Coming Back and Giving Back: Transposition,Institutional Actors,and the Paradox of Peripheral Influence*

Abstract

We explore transposition—bringing ideas from one context to a distant other context—as a mechanism for institutional change, and we study the conditions under which institutional actors successfully undertake it. Prior work on transposition has emphasized the paradox of embedded agency: actors embedded in a context may struggle to effect change because they lack exposure to fresh ideas. We complement this work by arguing that transposition is also subject to a paradox of peripheral influence: actors not embedded in a context, who may be a source of fresh ideas, can struggle to effect change because of their peripheral or outsider status. We suggest that these dual paradoxes can be overcome by actors who simultaneously have exposure to alternative institutional environments and are sufficiently embedded in the focal field to gain trust and buy-in from other decision makers. Such actors can both see the potential of new ideas and navigate their implementation successfully. We identify returnees from abroad, who have studied or worked elsewhere and then emigrated back to their home country, as one such type of actor. Using data on publicly listed Chinese companies from 2000 to 2012, we show that the presence on firms’ boards of directors of returnees with relevant exposure abroad significantly raises firms’ participation in corporate social responsibility, specifically in the form of making corporate donations. Supporting our theorizing about the two paradoxes, the effect of returnees is stronger when they or their board allies have greater exposure to foreign experience and greater embeddedness in the local context. The effect is also stronger when field conditions, such as insufficient economic development, present greater need for change.