Institutional Voids Research Articles

The Role of Governments in Driving Industry 4.0 Adoption in Emerging Countries

Industry 4.0 contributes to the virtualization of production system and enhances capabilities. However, the adoption process poses substantial challenges for SMEs in emerging markets due to institutional voids, resources, and public supports. This study explores the role of government in adopting Industry 4.0 by the SMEs and how organizational structure influences the process. It employed a quantitative approach and surveyed 225 managers. Industry 4.0 adoption is significantly influenced by government policy and subsidies. Government policy and subsidy transform organizational structure to be more transparent and flexible, streamlining them in adopting Industry 4.0. The organizational structure substantially mediates the relationships between government policy, subsidy, and Industry 4.0 adoption. This study implies that governments are vital in helping SMEs to adopt Industry 4.0 in emerging markets. Thus, governments should make policies that support technology adoption by offering sufficient funding/subsidies to boost innovation and technological transformation.

Bridging the digital divide in Africa via universal service funds: an institutional theory perspective

PurposeThe purpose of this paper is to provide evidence-based policy recommendations for improving the implementation of universal service funds (USF) with a view to closing the digital divide in Africa.Design/methodology/approachThe paper adopts a qualitative approach that draws examples from various African countries supported by 25 interviews from key stakeholders with hands-on experience and roles that shape telecommunications policy in Africa and other developing countries.FindingsThe study's findings point out that institutional voids which characterize several African countries inhibit the effectiveness of USF in African countries. The authors identify several institutional and organisational factors and explain how they negatively affect the performance of USF. The authors find that in order to overcome these obstacles, there is a need for a clear redefinition of Universal Access and Service (UAS) policies, restructuring the governance of USF, encouraging cross-sectoral collaborations, and bottom-up initiatives to bridge the digital divide in African countries.Originality/valueThe paper contributes to the underexplored USF literature by shedding light on the role of institutional factors in determining the success of USF. The paper thus complements and provides a different perspective on promoting digital inclusion in Africa from the viewpoint of institutional voids, bringing new insights into the existing literature on how to deal with an intractable area of UAS policy and the wider digital divide debate in developing countries.

Organisational drivers and sustainability implementation in the mining industry: A holistic theoretical framework

AbstractWhile few studies have examined the role of institutional pressures on sustainable business practices, there is a dearth of empirical research regarding the influence of internal organisational characteristics on sustainability implementation in developing countries. This paper examines internal organisational features and how they influence multinational companies (MNCs) operating in a resource‐rich developing country to embrace and embed sustainability into corporate policies and practices. The findings show that the history of past sustainable practices, the level of internationalisation and managerial cognition internally drive MNCs to implement sustainability in their host countries. We discuss that managerial cognition drives MNCs to embrace sustainability in non‐enabling institutional environments based on private morality and perceived ethical obligation. Accordingly, we have proposed a holistic theoretical framework for sustainability implementation based on external drivers, institutional voids and complexity and the moderating role of internal organisational features.

How Ethnic Minority SME Owners in the UK can Create Value Amid Informal Institutional Voids

This article shows that the COVID-19 pandemic exposed informal institutional voids that exist for Black, Asian and Minority Ethnic (BAME) business owners in the United Kingdom. Based on a primary database of surveys and semi-structured interviews, the results show that many BAME small and medium-sized enterprise (SME) owners encountered informal institutional voids that White SME owners did not face during the pandemic. The article also shows how these BAME SME owners created value amid these institutional voids and how they can continue to do so. The article concludes by suggesting that bridging these voids is crucial for promoting a more inclusive environment where ethnic and non-ethnic entrepreneurs can succeed. It also presents policy implications and offers directions for future research.

The institutionalization of sharing economy platforms in China

AbstractRecent past has witnessed a great proliferation of sharing economy platforms with great successes, but also many failures on their journey toward institutionalization, that is, their establishment and acceptance in society. To develop insight on factors contributing to this institutionalization process, this paper relies on the literature in institutional entrepreneurship and investigates sharing economy platforms in China, highlighting institutional voids that are encountered, and suggesting ways on how they can be overcome. These insights are derived through a multiple case study approach involving 61 semi‐structured interviews with managers from eight sharing economy platforms (DiDi, Uber China, Huochebang, Yunmanman, OfO, Mobike, Evcard, and Zhida) across four sharing economy industries in China (ride‐sharing, logistics‐sharing, bike‐sharing, and car‐sharing). The findings highlight the importance of exchange and collaboration with stakeholders (allies) in the network, as well as the effective response to emerging issues through the adaptation of the business models. In addition, mergers and acquisitions, and the role of government are identified as critical components in aiding platforms in their progression toward institutionalization. Further cognitive, regulative, and normative factors are found to represent valuable institutional pillars that serve as a fertile foundation throughout the institutionalization process. Overall, the findings provide an intriguing insight into the journey of Chinese sharing economy platforms toward institutionalization.

Deconstructing involuntary financial exclusion: a focus on African SMEs

Small and medium-sized enterprises (SMEs) struggle to obtain credit when credit ratings and collateral are used as criteria to assess their credit applications. In the context of Africa, the financial markets have gaping institutional voids, and contextual insights into SMEs’ experiences remain underdeveloped. Drawing on the stakeholder-agency theory of debt financing, this paper advances the scholarly conversation by theorising about how collateral security, collateral security value and the gender of SME owners lead to the involuntary financial exclusion of many manufacturing businesses in Africa. Analysis of the World Bank Enterprise Survey (WBES) dataset reveals that collateral security and collateral security value, together with gender biases in Africa’s financial markets, reduce credit access potential. Consequently, SMEs’ perceptions of the likelihood of obtaining credit for business purposes are reduced. Empirical results for 13,783 SMEs across 41 African countries indicate that the motivations to apply for credit also diminish. These observations contribute to entrepreneurial financing and SME research.

Banking the unbanked. Constitutive rules and the institutionalization of mobile payment systems in Nigeria

Researchers identify institutional voids as serious roadblocks to economic development. Mobile payment systems offer a promise to fill institutional voids in emerging economies. Financial technology companies can help to “bank the unbanked” by leapfrogging financial services found in more developed economies. However, both, economic regulations as well as technological solutions for institution building, such as cryptocurrencies, show mixed results. Institutional Theory extends institutional voids research by acknowledging the social dimension of institutions. Constitutive rules help to conceptualize the cultural-cognitive dimension of payment institutions. The study of Paga, the premier mobile payment platform of Nigeria, reveals the emergence of constitutive rules through the interplay of technology development and social action. Constitutive rules are vital for financial technology innovation, and more generally in the institutionalization of service ecosystems. The case demonstrates the central role of partner-networks in establishing mobile payment institutions.

Exploring the limits of mindfulness during the COVID-19 pandemic: qualitative evidence from African context

PurposeThis paper is one of the first studies to examine specificities, including limits of mindfulness at work in an African organisational context, whilst dealing with the ongoing COVID-19 pandemic. It specifically addresses the role of organisational and managerial support systems in restoring employee wellbeing, social connectedness and attachment to their organisations, in order to overcome the exclusion caused by the ongoing pandemic.Design/methodology/approachThe study uses a qualitative research methodology that includes interviews as the main data source. The sample comprises of 20 entrepreneurs (organisational leaders) from Ghana and Nigeria.FindingsThe authors found that COVID-19-induced worries restricted the practice of mindfulness, and this was prevalent at the peak of the pandemic, particularly due to very tough economic conditions caused by reduction in salaries, and intensified by pre-existing general economic and social insecurities, and institutional voids in Africa. This aspect further resulted in lack of engagement and lack of commitment, which affected overall team performance and restricted employees’ mindfulness at work. Hence, quietness by employees even though can be linked to mindfulness was linked to larger psychological stress that they were facing. The authors also found leaders/manager’s emotional intelligence, social skills and organisational support systems to be helpful in such circumstances. However, their effectiveness varied among the cases.Originality/valueThis paper is one of the first studies to establish a link between the COVID-19 pandemic and mindfulness limitations. Moreover, it is a pioneering study specifically highlighting the damaging impact of COVID-19-induced concerns on leader–member exchange (LMX) and team–member exchange (TMX) relationships, particularly in the African context. It further brings in a unique discussion on the mitigating mechanisms of such COVID-19-induced concerns in organisations and highlights the roles of manager’s/leader’s emotional intelligence, social skills and supportive intervention patterns. Finally, the authors offer an in-depth assessment of the effectiveness of organisational interventions and supportive relational systems in restoring social connectedness following a social exclusion caused by COVID-19-induced worries.

The role of subsidiaries in Global Value Chains (GVCs): An institutional voids perspective on LVC upgrading and integration

The role of subsidiaries in Global Value Chains (GVCs): An institutional voids perspective on LVC upgrading and integration

Knowledge transfer and innovation in multinationals: a review of the literature using SCM-TBFO framework

PurposeBusiness research has highlighted the importance of knowledge transfer and innovation in multinational firms for better performance outcomes. However, the existing body of literature is characterized by differentiated theories, antecedents and outcomes. This study aims to address this gap by adopting a systematic approach to analyze knowledge transfer and innovation literature from the perspective of multinational organizations.Design/methodology/approachThis study follows “preferred reporting items for systematic reviews and meta-analyses” (PRISMA) guidelines for conducting a systematic literature review. The study adopts a systematic approach for analyzing the literature using School of thought (S), Contexts (C), Methodologies (M), Triggers (T), Barriers (B), Facilitators (F) and Outcomes (O) framework (SCM-TBFO framework) devised for holistic literature review. The study analyzes 75 articles from reputed journals from 2000 to 2022.FindingsIn general, knowledge transfer and innovation in multinationals is a relatively new area and is evolving rapidly. There are many opportunities to study the various perspectives that are included in the SCM-TBFO framework. The key schools of thought included the evolutionary theory of innovation, institutional theory and internationalization theory. The studies had differing settings or contexts, including China, Europe, the USA and Taiwan. Further, key methodologies that were used included regression, case studies, structural equation modeling (SEM) and theoretical studies. Knowledge transfer and innovation triggers included competitive advantage, competitive pressure, constant requirements for better products and services, foreign direct investment (FDI) and globalization. Knowledge transfer and innovation facilitators were categorized into strategy-related facilitators, organization culture and orientation-related facilitators, and resource-related facilitators. Knowledge transfer and innovation barriers included autonomy, international knowledge dispersion, risk of knowledge leakage, search breadth, ambiguity and institutional voids. Key outcomes of knowledge transfer and innovation in multinationals included financial performance, innovation performance, knowledge flow, transfer effectiveness, patents and new product development.Originality/valueBy synthesizing the literature, the study aims to provide an overview of the current state of research on knowledge transfer and innovation in multinationals. The study develops a holistic model for fostering knowledge transfer and innovation in multinationals. The proposed novel framework can also be applied to perform a holistic assessment of the current literature in various research domains. Further, the study suggests future theory development and research agendas. The study also provides implications for practitioners using the framework to achieve more desirable outcomes.

Varieties of institutional systems, the belt-road initiative, and the patterned investment flows

Although the Belt-Road initiative (BRI), as a ‘model’ government initiative, has attracted great attention from both academia and industry, one central question related to the location choice of Chinese investment remains under-researched. Our study is motivated to reveal how institutional configurations of BRI participant countries that lead to a high volume of Chinese outward investment vary with the BRI. Utilizing the varieties of institutional systems (VIS) framework, we compare two Waves (2008–2013 and 2014–2019) of Chinese outward investment flows into 120 BRI participant countries. Using institutional elements—the roles of the state, financial markets, human capital, social trust, and corporate governance—as a holistic lens, some intriguing findings of patterned Chinese outward investment are observed. Instead of a single best form of institutional environment, various combinations of institutional arrangements are equally effective, but they differ subtly before and after the BRI in attracting Chinese outward investment. Four prototypes of institutional configurations of BRI participant countries are identified, including configurations with compatible institutional settings, institutional voids, ‘idealistic’ VIS conditions, and emerging institutional elements. Corresponding propositions are proposed for future theoretical advancement.

Meta-organizations and environmental sustainability: an overview in African context

This paper offers a conceptual overview of meta-organizations' role for environmental sustainability in the under-researched African context. The current paper is one of the few studies to offer a specific differentiation regarding the role and activities of meta-organizations for environmental sustainability in developed vs. emerging economies’ settings. The paper further offers an in-depth assessment of meta-organizations’ role for environmental sustainability in Africa, along with discussing major hurdles in this concern. Our analysis reveals several problems with business only meta-organizations in Africa, which significantly limit their role in ensuring environmental sustainability in this region. These problems include competing interests resulting in failure to accommodate multiple stakeholders, lack of responsible investing and environmental stewardship, along with institutional voids. Finally, the paper presents some potential solutions to overcome these problems.

Impact of China’s Belt & Road Initiative (BRI) on Foreign Institutional Investment: Winners and Losers among Pakistani Publicly Listed Firms

ABSTRACT We investigate the impact of China’s BRI on foreign institutional investment in Pakistani public firms. The question of interest is whether the BRI attracted foreign institutional investment in Pakistani firms in the presence of low government transparency about the BRI. We find that, on average, Pakistani public firms did not experience significant growth in foreign institutional investment between the pre- and post-BRI periods. However, we find that foreign institutional investment increased for Pakistani firms affiliated with business groups relative to non-affiliated Pakistani firms between the pre- and post-BRI periods. We note that the results become stronger with higher levels of groups diversification. Our finding of increased institutional investment for affiliated Pakistani firms also holds relative to matched Indian affiliated firms. These findings suggest that foreign institutional investors prefer business groups in emerging economies as a source of opportunity to overcome the institutional voids problem.

Women's informal entrepreneurship through the lens of institutional voids and institutional logics

AbstractIn this conceptual paper, we respond to the calls for broader theoretical approaches that can coherently demonstrate a high degree of conceptual sensitivity to multiple combinations of institutional factors influencing women's informal entrepreneurship (WIE) and related agency. We do so by integrating constructs of gender and gender inequality with those of institutional logics and institutional voids. We find that a refined understanding of institutional voids is required to pave the way for a meaningful theoretical integration and empirical application of the related conceptualizations. We offer such a revised definition by placing formal and informal logics (rather than institutions) at the heart of it. In our theorizing, we propose that gender interplaying with formal and informal institutional logics create varying degrees of obscure and unique institutional voids that shape WIE prevalence. The proposed harmonized theoretical lens provides researchers with flexible yet consistent guidance for conducting context‐specific empirical work that can coherently advance understanding of underlying logics shaping WIE and related agency.

A Green Criminological Framework for PM2.5 Pollution Prevention in the Bangkok Metropolitan Region

Since PM2.5 pollution is often considered an environmental crime, this study proposes a green criminological framework for PM2.5 pollution prevention in the Bangkok Metropolitan Region based on the problem-solving approach for crime prevention. Three data collection methods were applied in this study: documentary research, in-depth interviews, and focus groups. There were 26 participants in total. Qualitative content analysis was employed to identify the significant patterns embedded in the collected data. According to the research findings, challenges to PM2.5 pollution mitigation were classified into three regulatory voids: political voids, institutional voids, and knowledge voids. Combining the possible solutions to the regulatory voids and suggestions from all three data sources, alternative solutions to the PM2.5 crisis were conceptualized into a green criminological framework for PM2.5 pollution prevention. The solutions are based on environmental crime prevention approaches, including socio-legal, regulatory, and social action strategies. These approaches emphasize the enhancement of environmental laws and law enforcement, investments in public infrastructure, land use planning, application of economic incentives and technological solutions, and public participation in pollution monitoring.

Refugee Entrepreneurship and Institutional Voids: The Case of Syrian Refugee Entrepreneurs in Egypt

Refugee entrepreneurship is increasingly viewed as a viable means for refugees to gain self-reliance and integrate into their host countries. Yet, given the diversity of institutional contexts that host refugees, calls have been made to expand research on how institutions influence refugee entrepreneurship. We respond to this call by presenting herein an abductive study of Syrian refugee entrepreneurs in an emerging market (Egypt) who managed to establish and maintain entrepreneurial ventures despite institutional voids (i.e. where key institutions are either missing or underperforming). The work offers an extension of the institutional voids perspective for studying refugee entrepreneurs, known as refugee-economy voids. These account for the influence of national and international formal and informal institutions on refugee entrepreneurs. To address refugee-economy voids, we also discuss three strategies used by refugee entrepreneurs: (i) masking strategies, (ii) jockeying strategies, and (iii) informal crowdfunding strategies. This paper also provides new evidence dealing with the supportive role and solidarity of the host country’s nationals with refugee entrepreneurs. On a policy level, the findings can inform the development of targeted policy interventions to address refugee-economy voids across different host countries and to improve support for refugees’ self-reliance through entrepreneurship.

Community Inclusion under Systemic Inequality: How For‐Profit Businesses Pursue Social Purpose

AbstractIn countries where systemic inequality is pervasive, purposeful businesses that assume wider societal responsibilities try to counteract its effects by including marginalized social groups in their value creation processes. While current research documents a variety of business approaches for community inclusion, the nature, drivers and effectiveness of these inclusionary practices are not fully understood. We develop and empirically validate a framework of community inclusion that explicates the mechanisms through which purposeful businesses generate civic wealth – or economic and social benefits – to disadvantaged community groups. We differentiate between commercial practices that recast existent firm‐centric processes towards creating value for marginalized groups and collaborative practices that aim to devise novel, participatory processes for engaging marginalized groups. Analysis of primary data from a sample of 430 small businesses in seven African countries confirms that the effect of social purpose on civic wealth is partially mediated by the two inclusionary practices. Businesses are more likely to extend the scope of their inclusion through collaborative practices when they receive favourable external validation and when institutional voids are low. We contribute to the literature by documenting the role of social purpose in motivating the pursuit of community‐level goals and by unpacking the specific inclusionary practices used to achieve them.

“The emergence of the Indian hyperlocal grocery delivery industry: Dunzo v/s Blinkit”

This case details the evolution of the Hyperlocal Grocery Delivery Industry in India and a comparative analysis between Dunzo and Blinkit. The case describes the macro and industry level imperatives, growth drivers and competitive dynamics, and the resultant evolution of alternate business models. In an emerging economy context traditionally characterized by institutional voids, technological and infrastructural challenges, and a lack of entrepreneurial resources, the evolution, proliferation, and growth of the Hyperlocal Delivery business model makes for an intriguing story. We intend to make readers aware of the industry dynamics and allow them to use strategy, technological innovation, and the fundamentals of platform businesses frameworks from strategy, innovation, and platform businesses domains to evaluate the value proposition and offering that these firms have for consumers and the operational model to craft winning strategies in this emerging industry.

Sport and social entrepreneurship in the base-of-the-pyramid: The institutional work of refugees and a refugee-led organization in Uganda

ABSTRACT Social entrepreneurship has garnered increased attention from scholars in a number of disciplines, especially international development and to a growing degree, sport management. Responding to recent calls within institutional theory and sport management, in this study, the lens of institutional work is employed to explore how a refugee-led organization in Uganda and its members utilize sport-related social entrepreneurship to create, maintain, and disrupt institutions. Data analysis revealed three overarching themes related to the purposeful, intentional work of actors, including: the use of sport microfinance savings groups to fill institutional voids; social entrepreneurship work by refugees to build social and economic value; and experimentation work to disrupt gender norms. Findings underscore the way in which both organizations and individuals engage in sport-related social entrepreneurial activities to create, maintain, and contest interrelated institutions, in particular institutionalized poverty and gender. Discussion is presented which expands theoretical and practical knowledge on the institutional work and practices of individuals and organizations acting innovatively to contest institutional arrangements and the poverty of refugees.

Political–economic instability and earnings management in an emerging market: the case of the 2016 Presidential Impeachment in Brazil

PurposeThis study analyzes earnings management among Brazilian public firms during the 2016 Presidential Impeachment.Design/methodology/approachThe sample comprises, as a treatment group, 721 firm-quarter observations relating to Brazilian listed firms. It also considers a control group of listed firms from Mexico, which were not affected by the exogenous shock analyzed (i.e. the 2016 Presidential Impeachment in Brazil). The firms' quarterly financial data cover the period between 2013 and 2018.FindingsConsidering several proxies related to earnings management by accruals, the main findings suggest a negative relationship between the 2016 impeachment event and the level of discretionary accruals, suggesting that Brazilian firms tended to reduce their earnings management levels during the impeachment process. The results are robust whether the control group is considered or not.Originality/valueThis study brings new empirical evidence to the literature on accounting information quality about the role of the economic and political environment in earnings management, especially in weak institution countries characterized by institutional voids and higher levels of corruption.