ABSTRACT

The rationale behind fi rms’ non-market strategies is that the political, legal, social, and cultural context can affect fi rms’ ability to succeed in the market place. In this chapter, we reconcile evidence from the economics and fi nance literature with ideas from the neoinstitutional and corporate political activity (CPA) literature to examine relationships between fi rms’ connections, non-market strategies, and outcomes during periods of institutional change. These approaches provide complementary points of view regarding the ways in which institutions shape fi rms and their non-market strategies. Importantly, these diverse bodies of literature also provide insight into how fi rms’ non-market strategies shape the institutional context for fi rm advantage. To highlight the interplay between non-market strategy and institutions, we focus on what happens, what works, and what questions are raised when institutions are in fl ux.