Institutional Resources and Firm Competitive Advantage: Evidence from the Indian Textile Industry

In an era of global competition, there is a growing interest within the strategy field to study how the institutional environments influence firm strategies and competitive advantage. In this paper, we further this research by examining how access to institutional resources provided through a government program (Technology Upgradation Funds Scheme (TUFS)) influenced firm competitive advantage within the Indian textile industry. Results from a panel of firms during the 1989-2010 period show that while utilization of these institutional resources enhanced export growth of firms, the growth accrued at the cost of lower productivity. Furthermore, we find that the relationships between institutional resources and export growth and productivity are moderated by two types of quasi-institutions within which individual firms are embedded, namely business groups and geographical clusters.