Institutions, Sustainability Transitions and Aspects of Internationalisation

The shift towards economic activities that are environmentally sustain-
able involves the need to overcome incumbent socio- technical regimes
that are environmentally unsustainable but difficult to replace. Techno-
logical and institutional co-evolution of practices and technologies with
large scale effects and strong path dependencies create significant obsta-
cles that stand in the way to adapting technologies that cause less or no
damage to the environment. This phenomenon has been termed "carbon
lock-in" (Unruh, 2002), it impedes the introduction of environmentally
friendly practices and technologies or makes it an uphill struggle. Until
recently, most existing studies have taken single national systems as units
of analysis while issues of internationalization are just emerging on the
agenda. With a high degree of uncertainty involved, becoming part of a
sustainability transition is a risky proposal for any firm, and even more so
if this is happening in foreign markets where market conditions and in-
stitutional settings may be substantially different from those encountered
in the firm’s home markets. With the purpose of discussing further direc-
tions for research, this paper will take a focus on institutional settings in
foreign markets and how they affect foreign firms with a special focus on
sustainability transitions and systems of innovation.