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Institutional pressures and initiation of internationalization: Evidence from Taiwanese small- and medium-sized enterprises

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  • Cheng, Hsiang-Lin
  • Yu, Chow-Ming Joseph
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    Abstract

    This study attempts to reveal the pressure aspect of small- and medium-sized enterprises' (SME) internationalization. We suggest that the decision by an SME to initiate its internationalization can be regarded as an institutional change to respond to its external pressures within the home country. We empirically test our hypotheses regarding three types of institutional isomorphic pressure (i.e., coercive, mimetic and normative pressures), as identified by CEOs of 165 Taiwanese SMEs investing in Southeast Asia and China. The results show that for those SMEs under greater institutional pressures, they are not only tending to expand abroad earlier but also adopting their initial international activities in a more radical style. The results suggest that SMEs are very sensitive to their external environments and will respond to institutional pressures from the home country by moving aggressively to internationalize.

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    Bibliographic Info

    Article provided by Elsevier in its journal International Business Review.

    Volume (Year): 17 (2008)
    Issue (Month): 3 (June)
    Pages: 331-348

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    Handle: RePEc:eee:iburev:v:17:y:2008:i:3:p:331-348

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    Keywords: Institutional change Internationalization SMEs;

    References

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    Cited by:
    1. Yildiz, Harun Emre & Fey, Carl Felix, 2012. "The liability of foreignness reconsidered: New insights from the alternative research context of transforming economies," International Business Review, Elsevier, vol. 21(2), pages 269-280.
    2. Tsui-Yii Shih & Rumintha Wickramasekera, 2011. "Export decisions within Taiwanese electrical and electronic SMEs: The role of management characteristics and attitudes," Asia Pacific Journal of Management, Springer, vol. 28(2), pages 353-377, June.
    3. Wu, Guo-Ciang & Ding, Jyh-Hong & Chen, Ping-Shun, 2012. "The effects of GSCM drivers and institutional pressures on GSCM practices in Taiwan’s textile and apparel industry," International Journal of Production Economics, Elsevier, vol. 135(2), pages 618-636.
    4. Lin, Wen-Ting & Liu, Yunshi, 2012. "Successor characteristics, organisational slack, and change in the degree of firm internationalisation," International Business Review, Elsevier, vol. 21(1), pages 89-101.
    5. Gloria Ge & Hugh Wang, 2013. "The impact of network relationships on internationalization process: An empirical study of Chinese private enterprises," Asia Pacific Journal of Management, Springer, vol. 30(4), pages 1169-1189, December.
    6. Wang, Chengqi & Hong, Junjie & Kafouros, Mario & Boateng, Agyenim, 2012. "What drives outward FDI of Chinese firms? Testing the explanatory power of three theoretical frameworks," International Business Review, Elsevier, vol. 21(3), pages 425-438.
    7. Kiss, Andreea N. & Danis, Wade M. & Cavusgil, S. Tamer, 2012. "International entrepreneurship research in emerging economies: A critical review and research agenda," Journal of Business Venturing, Elsevier, vol. 27(2), pages 266-290.
    8. Brandau, Michael & Endenich, Christoph & Trapp, Rouven & Hoffjan, Andreas, 2013. "Institutional drivers of conformity – Evidence for management accounting from Brazil and Germany," International Business Review, Elsevier, vol. 22(2), pages 466-479.
    9. Svendsen, Mons Freng & Haugland, Sven A., 2011. "Host country institutional pressures and cross-border relationship governance," International Business Review, Elsevier, vol. 20(3), pages 324-337, June.

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