Social Desirability of Entrepreneurship and Internationalization: The Role of Economic Freedom

Abstract

This study investigates the influence of the domestic social desirability of entrepreneurship on the internationalization of early-stage firms. We also consider the moderating role of the home country economic freedom. Moreover, we study 45,454 early-stage entrepreneurs from the Global Entrepreneurship Monitor (GEM) survey from 2005-2016 and 48 countries. We employ a hierarchical modeling analysis, and the empirical results demonstrate in home country contexts of lower social desirability of entrepreneurship, individuals with higher entrepreneurial intentions are more likely to be pushed out for international markets. Interaction effects also indicate that a strong economic freedom context helps attenuate the negative effect of domestic social desirability on early-stage entrepreneurs’ internationalization. As well, the supplementary analysis also confirms the same interaction effects of each economic freedom’s pillar. This study fills the scant literature gap and extends the related field in institutional theory and international business, providing new empirical findings and implications in practice.