Relational exchanges versus arm’s-length transactions during institutional transitions


How do firms make strategic choices in response to institutional transitions? The literature suggests that with more market-oriented institutional transitions, firms may move from relational exchanges to arm’s-length transactions. However, it remains unclear under what circumstances such strategic transitions would occur. We develop a model to predict that such transitions are contingent upon the multiple facets of a country’s institutional profile, including informal institutions such as national culture and formal institutions that encourage market competition. Our model also specifies industryand firm-level contingencies affecting these strategic transitions.

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@inproceedings{Zhou2009RelationalEV, title={Relational exchanges versus arm’s-length transactions during institutional transitions}, author={Jessie Qi Zhou and Mike W. Peng and Seung-Hyun Lee and Julie Qiaojin Lin and Mona Makhija and R. Pinkham}, year={2009} }