In this study, data from 405 microfinance institutions (MFI) were used to examine the simultaneous and diverse effects of differences in informal and formal institutions on cross-border alliances’ financial performance.
According to the study, “the impact from informal institutional differences is sigmoid-shaped, with performance first increasing, then declining, before improving again as informal institutional differences grow large.”
The study addresses the following:
- Enhance understanding of the impact of institutional differences on the performance of cross-border alliances.
- Contribute to the alliance literature by simultaneously addressing the impact of informal and formal institutions.
- Contributes to the literature on nonlinear performance effects from internationalization.
- Comparing the impact of informal and formal institutional differences as the key contextual elements
- Contribute to the understanding of organizations working in a rapidly expanding global service industry.
The report shows that informal and formal institutional differences both have an impact on performance returns from cross-border alliances.
