seeking to implement flexi-time arrangements. A misalignment between formal and informal institutions and flexi-time may reduce its uptake and have deleterious effects on absenteeism and turnover.

Characterization and Identification of Major Constraints and Potentials of Kiltu Sorsa Watershed, in Guji Zone, Southern Ethiopia

Ethiopia is a country seriously affected by different natural resource degradation that included soil, vegetation, biodiversity and water degradation and climate deterioration. The study was conducted at Adola Rede District of Guji Zone, in Southern Ethiopia. The objectives of the study were to document baseline information on socioeconomic aspects and to document major biophysical and socio-economic constraints and potentials of the study watershed. The survey data were collected using key informant interview, focus group discussions, semi-structured interviews and guided field observations. A total of 60 respondents were selected for semi-structured interviews by means of simple random sampling methods. The majority (65%) of the respondent households were practiced physical and biological soil and water conservation activities. However, about 35% of the sampled households were not practiced soil and water conservation activities due to lack of awareness, lack of materials and labor. In the study watershed five major constraints such as land and soil related constraints, production related constraints, institutional and infrastructure related constraints, livestock related constraints and socio-economic related constraints were identified. However, suitable agro-ecology, availability of labor force, youth and women associations and informal institutions were the major identified potentials in the study watershed. Therefore, by using the potentials/opportunities of the study watershed and through providing quality extension services and training on soil and water conservation practices it is possible to enhance farmers participation and technical limitations. Moreover, for sustainable watershed management of the study area different soil and water conservation structures are very significant in various land use system of the study watershed through active participation of the local communities.

Adjustment and adaptation: English curriculum development in pesantren

As the religious institution which focuses on religious teaching, however Pesantren began to incorporate English Language Teaching (ELT) in its curricula by doing some adjustments in line with the Pesantren context. This paper aims to examine English curriculum development at Pesantren Darussalam Blokagung Banyuwangi both in formal and informal institutions inside Pesantren. The incorporation of English Language Teaching (ELT) and the authority of the Pesantren leader in modifying the English curriculum according to the Pesantren context are discussed. The research is a qualitative research approach by employing a case study methodology. The data is collected through in- depth interviews of six participants, observations and documentation. The study reveals two curriculum facets: formal and informal. The formal curriculum aligns with the national school system, while the informal one encompasses English courses progressing from basic to advanced levels, an English language dormitory, and extracurriculars like news reading, storytelling, debate, and public speaking. The research concludes that Pesantren Darussalam effectively integrates English education to complement formal schooling. Yet, to enhance students' English skills and local awareness, ELT materials are needed to be tailored to the Pesantren context. This approach underscores the institution's adaptability and commitment to holistic education.

The Companion: A Hospital Autoethnography on the Relationship Between Informal and Formal Institutions

The article is an analytical autoethnography that explores the author’s experience of navigating the Turkish healthcare system while caring for his father who underwent emergency bypass surgery. Their atypical positions, at once members of a privileged group but lacking extensive familial connections, helped bring to light the diverse range of tactics that patients use to navigate the hospital, despite reforms that tried to establish greater universalism. By highlighting the relationship between formal institutions and informal practices in the healthcare system and how they survive to include/exclude different status groups, the author’s micro-level observations and background in political sociology help reveal the complex impact that non-universalistic practices have on democratization and political change in Turkey and beyond.

Corporate political acuity and carbon - efficiency synergies

Research questionIn the context of global low-carbon emission reduction, how to achieve green and high-quality development has become a major issue for the Communist Party of China (CPC) and the Chinese government recently. Based on the data of China's listed companies from 2013 to 2020, this paper uses Python to implement text analysis of annual reports, and explores the relationship between political acuity and carbon-efficiency synergies (CES) from the perspective of enterprise initiative. Research findingsWe found that (1) political acuity positively affects carbon-efficiency synergies. (2) Increased political acuity can reduce carbon emissions, but the effect on economic efficiency is not obvious. That is, low carbon takes the lead in raising the level of carbon-efficiency synergies. (3) Environmental regulations can positively regulate the relationship between political acuity and carbon-efficiency synergies. (4) Political acuity in southern China, carbon neutral and non-state-owned enterprises (NSOEs) will have a more pronounced effect on carbon-efficiency synergies. Academic implicationsFrom the perspective of the root causes of political linkages, we find the synergies between formal and informal institutions, and the key factors for policy implementation. Policy implicationsThis paper is helpful for enterprises to improve the synergies of emission reduction and efficiency promotion, and has practical implications for the government to promote green and high-quality development.

Anak Didik Dalam Perspektif Al Qur’an: Kajian Analisis Qs. At-Tahrim 66/6, Qs As-Syuara 26/214, Qs. At Taubah 9/122 dan Qs. An-Nisa 4/170

The Koran has explained how important education is which is very influential in the lives of shaping the character of students to become Muslims with noble morals, especially in the field of developing religious education which is used as a basis for learning both in terms of formal, informal and non-formal institutions which have a very important role in it. The aim of this research is to reveal the important position of students in the view of the Qur'an. The method used in this research is a literature study research method, the data source is analyzed interactively using a literature review based on the latest references. The results of the research in this discussion show that based on the presentation of the verses of the Koran, forms of classification regarding students have been explained and of course they have given meaning to the most important subjects and objects in education, namely students, where they are always prioritized to gain an understanding of learning and formation. character, this cannot be separated from the role of an educator who always directs students to become human beings who are not only intellectual in general knowledge but also intelligent in developing their morals.

The Role and Contribution of The New Institutional Economics In Economic System Performance

This study investigates new institutions' contributions and economic implications in current economic developments. This study uses a qualitative approach with a literature study method. The study illustrates key thought concepts and relevant works from figures such as Douglass North, Elinor Ostrom, Oliver Williamson, Ronald Coase, and Avner Greif through analysis of various reference sources, including books, journal articles, and other related publications. The results of the literature study show that New Institutional Economics has an essential contribution to understanding the role of formal and informal institutions in shaping economic behavior and Performance. Legal institutions, such as laws, regulations, and public policies, provide the framework for economic interactions, literature study results whereas informal institutions, such as norms, beliefs, and social networks, influence individual economic decisions. The importance of institutions and organizations in improving economic efficiency and overcoming problems arising in the economic system is also highlighted in this study. In the context of New Institutional Economics, institutions and organizations act as mechanisms for reducing transaction costs, resolving conflicts, and increasing trust and cooperation among economic actors. Its theoretical implications strengthen an understanding of how institutions and organizations can shape economic behavior and Performance. In contrast, its practical implications can provide direction for more relevant and effective public policies addressing economic and social problems.

Aligning empirical evidence on ESG with ancient conservative traditions

Environmental, social, and governance (ESG) issues have attracted increasing attention worldwide. However, there is a concomitant growing concern regarding the motivation behind firms' ESG practices. This has even become a hotly debated issue among politicians. To provide empirical evidence of academic neutrality, we use a virtue ethics lens to investigate how informal institutions, specifically Confucian virtues, which are widespread, centuries-old, conservative traditions in China and many Ascian countries, affect corporate ESG activities. We reason that Confucian virtues provide guidelines and motivation for developing better ethical leadership. Our results indicate that companies located in places with stronger Confucianism have better ESG performance, consistent with ESG engagement resonating with Confucian emphasis on the public good. Additionally, our identified virtue and ethics effects are more pronounced for non-state-owned enterprises (consistent with ESG being more associated with firms distanced from the public sector) and for firms located in places with less developed formal institutional environments (consistent with cultural factors and informal institutions substituting for formal institutions).

Does social dishonesty accelerate corporate maturity mismatch of investment and financing?

This study investigates the effects of social dishonesty on the maturity mismatch of investment and financing in Chinese companies. Our findings reveal that social dishonesty significantly exacerbates the maturity mismatch, with the issue being particularly pronounced in non-state-owned enterprises, high-tech industries, and developed financial markets. Nevertheless, enhancing the quality of corporate accounting information disclosure, improving stock liquidity, achieving good ESG performance, and undergoing digital transformation can reverse the role of social dishonesty in exacerbating the maturity mismatch of investment and financing. This research highlights the significant influence of social dishonesty on corporate financial strategies within the framework of informal institutions.

Informality and insecurity in the Sahel: unravelling the hybrid political orders of Northern Mali and Northern Niger

Since the Sahelian crisis broke out in 2012, Northern Mali and Northern Niger have been identified as the two potential epicentres of violence in the region. Nevertheless, while sharing very similar structural conditions and constraints, during the last decade these two subregions have scored very differently in terms of stability and armed conflict along the centre-periphery divide. Aiming to understand the divergent security patterns in Northern Mali and Northern Niger, this work highlights the importance of informal institutions as politically – and spatially contingent networks whose mechanisms for regulating authority and power are key for the appreciation of state capacity and political ordering, and essential for understanding statehood in the Sahel. We stress the importance of hybrid political orders and informality for the definition of political settlements which result in (a) the cooptation of political/economic competitors and the stabilisation of viable governance arrangements; or (b) an open contestation of authority and value-extraction that paves the way for destabilising dynamics. The diverging pattern exhibited by the two cases demonstrates that hybrid networks that straddle political and informal institutions are crucial in determining either the stabilisation or destabilisation of political settlements.

Residents’ attitudes toward land lease for rural tourism

Residents’ attitudes toward land lease are a crucial factor in the success of tourism development, especially in developing countries like China, where land lease has emerged as a significant means for developers to obtain rural land for tourism purposes. Nevertheless, the absence of longitudinal field research, which could offer more profound insights into residents’ attitudes compared to cross-sectional studies, contributes to the persistent “attitude-behavior gap” in sustainable tourism. Using a field research method and taking Longtan Village in China as a typical case, this study focuses on changes in residents’ attitudes toward land lease and the mechanism underlying these changes. The findings show that Longtan residents’ attitudes toward land lease for tourism development changed from “anxiety and collective objection” to “ambivalence and individual differences” and finally to “expectation and collective support”. Residents’ attitudes were determined by the transaction risk arising from the conflict between formal and informal institutions in the context of social transformation. The findings provide implications for tourism managers to achieve the sustainable development of tourist destinations in developing countries.

Artificial Intelligence in Mental Control: the dialectical antilogies

The paper examines the influence technics on human conscience, the dialectic of interaction between artificial intelligence (AI) and human intelligence within the system: information technologies –mentality and psychology of society – control over people’s minds and technologies. The emphasis is on the essence of the concept of mentality, mental identity, the role of informal institutions, and the speed of changes in biological and information time. The author represents a conceptual view on the problem of the role of artificial intelligence in the development of mental management as a humanitarian problem in the logic of the development of ideas and approaches previously considered by the author in the following works: The Future of Russia: transition to a new formation; Strategy of Reforms in Russia: from leader to leader; and in the context of the idea of social justice and economic growth, discussed at the First Russian Economic Forum.

The role and interplay of institutions in water governance in the Central Rift Valley of Ethiopia.

Institutions can play a key role in coordinating how natural resources are effectively managed and used without over-exploitation. Institutions are laws, policies, and organizational arrangements that permit, forbid or regulate human action. This study aimed to look into the roles of formal and informal institutions, and their interactions in water resources governance in the Central Rift Valley (CRV), Ethiopia. Key informant interviews, focus group discussions, and secondary data sources were employed to collect relevant data. The result of the study indicated that the influence of informal institutions on formal institutions or vice versa was insignificant, and unable to change the actions of water users in the CRV. Other limitations observed in water resources governance in the CRV include a lack of actors' clear roles and responsibilities, absence of meaningful decentralization, limited engagement of key actors in policy development, lack of synergy between the institutions, and absence of enforcement mechanisms. Considering the local contexts and community's traditional knowledge of water governance in water-related policy, rules, and regulations, and enhancing the capacity of local-level institutions, strong interplay among all institutions involved in water governance, and meaningful actors' engagement were recommended to advance the role of institutions in water resources governance in the CRV and in the country. Hence, a mechanism that enables to harmonize formal and informal institutions in water management system can enhance the governance of water resources in the study area and elsewhere in the country.