This study examines the impact of national cultural values and the development of market institutions on three aspects of entrepreneurship (desire, intention, and confidence in creating new ventures). We ask: What different kinds of effects do cultural and institutional factors have on different aspects of entrepreneurship? Our samples come from Vietnam, Taiwan, and the United States (US). The use of three countries allows us to distinguish the separate influences of culture and market institutions on entrepreneurship. Our results suggest that only culture has a significant impact on individuals' desires to create new ventures. However, we found mixed results on whether culture or institution affects individuals' intentions and confidence in creating new ventures. Contrary to our hypotheses, the Vietnam sample had higher scores on intention to create new ventures than both the US and Taiwan * Corresponding author. 21 J. Dev. Entrepreneurship 2009.14:21-37. Downloaded from www.worldscientific.com by INDIANA UNIVERSITY @ BLOOMINGTON on 03/16/15. For personal use only. 22 T. V. Nguyen et al.samples. The Vietnam sample was also higher than Taiwan on the confidence in creating new ventures. This may suggest an interaction effect of cultural and institutional factors on entrepreneurship. This interaction deserves more attention in future research.

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PurposeGiven the inconclusive findings on relational ties–performance relationships, this study approaches this phenomenon through social capital theory and resource-based view (RBV) lenses to advocate the mediating role of nonmarket- and market-based capabilities.Design/methodology/approachA survey-based research methodology was employed. A list of 1,425 foreign subsidiaries was identified from the Thailand Board of Investment (BOI) website, and key informants were contacted. A final response rate of 11.8% was achieved. All hypotheses were tested via path analyses with the bootstrapping technique.FindingsThe results indicate that the relationships between business- and government-relational ties and performance are fully mediated by market- and nonmarket-based capabilities with the latter serving as essential but inadequate preconditions for achieving superior firm performance.Practical implicationsTo mitigate the liability of foreignness and to enhance performance of foreign subsidiaries operating in volatile emerging economies such as Thailand, government and business relational ties are crucial in developing nonmarket- and market-based capabilities. The nonmarket-based capabilities entail the ability to negotiate with and influence policy makers, which in turn helps augment the development of market-based capabilities, including the ability to be highly responsive to customers' needs.Originality/valueThis research illustrates the embedded roles of nonmarket and market-based capabilities developed through complex interactions among social actors, including the multinational enterprises’ (MNEs’) subsidiaries and government and nongovernment counterparts, in attaining superior performance. The results indicate how relational ties enable MNEs’ subsidiaries to develop various capabilities, and how these capabilities are related with each other and linked to firm performance. Findings from an emerging economy undergoing recent political and economic uncertainties also provide theoretical advancements for international business studies.

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