Institutional Specialization and Survival: Theory and Evidence from the French Film Industry

Firms increasingly face fragmented institutional environments where stakeholders endorse different institutional logics. While the effects of market specialization have been extensively studied, we don't know much about the firm-level implications of institutional specialization, i.e. when firms demonstrate consistent conformity to an institutional logic. In this study, I explore whether and to what extent institutional specialization affects firm survival. In contrast with arguments and evidence highlighting the potential negative survival effect of market specialization, I posit that institutional specialization is positively associated with survival. Because they may be more skilled at interacting with stakeholders, which perceive them as more appealing and understandable, institutional specialists, I argue, are more likely than other firms to form and maintain the reciprocal stakeholder relationships needed to operate and survive. I expect the survival benefit of institutional specialization to be accentuated when the contrast between logics decreases. I test and find support for these ideas using unique population data on French film producers (1994-2008).