Does entrepreneurs’ risk perception influence firm’s rapidity in foreign market entry through moderation of entrepreneurial decision-making approach?

Abstract

PurposeThe purpose of this paper is to find out whether risk perception can affect rapidity in international market entry. Also, this paper tries to find out whether the decision-making approach, effectuation, can moderate the pathway between risk tolerance and internationalization speed.Design/methodology/approachA hypothetico-deductive methodology has been used to conduct this study. Using partial least square regression, this study tested and proved two developed hypotheses based on a sample of 101 software and IT-enabled services firms in Bangladesh. The sample was selected using non-probability sampling techniques, and data were collected using a structured questionnaire developed from the extant literature.FindingsAll of the hypotheses proposed in this study have been accepted. The results show that the effectual approach of decision-making negates the risk perception of the entrepreneur and speeds up the internationalization process of that firm.Research limitations/implicationsThe implications of this study are inherent in the entrepreneurial cognition and decision-making approach (effectuation). This study provides an insight into risk perception and the rapidity of internationalization, which can spur future development in this field.Originality/valueRapidity in internationalization of small- and medium-sized enterprises depends on a significant number of factors, one of which is the decision-making approach. The decision-making approach followed by the firms can have an effect on the speed of internationalization. This paper connects the dots between the rapidity of entry to foreign markets with a cognitive variable, risk perception. This paper developed two hypotheses to measure the relationship between risk perception of the entrepreneurs and the rapidity in international market entry with moderation of the decision-making approach.