Winning in Emerging Markets

Three

Exploiting Institutional Voidsas Business Opportunities

INSTITUTIONAL VOIDS have a material impact on the operations of firms doing business in emerging markets.¹ They are often a source of frustration. Foreign firms, for example, have trouble replicating models from their home markets in contexts that lack the intermediaries that underpin them. Institutional voids can even derail businesses, as illustrated by the challenges faced by software, film, publishing, and other companies operating in emerging markets, such as China, that have undeveloped intellectual property rights regimes. For domestic firms, institutional voids can frustrate attempts to get off the ground, raise capital, hire employees, and, later, match the resources and ...