Joshua Ault
Moore School of Business, University of South
Carolina
Comparative institutional advantages at the
bottom of the pyramid: Explaining cross-national
differences in the growth of commercial
microfinance
joshua_ault@darla.moore.sc.edu
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Joshua
Ault is pursuing a doctoral degree in
international business in the Sonoco
International Business Department at the
University of South Carolina. He
received a Master of Finance degree from
the University of Utah in 2002 and a
Master of Business Administration in
International Management degree from
Baylor University in 2001. His research
focuses primarily on business in
emerging, transition, and less developed
countries. He is especially interested
in informality as a common factor in
these markets. His work takes a
comparative approach, exploring the
global divergence of informal systems
within these countries and how this
divergence affects organizational
structures, models of innovation,
knowledge transfer, and the flow of
capital across national boundaries. He
is also interested in issues of
sustainability – focusing especially on
the role of business in meeting the
needs of the poor in these countries.
For instance, he has recently conducted
research on the microfinance industry,
which provides financial services to
poor entrepreneurs. Additionally, in
2007, he co-authored a proposal to make
“Sustainable Enterprise and Development”
the new strategic initiative of the
Moore School of Business at the
University of South Carolina. In 2008,
this proposal was officially adopted by
the school.
His research has been presented at
numerous conferences and locations
including: The Academy of Management
annual meeting, The Academy of
International Business annual meeting,
Cornell University, and Oxford
University. Recently, he was recognized
by the Moore School of Business, which
granted him the 2008 Most Promising
Researcher Award for his work.
Comparative institutional advantages
at the bottom of the pyramid: Explaining
cross-national differences in the growth
of commercial microfinance
We apply a comparative institutional
perspective to extend research into the
conditions of successful business
innovation in Bottom-of-the-Pyramid
(BOP) markets. Specifically, we use the
concept of “comparative institutional
advantages” to argue that, rather than
obstructing all business activity, the
unique institutional resources and
capabilities found in various BOP
markets provide “repositories of
capabilities” that enable specific
innovations. Successful models in these
markets, therefore, are likely to both
be different than those found in
developed economies and differ across
BOP markets themselves. To test the
importance of the institutional context
in these markets, we analyze
cross-national differences in the growth
of one BOP innovation: commercial
microfinance. Our empirical analysis
supports the proposition that BOP
markets contain divergent comparative
institutional advantages. Specifically,
we find that the amount of micro lending
is strongest in those countries where
institutions support a specific type of
informal market exchange.
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