The Context Sensitivity of International Entrepreneurial Orientation and the Role of Process and Product Innovation Capabilities

Abstract

AbstractDrawing on a contingency perspective of the resource‐based view of the firm, we test the thesis that a relationship between international entrepreneurial orientation (IEO) and the international performance of export‐manufacturing firms is context‐sensitive and contingent on innovation capabilities. Using time‐lagged survey data from 369 Bangladeshi export‐manufacturing firms in a least developed country (LDC) as an extreme empirical context, we predict that process and product innovation capabilities are essential to the relationship between IEO and international performance among export‐manufacturing firms. We find that the effect of IEO on international performance is not positive; however, the relationship becomes positive when moderated by process and product innovation capabilities. International entrepreneurial firms in an LDC succeed when they can better align IEO‐driven efforts with these capabilities. Our study advances knowledge on the context sensitivity of IEO and embellishes a resource‐based theory of IEO.