Transaction Cost and Performance of Born Globals: The Role of Transaction Cost Institutionalism: An Emerging Economy Context

This study investigates how transaction costs impact the performance of born globals (BGs) emerging economy (EEs), with a particular focus on the moderating role of transaction cost institutionalism. Anchored in transaction cost theory and institutional theory, the research analyzes primary data from 225 Bangladeshi BGs across six sectors. Using hierarchical regression models, the findings confirm a significant negative relationship between transaction costs and firm performance. Moreover, transaction cost institutionalism—comprising elements such as enforcement, measurement, ideological attitudes, and market structure—moderates this relationship. Notably, institutional frameworks in host countries exert a stronger moderating influence than those in home countries. The study offers theoretical contributions by integrating transaction cost and institutional theories and provides practical insights for policymakers and international entrepreneurs operating in institutionally challenging environments. It emphasizes the strategic importance of institutional interactions in enhancing BGs' international performance.