Entrepreneurial bricolage and online store performance in emerging economies

Abstract

Third-party e-commerce platforms (such as eBay and Taobao) provide great opportunities for small or minor sized enterprises (SMEs) to overcome technological challenges to enter e-commerce markets. However, SMEs still encounter other market entry barriers such as resource constraints and institutional challenges. We apply entrepreneurial bricolage theory to the context of online businesses operating on third-party e-commerce platforms in order to shed light on how SMEs could possibly cope with these challenges. We present a novel framework to explore the relationships between different types of entrepreneurial bricolage and online store performance. The research hypotheses were evaluated by survey data collected from a sample of small online stores operating on the largest third-party e-commerce platform in China, Alibaba’s Taobao.com (NYSE: BABA). Results show that input bricolage has a positive effect on efficiency performance and market bricolage has a positive effect on sales performance, and the relationships between input (and market) bricolage and store performances are significantly stronger with higher level of institutional bricolage. Contrary to our expectations, the effects of input bricolage on sales performance and market bricolage on efficiency performance are positive but not significant. The study contributes to the development of entrepreneurial bricolage theory literature by providing a fine-grained analysis of the varying effects of different types of entrepreneurial bricolage on organizational outcomes. The findings of the study also provide guidelines for SMEs to effectively make use of resources at hand through the practice of entrepreneurial bricolage.