Institutional distance and institutional complexity in international business

Institutions (and institutional distance) are considered a central concept to the field of international business and dealing with a multitude of institutional environments is a front-and-center task for the global manager. However, exactly how institutions matter for foreign firm behavior and performance is a question that still puzzles the academic community. The inherent complexity of institutions is often singled out as one of the reasons for the current difficulty in understanding the role institutions play in international firm activities.
This thesis explores the role of institutional complexity in international business research. It takes stock of current literature on cultural and institutional distance, identifies theoretical and methodological challenges associated with the use of different institutional theories, and advances our understanding of institutional research by demonstrating the importance of understanding and accounting for institutional complexity, both theoretically and methodologically. Empirically, this thesis discusses the role of institutions on a variety of phenomena, such as entry mode choice, foreign market selection, foreign subsidiary performance, MNE performance, and the effectiveness of rewarding managers with ownership. The central tenet of this thesis is that institutions and the ways they affect international business activities and outcomes possess multiple facets that each have the potential to influence the phenomenon of interest both simultaneously and divergently.