How Institutions Shape Uncertainty and Risk
Purpose: The study proposes a conceptual framework on how institutions influence risk and uncertainty. Beyond the nuances in defining the concepts in the existing literature, the role of institutions in shaping risks and uncertainties remains understudied. This paper adopts the new institutional ec...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Escola Superior de Propaganda e Marketing - ESPM
2021-09-01
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| Series: | Internext: Revista Eletrônica de Negócios Internacionais |
| Subjects: | |
| Online Access: | https://internext.espm.br/internext/article/view/604 |
| _version_ | 1797302875575025664 |
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| author | Stephanie Tonn Goulart Moura Christian Daniel Falaster Christine Elena Bianchi Érica de Souza Mazato Laura Taysa Espig |
| author_facet | Stephanie Tonn Goulart Moura Christian Daniel Falaster Christine Elena Bianchi Érica de Souza Mazato Laura Taysa Espig |
| author_sort | Stephanie Tonn Goulart Moura |
| collection | DOAJ |
| description |
Purpose: The study proposes a conceptual framework on how institutions influence risk and uncertainty. Beyond the nuances in defining the concepts in the existing literature, the role of institutions in shaping risks and uncertainties remains understudied. This paper adopts the new institutional economics (NIE) perspective to revisit the concepts of risk and uncertainty and provide a deeper reflection about its interactions with formal and informal institutions.
Method: Our conceptual model is based on four propositions that support a theoretical explanation about the relationships between institutions and uncertainties, institutions and risks, and uncertainties and risks.
Findings: While formal institutions have a primary role in reducing uncertainties, informal institutions can be seen as a source of risk. These findings imply firms’ strategic decisions. In this regard, we also provide a research agenda for future empirical studies in the area.
Originality/value: The study highlights the importance of institutions for companies to deal with risk and uncertainties. The institutions have a primary role in defining the “known part” of the uncertainty, allowing the companies to evaluate the different scenarios for decision-making.
Theoretical/Methodological Contributions: This study differentiates risk and uncertainty interaction according to institutional theory. Additionally, we offer an academic discussion of how formal and informal institutions can shape risks and uncertainties.
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| first_indexed | 2024-03-07T23:45:13Z |
| format | Article |
| id | doaj.art-77ca8cc818bc4c59b67364239bda2600 |
| institution | Directory Open Access Journal |
| issn | 1980-4865 |
| language | English |
| last_indexed | 2024-03-07T23:45:13Z |
| publishDate | 2021-09-01 |
| publisher | Escola Superior de Propaganda e Marketing - ESPM |
| record_format | Article |
| series | Internext: Revista Eletrônica de Negócios Internacionais |
| spelling | doaj.art-77ca8cc818bc4c59b67364239bda26002024-02-19T14:18:00ZengEscola Superior de Propaganda e Marketing - ESPMInternext: Revista Eletrônica de Negócios Internacionais1980-48652021-09-0116310.18568/internext.v16i3.604How Institutions Shape Uncertainty and RiskStephanie Tonn Goulart Moura0Christian Daniel Falaster1Christine Elena Bianchi2Érica de Souza Mazato3Laura Taysa Espig4Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil). Purpose: The study proposes a conceptual framework on how institutions influence risk and uncertainty. Beyond the nuances in defining the concepts in the existing literature, the role of institutions in shaping risks and uncertainties remains understudied. This paper adopts the new institutional economics (NIE) perspective to revisit the concepts of risk and uncertainty and provide a deeper reflection about its interactions with formal and informal institutions. Method: Our conceptual model is based on four propositions that support a theoretical explanation about the relationships between institutions and uncertainties, institutions and risks, and uncertainties and risks. Findings: While formal institutions have a primary role in reducing uncertainties, informal institutions can be seen as a source of risk. These findings imply firms’ strategic decisions. In this regard, we also provide a research agenda for future empirical studies in the area. Originality/value: The study highlights the importance of institutions for companies to deal with risk and uncertainties. The institutions have a primary role in defining the “known part” of the uncertainty, allowing the companies to evaluate the different scenarios for decision-making. Theoretical/Methodological Contributions: This study differentiates risk and uncertainty interaction according to institutional theory. Additionally, we offer an academic discussion of how formal and informal institutions can shape risks and uncertainties. https://internext.espm.br/internext/article/view/604New Institutional Economics. Risk. Uncertainty. Institutions. Decision Making. |
| spellingShingle | Stephanie Tonn Goulart Moura Christian Daniel Falaster Christine Elena Bianchi Érica de Souza Mazato Laura Taysa Espig How Institutions Shape Uncertainty and Risk Internext: Revista Eletrônica de Negócios Internacionais New Institutional Economics. Risk. Uncertainty. Institutions. Decision Making. |
| title | How Institutions Shape Uncertainty and Risk |
| title_full | How Institutions Shape Uncertainty and Risk |
| title_fullStr | How Institutions Shape Uncertainty and Risk |
| title_full_unstemmed | How Institutions Shape Uncertainty and Risk |
| title_short | How Institutions Shape Uncertainty and Risk |
| title_sort | how institutions shape uncertainty and risk |
| topic | New Institutional Economics. Risk. Uncertainty. Institutions. Decision Making. |
| url | https://internext.espm.br/internext/article/view/604 |
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