Exploring the Role of a Country's Institutional Environment in Internationalization: Strategic Responses of SMEs in Russia

Abstract

Based on the suggested five-pillar institutional framework, the study empirically investigates the impact of the institutional environment on internationalization aspirations of small and medium enterprises (SMEs) in emerging economies and maps their strategic responses against imposed institutional pressures. The data collected across five forest cluster SMEs in Saint Petersburg andMoscow are analyzed. Political instability, corruption, bounded cognition, over-patriotism, and high power distance act as the main constraints, while demands for new knowledge and funding are identified as the main drivers for internationalization. The classified institutional challenges are mapped against the possible strategic responses of the SMEs, such as acquiescence, compromise, avoidance, defiance, and manipulation.

Institutional influences on SME exporters under divergent transition paths: Comparative insights from Tajikistan and Kyrgyzstan

“…Research on the outward internationalisation of transition economy firms is in its infancy (Thai & Turkina, 2014). However, a handful of existing studies have supported the proposition that certain dimensions of the domestic institutional environment -including tax regulations and tax administration, the quality of the legal system and incidence of corruption -do indeed affect the export behaviour and degree of internationalisation of firms from transition economies (Gao et al, 2010;LiPuma et al, 2011;Lu et al, 2009;Shirokova & Tsukanova, 2013;Volchek, Henttonen, & Edelmann, 2013). These few existing studies have a number of limitations, which our study begins to address.…”

“…These few existing studies have a number of limitations, which our study begins to address. First, they have either analysed patterns across a large basket of countries (LiPuma et al, 2011;Shirokova & McDougallCovin, 2012) or focused on a Chinese (Gao et al, 2010;Lu et al, 2009) or Russian empirical context (Shirokova & Tsukanova, 2013;Volchek et al, 2013). Thus, there is a clear need to broaden the evidence base to different and diverse transition contexts.…”

“…Thus, there is a clear need to broaden the evidence base to different and diverse transition contexts. Second, they have mainly adopted a quantitative modelling approach (exceptions are Shirokova & Tsukanova, 2013;Volchek et al, 2013); there is a case for more intensive, qualitative studies that give 'voice' to entrepreneurs and SME owner-managers. Third, they have been mainly concerned with formal institutions; closer attention to the operation and effects of informal institutions is required given their noted significance in transition contexts.…”

Dismantling institutional complexity behind international competitiveness of emerging market firms

“…Another important issue of Russian institutions that has been mentioned extensively is corruption (Yukhanaev et al, ). It takes many forms and obstructs firms' growth and internationalization (Volchek, Henttonen, & Edelmann, ). Russian entrepreneurs create personal and business networks that serve as substitutes for nonexistent or weak institutions (Aidis et al, ).…”

How to do? Russian entrepreneurs on business (the results of the survey of 2014): goals and motives

“…Российское предпринимательство, 16(15), 2313-2334. doi: 10.18334/rp.16.15.551 2315 внутриорганизационных параметров на успешное развитие малого и среднего бизнеса в России (Volchek, Henttonen, Edelmann, 2013;Volchek, Jantunen, Saarenketo, 2013;Shirokova, Vega, Sokolova, 2013). Портрет предпринимателя современной России, с одной стороны, отражает палитру многообразия региональных и отраслевых особенностей и, с другой, подвержен постоянной трансформации в связи с изменяющимися экономическими условиями (McCarthy, Puffer, 2013;Ojala, Isomäki, 2011;Taipale-Erävala, Heilmann, Lampela, 2014).…”