Location capabilities, institutional distance, and start‐up survival

Abstract

Location considerations play a key role in shaping venture performance. Using data from the largest accelerator in the world, we examine the effects of institutional distance and location capabilities on international start-ups' survival rates. We find that international start-ups' survival is shaped by whether it internationalizes to a country with stronger or weaker institutions than those in its home country.

Global cities and multilatinas: the search for global cities-specific advantages, establishment and ownership entry modes

“…They addressed the institutional benefits brought by GC. Finally, multilatinas’ use of GC confirms Bustamante et al (2021), who claimed that multinationals pursue positive institutional distance (i.e. internationalizing to a host country where institutions are more robust than those in the home country).…”

“…They addressed the institutional benefits brought by GC. Finally, multilatinas' use of GC confirms Bustamante et al (2021), who claimed that (Kavusan et al, 2016;Belderbos et al, 2020) P5: Country of origin offers no impact in entry mode selection Multilatinas leapfrog stages to catch up with multinationals from developed economies (Luo and Tung, 2007) and use mergers and acquisitions (M&As) and joint ventures (JVs) to speed up their internationalization process (Wei et al, 2015) P6: Country of origin presents no impact in the selection of ownership mode Mexican multilatinas provide an exception regarding ownership modes because of their trade and FDI relationship with the USA (Montoya et al, 2019) P7: Resource-seeking is the main reason for the internationalization of multilatinas through GC MNEs are attracted to global sites to lower LOF (Belderbos et al, 2020) P8: Multilatinas internationalize through alpha cities because of market-seeking EMNE opted to locate in a global city because it provided legitimacy, transportation, markets, resources and capital (Meouloud et al, 2019) multinationals pursue positive institutional distance (i.e. internationalizing to a host country where institutions are more robust than those in the home country).…”

“…New knowledge and improved efficiency are examples of location-specific capabilities (GCSA) that can translate into FSAs. Consequently, FDI through highly connected cities increases the odds of survival of internationalizing ventures from firms with large institutional distances (Denk et al , 2012; Trąpczyński and Banalieva, 2016; Bustamante et al , 2021).…”

Product development capabilities-based export channel selection and export performance

“…More attention should also be given to the interactions between different resources/capabilities in affecting channel selection to improve our understanding of the value creation role of export channel selection. As for institutional theory, previous studies tend to regard institutions as one congregated factor while ignoring the individual impact of different pillars of institutions (He et al ., 2013, 2018; Bustamante et al. , 2021).…”

“…More attention should also be given to the interactions between different resources/capabilities in affecting channel selection to improve our understanding of the value creation role of export channel selection. As for institutional theory, previous studies tend to regard institutions as one congregated factor while ignoring the individual impact of different pillars of institutions (He et al, 2013(He et al, , 2018Bustamante et al, 2021). Among institutions, cultural-cognitive institutions play a critical role in shaping organisations' and individuals' behaviour, and they also serve as a base for the development of other institutions, such as regulative and normative institutions (Suchman, 1995;Schwartz, 1999;Hofstede, 2001).…”