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The purpose of this paper is to examine how collective identity and institutional logic affect the design and use of an environmental performance measurement system.

The authors use a qualitative case study with abductive theorizing and empirical data obtained through semi-structured interviews, observation and document analysis.

The new environmental measures were reshaped by aligning them with the existing and dominant collective identity in the case organization – in other words, cost savings and profitability. Moreover, the institutional logic forced the environmental measures to remain as non-strategic and non-bonus criteria in favour of traditional financial measures.

Thornton and Ocasio’s (2008) institutional logic is applied and its potential for analyzing change in environmental accounting is shown. The paper illustrates how collective identity and institutional logic are important mechanisms reshaping environmental performance measurement design and use, when the existing collective identity is reproduced.

The paper aims to study the role of local institutions in the establishment of fast-food outlets in urban districts of Peru. In most urban districts, there are no fast-food outlets. The authors, therefore, study the effect of institutional quality on the presence or absence of these outlets and the number of outlets if these are present.

The theoretical framework in which this paper is based on is the theory of agglomeration, which establishes that firms benefit from being close to each other. In particular, the paper builds on a model of market entry and competition in geographically independent local markets. An explicit expression was found for the equilibrium number of outlets (including zero) as a function of exogenous determinants of the demand for fast-food in each market, available infrastructure and institutional quality of the district’s government. Principal component analysis was used to construct measures of institutional quality based on administrative and organizational characteristics of district’s municipalities. These measures were incorporated as explanatory variables in a zero-inflated Poisson model, which is appropriate to handle count data and to accommodate excess zeros and which also allows the specification of different models for the zero part and the positive part.

Institutional quality mainly affects the presence of fast-food outlets in a district. The quality of urban development management and use of information systems are relevant. An institutional variable particularly relevant in explaining the number of outlets is the presence of an investment programming office in the municipality. The authors confirm the general hypothesis of the paper: institutions have a role in explaining both the presence and number of fast-food outlets in a district. Overall, the results of this paper suggest that institutional quality of a municipal district is related to better infrastructure, which lowers the costs of establishing outlets.

Limitations in the availability of data at the regional and urban district level did not allow the authors to analyze other factors that affect entry decisions in the fast-food industry in Peru, such as controls to prevent corruption, legal uncertainty or crime. Another limitation was the lack of data on entry costs for each franchisee in each urban district. This forced the authors to use public infrastructure characteristics of the district as (imperfect) proxies of the entry costs.

The instruments of urban development management and information systems can be effective at attracting investment to a district. These tools operate partly through an indirect effect, namely, the improvement of district infrastructure, which is necessary to reduce the costs of establishing companies. There is also synergy between national government’s programs to attract investment and the good institutional quality in local governments. On the contrary, poor local institutions can be an obstacle to the successful implementation of those national programs.

Foreign direct investment has a positive impact on the economic development of a country through knowledge spillovers. Therefore, any administrative reform to make local government practices more efficient can have an indirect impact on development.

Principal component analysis is a statistical tool that can be important in building good measures of institutional quality by allowing the combination of different observable characteristics into one component that can be interpreted as an operational restriction. The count model allows the use of the primary, easily observable, dependent variable, namely, the number of outlets. Finally, the two-part model makes it possible to discern the effect of institutional quality on the presence or absence of outlets and the number of outlets if these are present.

Institutional theory shows promise as a viable framework for understanding police organization structures and activities but difficulties in measuring its core concepts make testing problematic. In order to advance the application of institutional theory in policing, this paper's aim is to develop a measurement model of institutional pressures derived from DiMaggio and Powell's discussion of institutional isomorphism.

First and second‐order confirmatory factor analyses are performed on secondary data originally collected in a 1997 national survey of law enforcement agencies about their approach to community policing.

The results showed a refined model of institutional processes including three constructs – professionalization, publications, and mimesis. A construct indicated by funding measures does not seem to be consistent with other institutional pressures.

The research made use of available data and existing measures not explicitly constructed for the purpose of theory testing. Nevertheless, the results appear to be consistent with institutional theory.

The model provides a framework for future testing of institutional theory in policing and avenues for the development of additional indicators.

We argue that uninformed subscribers to an initial public offering (IPO) of common stocks are exposed to greater ex ante risk of trading against informed traders in the secondary market because the advent of public trading conveys hitherto private information and thereby mitigates adverse selection. The going‐public firm underprices the new issue to compensate uninformed subscribers for this added secondary market adverse selection risk. We test this market liquidity‐based explanation by investigating the ex‐post consequences of ownership structure choice on the initial pricing and the secondary market liquidity of a sample of initial public offerings on the New York Stock Exchange (NYSE). Consistent with our argument, we find that initial underpricing varies directly with the ex post trading costs in the secondary market. Further, initial underpricing is related positively to the concentration of institutional shareholdings and negatively to the proportional equity ownership retained by the founding shareholders. Finally, the secondary market illiquidity of new issues is positively related to institutional ownership concentration and negatively to ownership retention and underwriter reputation. Thus, the evidence based on our NYSE sample supports the view that the entrepreneurs' choice of ownership structure affects both the initial pricing and the subsequent market liquidity of new issues.

Increasing amount of empirical research in operations and supply chain management is using institutional theory as its theoretical lens. Yet, a common scale to measure the three institutional pressures – coercive, mimetic and normative – is lacking. Many studies use proxies or a single, grouped, construct of external pressures which present methodological challenges. This study aims to present the development of multi-item scales to measure institutional pressures (in a purchasing context).

First, items were generated based on the theoretical construct definitions. These items were then tested through academic sorting and an international survey. The first empirical testing failed to produce reliable and valid scales, and further refinement and analysis revealed that coercive pressure splits into two separate constructs. A second q-sorting was then conducted with purchasing practitioners, followed by another survey in Italy to verify the new measurement scale for four institutional pressures.

The multimethod and multistage measurement development reveals that empirically the three institutional pressures actually turn into four pressures. The theoretical construct of coercive pressure splits into two distinct constructs: coercive market pressure and coercive regulatory pressure.

The results of the paper, namely, the measurement scales, are an important theoretical and methodological contribution to future empirical research. They present a much-needed measurement for these theoretical constructs increasingly used in management research.

The purpose of this paper is to examine the effect of shareholder rights on the quality of reported earnings using a proxy for strength of shareholder rights. In the analysis, the influence of institutional investors on shareholder rights is incorporated and their joint impact on earnings quality is studied.

Alternative regression models with the level of discretionary accrual (DA) as the dependent variables are estimated. To measure DA, a model developed by DeChow et al. is used. Higher levels of DA imply lower quality of earnings. The independent variables of interest are shareholder rights (measured by a modified Gomper's index) and institutional ownership (measured in three different ways discussed in the paper). A number of control variables, which prior research indicates, that can influence earnings quality is also included.

It is found that stronger shareholder rights are associated with higher earnings quality. However, when firms' stocks are held predominantly by institutions with short investment horizons (transient institutions), the role of shareholder rights in constraining aggressive and opportunistic management of earnings is significantly diminished or rendered essentially ineffective.

This research adds to the understanding of how levels of institutional ownership moderate the association between shareholder rights and earnings quality.

The purpose of this paper is to explore the interplay of institutional quality and market potential factors on the agglomeration of foreign fast-food franchises in major cities in Central America.

The authors approached the research question through a regression analysis of the main fast-food chains operating in the 41 largest cities in Central America. The exploratory analysis in this paper attempted to discover the statistical relationship between institutional quality and market potential factors on the agglomeration of fast-food chains in specific cities. The paper also examined the spatial distribution of fast-food units in selected cities to try to discover specific patterns on the selection of specific locations within each city.

The findings of this paper suggest that population size and institutional quality in terms of regulatory efficiency were the two most significant predictors of fast-food chains agglomerations in selected Central American cities. The authors also found a negative interaction between market potential and institutional quality on agglomeration of fast-food restaurants, whereby a relatively weak institutional environment might deter investors, even if initially a market offers moderate potential. Finally, they found specific geographic patterns for the chosen locations of fast-food places that signal to a preference for urban locations with easy access to main thoroughfares, high commercial traffic and more affluence.

The small sample size was a major constraint. Moreover, population size as a measure of market potential was available for all cities, but other city-level indicators were only available for a small number of cities. The preliminary results aligned with the predictions in this paper, yet the generalizability of the findings of this paper is limited by the sampling and measurement issues noted above. Finally, the paper did not include all fast-food chains in the cities examined, and inclusion of more foreign and domestic chains should be considered in future studies.

Local governments should consider the factors that impact franchise chains’ decisions to enter a market and the specific locations in which they choose to locate their units. Improving the quality of local institutions could be instrumental in attracting investment.

Very few studies have focused on Central America as a recipient of investment by fast-food chains. The region is less than attractive in terms of both market potential and risk. Yet fast-food franchises have continued to grow over the past two decades, making the examination of their investment decisions worth studying. The inclusion of institutional quality at the city level is an additional contribution of this paper. This paper furthers our understanding of the factors that drive investment decisions of global franchisors in regions with low to medium market potential and medium to high levels of institutional risk.

This paper analyses the impact of institutional proximity, cognitive proximity and geographical proximity (in the form of agglomeration economies) on the firm-level productivity of foreign-owned firms in Ireland. The analysis of agglomeration economies, consisting of internal economies of scale, localization economies, related variety and urbanization economies, has a strong pedigree in regional economics literature. Increasingly, however, alternative explanations of firm-level productivity performance have been explored with institutional and cognitive proximity often identified as other important determinants of performance. This paper presents an analysis of the importance of agglomeration economies (based on geographical proximity) versus institutional and cognitive proximity (which may be a-spatial).

A series of measures capturing regional level agglomeration economies are generated as well as measures of institutional and cognitive proximity. The impact of these effects on foreign-owned firm-level productivity is analysed using data from the Irish Census of Industrial Local Units 2009. The estimation method employed is general method of moments (GMM) which allows for the potential endogeneity of variables within the system of analysis.

The results reveal that institutional proximity has a positive impact on productivity. A possible reason for this result is that local units of the same nationality are sharing knowledge in relation to successfully conducting business in Ireland. However, cognitive proximity is found to be statistically insignificant. Agglomeration economies are also important with urbanization economies and the availability of skilled labour having a positive effect on productivity.

The key contributions of this paper are as follows; firstly, the paper provides the first test of the institutional and cognitive proximity hypotheses on productivity while also controlling for a series of internal and external agglomeration economies. Secondly, the analysis considers, firm level, regional level and national level indicators as determinants of firm's productivity. In combining micro and macro level indicators, the paper attempts to answer the call of Van Oort et al. (2012) for such analyses. Thirdly, the paper provides the first detailed examination of the role of ‘proximity’ on foreign-owned manufacturing firms in the Irish context.

Within the current institutional landscape, characterized by increased societal and governmental emphasis on environmental preservation, there is growing interest in the potential of digital transformation (DT) to advance the circular economy (CE). Nonetheless, the empirical substantiation of the connection between DT and CE remains limited. This study seeks to investigate the impact of DT on CE at the organizational level and examine how various institutional factors may shape this relationship within the Chinese context.

To scrutinize this association, we construct a research framework and formulate hypotheses drawing on institutional theory, obtaining panel data from 238 Chinese-listed high-tech manufacturing firms from 2006 to 2019. A regression analysis approach is adopted for the sample data.

Our regression analysis reveals a positive influence of DT on CE performance at the organizational level. Furthermore, our findings suggest that the strength of this relationship is bolstered in the presence of heightened regional institutional development and industry competition. Notably, we find no discernible effect of a firm’s political connections on the DT–CE performance nexus.

This study furnishes empirical evidence on the relationship between DT and CE performance. By elucidating the determinants of this relationship within the distinct context of Chinese institutions, our research offers theoretical and practical insights, thus laying the groundwork for subsequent investigations into this burgeoning area of inquiry.

This study seeks to explicate how institutional disruptions impact multinational corporation (MNC) subsidiary control choices. It uses institutional theory to understand the influence of formal and informal institutions across countries on the type of control system employed in an MNC manufacturing subsidiary.

This study’s sample is based on a unique dataset from five trustworthy sources. We use multi-level models to account for the hierarchical nature of the sample of 1,630 multinational subsidiaries spread across 26 host countries by firms from 21 home countries.

The institutional distance between the host and the home country has a negative relationship with strategic control. In contrast, the home country’s power distance has a positive relationship with strategic control.

Study findings indicate the need to incorporate formal and informal institutional elements in the control system’s conceptual framing and design. This notion complements existing visualizations of optimizing MNC controls through extant articulations of minimizing governance costs through organizational design choices or strategic needs.