The Role of International Entrepreneurial Orientation in Successful Internationalization from the Network Capability Perspective

Abstract

Purpose/Research Question: In general, networks have played a role in improving innovation, and early-stage companies adopt an entrepreneurial orientation to secure competitiveness. In other words, the companies would like to penetrate global markets due to the CEO’s international entrepreneurial orientation. In addition, by utilizing their networks, the companies would like to improve their international performance. Relatively few studies have been devoted to investigating the empirical relationships between entrepreneurial orientation, networks, and international performance. In particular, technology-based firms are one of the best samples. Therefore, this study aims to explore the characteristics of the firms and then investigate comprehensively and empirically the relationships between international entrepreneurial orientation, networks, and international performance, based on data from technology-based firms in South Korea. Design/Methodology/Approach: The study analyzes data from technology-based small and medium-sized enterprises (SMEs) using structural equation modeling (SEM). It assumes that networks will play a moderating role in the relationships between international entrepreneurial orientation and international performance. We carried out the survey after conducting interviews with CEOs of SMEs. Findings/Results: International entrepreneurial orientation has a significant effect on international performance. Moreover, the stronger the networks that SMEs have with other stakeholders such as universities, industries, and technoparks, the higher their international performance. With stronger networks, tech-based SMEs have easier access to useful technologies and hence better international performance. Research Limitations/Implications: There are some limitations to this study. First of all, the study relied heavily on quantitative methods, such as surveys. This approach is inadequate for considering individuals’ in-depth opinions. Therefore, future research utilizing both qualitative and quantitative measures needs to be carried out. Second, this study has some academic limitations. In fact, this study considered restricted factors regarding innovation and networks; thus it is necessary to evaluate other variables such as environmental factors (e.g., regulations or support policies) that might be significantly associated with networks and innovation hereafter. Finally, due to the fact that this study was focused on SMEs, it is difficult to generalize the above results. However, this study implies that stronger network ties improve international performance, thus SMEs must establish and reinforce networks to improve the performance.