Which of the following statements about institutional transitions is TRUE?
A)Without relational contracting, institutional transitions cannot be made.
B)Arm's-length transactions with third-party enforcement are the most effective approach to institutional transitions.
C) Institutional transitions are widespread in the world, especially in emerging economies.
D) The nature of institutional frameworks is unrelated to strategic decision making during transitions.

Question

Which of the following statements about institutional transitions is TRUE?
A)​Without relational contracting, institutional transitions cannot be made.
B)​Arm's-length transactions with third-party enforcement are the most effective approach to institutional transitions.
C) ​Institutional transitions are widespread in the world, especially in emerging economies.
D) ​The nature of institutional frameworks is unrelated to strategic decision making during transitions.

Quizplus · Accepted Answer

Institutional transitions are common in emerging economies, but they can occur in any country or industry. They involve changes to the formal and informal rules that guide economic activity, and can have significant impacts on firm behavior and competitiveness. Relational contracting and third-party enforcement may be important factors in institutional transitions, depending on the context. The nature of institutional frameworks can also play a crucial role in shaping strategic decision making during transitions.

Which of the Following Statements About Institutional Transitions Is TRUE