Institutional Voids are the gaps that exist in specific markets that serve as roadblocks to the ideal interactions and transactions of Buyers & sellers.By: Professor Tarun Khanna (HarvardX)
In emerging economies, the institutional infrastructure to support market-driven economies and provide basic services often falls short. Institutional development is a complex process, dependent upon specific factors related to the historical, social and cultural forces shaping the country or region in question.
The most important factor in a market economy is the ability of “Buyers & Sellers” to find one another and complete transactions as seamlessly as possible. Although Institutional voids are palpable impediments to effective transactions and the proliferation of beneficial services (such as Reliable Healthcare), they are also opportunities for Entrepreneurial Intervention.
Institutional voids come in a variety of forms. Here are some possible examples –
- Absent or unreliable sources of information related to the market as a whole.
- Uncertain regulatory or Intellectual Property regimes.
- Inefficient judicial apparatus.
Institutional voids are an opportunity for Entrepreneurial Intervention, to find out which market institutions or structures are missing and which are dysfunctional or inefficient.Source: Entrepreneurship in Emerging Economies (HarvardX)