With archival and perceptual survey data from 992 member firms of the largest 250 business groups in the transition economy of China, it is found that formal institutions in various forms of government influence exert different impacts on corporate entrepreneurial intensity. Institutional legacy effects in the form of government's administrative and ownership heritage have a hindering effect, while reform policy has an enhancing effect, on firms' corporate entrepreneurial intensity. As for informal institutions, cultural, strategic, and financial controls are positively related to corporate entrepreneurial intensity of group member firms. This confirms the importance of business groups as an informal void-filling institution in the transition economies. These findings enriched our understanding on the relationship between institutions and strategy during institutional transition, governance in business group, and wealth-creating entrepreneurial growth in transition economies.

This dissertation aims to study the relationship between the transitioning formal and informal institutions and firm strategy during institutional transition. The central premise is that during the period when pre-existing institutions have not been fully abolished and new institutions take time to come into place, both pre-existing and emerging institutions exert different influences on the economic growth of a country via their effects on firm's corporate entrepreneurial intensity. To empirically examine this theoretical premise, this dissertation examines how government influence (as a formal institution) and the control mechanisms of business groups (as an informal institution) simultaneously influence the wealth-creating corporate entrepreneurial strategy of member firms in a business group in a transition economy.