Country institutional profiles: evidence from Colombian software exporters

Abstract

Purpose The purpose of this paper is to illustrate how the perceived institutional environment of Colombian internationally operating small- and medium-sized enterprises (SMEs) in the software industry comes to determine their performance. Design/methodology/approach The research applies regression modelling to a sample of 43 internationally operating Colombian SMEs in the software development industry, collected via an online survey. Findings The results indicate that the normative dimension of the institutional environment comes to determine the export performance of the SMEs. Conversely, the cognitive and regulatory dimensions of the institutional forces do not have a significant effect. Research limitations/implications The cross-sectional nature of the survey tool, the single industry and the single country context place limitations on the generalisability of the results across different industry and country contexts. Practical implications The results highlight the need for entrepreneurship-friendly norms and values in the context of internationalising SMEs in Latin America. Governments should focus on the development and promotion of international entrepreneurs that inspire and serve as role models for other entrepreneurs rather than concentrate on the creation of regulatory frameworks and the provision of knowledge of how to start and manage risk for the internationalising SME. Originality/value The study is one of the first to apply the Busenitz et al. (2000) scale on the institutional country profile to real entrepreneurs. Previous studies have mainly applied the framework to a sample of students or officers assigned to US embassies. Besides Renko et al.’s (2009) conference paper, ours is the first one that links the country institutional profile to the performance of internationalising software firms and, especially, in the context of a Latin American country. The study, therefore, attempts to contribute to a better understanding of how a country’s institutional environment impacts the performance of internationalising SMEs.

The Fast Lane of Internationalization of Latin American SMEs: A Location-Based Approach

“…Finally, our findings extend previous research and suggest that formal institutional voids lessen the internationalization of Latin American SMEs [48]. Indeed, the impact of formal institutional voids and local informal institutions might differ from developed to developing countries [11,49].…”

Born global: the influence of international orientation on export performance

“…Finally, the institutional environment is important to keep into consideration for the study of BGs (Szyliowicz and Galvin, 2010). The impact of institutional forces on entrepreneurship is particularly heightened in emerging economies (Gupta et al., 2014; Kiss et al., 2012; Peng et al., 2008) and different formal and informal institutional environments seem to impact the performance of BGs in Latin America (Alvarez et al., 2014; Torkkeli and Fuerst, 2018). Future studies should therefore keep in mind the impact of the institutional environment on the export performance of BGs.…”

Discourses on Institutions “Intentions of Umbrella Organizations for Internationalization”

“…In the light of literature (Busenitz et al, 2000;Descotes et al, 2007;Kostova, 1997;Scott, 1995;Torkkeli and Fuerst, 2018), in our study the regulative institutions consist of laws, regulations, and policies that might influence internationalization in a country; the cognitive institutions consist of the knowledge and skills possessed by the people in a country pertaining to internationalization; and finally, the normative institutions refer to the evaluations of the people in a country regarding internationalization. In short, all of the institutions affect domestic internationalization activity.…”

“…The concept of normative institutions, when considered in terms of internationalization, may include values, assumptions, and norms of firms regarding internationalization. In the context of internationalization, this may also imply to which extent internationalization is encouraged or discouraged by society (Torkkeli and Fuerst, 2018). Accordingly, the more the firm attributes importance to international expansion and as a sign of success, the more increase will be expected in the firm's tendency and intensity of export or outward FDI.…”