Skip to main content
SpringerLink
Log in

Bringing institutions into performance persistence research: Exploring the impact of product, financial, and labor market institutions

  • Article
  • Published:
Journal of International Business Studies Aims and scope Submit manuscript

Abstract

This study challenges the implicit assumption of homogeneity in national institutional environments made in past studies of firm performance persistence. We propose that home-country institutions matter. We focus on the impact of formal institutions in the product, financial, and labor markets, arguing that they affect the size of pools of exchange partners and the types of exchanges allowed and condoned. Ultimately, these restrictions affect competitive intensity among firms, and firm performance persistence. Using data for over 10,000 firms from 33 countries over a 10-year time frame, we show that antitrust law strength, a product market institution designed to prevent collusion among firms, is associated with decreases in performance persistence. Unskilled labor market flexibility, a labor market institution that reduces legal constraints imposed on residual claimants (managers and owners) to take necessary actions to maintain or enhance profitability, is associated with increases in performance persistence. Product liability law effectiveness, another product market institution, and corporate control market development, a financial market institution, are positively associated with performance persistence only in the case of MNEs. The two remaining financial and labor market institutions, public equity market development (respectively skilled labor market availability) have a positive (respectively negative) impact for domestic firms only.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. We thank an anonymous reviewer for this suggestion.

  2. On credit flow, respondents were asked “How easily does credit flow from banks to companies?”, with higher scores indicating free flow of credit. On venture capital, respondents were asked “Is venture capital readily available for new business development?”, with higher scores indicating better venture capital availability. These items were highly correlated (>0.70), and loaded onto the single factor used here.

References

  • Agarwal, A., & Knoeber, C. R. 1996. Firm performance and mechanisms to control agency problems between managers and shareholders. Journal of Financial and Quantitative Analysis, 31 (3): 377–397.

    Article  Google Scholar 

  • Anwar, S. T. 2005. EU's competition policy and the GE-Honeywell merger fiasco: Transatlantic divergence and consumer and regulatory issues. Thunderbird International Business Review, 47 (5): 601–626.

    Article  Google Scholar 

  • Arrow, K. J., & Debreu, G. 1954. Existence of an equilibrium for a competitive economy. Econometrica, 22 (3): 265–290.

    Article  Google Scholar 

  • Barney, J. 1991. Firm resources and sustained competitive advantage. Journal of Management, 17 (1): 99–120.

    Article  Google Scholar 

  • Benito, G. R. G., Grøgaard, B., & Narula, R. 2003. Environmental influences on MNE subsidiary roles: Economic integration and the Nordic countries. Journal of International Business Studies, 34 (5): 443–456.

    Article  Google Scholar 

  • Berry, H., & Sakakibara, M. 2008. Resource accumulation and overseas expansion by Japanese multinationals. Journal of Economic Behavior and Organization, 65 (2): 277–302.

    Article  Google Scholar 

  • Black, B. S. 2001. The legal and institutional preconditions for strong securities markets. UCLA Law Review, 48 (4): 781–855.

    Google Scholar 

  • Boeker, W. 1997. Executive migration and strategic change: The effect of top manager movement on product-market entry. Administrative Science Quarterly, 42 (2): 213–237.

    Article  Google Scholar 

  • Bou, J. C., & Satorra, A. 2007. The persistence of abnormal returns at industry and firm levels: Evidence from Spain. Strategic Management Journal, 28 (7): 702–722.

    Article  Google Scholar 

  • Bowen, H. P., & De Clercq, D. 2008. Institutional context and the allocation of entrepreneurial effort. Journal of International Business Studies, 39 (4): 747–767.

    Article  Google Scholar 

  • Brito, L. A., & Vasconcelos, F. C. 2006. How much does country matter? In A.C. Cooper, S.A. Alvarez, A.A. Carrera, L. Mesquita, & R.S. Vassolo (Eds) Entrepreneurial strategies: New technologies and emerging markets: 95–113. Malden, MA: Blackwell.

    Google Scholar 

  • Busenitz, L. W., Gomez, C., & Spencer, J. W. 2000. Country institutional profiles: Unlocking entrepreneurial phenomena. Academy of Management Journal, 43 (5): 994–1003.

    Article  Google Scholar 

  • Cannella Jr, A. A., & Hambrick, D. C. 1993. Effects of executive departures on the performance of acquired firms. Strategic Management Journal, 14 (S1): 137–152.

    Article  Google Scholar 

  • Castanias, R. P., & Helfat, C. E. 2001. The managerial rents model: Theory and empirical analysis. Journal of Management, 27 (6): 661–678.

    Article  Google Scholar 

  • Caves, R. 1989. International differences in industrial organization. In R. Schmalensee & R.W. Willig (Eds) Handbook of industrial organization: 1225–1246. Amsterdam: North-Holland.

    Google Scholar 

  • Chacar, A.S., & Coff, R. 2000. The knowledge-based employees paradox. In R. Bresser, D. Hesuskel, & R. Nixon (Eds) Winning Strategies in a Deconstructing World. London: John Wiley & Sons.

    Google Scholar 

  • Chacar, A., & Vissa, B. 2002. Are emerging economies more efficient? Comparing performance persistence in the US and India. Academy of Management Proceedings: k1–k6.

  • Chacar, A., & Vissa, B. 2005. Are emerging economies less efficient? Performance persistence and the impact of business group affiliation. Strategic Management Journal, 26 (10): 933–946.

    Article  Google Scholar 

  • Chan, C. M., Isobe, T., & Makino, S. 2008. Which country matters? Institutional development and foreign affiliate performance. Strategic Management Journal, 29 (11): 1179–1205.

    Article  Google Scholar 

  • Chen, C. J. P., Cheng, C. S. A., He, J., & Kim, J. 1997. An investigation of the relationship between international activities and capital structure. Journal of International Business Studies, 28 (3): 563–577.

    Article  Google Scholar 

  • Chen, D., Newburry, W., & Park, S. 2009. Improving sustainability: An international evolutionary framework. Journal of International Management, 15 (3): 317–327.

    Article  Google Scholar 

  • Chesbrough, H. 1999. The organizational impact of technological change: A comparative theory of national institutional factors. Industrial and Corporate Change, 8 (3): 447–486.

    Article  Google Scholar 

  • Child, J., & Tsai, T. 2005. The dynamic between firms’ environmental strategies and institutional constraints in emerging economies: Evidence from China and Taiwan. Journal of Management Studies, 42 (1): 95–125.

    Article  Google Scholar 

  • Chittor, R., Sarkar, M. B., Ray, S., & Aulakh, P. S. 2009. Third-world copycats to emerging multinationals: Institutional changes and organizational transformation in the Indian pharmaceutical industry. Organization Science, 20 (1): 187–205.

    Article  Google Scholar 

  • Christmann, P., Day, D., & Yip, G. S. 1999. The relative influence of country conditions, industry structure, and business strategy on multinational corporation subsidiary performance. Journal of International Management, 5 (4): 241–265.

    Article  Google Scholar 

  • Contractor, F. J., Kundu, S. K., & Hsu, C. C. 2003. A three-stage theory of international expansion: The link between multinationality and performance in the service sector. Journal of International Business Studies, 34 (1): 5–18.

    Article  Google Scholar 

  • Cuervo-Cazurra, A., & Genc, M. 2008. Transforming disadvantages into advantages: Developing-country MNEs in the least developed countries. Journal of International Business Studies, 39 (6): 957–979.

    Article  Google Scholar 

  • Decker, J. H., & Lim, J. J. 2008. What fundamentally drives growth? Revisiting the institutions and economic performance debate. Journal of International Development, 20 (5): 698–725.

    Article  Google Scholar 

  • Delios, A., & Henisz, W. J. 2003. Political hazards, experience, and sequential entry strategies: The international expansion of Japanese firms, 1980–1998. Strategic Management Journal, 24 (11): 1153–1164.

    Article  Google Scholar 

  • Dunning, J. H. 1993. Multinational enterprises and the global economy. Wokingham: Addison-Wesley.

    Google Scholar 

  • Dutz, M. A., & Vagliasindi, M. 2000. Competition policy implementation in transition economies: An empirical assessment. European Economic Review, 44 (4–6): 762–772.

    Article  Google Scholar 

  • Fairgrieve, D., & Howells, G. 2007. Is product liability still a global problem? Managerial Law, 49 (1/2): 6–9.

    Article  Google Scholar 

  • Fama, E. 1980. Agency problems and the theory of the firm. Journal of Political Economy, 88 (2): 288–307.

    Article  Google Scholar 

  • Forteza, A., & Rama, M. 2006. Labour market “rigidity” and the success of economic reforms across more than 100 countries. Journal of Policy Reform, 9 (1): 75–105.

    Article  Google Scholar 

  • Frost, T. S., Birkinshaw, J. M., & Ensign, P. 2002. Centers of excellence in multinational corporations. Strategic Management Journal, 23 (11): 997–1018.

    Article  Google Scholar 

  • Geroski, P. A., & Jacquemin, A. 1988. The persistence of profits: A European comparison. The Economic Journal, 98 (391): 375–389.

    Article  Google Scholar 

  • Gittelman, M. 2006. National institutions, public-private knowledge flows, and innovation performance: A comparative study of the biotechnology industry in the US and France. Research Policy, 35 (7): 1052–1068.

    Article  Google Scholar 

  • Greenwood, J., & Jovanovic, B. 1990. Financial development, growth, and the distribution of income. Journal of Political Economy, 98 (5): 1076–1107.

    Article  Google Scholar 

  • Greif, A. 1993. Contract enforceability and economic institutions in early trade: The Maghribi traders coalition. American Economic Review, 83 (3): 525–548.

    Google Scholar 

  • Guillén, M. 2001. The limits of convergence: Globalization and organizational change in Argentina, South Korea, and Spain. Princeton, NJ: Princeton University.

    Google Scholar 

  • Hawawini, G., Subramanian, S., & Verdin, P. 2004. The home country in the age of globalization: How much does it matter for firm performance? Journal of World Business, 39 (2): 121–135.

    Article  Google Scholar 

  • Henisz, W. J., & Zelner, B. A. 2001. The institutional environment for telecommunications investment. Journal of Economics & Management Strategy, 10 (1): 123–147.

    Article  Google Scholar 

  • Hill, C. W. L. 1995. National institutional structures, transaction cost economizing and competitive advantage: The case of Japan. Organization Science, 6 (1): 119–131.

    Article  Google Scholar 

  • Hirsch, P. M., & Lounsbury, M. D. 1996. Rediscovering volition: The institutional economics of Douglass C North. Academy of Management Review, 21 (3): 872–884.

    Google Scholar 

  • Hitt, M. A., Dacin, M. T., Levitas, E., Arregle, J., & Borza, A. 2000. Partner selection in emerging and developed market contexts: Resource-based and organizational learning perspectives. Academy of Management Journal, 43 (3): 449–467.

    Article  Google Scholar 

  • Holburn, G. L. F., & Zelner, B. A. Forthcoming. Political capabilities, policy risk and international investment strategy: evidence from the global electric power generation industry. Strategic Management Journal. doi: 10.1002/smj.860.

  • Hoskisson, R. E., Eden, L., Lau, C., & Wright, M. 2000. Strategy in emerging economies. Academy of Management Journal, 43 (3): 249–267.

    Article  Google Scholar 

  • Hsiao, C. 1986. Analysis of panel data. Cambridge: Cambridge University Press.

    Google Scholar 

  • Hymer, S. H. 1976. The international operations of national firms: A study of direct foreign investment. Cambridge, MA: MIT Press.

    Google Scholar 

  • Jacobsen, R. 1988. The persistence of abnormal returns. Strategic Management Journal, 9 (5): 415–430.

    Article  Google Scholar 

  • Jarrell, G. A., & Poulsen, A. B. 1987. Shark repellents and stock prices: The effects of anti-takeover amendments since 1980. Journal of Financial Economics, 19 (1): 127–168.

    Article  Google Scholar 

  • Jensen, M. C., & Ruback, R. S. 1983. The market for corporate control: The scientific evidence. Journal of Financial Economics, 11 (1–4): 5–50.

    Article  Google Scholar 

  • Khanna, T., & Palepu, K. G. 1997. Why focused strategies may be wrong of emerging markets. Harvard Business Review, 75 (4): 41–51.

    Google Scholar 

  • Khanna, T., & Rivkin, J. 2001. Estimating the performance effects of business groups in emerging markets. Strategic Management Journal, 22 (1): 45–74.

    Article  Google Scholar 

  • Khanna, T., Palepu, K. G., & Sinha, J. 2005. Strategies that fit emerging markets. Harvard Business Review, 83 (6): 63–76.

    Google Scholar 

  • Kιlιçaslan, Y., & Taymaz, E. 2008. Labor market institutions and industrial performance: An evolutionary study. Journal of Evolutionary Economics, 18 (3–4): 477–492.

    Article  Google Scholar 

  • Kindleberger, C. 1969. Industry consolidation and global competition: Multiple market competition in the tire industry. New Haven, CT: Yale University.

    Google Scholar 

  • Klapper, L., Laeven, L., & Rajan, R. 2006. Entry regulation as a barrier to entrepreneurship. Journal of Financial Economics, 82 (3): 591–629.

    Article  Google Scholar 

  • Knack, S., & Keefer, P. 1995. Institutions and economic performance: Cross country tests using alternative institutional measures. Economics and Politics, 7 (3): 207–227.

    Article  Google Scholar 

  • Kogut, B., & Singh, H. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19 (3): 411–432.

    Article  Google Scholar 

  • Kostova, T. 1999. Transnational transfer of strategic organizational practices: A contextual perspective. Academy of Management Review, 24 (2): 308–324.

    Google Scholar 

  • Kostova, T., & Roth, K. 2002. Adoption of an organizational practice by subsidiaries of multinational corporations: Institutional and relational effects. Academy of Management Journal, 45 (1): 215–233.

    Article  Google Scholar 

  • Kostova, T., & Zaheer, S. 1999. Organizational legitimacy under conditions of complexity. Academy of Management Review, 24 (1): 64–81.

    Google Scholar 

  • La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. 1999. Corporate ownership around the world. Journal of Finance, 54 (2): 471–517.

    Article  Google Scholar 

  • La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. 2000. Investor protection and corporate governance. Journal of Financial Economics, 58 (1): 3–27.

    Article  Google Scholar 

  • Law, K. S., Tse, T. K., & Zhou, N. 2003. Does human resource management matter in a transitional economy? China as an example. Journal of International Business Studies, 34 (3): 255–265.

    Article  Google Scholar 

  • Lee, K., & Kwok, C. Y. 1988. Multinational corporations vs domestic corporations: International environmental factors and determinants of capital structure. Journal of International Business Studies, 19 (2): 195–217.

    Article  Google Scholar 

  • Leff, N. 1978. Industrial organization and entrepreneurship in the developing countries: The economic groups. Economic Development and Cultural Change, 26 (4): 661–675.

    Article  Google Scholar 

  • Levine, R. 1997. Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35 (2): 688–727.

    Google Scholar 

  • Levine, R. 1999. Law, finance and economic growth. Journal of Financial Intermediation, 8 (12): 8–35.

    Article  Google Scholar 

  • Li, W., & Wyer Jr, R. S. 1994. The role of country of origin in product evaluations: Informational and standard-of-comparison effects. Journal of Consumer Psychology, 3 (2): 187–212.

    Article  Google Scholar 

  • Lievens, F., Decaesteker, C., Coetsier, P., & Geirnaert, J. 2001. Organizational attractiveness for prospective applicants: A person-organization fit perspective. Applied Psychology: An International Review, 50 (1): 30–51.

    Article  Google Scholar 

  • Lippman, S. A., & Rumelt, R. 1982. Uncertain imitability: An analysis of interfirm differences in efficiency under competition. Bell Journal of Economics, 13 (2): 418–438.

    Article  Google Scholar 

  • Lu, J. W., & Beamish, P. W. 2004. International diversification and firm performance: The S-curve hypothesis. Academy of Management Journal, 47 (4): 598–609.

    Article  Google Scholar 

  • Lubatkin, M. 1983. Mergers and the performance of the acquiring firm. Academy of Management Review, 8 (2): 218–226.

    Google Scholar 

  • Madsen, T. L., Mosakowski, E., & Zaheer, S. 2002. The dynamics of knowledge flows: Human capital mobility, knowledge retention and change. Journal of Knowledge Management, 6 (2): 164–176.

    Article  Google Scholar 

  • Makhija, M. V., Kim, K., & Williamson, S. D. 1997. Measuring globalization of industries using a national industry approach: Empirical evidence across five countries and over time. Journal of International Business Studies, 28 (4): 679–710.

    Article  Google Scholar 

  • Makino, S., Isobe, T., & Chan, C. M. 2004. Does country matter? Strategic Management Journal, 25 (10): 1027–1043.

    Article  Google Scholar 

  • Makowski, L., & Ostroy, J. M. 2001. Perfect competition and the creativity of the market. Journal of Economic Literature, 39 (2): 479–535.

    Article  Google Scholar 

  • Manne, H. G. 1965. Mergers and the market for corporate control. Journal of Political Economy, 73 (2): 110–120.

    Article  Google Scholar 

  • McCubbins, T. F., & Mosier, G. C. 1998. Effects of product liability laws on small business: An introduction to international exposure. Journal of Small Business Management, 36 (3): 72–79.

    Google Scholar 

  • McGahan, A. M., & Porter, M. E. 1999. The persistence of shocks to profitability. Review of Economics and Statistics, 81 (1): 143–153.

    Article  Google Scholar 

  • McGahan, A. M., & Victer, R. 2010. How much does home country matter to corporate profitability? Journal of International Business Studies, 41 (1): 142–165.

    Article  Google Scholar 

  • McNamara, G., Aime, F., & Vaaler, P. M. 2005. Is performance driven by industry- or firm-specific factors? A response to Hawawini, Subramanian, and Verdin. Strategic Management Journal, 26 (11): 1075–1081.

    Article  Google Scholar 

  • Meyer, K. E., & Peng, M. W. 2005. Probing theoretically into Central and Eastern Europe: Transactions, resources, and institutions. Journal of International Business Studies, 36 (6): 600–621.

    Article  Google Scholar 

  • Meyer, M. W., & Zucker, L. G. 1989. Permanently failing organizations. Newbury Park, CA: Sage.

    Google Scholar 

  • Mezias, J. M. 2002. Identifying liabilities of foreignness and strategies to minimize their effects: The case of labor lawsuit judgments in the United States. Strategic Management Journal, 23 (3): 229–244.

    Article  Google Scholar 

  • Michel, A., & Shaked, I. 1986. Multinational corporations vs domestic corporations: Financial performance and characteristics. Journal of International Business Studies, 17 (3): 89–100.

    Article  Google Scholar 

  • Miller, D. 2003. An asymmetry-based view of advantage: Towards an attainable sustainability. Strategic Management Journal, 24 (10): 961–976.

    Article  Google Scholar 

  • Miller, K. D., & Reuer, J. D. 1998. Firm strategy and economic exposure to foreign exchange rate movements. Journal of International Business Studies, 29 (3): 493–513.

    Article  Google Scholar 

  • Morck, R., Shleifer, A., & Vishny, R. W. 1989. Alternative mechanisms for corporate control. American Economic Review, 79 (4): 842–852.

    Google Scholar 

  • Mueller, D. C. 1986. Profits in the long run. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Mueller, D. C. 1990. The dynamics of company profits: Profits and the process of competition. In D.C. Mueller (Ed.) The dynamics of company profits: 1–15. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Murtha, T. P., & Lenway, S. A. 1994. How national political institutions affect multinational corporations’ strategies. Strategic Management Journal, 15 (S2): 113–130.

    Article  Google Scholar 

  • Nachum, L. 2003. Liability of foreignness in global competition? Financial service affiliates in the City of London. Strategic Management Journal, 24 (12): 1187–1208.

    Article  Google Scholar 

  • Nelson, R. R., & Winter, S. G. 1982. An evolutionary theory of economic change. Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Neter, J., Wasserman, W., & Kutner, M. H. 1996. Applied linear statistical models. Chicago, IL: Irwin Press.

    Google Scholar 

  • Newburry, W., Gardberg, N., & Belkin, L. 2006. Organizational attractiveness is in the eye of the beholder: The interaction of demographic characteristics with foreignness. Journal of International Business Studies, 37 (5): 666–686.

    Article  Google Scholar 

  • Nickell, S. J. 1985. Error correction, partial adjustment and all that: An expository note. Oxford Bulletin of Economics and Statistics, 47 (2): 119–129.

    Article  Google Scholar 

  • North, D. 1990. Institutions, institutional change and economic performance. New York: Cambridge University Press.

    Book  Google Scholar 

  • Odagiri, H., & Yamawaki, H. 1986. A study of company profit rate time series: Japan and the United States. International Journal of Industrial Organization, 4 (March): 1–24.

    Article  Google Scholar 

  • Oliver, C. 1991. Strategic responses to institutional processes. Academy of Management Review, 16 (1): 145–179.

    Article  Google Scholar 

  • Peng, M. W. 2003. Institutional transitions and strategic choices. Academy of Management Review, 28 (2): 275–297.

    Google Scholar 

  • Pereira, A., Hsu, C., & Kundu, S. K. 2005. Country-of-origin image: Measurement and cross-national testing. Journal of Business Research, 58 (1): 103–106.

    Article  Google Scholar 

  • Porter, M. E. 1990. The competitive advantage of nations. New York: Free Press.

    Book  Google Scholar 

  • Ralston, D. A. 2008. The crossvergence perspective: Reflections and projections. Journal of International Business Studies, 39 (1): 27–40.

    Article  Google Scholar 

  • Rao, H., & Drazin, R. 2002. Overcoming resource constraints on product innovation by recruiting talent from rivals: A study of the mutual fund industry, 1986–94. Academy of Management Journal, 45 (3): 491–505.

    Article  Google Scholar 

  • Roberts, P. 1999. Product innovation, product-market competition and persistent profitability in the US pharmaceutical industry. Strategic Management Journal, 20 (7): 655–670.

    Article  Google Scholar 

  • Roberts, P., & Dowling, G. 2002. Corporate reputation and sustained superior financial performance. Strategic Management Journal, 23 (12): 1077–1109.

    Article  Google Scholar 

  • Rugman, A. M., & Verbeke, A. 2004. A perspective on regional and global strategies of multinational enterprises. Journal of International Business Studies, 35 (1): 3–8.

    Article  Google Scholar 

  • Sakakibara, M., & Yamawaki, H. 2008. What determines the profitability of foreign direct investment? A subsidiary-level analysis of Japanese multinationals. Managerial and Decision Economics, 29 (2–3): 277–292.

    Article  Google Scholar 

  • Scherer, F. M., & Ross, D. 1990. Industrial market structure and economic performance. Boston, MA: Houghton Mifflin.

    Google Scholar 

  • Scott, W. R., & Meyer, J. W. 1983. The organization of societal sectors. In J.W. Meyer & W.R. Scott (Eds) Organizational environments: Ritual and rationality: 129–153. Thousand Oaks, CA: Sage.

    Google Scholar 

  • Shenkar, O., & Von Glinow, M. A. 1994. Paradoxes of organizational theory and research: Using the case of China to illustrate national contingency. Management Science, 40 (1): 56–71.

    Article  Google Scholar 

  • Singh, J. 2007. Asymmetry of knowledge spillovers between MNCs and host country firms. Journal of International Business Studies, 38 (5): 764–786.

    Article  Google Scholar 

  • Spender, J. C. 1996. Making knowledge the basis of a dynamic theory of the firm. Strategic Management Journal, 17 (Winter Special Issue): 45–56.

    Article  Google Scholar 

  • Steensma, H. K., Tihanyi, L., Lyles, M. A., & Dhanaraj, C. 2005. The evolving value of foreign partnerships in transitioning economies. Academy of Management Journal, 48 (2): 213–235.

    Article  Google Scholar 

  • Tallman, S., & Li, J. 1996. Effects of international diversity and product diversity on the performance of multinational firms. Academy of Management Journal, 39 (1): 179–196.

    Article  Google Scholar 

  • Teece, D. J. 1998. Research directions for knowledge management. California Management Review, 40 (3): 289–293.

    Article  Google Scholar 

  • Tolbert, P. S., & Zucker, L. G. 1983. Institutional sources of change in the formal structure of organizations: The diffusion of civil service reform, 1880–1935. Administrative Science Quarterly, 28 (1): 22–39.

    Article  Google Scholar 

  • Tong, T. W., Alessandri, T. M., Reuer, J. J., & Chintakananda, A. 2008. How much does country matter? An analysis of firms’ growth options. Journal of International Business Studies, 39 (3): 387–406.

    Article  Google Scholar 

  • Tybout, J. R. 2000. Manufacturing firms in developing countries: How well do they do, and why? Journal of Economic Literature, 38 (1): 11–44.

    Article  Google Scholar 

  • van Tulder, R., & Kolk, A. 2001. Multinationality and corporate ethics: Codes of conduct in the sporting goods industry. Journal of International Business Studies, 32 (2): 267–283.

    Article  Google Scholar 

  • Villalonga, B. 2004. Intangible resources, Tobin's q, and sustainability of performance differences. Journal of Economic Behavior and Organization, 54 (2): 205–230.

    Article  Google Scholar 

  • Vissa, B., Greve, H. R., & Chen, W. 2009. Business group affiliation and firm search behavior in India: Responsiveness and focus of attention. Organization Science, advance online publication 7 October. doi: 10.1287/orsc.1090.0475.

  • Von Hippel, E. 1988. The sources of innovation. New York: Oxford University Press.

    Google Scholar 

  • Wade, J. B., Porac, J. F., Pollock, T. G., & Graffin, S. D. 2006. The burden of celebrity: The impact of CEO certification contests on CEO pay and performance. Academy of Management Journal, 49 (4): 643–660.

    Article  Google Scholar 

  • Waring, G. 1996. Industry differences in the persistence of firm specific returns. American Economic Review, 86 (5): 1253–1263.

    Google Scholar 

  • Westney, E. 1993. Institutionalization theory and the MNE. In S. Ghoshal & E. Westney (Eds) Organization theory and the multinational corporation: 53–76. New York: St Martin's.

    Chapter  Google Scholar 

  • Williamson, O. E. 1991. Comparative economic organization: The analysis of discrete structural alternatives. Administrative Science Quarterly, 36 (2): 269–296.

    Article  Google Scholar 

  • Zaheer, S. 1995. Overcoming the liability of foreignness. Academy of Management Journal, 38 (2): 341–363.

    Article  Google Scholar 

  • Zaheer, S. 2002. The liability of foreignnesss, redux: A commentary. Journal of International Management, 8 (3): 351–358.

    Article  Google Scholar 

  • Zajac, E. J. 1990. CEO selection, succession, compensation and firm performance: A theoretical integration and empirical analysis. Strategic Management Journal, 11 (3): 217–231.

    Article  Google Scholar 

Download references

Acknowledgements

This paper was a finalist for the Conference Best Paper Award at the 2008 Strategic Management Society Annual Meeting. We thank JIBS Department Editor Witold Henisz and three anonymous reviewers for helpful guidance, and Cassandra Alonso and Yannick Thams for research assistance.

Author information

Authors and Affiliations

  1. College of Business Administration, Florida International University, Miami, USA

    Aya S Chacar & William Newburry

  2. INSEAD, Singapore

    Balagopal Vissa

Authors
  1. Aya S Chacar
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. William Newburry
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Balagopal Vissa
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Aya S Chacar.

Additional information

Accepted by Witold Henisz, Area Editor, 26 October 2009. This paper has been with the authors for four revisions.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Chacar, A., Newburry, W. & Vissa, B. Bringing institutions into performance persistence research: Exploring the impact of product, financial, and labor market institutions. J Int Bus Stud 41, 1119–1140 (2010). https://doi.org/10.1057/jibs.2010.3

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/jibs.2010.3

Keywords

Search

Navigation