Skip to main content
SpringerLink
Log in

Where Angels Fear to Tread: Internationalization of Emerging Country SMEs

  • Published:
Journal of International Entrepreneurship Aims and scope Submit manuscript

Abstract

Based on institutional theory and risk perspectives, this study examines how the entrepreneurial orientation of firms as determined by national cultural factors is related to the internationalization of small- and medium-sized enterprises (SMEs) from emerging and developing countries. We also suggest that institutional improvements can have a moderating effect on the relationship between culture and internationalization. We develop a unique measure of internationalization and test it on a sample of 7,212 SMEs from 36 developing countries using a multilevel linear hierarchical model that allows us to examine both firm- and country-level effects. We find that developed institutions support the internationalization of SMEs from more masculine and individualistic cultures.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. We thank an anonymous reviewer for pointing this out.

References

  • Acs Z, Dana L, Jones M (2003) Toward new horizons: the internationalization of entrepreneurship. J Int Entrep 1(1):5–12

    Article  Google Scholar 

  • Adler N, Jelinek M (1986) Is ‘organization culture’ culture bound? Hum Resour Manag 25(1):73–90

    Article  Google Scholar 

  • Arranz N, De Arroyabe J (2009) Internationalisation process of Spanish small firms. Int Small Bus J 27(4):420–441

    Article  Google Scholar 

  • Aulakh P, Kotabe M (2008) Institutional changes and organizational transformation in developing economies. J Int Manag 14(3):209–216

    Article  Google Scholar 

  • Baker T, Gedajlovic E, Lubatkin M (2005) A framework for comparing entrepreneurship processes across nations. J Int Bus Stud 36:492–504

    Article  Google Scholar 

  • Bell C, Crick D, Young S (2004) Small firm internationalisation and business strategy: an exploratory study of ‘knowledge-intensive’ and ‘traditional’ manufacturing firms in the UK. Int Small Bus J 22(1):23–56

    Article  Google Scholar 

  • Bryk A, Raudenbush S (1992) Hierarchical linear models. Sage, Newbury Park

    Google Scholar 

  • Cavusgil S, Knight G (2009) Born global firms: a new international enterprise. Business Expert Press, New York

    Book  Google Scholar 

  • Chakrabarty S (2009) The influence of national culture and institutional voids on family ownership of large firms: a country level empirical study. J Int Manag 15:32–45

    Article  Google Scholar 

  • Chittoor R, Ray S, Aulakh P, Sarkar M (2008) Strategic responses to institutional changes: ‘indigenous growth’ model of the Indian pharmaceutical industry. J Int Manag 14(2):252–269

    Article  Google Scholar 

  • Chung C, Beamish P (2005) ‘The impact of institutional reforms on the characteristics and survival of foreign subsidiaries in emerging economies’. J Manage Stud 42(1):35–62

    Google Scholar 

  • Chung KH, Lee HC (1997) Korean management: global strategy and cultural transformation. Walter de Gruyter, Berlin

    Google Scholar 

  • De Clercq D, Danis W, Dakhli M (2010) The moderating effect of institutional context on the relationship between associational activity and new business activity in emerging economies. Int Bus Rev 19:85–101

    Article  Google Scholar 

  • Estrin S, Meyer K, Wright M, Foliano F (2008) Export propensity and intensity of subsidiaries in emerging economies. Int Bus Rev 17:574–586

    Article  Google Scholar 

  • Freeman S, Edwards R, Schroder B (2006) How smaller born global firms use networks and alliances to overcome constraints to rapid internationalisation. J Int Mark 14(3):33–49

    Article  Google Scholar 

  • Globerman S, Shapiro D (2002) Global foreign direct investment flows: the role of governance infrastructure. World Dev 30(11):1899–1919

    Article  Google Scholar 

  • Hitt MA, Ahlstrom D, Dacin MT, Levitas E, Svobodina L (2004) The institutional effects on strategic alliance partner selection in transition economies. Organ Sci 15(2):173–185

    Article  Google Scholar 

  • Hofmann D (1997) An overview of the logic and rationale of hierarchical linear models. J Manag 23:723–744

    Article  Google Scholar 

  • Hofstede G (1980) Culture’s consequences: international differences in work-related values. Sage, Beverly Hills

    Google Scholar 

  • Hofstede G (2010) Cultures and organizations: software of the mind. Revised and expanded, 3rd edn. McGraw-Hill, New York

  • Holmund M, Kock S, Vanyushyn V (2007) Small and medium enterprises’ internationalisation and the influence of importing on exporting. Int Small Bus J 25(5):459–475

    Article  Google Scholar 

  • Hoskisson R, Eden L, Lau C, Wright M (2000) Strategy in emerging economies. Acad Manag J 43:249–267

    Article  Google Scholar 

  • House RJ, Hanges PJ, Javidan M, Dorfman PW, Gupta V (2004) Culture, leadership and organisations—the GLOBE study of 62 societies. Sage, Thousand Oaks

    Google Scholar 

  • Hymer S (1976) The international operations of national firms: a study of foreign direct investment. MIT Press, Cambridge

    Google Scholar 

  • Johanson J, Vahlne J (1977) The internationalisation process of the firm: a model of knowledge development and increasing foreign market commitment. J Int Bus Stud 4:20–29

    Google Scholar 

  • Kaufmann D, Kraay A, Zoido-Lobaton P (1999) Governance matters. World Bank working paper No. 2196

  • Khanna T, Palepu K (2006) Building world class companies in developing countries. Harvard Business Review, pp. 60–69

  • Kim L (1997) Imitation to innovation: the dynamics of Korea’s technological learning. Harvard Business School Press, Boston

    Google Scholar 

  • Knight G, Cavusgil S (1996) The born global firm: a challenge to traditional internationalisation theory. Adv Int Mark 8(11):11–26

    Google Scholar 

  • Knight G (2001) Entrepreneurship and strategy in the international SME. J Int Manag 7:155–171

    Article  Google Scholar 

  • Kogut B, Singh H (1988) The effect of national culture on the choice of entry mode. J Int Bus Stud 19:411–432

    Article  Google Scholar 

  • Kuivalainen O, Sundqvist S (2007) Profitability of rapid internationalisation: the relationship between internationalisation intensity and firms’ export performance. J Euromarketing 16(1/2):59–69

    Article  Google Scholar 

  • Lumpkin G, Dess G (1996) Clarifying the entrepreneurial orientation construct and linking it to performance. Acad Manag Rev 21(1):135–172

    Google Scholar 

  • Martin K, Cullen J, Johnson PK (2007) Deciding to bribe: a cross-level analysis of firm and home country influences on bribery activity. Acad Manag J 50(6):1401–1422

    Article  Google Scholar 

  • Morris M, Davis D, Allene J (1994) Fostering corporate entrepreneurship: cross-cultural comparisons of the importance of individualism versus collectivism. J Int Bus Stud 25:65–89

    Article  Google Scholar 

  • North D (1990) Institutions, institutional change and economic performance. Cambridge University Press, Cambridge

    Book  Google Scholar 

  • Oliver C (1997) ‘Sustainable competitive advantage, combining institutional and resource-based perspectives’. Strateg Manage J 18(9):145–179

    Google Scholar 

  • Oviatt B, McDougall P (2005) Defining international entrepreneurship and modeling the speed of internationalisation. Entrepreneurship Theory and Practice, pp. 537–553

  • Peng M, Heath P (1996) The growth of the firm in planned economies in transition: institutions, organizations and strategic choice. Acad Manag Rev 21:492–528

    Google Scholar 

  • Peng M (2003) Institutional transitions and strategic choices. Acad Manag Rev 28:275–296

    Google Scholar 

  • Ramaswamy K, Kroeck K, Renforth W (1996) Measuring the degree of internationalisation of a firm: a comment. J Int Bus Stud 27:167–178

    Article  Google Scholar 

  • Schein EH (1984) Coming to a new awareness of organizational culture. Sloan Management Review, pp. 3–16

  • Scott W (1995) Institutions and Organisations, Sage Publications. Thousand Oaks, CA

  • Shane S, Venkataraman S (2000) ‘The promise of entrepreneurship as a field of research’. Acad Manage Rev 25(1):217–226

    Google Scholar 

  • Snijders T, Bosker R (1999) Multilevel Analysis: An introduction to basic and advanced multilevel modeling London, Sage Publications

  • Terjesen S, O’Gorman C, Acs Z (2008) Intermediated mode of internationalisation: new software ventures in Ireland and India. Entrep Reg Dev 20:89–109

    Article  Google Scholar 

  • Triandis H (1982) Review of culture’s consequences: international differences in work related values. Hum Organ 41:86–90

    Google Scholar 

  • Trompenaars F (1993) Riding the waves of culture. Nicholas Brealey, London

    Google Scholar 

  • Welch L, Luostarinen R (1988) Internationalisation: evolution of a concept. J Gen Manag 14(2):36–64

    Google Scholar 

  • Yamakawa Y, Peng M, Deeds D (2008) What drives new ventures to internationalize from emerging to developed economies? Entrep Theory Pract 32(2):59–82

    Google Scholar 

  • Zahra S, Ireland D, Gutierrez I, Hitt M (2000) Privatization and entrepreneurial transformation: emerging issues and future research agenda. Acad Manag Rev 25(3):509–524

    Google Scholar 

  • Zhang M, Dodgson M (2007) A roasted duck can still fly away: a case study of technology, nationality, culture and the rapid and early internationalisation of the firm. J World Bus 42:336–349

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. School of Public Policy, George Mason University, 3351 Fairfax Drive, MS 3B1, Arlington, VA, 22201, USA

    Sonia Ketkar & Zoltan J. Acs

Authors
  1. Sonia Ketkar
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Zoltan J. Acs
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Zoltan J. Acs.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Ketkar, S., Acs, Z.J. Where Angels Fear to Tread: Internationalization of Emerging Country SMEs. J Int Entrep 11, 201–219 (2013). https://doi.org/10.1007/s10843-013-0107-z

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10843-013-0107-z

Keywords

Search

Navigation