Founder Cross-Cultural Experience and Venture Profitability: A Serendipity Mindset Lens

Abstract

Research on the constructive linkages between forms of multicultural experience and entrepreneurial activity continues to proliferate. However, to date empirical research at the individual level has largely focused on cognitive, pre-launch outcomes such as entrepreneurial intention, alertness, or opportunity recognition. We advance this literature by probing the role of cross-cultural experience on venture performance using a longitudinal design on a primary sample (n = 357) of new and small ventures. We draw from and integrate research on serendipity mindset with cultural tightness-looseness theory to explain why exposure to foreign cultures is so conducive for venture performance. Specifically, spending time abroad takes founders out of their normative frames of reference and provides uniquely impactful ‘serendipity fields’ for valuable encounters to emerge that help systematically bolster novel bisociations of foreign ideas, concepts, resources, and contacts—which enhances venture profitability over time. Critically, we theorize that founders socialized into tighter sociocultural norms and expectations stand to leverage cross-cultural experience to constructive ends in their ventures to a much greater extent than those socialized into looser norms as foreign experiences provide deeper cultural juxtapositions that spark innovativeness. We find support for our theorizing by unpacking the differences between male and female founders and family versus non-family businesses in a culturally tight national setting with relatively fixed gender and family role expectations. Our findings provide several key theoretical advancements to this literature along with some meaningfully practical insights on the transformative role of cross-cultural experience, especially among entrepreneurs from marginalized or socially restrictive contexts.