International business scholars have recognized the importance of the contextual embeddedness of firms. However, how they matter remains a contested question. Although recent efforts have been made to review the field, it remains unclear how institutions affect firms’ performance. We aim at answering the following research question: How is the intellectual and the conceptual structure of the institutions and firms’ performance field defined? We searched in the WoS and Scopus databases with pre-determined keywords, and we obtained a sample of 1063 articles that we analyzed by conducting the citation and co-citation analyses, keyword co-occurrence analysis, and thematic map analysis. Our bibliometric results portrayed how the intellectual and conceptual structure of the field has evolved. We contribute to the international business literature by providing a one-stop overview of the field, thus identifying current accomplishments and future research avenues on the relationship between institutions and firms’ performance. By analyzing the articles included on the Emerging and Niche clusters, we discuss future research avenues on the topics of sustainability, entrepreneurship, political ties, and institutional quality.

Firms’ success depends on their ability to deal with formal institutional quality. Specifically, firms exposed to a diversified set of institutional profiles can achieve institutional competitive advantage that provides firms with diverse knowledge and broader learning opportunities. While prior studies argued that being exposed to a diversified set of institutional profiles negatively influences firms because institutional knowledge can only be replicated in similar institutional profiles, they missed the point of learning from diversity. The purpose of this study is to further understand how firms’ institutional experience moderates the relationship between formal institutional quality and firms’ performance. We argue that firms with higher and more diverse institutional experience will adapt more efficiently to formal institutional quality, thus improving firms’ performance. We test the hypotheses on 4,011 publicly traded firms from the European Union between 2010 and 2021, and our results show that firms that develop higher institutional experience are better able to efficiently adapt to and leverage formal institutional quality and achieve higher firm performance. We contribute to the ongoing discussion on how formal institutions influence firms’ performance by acknowledging the importance of developing a diversified institutional experience. JEL CLASSIFICATION: F23