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Mexico City street vendors and the stickiness of institutional contexts

Mexico City street vendors and the stickiness of institutional contexts <jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>The need for a firm’s business strategy to be responsive to the institutional contexts of emerging markets is well-established in the literature. Often, however, strategic responsiveness is impeded by defining institutional contexts as country-level aggregations (macro-level) and glossing over sub-national variations (micro-level). The purpose of this paper is to investigate micro-level contexts that can defy macro-level assumptions of economic rationality.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>As a research site, the motivations of street vendors in Mexico City are analyzed in terms staying in one sub-national context, the informal sector, as opposed movement to another, the formal sector. Unanticipated reluctance to move from one context to another is defined as stickiness.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>Sub-national institutional contexts are found to be sticky, with less movement between informal and formal sectors than would have been anticipated. Unexpectedly, it is found that a significant number of street vendors prefer the hardship of the informal sector to the relative security of the formal sector.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Research implications</jats:title> <jats:p>International business research makes assumptions about the growth narrative of emerging markets, often characterizing a growing middle class as a rising tide that lifts all boats. In terms of further research on adapting strategy, however, assumptions of rational expectations ought to be tempered, as demonstrated by the stickiness of the informal sector.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>A contribution is made to the international business literature by showing that macro-level assumptions about institutional context based on rational expectations of wealth-maximizing behavior in emerging markets may result in an incomplete view of institutional context. Ultimately, adaptation of strategy could be impaired as a result.</jats:p> </jats:sec> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png critical perspectives on international business CrossRef

Mexico City street vendors and the stickiness of institutional contexts

critical perspectives on international business , Volume 13 (2): 119-135 – May 2, 2017

Mexico City street vendors and the stickiness of institutional contexts


Abstract

<jats:sec>
<jats:title content-type="abstract-subheading">Purpose</jats:title>
<jats:p>The need for a firm’s business strategy to be responsive to the institutional contexts of emerging markets is well-established in the literature. Often, however, strategic responsiveness is impeded by defining institutional contexts as country-level aggregations (macro-level) and glossing over sub-national variations (micro-level). The purpose of this paper is to investigate micro-level contexts that can defy macro-level assumptions of economic rationality.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title>
<jats:p>As a research site, the motivations of street vendors in Mexico City are analyzed in terms staying in one sub-national context, the informal sector, as opposed movement to another, the formal sector. Unanticipated reluctance to move from one context to another is defined as stickiness.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Findings</jats:title>
<jats:p>Sub-national institutional contexts are found to be sticky, with less movement between informal and formal sectors than would have been anticipated. Unexpectedly, it is found that a significant number of street vendors prefer the hardship of the informal sector to the relative security of the formal sector.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Research implications</jats:title>
<jats:p>International business research makes assumptions about the growth narrative of emerging markets, often characterizing a growing middle class as a rising tide that lifts all boats. In terms of further research on adapting strategy, however, assumptions of rational expectations ought to be tempered, as demonstrated by the stickiness of the informal sector.</jats:p>
</jats:sec>
<jats:sec>
<jats:title content-type="abstract-subheading">Originality/value</jats:title>
<jats:p>A contribution is made to the international business literature by showing that macro-level assumptions about institutional context based on rational expectations of wealth-maximizing behavior in emerging markets may result in an incomplete view of institutional context. Ultimately, adaptation of strategy could be impaired as a result.</jats:p>
</jats:sec>

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Publisher
CrossRef
ISSN
1742-2043
DOI
10.1108/cpoib-05-2015-0017
Publisher site
See Article on Publisher Site

Abstract

<jats:sec> <jats:title content-type="abstract-subheading">Purpose</jats:title> <jats:p>The need for a firm’s business strategy to be responsive to the institutional contexts of emerging markets is well-established in the literature. Often, however, strategic responsiveness is impeded by defining institutional contexts as country-level aggregations (macro-level) and glossing over sub-national variations (micro-level). The purpose of this paper is to investigate micro-level contexts that can defy macro-level assumptions of economic rationality.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Design/methodology/approach</jats:title> <jats:p>As a research site, the motivations of street vendors in Mexico City are analyzed in terms staying in one sub-national context, the informal sector, as opposed movement to another, the formal sector. Unanticipated reluctance to move from one context to another is defined as stickiness.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Findings</jats:title> <jats:p>Sub-national institutional contexts are found to be sticky, with less movement between informal and formal sectors than would have been anticipated. Unexpectedly, it is found that a significant number of street vendors prefer the hardship of the informal sector to the relative security of the formal sector.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Research implications</jats:title> <jats:p>International business research makes assumptions about the growth narrative of emerging markets, often characterizing a growing middle class as a rising tide that lifts all boats. In terms of further research on adapting strategy, however, assumptions of rational expectations ought to be tempered, as demonstrated by the stickiness of the informal sector.</jats:p> </jats:sec> <jats:sec> <jats:title content-type="abstract-subheading">Originality/value</jats:title> <jats:p>A contribution is made to the international business literature by showing that macro-level assumptions about institutional context based on rational expectations of wealth-maximizing behavior in emerging markets may result in an incomplete view of institutional context. Ultimately, adaptation of strategy could be impaired as a result.</jats:p> </jats:sec>

Journal

critical perspectives on international businessCrossRef

Published: May 2, 2017

References