How Institutions Shape Uncertainty and Risk




New Institutional Economics. Risk. Uncertainty. Institutions. Decision Making.


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.


Não há dados estatísticos.

Biografia do Autor

Stephanie Tonn Goulart Moura, Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).

Doutoranda em Management and Marketing University College Cork, UCC, (Irlanda).

Christian Daniel Falaster, Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).

Doutor em Administração pela Universidade Nove de Julho - UNINOVE, São Paulo, (Brasil). Professor do Programa de Pós-Graduação em Administração (PPGAd) e do Programa de Pós-Graduação em Ciências Contábeis (PPGCC) da Universidade Regional de Blumenau - FURB.

Christine Elena Bianchi, Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).

Mestra em Administração pela Fundação Universidade Regional de Blumenau - FURB, Santa Catarina, (Brasil).

Érica de Souza Mazato, Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).

Mestra em Administração pela Universidade Regional de Blumenau - FURB, Santa Catarina, (Brasil).

Laura Taysa Espig, Fundação Universidade Regional de Blumenau – FURB, Santa Catarina, (Brasil).

Mestranda do Programa de Pós-Graduanção em Administração da Fundação Regional de Blumenau - FURB, Santa Catarina, (Brasil).


Agboola, A. O. (2015). Neoclassical economics and new institutional economics: An assessment of their methodological implication for property market analysis. Property Management, 33(5), 412–429.

Amal, M., & Seabra, F. (2007). Determinantes do investimento direto externo (IDE) na América Latina: uma perspectiva institucional. Revista Economia, 8(2), 231–247.

Anderson, E., & Gatignon, H. (1986). Modes of Foreign Entry: A Transaction Cost Analysis and Propositions. Journal of International Business Studies, 17(3), 1–26.

Camerer, C., & Weber, M. (1992). Recent developments in modeling preferences: Uncertainty and ambiguity. Journal of Risk and Uncertainty, 5(4), 325–370.

Carruthers, B. G. (2013). From uncertainty toward risk: the case of credit ratings. Socio-Economic Review, 11(3), 525–551.

Crook, T. R., Combs, J. G., Ketchen, D. J., & Aguinis, H. (2013). Organizing Around Transaction Costs: What Have We Learned and Where Do We Go from Here? Academy of Management Perspectives, 27(1), 63–79.

Damodaran, A. (2008). Gestão Estratégica do Risco. Bookman.

de Groot, H. L. F., Linders, G., Rietveld, P., & Subramanian, U. (2004). The Institutional Determinants of Bilateral Trade Patterns. Kyklos, 57(1), 103–123.

Dequech, D. (2006). The new institutional economics and the theory of behaviour under uncertainty. Journal of Economic Behavior and Organization, 59(1), 109–131.

Dequech, D. (2011). Uncertainty: A Typology and Refinements of Existing Concepts. Journal of Economic Issues, 45(3), 621–640.

Dequech, D. (2018). Institutions in the economy and some institutions of mainstream economics: From the late 1970s to the 2008 financial and economic crisis. Journal of Post Keynesian Economics, 41(3), 478–506.

Dosi, G., & Egidi, M. (1991). Substantive and procedural uncertainty. Journal of Evolutionary Economics, 1(2), 145–168.

Downey, H. K., & Slocum, J. W. (1975). Uncertainty: Measures, Research, and Sources of Variation. Academy of Management Journal, 18(3), 562–578.

Duncan, R. B. (1972). Characteristics of Organizational Environments and Perceived Environmental Uncertainty. Administrative Science Quarterly, 17(3), 313.

Dunning, J. H. (1988). The Eclectic Paradigm of International Production: A Restatement and Some Possible Extensions. Journal of International Business Studies, 19(1), 1–31.

Friedman, M., & Friedman, M. (1953). Essays in Positive Economics. University of Chicago Press.

Furubotn, E. G., & Richter, R. (2008). The New Institutional Economics - A Different Approach to Economic Analysis. Economic Affairs, 28(3), 15–23.

García-Canal, E., & Guillén, M. F. (2008). Risk and the strategy of foreign location choice in regulated industries. Strategic Management Journal, 29(10), 1097–1115.

Garner, W. R. (1962). Uncertainty and structure as psychological concepts. In Uncertainty and structure as psychological concepts. Wiley.

Gibson, C. B., & Dibble, R. (2013). Excess May Do Harm: Investigating the Effect of Team External Environment on External Activities in Teams. Organization Science, 24(3), 697–715.

Hall, P. A., & Soskice, D. (2001). An introduction to varieties of capitalism. In op. cit.

Hall, P. A., & Soskice, D. (2004). Varieties of Capitalism and Institutional Complementarities BT - Institutional Conflicts and Complementarities: Monetary Policy and Wage Bargaining Institutions in EMU (R. Franzese, P. Mooslechner, & M. Schürz (eds.); pp. 43–76). Springer US.

Hall, P. A., & Taylor, R. C. R. (2003). As três versões do neo-institucionalismo. Lua Nova: Revista de Cultura e Política, 58, 193–223.

Hogg, M. A. (2007). Uncertainty–Identity Theory (pp. 69–126).

Huff, A. S. (1978). Consensual Uncertainty. Academy of Management Review, 3(3), 651–655.

Keeney, R. L. (1982). Decision Analysis: an Overview. Oper Res, V 30(N 5), 803–838.

Kerremans, B. (1996). Do Institutions Make a Difference? Non-Institutionalism, Neo-Institutionalism, and the Logic of Common Decision-Making in the European Union. Governance, 9(2), 217–240.

Khader, P. H., Pachur, T., Meier, S., Bien, S., Jost, K., & Rösler, F. (2011). Memory-based Decision-making with Heuristics: Evidence for a Controlled Activation of Memory Representations. Journal of Cognitive Neuroscience, 23(11), 3540–3554.

Knight, F. H. (1921). Risk, Uncertainty and Profit. Houghton Mifflin.

Knight, J., & North, D. (1997). Explaining Economic Change: The Interplay Between Cognition and Institutions. Legal Theory, 3(3), 211–226.

Kostova, T., & Roth, K. (2002). Adoption of an Organizational Practice by Subsidiaries of Multinational Corporations: Institutional and Relational Effects. Academy of Management Journal, 45(1), 215–233.

Lawrence, P. R., & Lorsch, J. W. (1967). Differentiation and Integration in Complex Organizations. Administrative Science Quarterly, 12(1), 1.

Lewis, Y., & Bozos, K. (2019). Mitigating post-acquisition risk: the interplay of cross-border uncertainties. Journal of World Business, 54(5), 100996.

Liesch, P. W., Welch, L. S., & Buckley, P. J. (2011). Risk and Uncertainty in Internationalisation and International Entrepreneurship Studies: Review and Conceptual Development. Management International Review, 51(6), 851–873.

Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman, H. J. (1978). Organizational Strategy, Structure, and Process. Academy of Management Review, 3(3), 546–562.

Miller, E. M. (1977). RISK, UNCERTAINTY, AND DIVERGENCE OF OPINION. The Journal of Finance, 32(4), 1151–1168.

Miller, K. D. (1992). A Framework for Integrated Risk Management in International Business. Journal of International Business Studies, 23(2), 311–331.

Milliken, F. J. (1987). Three Types of Perceived Uncertainty About the Environment: State, Effect, and Response Uncertainty. Academy of Management Review, 12(1), 133–143.

Mintzberg, H., Lampel, J., & Ahlstrand, B. W. (2009). Strategie safari: uw complete gids door de jungle van strategisch management (2nd ed.). Pearson Education.

Müllner, J. (2016). From uncertainty to risk—A risk management framework for market entry. Journal of World Business, 51(5), 800–814.

Norman, A. L., & Shimer, D. W. (1994). Risk, uncertainty, and complexity. Journal of Economic Dynamics and Control, 18(1), 231–249.

North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge University Press.

North, D. C. (1991). Institutions. Journal of Economic Perspectives, 5(1), 97–112.

Packard, M. D., Clark, B. B., & Klein, P. G. (2017). Uncertainty Types and Transitions in the Entrepreneurial Process. Organization Science, 28(5), 840–856.

Peng, M. W., Sun, S. L., Pinkham, B., & Chen, H. (2009). The Institution-Based View as a Third Leg for a Strategy Tripod. Academy of Management Perspectives, 23(3), 63–81.

Peng, M. W., Wang, D. Y. L., & Jiang, Y. (2008). An institution-based view of international business strategy: a focus on emerging economies. Journal of International Business Studies, 39(5), 920–936.

Porta, R. La, Lopez-de-Silanes, F., & Shleifer, A. (2008). The Economic Consequences of Legal Origins. Journal of Economic Literature, 46(2), 285–332.

Rakow, T. (2010). Risk, uncertainty and prophet: The psychological insights of Frank H. Knight. Judgment and Decision Making, 5(6), 458–466.

Rodrik, D. (2000). Institutions for high-quality growth: What they are and how to acquire them. Studies in Comparative International Development, 35(3), 3–31.

Selznick, P. (1996). Institutionalism “Old” and “New.” Administrative Science Quarterly, 41(2), 270.

Siggelkow, N., & Rivkin, J. W. (2005). Speed and Search: Designing Organizations for Turbulence and Complexity. Organization Science, 16(2), 101–122.

Simon, H. A. (1960). The new science of management decision. In The new science of management decision. Harper & Brothers.

Teece, D., & Leih, S. (2016). Uncertainty, Innovation, and Dynamic Capabilities: An Introduction. California Management Review, 58(4), 5–12.

Thompson, J. D. (1967). Organizations in action: social science bases of administrative theory. McGraw-Hill.

Tywoniak, S., Galvin, P., & Davies, J. (2007). New Institutional Economics’ contribution to strategic groups analysis. Managerial and Decision Economics, 28(3), 213–228.

Volz, K. G., & Gigerenzer, G. (2012). Cognitive Processes in Decisions Under Risk are not the Same as in Decisions Under Uncertainty. Frontiers in Neuroscience, 6.

Williamson, O. E. (1976). The Economics of Internal Organization: Exit and Voice in Relation to Markets and Hierarchies. The American Economic Review, 66(2), 369–377.

Yiu, D., & Makino, S. (2002). The Choice Between Joint Venture and Wholly Owned Subsidiary: An Institutional Perspective. Organization Science, 13(6), 667–683.

Zanini, M. T. F., Lusk, E. J., & Wolff, B. (2009). Confiança dentro das organizações da nova economia: uma ma análise empírica s sobre as conseqüências bre da incerteza institucional. RAC - Revista de Administração Contemporânea, 13(1), 72–91.




Como Citar

Moura, S. T. G., Falaster, C. D., Bianchi, C. E., Mazato, Érica de S., & Espig, L. T. (2021). How Institutions Shape Uncertainty and Risk. Internext, 16(3), 238–251.

Artigos mais lidos pelo mesmo(s) autor(es)