Variables evaluadas A) Tiempos y jornales A) Tiempos y jornales

The term ‘institutional voids’, as presented by Khanna & Palepu (1997) and elaborated on in their book ‘Winning in Emerging Markets’, is referred to as the lack of intermediaries that connect buyers and sellers for efficient economic transactions. The absence of intermediaries creates frightening hurdles for firms determined to function in emerging markets. They reported that it is necessary to understand these voids and learn how to deal with them for successful operations in specific markets. They also emphasised that, instead of defining emerging markets by their size or growth measures, the most important exploitable feature of these markets can be seen in the absence of advanced infrastructures and institutions that empowers efficient business operations that taken for granted in developed economies.

Essentially, institutional voids take place when supportive institutions do not exist in the markets. Moreover, working without them is a challenging job, and it may produce certain opportunities for specific elements of the market. Thus, it provides an alternative justification for the presence of business groups in emerging economies. The scholars of strategy research have empirically analysed the implications of institutional voids for business groups. Since, in emerging markets institutional voids provides both challenges and opportunities, as business

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group is described as response to institutional voids to cope with deficiencies and lower the Transaction Costs linked with the institutional shortcomings.

An article encouraged a new approach of the firms’ strategies in emerging markets, emphasising on the tensions and inconsistencies in firms when interacting with institutions in the developing countries (Khanna & Palepu, 1997). The institutional void perspective motivates a more dynamic view for investigating the way in which firms strategise individually or in combination with other players to avoid (Regner’r & Edman, 2014), reward and substitute (Boddewyn & Doh, 2011), influence and even take benefits of institutional weaknesses (Khanna & Palepu, 2010). The institutional voids demonstrate institutional environment that impede the comfort by which buyers and sellers can interact with each other in the market.

Therefore, it resulted in higher costs for acquiring materials, raising capital, generating new ideas, information and skills, which, in turn, decrease the probability of efficient financial outcomes. Moreover, institutional voids spoils the efficient functioning of markets, leads to opportunistic behaviour including corruption, encouraging monopolistic behaviour and discouraging entrepreneurship and market power that is translated into competition (Doh, Rodrigues, Saka-Helmhout & Makhija, 2017).

The researchers have analysed different strategic alternatives when it comes to addressing the issue of institutional voids:

• altering their business model that best suited to local environment by internalising functions,

• changing these conditions, or

• completely avoid to function in this environment.

In fact, the scholars have focused on the first alternative, reflecting on the way in which business groups, through internal capital markets or the use of a diversification strategy, support firms to customise their operations according to institutional voids (Khanna & Palepu, 2000, 2010; Elango & Pattniak, 2007; Makhija, 2004; Chang & Hong, 2000). Scholars have also analysed the nonmarket responses that supports to alleviate institutional voids (Cantwell, Dunning & Lundan, 2010). Political affiliation is considered an alternative method of nonmarket strategies to alter the form and fulfil the requirement of regulations (Ramamurti, 2005), combining interests between state and firms (Musacchio & Lazzarini, 2014; Li, Peng &

Macaulay, 2013; Child, Rodrigues & K-T Tse, 2012), forming partnership to develop and legalize additional principles in emerging markets (Teegen, Doh & Vachani, 2004).

Importantly, empirical studies have also emphasised that business groups provide

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compensation by internalising product, capital and labour markets (Doh, Lawton & Rajwani, 2012; Fisman & Khanna, 2004; Khanna & Palepu, 2010; Elango & Pattniak, 2007). Moreover, other approaches can also be beneficial, such as firms are able to respond to institutional voids by making them a part of trustworthy networks to reduce risks (Landa, 2016). Moreover, the strong relations amongst business organisations, government entities and NGOs may also be useful in mitigating the effects of institutional voids. As has been recognised, institutional voids lead to both challenges and opportunities, with business groups appearing to fill the gap left by formal institutions and capable of successfully catering to these voids in labour, product and capital markets.

The internal reallocation of resources from financially strong to weak group-member firms is critical when the objective of wealth maximisation is vulnerable by external shocks, particularly those arising from the transitional period (Shapiro, Estrin & Poukliakova, 2009).

Therefore, internal reallocation reduces variance, which arises due to prevailing institutional voids. Accordingly, it would be a rational approach for business groups to respond market failures for protecting group-member firms from unusual external shocks to minimise risk and to increase performance. Peng (2003) argued that during institutional transition phase, the formal rules and regulations are changed and increasing cost and uncertainty are expected. The business groups or networks founded on interpersonal relationships to overcome market failures and institutional voids. Previous studies have discussed the business groups resource based advantages particularly in the context of institutional voids (Yiu et al., 2005; Guillen, 2000). It has been explored that institutional voids support the creation of business groups by developing ‘generalised’ capabilities and more valuable resources (Ghemawat & Khanna, 1998). In connection with late industrialisation, capability of acquiring foreign technology becomes an essential tool for corporate growth and success. The diversified business groups are good enough to apply and to transform into organisational knowledge and learning that provides an important resource in the success of business growth through diversification (Amsden & Hikino, 1994) and the ability to leverage contacts (Kocs & Guillen, 2001) possible example of such resources. Moreover, the difference of asymmetries between developed and emerging countries related to investment and foreign trade may disappear (Guillen, 2000).

Thus, member firms do not receive benefits from group membership, as the emergence of new institutional arrangements is materialised.

The description of business groups, as based on the view of institutional voids, remains uncertain. Other researchers have agreed that business groups are capable of overcoming

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institutional voids by addressing the issue of market failures (Khanna & Palepu, 1997).

Considering this view, business groups should operate in industries that are sufferings most likely due to market failures. However, these studies demonstrate that business groups are engaged in multiple industries and, suffer from institutional voids. Based on this viewpoint, Leff (1978) argued that business groups might be considered as an organisation response to missing and imperfect markets, such as labour and capital markets. In particular, institutional legitimacy is an imperative tool for efficient operative of markets. Moreover, the supremacy of institutions will support the economic balance and protect the interests of all stakeholders.

Considering the country’s judicial system, intermediaries and regulatory frameworks are considered to be the backbone of the economy in regards the efficient working of markets.

Nevertheless, when markets suffer due to the failing of these institutions, such practices lead to high Transaction Costs and, ultimately, an approach of business groups is filling these institutional voids (Khanna & Palepu, 1997). Accordingly, a business groups could develop repute for providing quality goods and services in product markets, where consumer protection is weak. Thus, the brand name converts into a valued intangible asset that could be shared by all group-member firms.