To understand what an institutional void is, we must first understand what an institution is. An institution is an organization that sets 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 strengthen a country's political, legal, and economic systems. Institutional voids is a term that broadly refers to the lack of intermediary institutions that effectively connect buyers and sellers in a market. The lack of formal organizations and institutions to support the rule of law, administration, and respect for private property, to name just a few essential functions, separates buyers and sellers for lack of anything other than 'an informal trust. As buyers and sellers cannot come together easily, transaction costs increase. These are the costs associated with coordinating purchases, sales or any business transaction. Market intermediation is rare and therefore market participants do not have the relevant information needed to make informed decisions. For example, comparing healthcare in the United States and India highlights institutional gaps in Asia. If you need a doctor in India, other than word of mouth recommendations, there is very little information available to guarantee the quality of care you will receive. On the other hand, in America, there are various channels of information easily accessible to the public regarding the quality, ethical standards, and availability of health care; whether in a government publication or a health care ranking magazine. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”? Get an original essay These institutional voids can affect economic development in emerging economies, as companies operating in these countries often must overcome institutional voids by accomplishing themselves “institutional duties” such as: self-regulation, agents responsible for executing contracts and banks. This can present a significant conflict of interest, because even if companies want to increase market intermediation to reduce business transaction costs, they are unlikely to act objectively in the event of a dispute against them . This conflict of interest is 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 emerging market companies to implement institutions privately if done correctly. Researchers have argued that institutions are more than just basic 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 maintain competitive advantage by overcoming, shaping and capitalizing on the nature of their institutional environment (Marquis and Raynard, 2015). This can be illustrated in the case of Patrimonio Hoy (an example of institutional development), this institution was created by the Mexican cement manufacturer CEMEX at a very difficult time for the Mexican economy, a time of fiscal austerity and government ignorance of the increase in..