International Entrepreneurial Orientation and Performance of SMEs: The Mediating Role of Informal Institutional Framework

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Kurtulmus B. E., KATRİNLİ A., Warner B.

SAGE OPEN, vol.10, no.4, 2020 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 10 Issue: 4
  • Publication Date: 2020
  • Doi Number: 10.1177/2158244020983294
  • Journal Name: SAGE OPEN
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, Directory of Open Access Journals
  • Keywords: informal institutional framework, international entrepreneurial orientation (IEO), perceived financial performance, small and medium-sized enterprises, entrepreneurial orientation (EO)
  • Dokuz Eylül University Affiliated: Yes

Abstract

This article identifies the mediating role of informal institutional frameworks upon the relationship between the international entrepreneurial orientation (IEO) behavior of small and medium-sized enterprises (SMEs), and their perceived financial performance, while operating within a volatile business environment. To reach the study's aim, we conducted a regression analysis upon SMEs operating in Turkey and implemented structural equation modeling on the construct to specify the validity of the model. The findings are that the indicated relationship is indeed mediated by informal institutional frameworks. However, IEO and financial performance relationship is negative. The practical implementation of IEO activities is risky when target market financial conditions are difficult, and the nature of relevant informal institutional frameworks should be considered before full commitment to IEO activities.