To understand what an institutional void is, we must first understand what an institution is. An institution is an organization that establishes the “rules of the game”. In the context of a nation, there are two categories of institutions; formal and informal. Informal institutions tend to focus on general social and psychological norms while formal institutions empower the political, legal, and economic systems within a country. Institutional voids are a term that broadly refers to the lack of intermediary institutions that efficiently connect buyers and sellers in a market. The lack of formal organizations and institutions to support the rule of law, governance, and respect for private property, to name just a few essential functions, alienates buyers and sellers due to the lack of more than informal trust. Since buyers and sellers are unable to meet easily, transaction costs increase. These are the costs associated with coordinating purchases, sales, or any business transaction. Market intermediation is low, so market participants lack the relevant information needed to make informed decisions. For example, comparing healthcare in the United States and India highlights institutional voids in Asia. If you need a doctor in India, other than word of mouth, there is very little information available to guarantee the quality of care you will receive. On the other hand, in America the information channels available to the public on the quality, ethical standards and availability of healthcare are diverse and easily accessible; whether it is a government publication or a journal specializing in healthcare classification. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essayThese institutional voids can influence economic development in emerging economies because companies operating in these countries often have to overcome institutional voids by performing "institutional duties" themselves such as: self-regulation, executive agents and banks. This can present a significant conflict of interest because, although companies want to increase market intermediation so as to reduce the costs of doing business, they are unlikely to act objectively should a dispute arise against them. This conflict of interest is the reason why lack of trust between buyers and sellers and corruption within these markets will persist, to the detriment of potential economic growth. However, the institutional void can also present an opportunity for companies in emerging markets to implement private-level institutions, if done correctly. Scholars have argued that institutions are more than simply background conditions ( Meyer, Estrin, Bhaumik, & Peng, 2009 ) and directly influence the strategic actions available to an organization ( Ingram & Silverman, 2002 ). In this way, firms can gain and sustain a competitive advantage by overcoming, shaping and exploiting the nature of their institutional environments (Marquis and Raynard, 2015). This can be exemplified in the case of Patrimonio Hoy (an example of institutional development). , this institution was created by the Mexican cement manufacturer CEMEX at a very bad time for the Mexican economy, a time of fiscal austerity and government ignorance about rising levels of poverty. This resulted in the devaluation of the peso and some rebellions commonly known as the tequila crisis. CEMEX had the goal of being one..