Reference no: EM133343788
Questions about Interparfums (IPAR) - Perfume Industry.
- Institutional Distance Analysis (Economic Freedom)
(Understanding institutional distance, i.e. the difference in institutional context between countries, is critical for firms whose operations span national boundaries. Institutional distance impacts the relative attractiveness of country markets, trade-offs among foreign market entry strategies, the management of subsidiaries abroad, and ultimately, firm performance.(Bae and Solamon 2010) Institutional distance is a measure of cross-country differences (Kostova & Zaheer, 1999) and refers to "the extent of similarity or dissimilarity between the regulatory, cognitive, and normative institutions of two countries" (Xu & Shenkar, 2002, p. 608). Similarities between countries can attract, facilitate and expand trade; dissimilarities can provide a challenge and a higher level of risk.
Several ways to assess institutional distances between different countries. Research and find data about a few dimensions: Governance Indicators*; Infrastructure ranking; Financial Institutions Index; and Education system ranking
*: Following World Bank site will give you data regarding World Governance Indicators
You can select all or a few relevant indicators and plot data for U.S., China, Vietnam and Mexico. Take the latest year data (e.g. 2020). These indicators are for
• Voice and Accountability.
• Political Stability and Absence of Violence/Terrorism.
• Government Effectiveness.
• Regulatory Quality.
• Rule of Law.
• Control of Corruption.
Note: you can use Governance Indicators and either compare each of the six areas or compute a composite index