Abstract
The favorable effects of innovation and internationalization on the development of the economies of countries have been prominent factors in multiple management studies. The objective of this document is to make a theoretical review of the studies contained in the ScienceDirect (Elsevier) and ResearchGate databases, to offer an integrating framework of those institutional factors in the countries that favor the positive spillover of these two strategic actions carried out by companies: innovation and internationalization. As a result, we observed that an institutional framework characterized by a simplification of bureaucratic administrative procedures to access the financial resources necessary to undertake growth and innovation in companies, a favorable climate for collaboration between companies and universities or an institutional commitment to favor transparency and technological support for companies, are institutional key elements to address growth strategies by companies.
Highlights
The institutional mechanisms of an economy can facilitate transactions, safeguard property rights and stimulate or discourage behaviors and entrepreneurship actions
After presenting some concepts about institutions, the way in which they can positively influence the level of entrepreneurship, innovation and internationalization of a country and the existence of the virtuous circle, we present a section of recommendations based on theory review and we propose possible areas of institutional improvements in which countries and companies can accomplish
To make the appropriate improvements to the institutional framework, actions can be taken through three dimensions: (i) the regulatory dimension, which is associated with policies, laws and norms, for instance, facilitating access to resources for SMEs; (ii) the normative dimension, which is related to social norms, beliefs or values, for example, valuing entrepreneurship and innovation in a society; (iii) and the cognitive dimension, which is linked to widely shared knowledge and higher levels of education
Summary
The institutional mechanisms of an economy can facilitate transactions, safeguard property rights and stimulate or discourage behaviors and entrepreneurship actions Many factors determine these achievements: rules and regulations, the quality of government, the availability of education, and the ambient culture. Many of these factors fall under the heading of institutions and constitute the constraints on behavior imposed by the state or societal norms that shape economic interactions. Those countries with institutional weaknesses have inefficient labor, developed product and capital markets (Ciravegna, Lopez & Kundu, 2013), which in turn will limit investments in relevant activities such as innovation in production processes (Zhang, Tan, Ji, Chung & Tseng, 2017). It is necessary to provide companies with institutional mechanisms that allow them to overcome institutional weaknesses and conduct their activities to achive better performance
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