O. Kovtun, E. Angelskaya
INSTITUTIONAL APPROACH IN WORLD TRADE: THE ROLE AND IMPORTANCE OF INFORMAL INSTITUTES
Olga I. Kovtun – PhD in History, Associate Professor, Department of Economic Theory, Novosibirsk State University of Economics and Management, Novosibirsk, Russian Federation, SPIN: 7161-9105, E-mail: firstname.lastname@example.org
Ekaterina A. Angelskaya – Master student of the faculty of the public sector, Novosibirsk State University of Economics and Management, Novosibirsk, Russian Federation, E-mail: katalina1995@yandex
Abstract. The authors reviewed the basic categories and methodological principles of institutional analysis in relation to world trade. The influence of such informal institutions as business reputation, opportunistic behavior and differences in mentality as factors contributing to or complicating the development of new markets by companies for their products in different regions of the world and making deals with new foreign partners is investigated. Concrete recommendations are offered on how to reduce campaign transaction costs associated with the functioning of informal institutions, for example, the Chinese company Huawei, the Nestle campaign, and others. The authors examined the informal institutions activities on an example that describes the influence of reputational mechanisms on changing a company’s position in the TNC hierarchy if the United States imposes sanctions on the Chinese telecommunications equipment manufacturer Huawei. The opportunistic behavior of the campaigns and its impact on transaction costs were studied as an example of several Chinese food campaigns in connection with the “melanin scandal”. And the influence of the mentality of the nation on the transaction costs of the campaign related to the development of new sales markets was studied on the example of the activities of the Swiss Nestle campaign during the conflict with the Gerber brand baby food in the Ethiopian market.
Keywords: business reputation of a company, opportunistic behavior of economic agents, mentality, informal institutions.
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Kovtun O.I., Angelskaya E.A. Institutional approach in world trade: the role and importance of informal institutes. CITISE, 2019, no. 4, pp. 355-368. DOI: http://doi.org/10.15350/24097616.2019.4.34