Institutional environment and network competence in successful SME internationalisation

Abstract

This study examines the impact of institutional environment on the international performance of small-and medium-sized enterprises (SMEs) and how this relationship is influenced by network competence. Design/methodology/approach: This study uses a quantitative approach. In total, 119 internationally operating Finnish SMEs from five industry sectors are sampled via a crosssectional survey. Data are analysed through regression modelling. Findings: The international performance of SMEs is influenced directly and indirectly by institutional drivers. The results show that network competence mediates the positive relationship between institutional drivers and international performance. Research limitations/implications: Network capability development can help SMEs leverage more or less favourable institutional environments for successful internationalisation. Perceived institutional drivers directly result in higher performance, but the effect can be partially mediated by dynamic capabilities. The limitations of the study include its singlecountry context and the cross-sectional nature of the data. Practical implications: SMEs should take their home countries' institutional environments into account, but for long-term success, they should develop the ability to manage their business networks. A conducive institutional environment may help develop competence, which in turn can enable more successful internationalisation in terms of scale, scope and satisfaction. Social implications: Decision-makers may benefit from knowing that, in addition to capabilities, an institutionally conducive environment that drives domestic SMEs toward international markets may be an antecedent of successful internationalisation in the SME sector. Originality/value: This is one of the few studies to illustrate how network capabilities can mediate the influence of institutional factors on entrepreneurial internationalisation. It combines institutional theory and the dynamic capabilities view to explain successful SME internationalisation.

An analysis of environmental sustainability in small & medium‐sized enterprises: Patterns and trends

“…We also classified the studies we investigated by continent (Figure ). Most of the research studies we have found occur in Europe, which makes up 41% of the research (e.g., Girgenti, Peano, Baudino, & Tecco, ; Hertel & Menrad, ; Flynn & Davis, ; Jansson, Nilsson, Modig, & Hed Vall, ; Mayr, Mitter, & Aichmayr, ; Torkkeli, Kuivalainen, Saarenketo, & Puumalainen, ; Girella, Zambon, & Rossi, ), Asia accounts for 22% (e.g., Seth, Rehman, & Shrivastava, ; Singh, Olugu, & Musa, ) and South America at 19% (e.g., Lucato, Costa, & de Oliveira Neto, ; Pacheco, Caten, Jung, Navas, & Cruz‐Machado, ; Sarango‐Lalangui, Álvarez‐García, & del Río‐Rama, ).…”

“…We also classified the studies we investigated by continent ( Figure 4). Most of the research studies we have found occur in Europe, which makes up 41% of the research (e.g., Girgenti, Peano, Baudino, & Tecco, 2014;Hertel & Menrad, 2015;Flynn & Davis, 2016;Jansson, Nilsson, Modig, & Hed Vall, 2017;Mayr, Mitter, & Aichmayr, 2017;Torkkeli, Kuivalainen, Saarenketo, & Puumalainen, 2019;Girella, Zambon, & Rossi, 2019), Asia accounts for 22% (e.g., Seth, Rehman, & Shrivastava, 2018;Singh, Olugu, & Musa, 2016) and South America at 19% (e.g., Lucato, Costa, & ables on which SMEs can be categorized (Bar, 2015;Boiral, Ebrahimi, Kuyken, & Talbot, 2019;Groot et al, 2019;Long, Looijen, & Blok, 2018;Malesios et al, 2018;Prieto-Sandoval, Ormazabal, Jaca, & Viles, 2018). Our results show the pattern in the sectors that are studied from 2013 to 2019 (Figure 7).…”

Role of Business Incubators as a Tool for Entrepreneurship Development: The Mediating and Moderating Role of Business Start-Up and Government Regulations

“…They found that the performance of institute affiliates was significantly affected by their network abilities. Torkkeli, et al [29] found that networking capabilities help develop knowledge-intensive products that enable companies to identify and take advantage of performance opportunities in global markets.…”

Cross-Country Differences in Entrepreneurial Internationalization Tendencies: Evidence from Germany and Pakistan

“…Thus, institutional theory has played a key role in explaining institutional factors behind entrepreneurial success particularly with respect to international topics (Bruton et al 2010;Jones et al 2011;Lim et al 2010). Indeed, the relationship between institutional conditions and entrepreneurial internationalization has been studied extensively (Child et al 2017;Ervits and Zmuda 2018;Oparaocha 2015;Torkkeli et al 2019). Favorable institutional conditions are related to international performance of entrepreneurial firms (Torkkeli et al 2019) and account to global innovation (Ervits and Zmuda 2018).…”

“…Indeed, the relationship between institutional conditions and entrepreneurial internationalization has been studied extensively (Child et al 2017;Ervits and Zmuda 2018;Oparaocha 2015;Torkkeli et al 2019). Favorable institutional conditions are related to international performance of entrepreneurial firms (Torkkeli et al 2019) and account to global innovation (Ervits and Zmuda 2018). Institutions such as government agencies, business incubators, research institutes or agencies for international development help to overcome resource barriers and support IE activity (Oparaocha 2015).…”