Exploring the benefits of inter-firm collaboration : how institutional voids shape the benefits of collaboration

Abstract

Institutional voids are increasingly gaining precedence and research attention due to the increased participation of developing countries in global markets (Mair&Marti, 2009). This theory focuses on the identification of weaknesses in institutions and how these voids result in ineffective functioning of emerging markets (Mair&Marti, 2009). In this study, focus is on collaboration as a strategy used by the emerging markets to overcome the absence of institutional and regulatory frameworks, prevalent in their capital, labour and product markets.Forty (40) South African small-medium enterprises were analysed to determine what the priority collaborative benefits are for firms operating in the emerging market context. The research shows that in emerging markets, collaboration benefits are based on a need to overcome institutional voids i.e. to reduce the costs and risks associated with weak institutions.