Managing uncertainties through institutional capital and adaptive capability

通過制度資本及應變能力管理不確定性

Student thesis: Doctoral Thesis

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Author(s)

  • Fang JIA

Related Research Unit(s)

Detail(s)

Awarding Institution
Supervisors/Advisors
Award date15 Jul 2014

Abstract

The concept of institutional capital is introduced as the firm's innate and acquired competences which help the firm utilize institutional opportunities, reduce institutional constraints, and hence gain legitimacy. This thesis explores how firms use institutional capital and adaptive capability to gain legitimacy and efficiency under different types of uncertainties. Uncertainty has long and commonly been considered a key feature of doing business in China. Market uncertainty increases difficulty of predicting future market trends while the volatility and ambiguity of institutional environment also creates uncertainty for firms. Acknowledging these uncertainties, this research proposes that Chinese firms optimize their institutional capital, integrate through adaptive capability, and respond to the uncertainties. Based on institutional theory, a theoretical framework is developed to examine uncertainty - competence - outcome relationships from a new angle. The sample of 212 firms located in China represents a variety of firms characterized by different types of ownership, size, industry, history and location. Results of empirical tests support the theoretical argument that institutional environment volatility increases a firm's use of institutional capital while institutional environment ambiguity decreases institutional capital and adaptive capability. Market uncertainty is found to have positive effect on institutional capital and adaptive capability. In addition, both institutional capital and adaptive capability influence performance and legitimacy positively. Theoretical and practical contributions are discussed, in considerable detail, in the dissertation. This comprehensive analytical discussion is followed by limitations and implications.

    Research areas

  • Uncertainty, Institutional economics