Engagement in international entrepreneurship: interactive effects of resource-based factors and institutional environments

Tianchen Li

doi:10.1186/s40497-019-0185-z

Abstract

PurposeIntegrating the resource-based view and institutional approach, this study aims to examine how resource-based factors and formal and informal institutional context interact in influencing the international engagement.Design/methodology/approachBased on the data from the Global Entrepreneurship Monitor surveys, this paper performs a multilevel estimation approach in which cross-level (random effects) moderation analysis is applied.FindingsThis paper offers new insights into the internationalisation by ascertaining the primary role of resource-based factors in influencing internationalisation. In addition, it reveals the differential contingent values of formal and informal institutions in regard to the relationship between resource-based characteristics and internationalisation.Practical implicationsThe research findings reveal the importance of the country-specific institutional system to drive early stage entrepreneurs’ intention to go international. In addition, the significant impacts of formal and informal institutions call upon policy-makers to improve institutional environments (e.g. government policies, governmental programmes, entrepreneurial finance, market openness, commercial and professional infrastructure, intellectual property rights, etc.).Research originalityThis research indicates that the degree of internationalization increases when entrepreneurs possess the necessary resources and under suitable formal and informal institutional environments.

Highlights

International market expansion is a process fraught with difficulty for entrepreneurs
This paper identifies the significant and positive moderating effect of informal institutions on the effects of human resources on the degree of internationalisation, suggesting that when the perceived support of informal institutions including social norms and cultural values is strong, it can strengthen the positive impacts of human resources on the extent of internationalisation; such an impact cannot be observed on financial resources and hypothesis 3 is partially supported
Given that the novel feature of the models is the link between the extant macro theories and micro-level antecedents, the analytical results suggest the positive effects of the RBV variables and find that formal and informal institutions affect these relationships differently

Summary

Introduction

International market expansion is a process fraught with difficulty for entrepreneurs. Despite a rising body of research documenting the effect of international expansion Autio, 2005; Coviello & McAuley,1999; Fabian et al, 2009; Ireland & Webb, 2009; McDougall et al, 1994; Tracey & Phillips, 2011), much less emphasis has been paid to the determining factors of firms going international (Zahra et al, 2005; Zander, McDougall-Covin, & Rose, 2015). While the effects of RBV on entrepreneurship have been acknowledged in the literature, how resource-based factors affect international market expansion deserves more research in the international business domain. The first objective of this study is to address this gap by looking at how resource-based factors are related to the degree of internationalisation

Objectives

Results

Conclusion