Transnational entrepreneurship, social networks, and institutional distance

Abstract

Purpose Transnational entrepreneurship can be considered a new stream of research where migrant entrepreneurship and international business research fields intersect. The purpose of this paper is to offer a theoretical framework to address the following research question: How do transnational entrepreneurs (TEs) develop their competitive advantage to succeed in a global market? Design/methodology/approach Based on the strategic entrepreneurship approach and dynamic capability perspective, this paper suggests a theoretical framework to extend the understanding on how TEs may develop their competitive advantage to succeed in a global market. Findings The suggested theoretical framework exhibits how the social ties of TEs affects their firm performance through the mediating effect of a bundle of two organizational processes (opportunity sensing and opportunity seizing) and the moderating effect of institutional distance between countries of origin and residence. Practical implications TEs should not solely focus on their ethnic social ties. That is why this paper suggests that ethnic ties in the country of origin and the country of residence (COR) may lead to higher firm performance only if systematically used alongside nonethnic ties in the COR. Furthermore, it is crucial for TEs to understand the importance of dynamic capabilities in developing and sustaining their competitive advantage. Originality/value Based on the strategic entrepreneurship approach, this paper suggests a social tie-based model of the dynamic capability to address the theoretical void in the transnational entrepreneurship literature. The linkage between social tie and performance which has been in a black box is examined in terms of how strong and weak social ties may affect different underlying processes of TEs’ dynamic capabilities differently. In contrast to the common conceptualization of institutional distance as a negative moderator in international business literature, institutional distance is theorized as a positive moderator in the suggested theoretical model of transnational entrepreneurship.

Entrepreneurial Opportunities of Refugees in Germany, France, and Ireland: Multiple Embeddedness Framework

“…In addition to the home-country and host-country contexts, refugees can be embedded in transnational contexts. Several refugees study or work abroad before fleeing their countries, which allows them to build transnational human and social capital (Cucculelli and Morettini 2012;Kariv et al 2009;Moghaddam et al 2018). Due to sharing the same or similar ethnic background, refugees may access transnational diaspora networks, which consist of globally displaced communities from their homelands (Dutia 2012;Newland and Tanaka 2010).…”

Enhancing hospitality business performance: The role of entrepreneurial orientation and networking ties in a dynamic environment

“…Traditionally the performance of hospitality organizations has been studied from the point of destination brand/reputation (e.g., image, perceived service quality, price) (e.g., Gomez et al, 2013 ), attractions (e.g., adventure, architecture, natural resources and endowments) (e.g., Alhemoud and Armstrong, 1996 ; Mussalam and Tajeddini, 2016 ), infrastructure (e.g., efficiency of transportation, shopping, sports facilities) ( Molina-Azorin et al, 2010 ), and services (e.g., quality and variety of accommodation, food and wine) (e.g., Henderson, 2011 ; Roxas and Chadee, 2013 ). However, recently a number of hospitality scholars ( Fu et al, 2019 ; Moghaddam et al, 2018 ; Omerzel, 2016 ; Taheri et al, 2019 ; Vega-Vázquez et al, 2016 ) have seen entrepreneurship and innovation as having a critical role in shaping this global industry and have advocated for further research. Entrepreneurial activities have been examined as an antecedent of growth, competitive advantage and superior performance.…”

Dynamic Capabilities Erosion in Indonesia’s Retail Industry: Consumers’ Perspective on Matahari Department Store

“…This shows that in consumer's perspective, PT Matahari Department Store is facing erosion in the firm's sensing capability, which will impact sustainability of PT Matahari Department Store. The result of this study sugests that the firm's inability in sensing opportunities and threats will cause decrease in the firm's performance (Moghaddam, 2018;Vargo, 2004;Winter, 2003). Therefore, the firm needs to improve its sensing capability by completing Matahri with matching facilities such as improving the quality of the call centre and innovate on the products sold.…”

“…When an organization is unable to utilize its dynamic capabilities, then the organizationn will suffer erosion, or what is called as dynamic capabilities erosion that will cause decrease in organizaiton's performance (Eisenhardt & Martin, 2006;Laaksonen & Peltoniemi, 2018;Winter, 2003). Organization's inability to identify opportunity, create opportunity ideas, and reconfigure resources will cause the organization to be unable to maintain its competitive advantage and would therefore lose in the competition in the market (Brandon-Jones & Knoppen, 2018; Kor & Mahoney, 2005;Moghaddam, Rustambekov, Weber, & Azarpanah, 2018;Teece, 2007 Dynamic capabilities erosion happens when routinities are interupted and therefore the organization suffers decrease in performance (Rahmandad & Repenning, 2015). On the contrary, having routines in the organization can prolong its sustainability, especially for organizations with young age (D'aveni, 1989).…”

“…Dynamic capabilities erosion is the decrease in organization's performance caused by the organization's inability to adapt and adjust to the changes happening in the environment (Teece, 2007;Eisenhardt & Martin, 2006;Winter, 2003). The organization's inability to sense opportunities, create new opportunity ideas, and regonfigure resources will cause the organization to be unable to maintain its competitive advantage and therefore it would lose in competition in the market (Teece, 2007;Brandon-Jones & Knoppen, 2018;Kor & Mahoney, 2005;Moghaddam et al, 2018). In order to avoid dynamic capabilities erosion, firms need to hone its sensing, seizing, and reconfiguring capabilities so that the firm's competitive advantage is preserved and it would give value creation to the customers (Vargo & Lusch, 2004).…”