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Formal institutions, for example, regulations, are considered crucial determinants of entrepreneurship, but what enables regulatory change when there is a regulatory void, meaning entrepreneurship clashes with existing regulations? Drawing on public choice theory, we hypothesize that regulatory freedom facilitates the introduction of legislation to fill such voids. We test this hypothesis using unique data documenting the time for ridesharing to become legalized at the state level across the United States following its local (and often illegal) rollout. Results suggest states with greater regulatory freedom passed ridesharing legislation quicker, highlighting an underappreciated way that extant regulatory freedom facilitates the accommodation of entrepreneurship. [ABSTRACT FROM AUTHOR]

This paper examines forced migrants who fled their homeland due to conflict and later returned to undertake entrepreneurial activity. Drawing on qualitative interviews with returnees to Bosnia & Herzegovina and Kosovo, we contribute to the process-oriented view of entrepreneurship by showing how forced migration leads to historical bonds to the homeland which influence resultant entrepreneurial activity. We extend literature on institutional voids by demonstrating that they can be enabling, with formal voids substituted by informal networks. Returnees rely on informal ties due to mistrust of formal ties, and these are strengthened by shared experiences of conflict and lead to activities which satisfy non-monetary gains rather than profit. [ABSTRACT FROM AUTHOR]

The literature on Base of the Pyramid (BoP) strategies emphasizes that creating social value requires collaborative, multi-stakeholder business approaches. However, there is limited understanding of how businesses can successfully coordinate such value creation processes in the developing economies that face significant institutional voids. This study adopts a business model perspective for analyzing social value creation processes that span organizational boundaries. We introduce a novel, theoretically grounded business model framework that helps conceptualize social value by locating the various loci of value creation, and the stakeholders that partake in creating and capturing this value. We subsequently analyze the mechanisms of social value creation in M-Pesa, a renowned boundary-spanning mobile money system that has advanced financial inclusion among tens of millions of users in Kenya. The results show that information and communications technology can help advance social value creation by reducing the cost of coordinating boundary-spanning business models that integrate diverse societal stakeholders. The results further point to uneven distributional outcomes in self-governing social value creation strategies where the focal firm plays a coordinating role. [ABSTRACT FROM AUTHOR]

Entrepreneurs in developing economies try to cope with weak or absent formal institutions—often referred to as "institutional voids"—by relying extensively on intermediary organizations such as business incubators and development organizations or informal institutions such as political, kinship, or family relationships. However, in many African countries, intermediary support is limited and informal institutions are also unreliable, adding risks and costs to doing business and increasing the severity of institutional voids in the surrounding ecosystem. We investigate the practices followed by 47 commercial entrepreneurs in Kenya to "work around" these severe institutional voids to achieve their goals of business creation and growth. We find that severe institutional voids stimulate the hybridization of goals to include social value creation, create a need for a more strategic orchestration of business relationships, and motivate entrepreneurs to proactively cross-brace the institutional infrastructure around them. We contribute by unveiling the important role of entrepreneurs as microinstitutional agents in developing economies and by detailing how commercial and social goals become intertwined in the context of African entrepreneurship. [ABSTRACT FROM AUTHOR]

This study investigates how transnational interorganizational projects (IOPs) cope with institutional complexity and voids. A case study of a cross-border gas pipeline suggests the coexistence of institutional complexity and voids that amplify collaboration hazards in developing transnational IOPs. Institutional complexity harms the feasibility of a unified form of organizing, whereas institutional voids sabotage the ability of involved organizations to collaborate in a market-based approach. A hybrid organization featured by modular structure, complementary advantages, and system integrator, was designed to navigate complex institutional environments. This study contributes to the project-organization-institution linkage by depicting the impacts of institutions on project organizing. [ABSTRACT FROM AUTHOR]

This study explores how multinational enterprises (MNEs) take advantage of their ownership-based political capital – political ties and political identity – in responding to institutional voids in host country contexts. Investigating multiple cases of central and local Chinese state-owned enterprises in Africa, we identify unique responding strategies comprising allied fleet and co-dependent alliance formations to overcome human capital voids, and dual management and closed-door management strategies to address industry standard voids. We propose a typology which extends the theory of MNE responses to institutional voids not only by adding the political dimension to strategy formation in responding to institutional voids, but also by providing greater insights into MNE strategies to convert home-based political capital for better response to host country institutional voids. [ABSTRACT FROM AUTHOR]

Although innovation studies in developing countries acknowledge the importance of resources for firm innovation, their emphasis tends to be on bottlenecks created by resource constraints and institutional weaknesses. We address this shortcoming by exploring the relationship among firm resources and formal and informal institutions leading to innovation in these settings. By adopting a crisp-set qualitative comparative analysis of firms in sub-Saharan Africa, we confirm the thesis that informal institutions substitute underdeveloped formal institutions and in combination with firm-level resources afford firm innovation. More importantly, we find that informal institutions also complement more developed formal institutions in the presence or absence of high levels of firm resources or accommodate them in the presence of high levels of firm resources to support firm innovation. Our findings point to multiple paths that firms can take to be innovative that best fit their existing institutional context. [ABSTRACT FROM AUTHOR]

We examine the demise of a multi-stakeholder network that was launched to promote an inclusive dairy market in Ethiopia to better understand why nongovernmental organizations (NGOs) may develop interventions in contexts of poverty that fail to endure after they exit. We identify organizational reflexivity – the capacity to recognize and understand the recursive interplay between an intervention and the local environment – as a key explanatory mechanism for this intervention outcome. Limited reflexivity not only prevented the NGO we studied from properly aligning the intervention with the context (design failures), but also prevented the organization from adjusting its intervention when negative feedback emerged (orchestration failures), which eventually evolved into the demise of the network (maintenance failure). While our study confirms the theoretical premise that NGOs need to contextualize their interventions, we expand current knowledge by highlighting the role of organizational reflexivity in this process. Moreover, by showing how reflexivity deficits can trigger a cascade of failure, especially when intervening in voids where incumbent firms have interests in maintaining the void, our study calls attention to the politicized nature of institutional voids. [ABSTRACT FROM AUTHOR]

This article inductively builds theory on how transaction costs may be alleviated and institutional voids bridged in developing economies, based on the case study of successful migrant entrepreneurial involvement in Nigerian agriculture: Shonga Farms. We argue that the iterative process of building conditions of trust through long-term commitment, involvement of regional government, appropriate modes of financial contracts and the gradual transitioning of controlling interests to private actors are factors of success. We draw additional lessons by contrasting our case study with other similar migrant schemes that have failed. [ABSTRACT FROM AUTHOR]

Building new space for institutional theory, we propose how the severity of formal and informal institutional voids shapes the productivity of entrepreneurial activities within society. Our theory makes the key assumptions that voids can exist in both formal and informal institutions and that they are capable of hindering entrepreneurial behavior that is favorable to development progress. We extend new theoretical domains by conceptualizing informal institutional voids and proposing how both formal and informal institutional voids and their interaction influence two qualitative outcomes within localities: (1) the unique forms of entrepreneurial activity, and (2) the objectives underlying this entrepreneurial activity. [ABSTRACT FROM AUTHOR]

How do entrepreneurs fill institutional voids that prevail in emerging markets? By incorporating insights from both the political and family embeddedness perspectives, we argue that both political ties and family ties can compensate for gaps in the institutional infrastructure of emerging markets. Specifically, we propose and examine the partial substitutability of family ties for political ties as a means of filling institutional voids. Our empirical work based on Chinese private enterprises strongly supports this argument. We also find that the effective utilization of family ties is contingent on both family members' motivation (willingness to use resources for the firm) and entrepreneurs' mobilization (authority in the family to mobilize family members). This study bridges the literature on political ties and family ties to understand their respective costs and benefits and therefore advances our understanding of entrepreneurs' networking strategies in emerging markets. [ABSTRACT FROM AUTHOR]

In this essay, we critique the usage of the term 'institutional void' to characterize non-Western contexts in organizational studies. We explore how 'conceptual stretching' of institutional voids – specifically, the theoretical and geographic expansion of the concept – has led not only to poor construct clarity, but also pejorative labelling of non-Western countries. We argue that research using this term perpetuates an ethnocentric bias by deifying market development and overlooking the richness and power of informal and non-market institutions in shaping local economic activity. We call for an 'epistemological rupture' to decolonize organizational scholarship in non-Western settings and facilitate contextually grounded research approaches that allow for more indigenous theorization. [ABSTRACT FROM AUTHOR]

Social capital was investigated in the Lao People’s Democratic Republic (abbreviated as Laos), and findings were compared and contrasted to social capital practices in Confucian contexts (in particular China). We found horizontal social capital between heterogeneous groups in Theravada Buddhist Laos to be relatively accessible compared to the more homogeneous Confucian networks, whereas vertical networks with government officials are of greater importance in Confucian contexts. Through comparison between Lao and variations of Confucian social capital, we identified a number of distinctive features of Lao social capital (teun tang sangkhom) which delineate it from guanxi and other concepts identified in the literature. We argue that Lao social capital is not merely a new label for old concepts in the Western or guanxi literature, but rather is a uniquely evolved artefact of Lao society and thus represents a new distinct concept in the literature. Furthermore, through comparative insights into networking practices in Theravada Buddhist Laos and Confucian contexts, this research provides a more nuanced understanding of similarities and differences in cross-cultural management in the region. [ABSTRACT FROM AUTHOR]

Building on the complementarity of the revisited Uppsala model and effectual logic, this article examines the role of affective and cognitive trust for developing knowledge in the context of small- and medium-sized enterprise (SME) internationalization in emerging markets. Drawing on qualitative interview data from New Zealand SMEs engaging with Chinese business partners, the article first shows that an overreliance on affective trust can result in a situation of ‘persistent mediation’, in which learning about opportunities is impaired. Second, utilization of the affordable loss principle and a focus on control facilitates relationship-specific knowledge, which may also lead to cognitive trust. However, cognitive trust does not necessarily transform in the substantive business market knowledge needed to overcome the liability of outsidership. Third, business market knowledge is advanced when partners mutually set goals and develop the opportunity, which potentially also fosters cognitive and affective trust. [ABSTRACT FROM AUTHOR]

To encourage new research on the role of institutions in the entrepreneurial process in less developed countries (LDCs), the authors propose a conceptual framework to investigate concurrent institutional constraints. The authors define these constraints as geopolitical contexts that encounter simultaneous challenges to well functioning formal and informal institutions. Systems of stronger institutions compensating for weaker institutions are hampered in these settings and such systems weigh heavier on local entrepreneurs and further challenge their ability to mobilize resources and access market opportunities. By investigating the extreme operating conditions of these settings, scholars gain a deeper understanding of how entrepreneurs confront operational dilemmas and express agency through engaging with bricolage and cultural entrepreneurship. To animate these proposals, the authors consider a case illustration of a venture operating under such constraints. [ABSTRACT FROM AUTHOR]

To create sustainable rural areas, farming and non-farming stakeholders must learn to work together better. In this paper, the authors contribute to the discussion of innovation platforms as drivers of institutional change by taking a closer look at the group dynamics of emerging social bodies in innovation projects, focusing on the joint creation of institutions in the process of learning to work together. Three examples of institutional learning are discussed. The authors show that 'institutional voids' are important in facilitating institutional learning at multi-actor interfaces. They also show how different team roles, such as those of collaborative leaders and brokers, emerge and are assigned tasks, and how they can be identified. The paper concludes with reflections on the implications of the findings for innovation processes. [ABSTRACT FROM AUTHOR]