Entrepreneurial ventures, institutional voids, and business group affiliation: The case of two Brazilian start-ups, 2002-2009

Purpose – Institutional voids – the lack of institutions that can facilitate the functioning of markets – are ubiquitous in emerging markets. Because of their newness, entrepreneurial ventures are especially susceptible to institutional vacuums. This research seeks to shed light on the role that business groups can play in the development of entrepreneurial ventures in emerging markets. Design/methodology/approach – Based on detailed fieldwork, the study describes and analyzes the creation and evolution of two biotechnology start-ups that were affiliated to a major Latin American business group. The research covers the period between their foundation and later acquisition by a multinational company. Findings – The article discusses the role that the business group affiliation had in terms of helping the start-ups to interact with multiple institutional voids. The analysis shows that the start-ups benefited from the group’s reputation and connections, experience and know-how in managing different types of businesses in the country, strong resource base, long-term vision, and strong organizational culture. Originality/value – The main contribution of this work is to show that business group affiliation can be an interesting solution that facilitates the development of entrepreneurial ventures in emerging markets.