Country institutional context, social networks, and new venture internationalization speed

Abstract

This paper examines the role of social networks in the internationalization processes of new ventures in contexts characterized by different levels of institutional development. A country’s level of institutional development may have a direct effect on the composition of entrepreneurs’ social networks (i.e., prevalence of strong versus weak ties). Furthermore, both strong and weak ties may have direct, positive effects on the speed of new venture internationalization, but the relative strength of these effects likely depends on a country’s level of institutional development. Building on these arguments, we develop a theoretical model which specifies the rationale entrepreneurs use to draw on their social networks and drive internationalization; the model also enumerates institutional conditions in which different types of network ties tend to be most prominent and valuable.