Mexico City street vendors and the stickiness of institutional contexts

Implications for strategy in emerging markets

Bibliographic Data

ID15538902
AuthorsFarzad Haider Alvi (0000-0003-2636-362X, Tecnológico de Monterrey, corresponding author), Jorge Alberto Mendoza (Tecnológico de Monterrey)
Year2017
Volume13
Issue2
Pages119-135
Publication date2017-04-26
Open AccessYes
TypeARTICLE
VenueCritical Perspectives on International Business (JOURNAL)
Journal identifiersISSN: 1742-2043 • E-ISSN: 1758-6062
PublisherEmerald Publishing Limited (PUBLISHER • GB)
DOI10.1108/cpoib-05-2015-0017
OpenAlexW2605228208
LanguageEN
Citations received5
References cited33

Purpose 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. Design/methodology/approach 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. Findings 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. Research implications 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. Originality/value 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

Business · Context (archaeology · Economics · Emerging markets · Informal sector · Institutional theory · Macroeconomics · Management · Market economy · Narrative · Originality · Political science · Qualitative research · Rationality · Social science · Sociology · Value (mathematics · Corporate Finance and Governance · Family Business Performance and Succession · Taxation and Compliance Studies · Marketing

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