Performance Effects of Stakeholder Interaction in Emerging Economies: Evidence from Brazil (Report‪)‬

Introduction Mainstream research in Strategy has focused primarily on industry and firm effects as determinants of firm performance (e.g. McGahan & Porter, 1997; McGahan & Victer, 2010; Rumelt, 1991, e.g. for Brazil, Bandeira-de-Mello & Marcon, 2006; Brito & Vasconcelos, 2004, 2005), disregarding institutional differences (Peng, 2002). Nonetheless, some studies in this line of research have reported the importance of national institutional differences. For example, Carvalho, Bandeirade-Mello, Vianna and Marcon (2009) found relevant stable and transient country effects in a Latin American sample of firms. Goldszmidt, Brito and Vasconcelos (2007) found that country, industry and country-industry interaction effects had approximately the same relative importance in performance variance decomposition; and altogether, these effects were nearly as important as the firm effect. These country differences arise from differences in national formal and informal institutional arrangements, which affect the way business is done, as well as the resulting performance distribution (Griffiths & Zammuto, 2005).