Abstract
This article identifies the mediating role of informal institutional frameworks upon the relationship between the international entrepreneurial orientation (IEO) behavior of small and medium-sized enterprises (SMEs), and their perceived financial performance, while operating within a volatile business environment. To reach the study’s aim, we conducted a regression analysis upon SMEs operating in Turkey and implemented structural equation modeling on the construct to specify the validity of the model. The findings are that the indicated relationship is indeed mediated by informal institutional frameworks. However, IEO and financial performance relationship is negative. The practical implementation of IEO activities is risky when target market financial conditions are difficult, and the nature of relevant informal institutional frameworks should be considered before full commitment to IEO activities.
Highlights
And rapid internationalization of the relatively young and entrepreneurial firms are new phenomena (Cavusgil & Knight, 2015; Paul & Rosado-Serrano, 2019)
This study found that the international entrepreneurial orientation (IEO) behaviors of the small and medium-sized enterprises (SMEs) observed were influenced by their informal institutional framework and that the IEO/performance relationship was mediated by this environment
The relationship between IEO and perceived financial performance is negative. This may mean that high IEO activities do not necessarily cause higher performance in turbulent and complex business environment
Summary
And rapid internationalization of the relatively young and entrepreneurial firms are new phenomena (Cavusgil & Knight, 2015; Paul & Rosado-Serrano, 2019). The study aims to identify the relationship between IEO and perceived financial performance and mediating role of informal institutional framework. By identifying the relationship between these variables, the study enhances the understanding of informal institutional framework impacts on the IEO behaviors of firms. 100) The study reveals the mediating role of informal institutional frameworks upon the relationship between IEO and perceived financial performance. The key research aim of this study was the identification of the mediating role of informal institutional frameworks on the relationship between IEO of firms and performance. Analysis of the collected data revealed that there is a strong relationship between informal institutional frameworks and the IEO behavior of firms. Results indicate the relationship between IEO and perceived financial performance and mediating effect of informal institutional framework. It can be concluded that the findings confirm proposed hypothesis
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