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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.

Critiques of international business (IB) have long pointed to the weaknesses in the understanding of context. This has ignited debate on the understanding of institutions and how they “matter” for IB. Yet how institutions matter ultimately depends on how IB applies institutional theory. It is argued that institutional-based research is dominated by a narrow set of approaches, largely overlooking institutional perspectives that account for institutional diversity. This paper aims to forward the argument that IB research should lend greater attention to comparing the topography of institutional configurations by bringing political economy “back in” to the IB domain.

Using principal components analysis and hierarchical cluster analysis, the authors provide IB with a taxonomy of capitalist institutional diversity which defines the landscape of political economies.

The authors show institutional diversity is characterised by a range of capitalist clusters and configuration arrangements, identifying four clusters with distinct modes of capitalism as well as specifying intra-cluster differences to propose nine varieties of capitalism. This paper allows IB scholars to lend closer attention to the institutional context within which firms operate. If the configurations of institutions “matter” for IB scholarship, then clearly, a quantitative blueprint to assess institutional diversity remains central to the momentum of such “institutional turn.”

This paper provides a comprehensive survey of institutional theory, serving as a valuable resource for the application of context within international business. Further, our taxonomy allows international business scholars to utilise a robust framework to examine the diverse institutional context within which firms operate, whilst extending to support the analysis of broader socioeconomic outcomes. This taxonomy therefore allows international business scholars to utilise a robust framework to examine the institutional context within which firms operate.

The main purpose of this study is to examine the impact of different dimensions of institutional quality indices on the economic growth of Sub-Saharan African (SSA) countries.

The study uses a panel data set of 31 SSA countries from 1991 to 2015 and employs a two-step system-GMM (Generalized Method of Moments) estimation technique.

The study's empirical results indicate that investment-promoting and democratic and regulatory institutions have a significant positive effect on economic growth; however, once these institutions are taken into account, conflict-preventing institutions do not have a significant impact on growth.

The study's findings suggest that countries in the region should continue their institutional reforms to enhance the region's economic growth. Specifically, institutions promoting investment, democracy and regulatory quality are crucial.

Unlike previous studies that use either composite measures of institutions or a single intuitional indicator in isolation, the present study has employed principal component analysis (PCA) to extract fewer institutional indicators from multivariate institutional indices. Thus, this paper provides important insights into the distinct role of different clusters of institutions in economic growth.

The objective of this study is to examine how the heterogeneity of the institutional environments within a single country influences International Financial Reporting Standards (IFRS) convergence and earnings quality based on a meso- and multi-level approach.

Using hierarchical linear modeling (HLM) to capture the between-group heteroskedasticity and within-cluster interdependence, this study investigates the simultaneous effect by incorporating institutional factors residing at different hierarchical levels and the interaction effects of factors within the same level on IFRS convergence and earnings quality in the largest IFRS adopter, China.

The results show that after IFRS convergence (i.e. 2007–2015), earnings quality decreases in terms of conservatism. However, the further analysis indicates that the strong institutional environment could mitigate the negative impact of IFRS on conservatism.

Consistent with the emphasis of heterogeneity within a country by Terracciano et al. (Science, 2005, 310 (5745)), this study indicates that the heterogeneity in the institutional environments and the simultaneous effect of the multilevel institutional environments within a single country cannot be ignored. This study also indicates that, equally important, research methodology plays a substantial role in investigating the outcomes of IFRS convergence. Finally, this study, based on an integrated theory, adopts a meso-paradigm linking macro- and micro-level institutions to provide comprehensive insights into IFRS convergence and conservatism.

Institutional investors are major shareholders in publicly traded firms and play crucial roles in the financial and governance aspects of these firms. Despite their importance, little is known about their role in internal auditing. This study aims to fill this gap by investigating the relationship between institutional investors’ ownership and investment in the internal audit function (IAF).

The study uses ordinary least squares regressions with two-way cluster-robust standard errors (firm and year) to estimate the relationship between institutional investors’ ownership and investment in IAF for Malaysian listed firms between 2009 and 2020.

The findings show that companies with higher levels of institutional ownership invest more in IAF, suggesting that institutional investors can effectively monitor managers due to their large holdings. Moreover, both transient and dedicated institutional investors are more likely to invest in IAF.

The results highlight the importance of institutional investors as a significant determinant of investment in IAF, which can aid regulators and managers in understanding the institutional investors’ role in governing and optimizing the efficient use of a firm’s resources. The findings also provide insight into institutional investors’ behavior regarding monitoring systems, which may inspire regulators and policymakers to consider increasing institutional investors’ participation to enhance governance structures.

The existing research on institutional distance implicitly posits the monotonic effect of contextual differences on the multinational enterprise (MNE) behaviors (e.g. entry mode, research and development (R&D) investment and subsidiary reverse knowledge transfer). Namely, MNEs from the same home to the same host countries are thought to have homogenous perceptions on the institutional influences and thus behave similarly. However, the authors argue that MNEs, due to their different performance aspirations in host countries, will have heterogenous perceptions on such contextual influences and thereafter behave differently.

Drawing on the behavioral theory of the firm and employing a unique sample comprised of 140 Chinese MNEs' foreign direct investments (FDIs) in Taiwan in 2017, the authors developed and tested the hypotheses.

The authors found that the emerging-market MNEs' (EMNEs’) perceptions of higher local institutional difficulties will be strengthened when their local performances are below their aspiration levels, making them more risk-taking. Nevertheless, EMNEs' local experiences and local equity-based partnerships will mitigate such negative perceptions, mitigating their risk-taking orientation.

The empirical findings make contributes to the international business (IB) literature by extending knowledge on the determinants and conditions of the heterogeneity in EMNEs' behavioral orientations when in face of the same institutional distance. The authors also provide managerial implications by showing that EMNEs' firm-specific resources (i.e. local experience and local equity-based partnership) will alter their perceptions of local institutional difficulties, leading to different behavioral orientations.

The study examines whether the growth effect of government spending is contingent on the level of institutional environment prevalent in Economic Community of West African States (ECOWAS).

The study adopts the more refined and more appropriate dynamic threshold panel by Seo and Shin (2016) and made applicable be Seo et al. (2019). The technique models a nonlinear asymmetric dynamics and cross-sectional heterogeneity simultaneously in a dynamic threshold panel data framework.

The results show that there is a threshold effect in the government spending-growth relationship. Specifically, the authors found that the impact of government spending on economic growth is positive and statistically significant only above a certain threshold level of institutional development. Below that threshold, the effect of government spending on growth is insignificant and negative at best. The findings suggest that government spending-growth nexus is contingent on the level of Institutional quality.

Unlike previous studies that adopt the linear interaction model which pre-impose a priori conditional restrictions, this study adopts the dynamic threshold panel framework which allows the lagged dependent variable and endogenous covariates.

This study examines the effect of stable institutional investors on firms' product quality failures. Furthermore, the authors investigate the channels through which institutional ownership stability enhances product quality management.

This study uses probit, ordered probit and negative binomial regression frameworks to investigate the research questions. In addition, the authors utilize the three-stage least-squares to address the endogeneity issues.

Using a sample of product recall incidents from 2012 to 2021, the authors find that firms with more stable institutional ownership have a lower probability, frequency and severity of recall incidents and adopt a proactive product recall strategy. Institutional investors with significant and persistent holdings improve quality management by reducing overinvestment and the use of option-linked and relative performance executive compensations. Furthermore, the influence of stable institutional owners on product quality failures is more pronounced in firms with low managerial ability and specialist CEOs. Lastly, the empirical evidence demonstrates that stable holdings by active investors have a more substantial impact on reducing product recalls than passive and other stable institutional holdings.

This study is the first to examine the impact of institutional ownership stability on firms' product recalls. The authors contribute to the literature on the benefits of stable institutional ownership on firm outcomes and the determinants of product quality failures.

Despite just eight years remaining to meet the sustainable development goals (SDG, 2030), the manufacturing industry faces numerous challenges for small and medium-sized enterprises (SMEs). Some notable challenges include integrating sustainability, circular economy (CE), and industry 4.0 (I4.0) technologies in a productive manner. However, there is a paucity of evidence available on the role of institutional pressures and organizational resources to promote I4.0 and sustainability. To fill this void, this study develops and tests a model based on institutional theory and resource-based view (RBV) theory while also taking company size into view as a moderating construct.

To test the study hypotheses and validate the model, data were obtained through a survey from 228 randomly selected SMEs manufacturing in China. Structured equation modeling and multigroup analysis were used to analyze the data.

The research findings indicate that institutional pressure has a positive effect on organizational resources (i.e., tangible and intangible), which are capable of orchestrating I4.0 readiness effectively. Also, I4.0 readiness has a positive effect on sustainable manufacturing practices and CE capabilities. Finally, firm size was revealed to be a significant moderator in driving overall integration.

Based on the findings, practical implications and future research directions are discussed.

Based on the institutional and RBV theories, this research shows how SMEs could be influenced by different stakeholders to acquire and develop their resources and capabilities to accelerate I4.0 readiness that further enhances sustainable practices.