The effect of institutional ties on knowledge acquisition in uncertain environments

Abstract

Institutional ties can contribute to a firm`s performance in emerging economies because of the existence of ambiguous laws and unclear regulations. The main thrust of our argument is that a firm`s choice of institutional ties needs to be congruent with the external environment and with industry characteristics. We test our proposed framework with survey data from 308 firms in China. The results indicate that, first, environmental uncertainty has a direct influence on institutional ties and knowledge acquisition, but second, a firm`s industry position, although it likewise has an effect on knowledge acquisition, influences institutional ties in a U-shaped manner. Third, we find that institutional ties are positively related to knowledge acquisition. [PUBLICATION ABSTRACT]