Chapter 1: Institutions 2.0: Which Institutions Matter in IB Research?

Analysis of institutions has been at the heart of international business (IB) research, ever since it became established as a credible field of scientific inquiry, starting in the late 1950s. Institutional complexity has been on the rise during the past six decades, thereby requiring new approaches to analyze them, a perspective we coin as “Institutions 2.0.” This research volume provides an overview of some of the most salient dimensions of the present institutional complexity facing managers and policy-makers, who are involved in IB transactions and in establishing institutional frameworks, respectively.

The first four chapters in this volume reflect today’s new globalization challenges, specifically the emergence of the digital economy and changing societal views on the benefits of globalization itself. In Chapter 2, “International Business and Multi-level Institutional Change: Looking Back and Facing Forward,” Westney, in whose honor we composed this volume, acknowledges the challenges facing MNEs (multinational enterprises) as a result of growing anti-globalization sentiment – challenges that have been amplified by the COVID-19 pandemic. While volatility and uncertainty make it difficult to predict specific outcomes, it is inevitable that current conditions will be the impetus for long-run institutional changes. As IB scholars, it is incumbent upon us to develop – and share with societal stakeholders – reliable assessments of the main institutional trends and their possible impacts on internationally operating firms.