Purpose Focusing on the direction of foreign acquisition, this study aims to differentiate the effect of institutional distance on the level of ownership. The authors identify several theoretical and methodological issues that might account for the inconsistencies in the literature and provide remedies accordingly. Specifically, the authors propose perceived institutional distance as a conceptualization of distance that controls for asymmetric uncertainty. Design/methodology/approach The authors test the framework with ordinary least squares regression for a sample of 14,192 firm-entries in 115 target countries over 2007–2017. Findings The authors find that institutional distance shows a negative effect on equity ownership in all-inclusive global samples, while there are two imbalanced opposite effects if direction is considered. This casts doubt on the validity of studies that ignore direction. The authors suggest that multinational enterprises entering countries with lower-quality institutions tend to perceive more pronounced distance effects than those expanding the other way around. Hence, the authors argue that “perceived institutional distance” better explains the functional role of distance than simple distance. Practical implications This study better delineates the link between distance and uncertainty and enhances managerial insights for entry mode selection. For policy-making purposes, the authors also show that improvement in institutional quality has a different effect on foreign resource commitment in developed and developing countries. Originality/value To the best of authors’ knowledge, this is the first study that considers both directionality and imbalance in institutional distance and proposes a measure to control for non-linear asymmetric relationship between distance and ownership. The authors extend the institutional theory and show the superiority of perceived institutional distance in predicting ownership implications.

PurposeThis cross-national study of entrepreneurship seeks to investigate the perceptual and institutional determinants of entrepreneurial entry. To do so, the authors distinguish between social and commercial entrepreneurial activities, taking the position that the concept of entrepreneurship is not a monolithic one.Design/methodology/approachThe authors construct a large cross-national data set and employ hierarchical linear modeling (HLM) to run a multi-level analysis on individual-level data from Global Entrepreneurship Monitor (GEM) and country-level data from Polity IV and GLOBE, representing 47 countries.FindingsIndividuals' perceptual characteristics (i.e. perceived self-efficacy, opportunity perception, and fear of failure) and informal institutions in the form of supportive cultures impact social entrepreneurship more strongly than commercial entrepreneurship. On the other hand, the formal institution of the rule of law, specifically the protection of property rights, is more conducive to commercial entrepreneurship.Originality/valueThe results of this study contribute to theory by illuminating the complicated relationships between environmental conditions, individual-level psychological factors, and entrepreneurial decisions. Furthermore, the authors’ multi-level model contributes to a more detailed conceptualization of entrepreneurial entry by identifying institutional settings that facilitate commercial versus social entrepreneurship. The authors also clarify why commercial entrepreneurship and social entrepreneurship attract different types of individuals.

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