IDEAS home Printed from https://ideas.repec.org/a/kap/jinten/v15y2017i1d10.1007_s10843-016-0196-6.html
   My bibliography  Save this article

The effect of sub-national institutions and international entrepreneurial capability on international performance of export-focused SMEs: Evidence from China and South Korea

Author

Listed:
  • Man Zhang

    (Bowling Green State University)

  • Qian Gao

    (Anhui University)

  • Hyuk-Soo Cho

    (Chungnam National University)

Abstract

A number of recent studies have taken notice of the differences among sub-national institutions within the convoluted structures of Asian economies. The influence that the institutional environment exerts upon the performance of larger multi-national enterprises (MNEs) in Asian markets is well-documented; however, the relationship between sub-national institutions, international entrepreneurial capability (IEC), and international performance (IP) is a realm that has been less closely explored. This paper seeks to address that gap by assessing the effect of relevant sub-national institutions, namely, local government support, legal rules, government transparency, and government efficiency on the IEC of export-focused small and medium-sized enterprises (SMEs) in two leading Asian economies. The researchers have devised and assessed a model that links sub-national institutions, their IEC and IP. To this end, data was collected from export-focused SMEs in two important emerging markets, China and South Korea. Three rounds of data collection resulted in 217 complete surveys. This paper discusses the analyzed data as well as the theoretical and managerial contributions of those findings.

Suggested Citation

  • Man Zhang & Qian Gao & Hyuk-Soo Cho, 2017. "The effect of sub-national institutions and international entrepreneurial capability on international performance of export-focused SMEs: Evidence from China and South Korea," Journal of International Entrepreneurship, Springer, vol. 15(1), pages 85-110, March.
    • Handle: RePEc:kap:jinten:v:15:y:2017:i:1:d:10.1007_s10843-016-0196-6
    DOI: 10.1007/s10843-016-0196-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10843-016-0196-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10843-016-0196-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mueller, Stephen L. & Thomas, Anisya S., 2001. "Culture and entrepreneurial potential: A nine country study of locus of control and innovativeness," Journal of Business Venturing, Elsevier, vol. 16(1), pages 51-75, January.
    2. John McMillan & Christopher Woodruff, 1999. "Interfirm Relationships and Informal Credit in Vietnam," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1285-1320.
    3. Gilles Guiheux, 2006. "The political "participation" of entrepreneurs : challenge or opportunity for the Chinese Communist Party ?," Post-Print halshs-00207570, HAL.
    4. Oded Shenkar & Mary Ann von Glinow, 1994. "Paradoxes of Organizational Theory and Research: Using the Case of China to Illustrate National Contingency," Management Science, INFORMS, vol. 40(1), pages 56-71, January.
    5. Lowell W. Busenitz & Chung-Ming Lau, 1996. "A Cross-Cultural Cognitive Model of New Venture Creation," Entrepreneurship Theory and Practice, , vol. 20(4), pages 25-40, July.
    6. Lance Eliot Brouthers & Kefeng Xu, 2002. "Product Stereotypes, Strategy and Performance Satisfaction: The Case of Chinese Exporters," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(4), pages 657-677, December.
    7. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    8. John Hulland, 1999. "Use of partial least squares (PLS) in strategic management research: a review of four recent studies," Strategic Management Journal, Wiley Blackwell, vol. 20(2), pages 195-204, February.
    9. Robert E. Hoskisson & Mike Wright & Igor Filatotchev & Mike W. Peng, 2013. "Emerging Multinationals from Mid-Range Economies: The Influence of Institutions and Factor Markets," Journal of Management Studies, Wiley Blackwell, vol. 50(7), pages 1295-1321, November.
    10. J. Myles Shaver & Fredrick Flyer, 2000. "Agglomeration economies, firm heterogeneity, and foreign direct investment in the United States," Strategic Management Journal, Wiley Blackwell, vol. 21(12), pages 1175-1193, December.
    11. Klaus E. Meyer & Hung Vo Nguyen, 2005. "Foreign Investment Strategies and Sub‐national Institutions in Emerging Markets: Evidence from Vietnam," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 63-93, January.
    12. Simeon Djankov & Edward Miguel & Yingyi Qian & Gérard Roland & Ekaterina Zhuravskaya, 2005. "Who are Russia's Entrepreneurs?," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 587-597, 04/05.
    13. Jay J. Ebben & Alec C. Johnson, 2005. "Efficiency, flexibility, or both? Evidence linking strategy to performance in small firms," Strategic Management Journal, Wiley Blackwell, vol. 26(13), pages 1249-1259, December.
    14. Teece, David J., 2016. "Dynamic capabilities and entrepreneurial management in large organizations: Toward a theory of the (entrepreneurial) firm," European Economic Review, Elsevier, vol. 86(C), pages 202-216.
    15. Gary A Knight & S Tamar Cavusgil, 2004. "Innovation, organizational capabilities, and the born-global firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(2), pages 124-141, March.
    16. Alt, James E. & Lassen, David Dreyer, 2006. "Fiscal transparency, political parties, and debt in OECD countries," European Economic Review, Elsevier, vol. 50(6), pages 1403-1439, August.
    17. Wynne W. Chin & Barbara L. Marcolin & Peter R. Newsted, 2003. "A Partial Least Squares Latent Variable Modeling Approach for Measuring Interaction Effects: Results from a Monte Carlo Simulation Study and an Electronic-Mail Emotion/Adoption Study," Information Systems Research, INFORMS, vol. 14(2), pages 189-217, June.
    18. Carol S. Leonard & Zafar Nazarov & Elena S. Vakulenko, 2016. "The impact of sub-national institutions," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 24(3), pages 421-446, July.
    19. Douglass C. North, 2016. "Institutions and Economic Theory," The American Economist, Sage Publications, vol. 61(1), pages 72-76, March.
    20. Tran, Thi Bich & Grafton, R. Quentin & Kompas, Tom, 2009. "Institutions matter: The case of Vietnam," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(1), pages 1-12, January.
    21. Chris Hall, 2007. "When the dragon awakes: Internationalisation of SMEs in China and implications for Europe," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(02), pages 29-34, July.
    22. Sea-Jin Chang & Arjen van Witteloostuijn & Lorraine Eden, 2010. "From the Editors: Common method variance in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(2), pages 178-184, February.
    23. Benjamin M. Oviatt & Patricia P. McDougall, 2005. "Defining International Entrepreneurship and Modeling the Speed of Internationalization," Entrepreneurship Theory and Practice, , vol. 29(5), pages 537-553, September.
    24. Weilei (Stone) Shi & Sunny Li Sun & Mike W. Peng, 2012. "Sub-National Institutional Contingencies, Network Positions, and IJV Partner Selection," Journal of Management Studies, Wiley Blackwell, vol. 49(7), pages 1221-1245, November.
    25. Keh, Hean Tat & Nguyen, Thi Tuyet Mai & Ng, Hwei Ping, 2007. "The effects of entrepreneurial orientation and marketing information on the performance of SMEs," Journal of Business Venturing, Elsevier, vol. 22(4), pages 592-611, July.
    26. Fernando A. Broner & Alberto Martin & Jaume Ventura, 2008. "Enforcement Problems and Secondary Markets," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 683-694, 04-05.
    27. Omar R. Malik & Masaaki Kotabe, 2009. "Dynamic Capabilities, Government Policies, and Performance in Firms from Emerging Economies: Evidence from India and Pakistan," Journal of Management Studies, Wiley Blackwell, vol. 46(3), pages 421-450, May.
    28. Rakesh Sambharya & Martina Musteen, 2014. "Institutional environment and entrepreneurship: An empirical study across countries," Journal of International Entrepreneurship, Springer, vol. 12(4), pages 314-330, December.
    29. Nadim Ahmad & Anders Hoffman, 2008. "A Framework for Addressing and Measuring Entrepreneurship," OECD Statistics Working Papers 2008/2, OECD Publishing.
    30. Brian R Chabowski & G Tomas M Hult & Tunga Kiyak & Jeannette A Mena, 2010. "The structure of JIBS's social network and the relevance of intra-country variation: A typology for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(5), pages 925-934, June.
    31. Landau, Daniel, 2003. "A Simple Theory of Economic Growth," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 217-235, October.
    32. Danny Miller, 1983. "The Correlates of Entrepreneurship in Three Types of Firms," Management Science, INFORMS, vol. 29(7), pages 770-791, July.
    33. Garry D. Bruton & Igor Filatotchev & Salim Chahine & Mike Wright, 2010. "Governance, ownership structure, and performance of IPO firms: the impact of different types of private equity investors and institutional environments," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 491-509, May.
    34. Nir Kshetri, 2007. "Institutional Changes Affecting Entrepreneurship In China," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 12(04), pages 415-432.
    35. Scott, Allen J. (ed.), 2001. "Global City-Regions: Trends, Theory, Policy," OUP Catalogue, Oxford University Press, number 9780198297994.
    36. Peter Ho, 2001. "Greening Without Conflict? Environmentalism, NGOs and Civil Society in China," Development and Change, International Institute of Social Studies, vol. 32(5), pages 893-921, November.
    37. Gary A Knight & S Tamer Cavusgil, 2004. "Innovation, organizational capabilities, and the born-global firm," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(4), pages 334-334, July.
    38. Zahra, Shaker A. & Korri, Juha Santeri & Yu, JiFeng, 2005. "Cognition and international entrepreneurship: implications for research on international opportunity recognition and exploitation," International Business Review, Elsevier, vol. 14(2), pages 129-146, April.
    39. Scott Shane, 2000. "Prior Knowledge and the Discovery of Entrepreneurial Opportunities," Organization Science, INFORMS, vol. 11(4), pages 448-469, August.
    40. Benjamin M Oviatt & Patricia P McDougall, 2005. "The internationalization of entrepreneurship," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(1), pages 2-8, January.
    41. Kuivalainen, Olli & Sundqvist, Sanna & Servais, Per, 2007. "Firms' degree of born-globalness, international entrepreneurial orientation and export performance," Journal of World Business, Elsevier, vol. 42(3), pages 253-267, September.
    42. Man Zhang & Patriya Tansuhaj & James McCullough, 2009. "International entrepreneurial capability: The measurement and a comparison between born global firms and traditional exporters in China," Journal of International Entrepreneurship, Springer, vol. 7(4), pages 292-322, December.
    43. Zhi Tang & Clyde Eiríkur Hull, 2011. "THE STRATEGY CONFIGURATION OF CHINESE SMEs," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 19(03), pages 229-259.
    44. Shou, Zhigang & Chen, Jun & Zhu, Wenting & Yang, Lihua, 2014. "Firm capability and performance in China: The moderating role of guanxi and institutional forces in domestic and foreign contexts," Journal of Business Research, Elsevier, vol. 67(2), pages 77-82.
    45. Keith D Brouthers, 2002. "Institutional, Cultural and Transaction Cost Influences on Entry Mode Choice and Performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 33(2), pages 203-221, June.
    46. Westhead, Paul & Wright, Mike & Ucbasaran, Deniz, 2001. "The internationalization of new and small firms: A resource-based view," Journal of Business Venturing, Elsevier, vol. 16(4), pages 333-358, July.
    47. Saul Estrin & Jan Hanousek & Evzen Kocenda & Jan Svejnar, 2009. "The Effects of Privatization and Ownership in Transition Economies," Journal of Economic Literature, American Economic Association, vol. 47(3), pages 699-728, September.
    48. anonymous, 2006. "Southeastern economy to grow modestly in 2007," EconSouth, Federal Reserve Bank of Atlanta, vol. 8(Q 4).
    49. Spencer, Jennifer W. & Gomez, Carolina, 2004. "The relationship among national institutional structures, economic factors, and domestic entrepreneurial activity: a multicountry study," Journal of Business Research, Elsevier, vol. 57(10), pages 1098-1107, October.
    50. J Child & L Chung & H Davies, 2003. "The performance of cross-border units in China: a test of natural selection, strategic choice and contingency theories," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 34(3), pages 242-254, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gaofeng Yi, 2021. "From green entrepreneurial intentions to green entrepreneurial behaviors: the role of university entrepreneurial support and external institutional support," International Entrepreneurship and Management Journal, Springer, vol. 17(2), pages 963-979, June.
    2. Rafik Abdesselam & Jean Bonnet & Patricia Renou-Maissant & Mathilde Aubry, 2018. "Entrepreneurship, economic development, and institutional environment: evidence from OECD countries," Journal of International Entrepreneurship, Springer, vol. 16(4), pages 504-546, December.
    3. Onuklu, Atilla & Hill, Theodore (TL) & Darendeli, Izzet S. & Genc, Omer F., 2021. "Poison or antidote: How subnational informal institutions exacerbate and ameliorate institutional voids," Journal of International Management, Elsevier, vol. 27(1).
    4. Yan, Hongmin & Hu, Xiaowen & Liu, Yulong, 2020. "The international market selection of Chinese SMEs: How institutional influence overrides psychic distance," International Business Review, Elsevier, vol. 29(4).
    5. Heléne Lundberg & Anneli Rehnfors, 2018. "Transnational entrepreneurship: opportunity identification and venture creation," Journal of International Entrepreneurship, Springer, vol. 16(2), pages 150-175, June.
    6. Buccieri, Dominic & Javalgi, Raj G. & Cavusgil, Erin, 2020. "International new venture performance: Role of international entrepreneurial culture, ambidextrous innovation, and dynamic marketing capabilities," International Business Review, Elsevier, vol. 29(2).
    7. Istipliler, Baris & Bort, Suleika & Woywode, Michael, 2023. "Flowers of adversity: Institutional constraints and innovative SMEs in transition economies," Journal of Business Research, Elsevier, vol. 154(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jones, Marian V. & Coviello, Nicole & Tang, Yee Kwan, 2011. "International Entrepreneurship research (1989–2009): A domain ontology and thematic analysis," Journal of Business Venturing, Elsevier, vol. 26(6), pages 632-659.
    2. Farhad Uddin Ahmed & Louis Brennan, 2019. "The impact of Founder’s human capital on firms’ extent of early internationalisation: Evidence from a least-developed country," Asia Pacific Journal of Management, Springer, vol. 36(3), pages 615-659, September.
    3. Buccieri, Dominic & Javalgi, Raj G. & Cavusgil, Erin, 2020. "International new venture performance: Role of international entrepreneurial culture, ambidextrous innovation, and dynamic marketing capabilities," International Business Review, Elsevier, vol. 29(2).
    4. Farhad Uddin Ahmed & Louis Brennan, 2019. "Performance determinants of early internationalizing firms: The role of international entrepreneurial orientation," Journal of International Entrepreneurship, Springer, vol. 17(3), pages 389-424, September.
    5. Ciravegna, Luciano & Majano, Sara B. & Zhan, Ge, 2014. "The inception of internationalization of small and medium enterprises: The role of activeness and networks," Journal of Business Research, Elsevier, vol. 67(6), pages 1081-1089.
    6. Vahid Jafari-Sadeghi & Jean-Marie Nkongolo-Bakenda & Léo-Paul Dana & Robert B. Anderson & Paolo Pietro Biancone, 2020. "Home Country Institutional Context and Entrepreneurial Internationalization: The Significance of Human Capital Attributes," Journal of International Entrepreneurship, Springer, vol. 18(2), pages 165-195, June.
    7. Calabrò, Andrea & Campopiano, Giovanna & Basco, Rodrigo & Pukall, Thilo, 2017. "Governance structure and internationalization of family-controlled firms: The mediating role of international entrepreneurial orientation," European Management Journal, Elsevier, vol. 35(2), pages 238-248.
    8. Erik Lundmark & Anna Krzeminska & Dean A. Shepherd, 2019. "Images of Entrepreneurship: Exploring Root Metaphors and Expanding Upon Them," Entrepreneurship Theory and Practice, , vol. 43(1), pages 138-170, January.
    9. Glavas, Charmaine & Mathews, Shane, 2014. "How international entrepreneurship characteristics influence Internet capabilities for the international business processes of the firm," International Business Review, Elsevier, vol. 23(1), pages 228-245.
    10. Ciravegna, Luciano & Kuivalainen, Olli & Kundu, Sumit K. & Lopez, Luis E., 2018. "The antecedents of early internationalization: A configurational perspective," International Business Review, Elsevier, vol. 27(6), pages 1200-1212.
    11. Ripollés, Maria & Blesa, Andreu, 2012. "International new ventures as “small multinationals”: The importance of marketing capabilities," Journal of World Business, Elsevier, vol. 47(2), pages 277-287.
    12. Gerschewski, Stephan & Rose, Elizabeth L. & Lindsay, Valerie J., 2015. "Understanding the drivers of international performance for born global firms: An integrated perspective," Journal of World Business, Elsevier, vol. 50(3), pages 558-575.
    13. Jeffrey G. Covin & Danny Miller, 2014. "International Entrepreneurial Orientation: Conceptual Considerations, Research Themes, Measurement Issues, and Future Research Directions," Entrepreneurship Theory and Practice, , vol. 38(1), pages 11-44, January.
    14. Johanson, Martin & Martín Martín, Oscar, 2015. "The incremental expansion of Born Internationals: A comparison of new and old Born Internationals," International Business Review, Elsevier, vol. 24(3), pages 476-496.
    15. Niklas Åkerman, 2015. "International opportunity realization in firm internationalization: Non-linear effects of market-specific knowledge and internationalization knowledge," Journal of International Entrepreneurship, Springer, vol. 13(3), pages 242-259, September.
    16. Gordian Rättich & Kim Clark & Evi Hartmann, 2011. "Performance measurement and antecedents of early internationalizing firms: A systematic assessment," Working Papers 0031, College of Business, University of Texas at San Antonio.
    17. Charmaine Glavas & Shane Mathews & Constanza Bianchi, 2017. "International opportunity recognition as a critical component for leveraging Internet capabilities and international market performance [Reconocimiento de oportunidad internacional como un componen," Journal of International Entrepreneurship, Springer, vol. 15(1), pages 1-35, March.
    18. Jean-François Hennart & Antonio Majocchi & Birgit Hagen, 2021. "What’s so special about born globals, their entrepreneurs or their business model?," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(9), pages 1665-1694, December.
    19. Rui Xue & Gongming Qian & Zhengming Qian & Lee Li, 2021. "Entrepreneurs’ Implicit and Explicit Achievement Motives and Their Early International Commitment," Management International Review, Springer, vol. 61(1), pages 91-121, March.
    20. Petrou, Andreas P. & Hadjielias, Elias & Thanos, Ioannis C. & Dimitratos, Pavlos, 2020. "Strategic decision-making processes, international environmental munificence and the accelerated internationalization of SMEs," International Business Review, Elsevier, vol. 29(5).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jinten:v:15:y:2017:i:1:d:10.1007_s10843-016-0196-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.