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The analysis of level of institutional support for international entrepreneurial expansion of small and medium-sized enterprises from developing countries

Author

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  • Mitrašević, Lidija
  • Radević, Ivan
  • Barišić, Radoslav

Abstract

The initiating and development of international entrepreneurial expansion of small and medium-sized enterprises (SMEs) from developing countries (DCs) is under the influence of numerous internal and external challenges and limitations. Unlike developed countries, the institutional context of DCs determines specific business conditions, so the relevant literature indicates the necessity of incorporating institutional theory in international entrepreneurship research. Compared to previous research in which the estimation of institutional environment was performed on the basis of one dimension, in this paper, a composite indicator of benefits of country institutional profile for entrepreneurship (CIPE), which is relevant for export SMEs, is used. The aim of the paper is to point out the importance and the necessity of measuring entrepreneurs’ perception on the characteristics of institutional environment of a small and open economy, encompassing its regulatory, normative and cognitive dimension. The subject of the research is the attitude of entrepreneurs/managers of export SMEs from Bosnia and Herzegovina (BIH) about the level of institutional support for their international expansion. The results of the research indicate that the CIPE scale has high reliability and validity. Based on the data collected from 81 export SMEs from BIH, it has been determined that the institutional environment in BIH does not provide significant support for international entrepreneurial activities. The normative dimension of institutional environment has been rated the most favorably, while the regulatory dimension is considered to be the greatest obstacle to international entrepreneurship development. The paper, both theoretically and empirically, presents the complexity of institutional profile of DCs, states the recommendations for overcoming institutional barriers, the areas of institutional framework where measures of government policy are necessary, as well as recommendations for future research.

Suggested Citation

  • Mitrašević, Lidija & Radević, Ivan & Barišić, Radoslav, 2023. "The analysis of level of institutional support for international entrepreneurial expansion of small and medium-sized enterprises from developing countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 17(1), pages 15-24.
    • Handle: RePEc:zbw:espost:339723
    DOI: 10.7251/ZREFB2317015M
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    References listed on IDEAS

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    1. De Clercq, Dirk & Danis, Wade M. & Dakhli, Mourad, 2010. "The moderating effect of institutional context on the relationship between associational activity and new business activity in emerging economies," International Business Review, Elsevier, vol. 19(1), pages 85-101, February.
    2. Garry D. Bruton & David Ahlstrom & Krzysztof Obloj, 2008. "Entrepreneurship in Emerging Economies: Where Are We Today and Where Should the Research Go in the Future," Entrepreneurship Theory and Practice, , vol. 32(1), pages 1-14, January.
    3. Garry D. Bruton & David Ahlstrom & Han–Lin Li, 2010. "Institutional Theory and Entrepreneurship: Where Are We Now and Where Do We Need to Move in the Future?," Entrepreneurship Theory and Practice, , vol. 34(3), pages 421-440, May.
    4. Vishal K. Gupta & Ali Alper Yayla & Arijit Sikdar & Min-Seok Cha, 2012. "Institutional Environment For Entrepreneurship: Evidence From The Developmental States Of South Korea And United Arab Emirates," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 17(03), pages 1-21.
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    Keywords

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    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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