Informal institutions, entrepreneurs’ political participation, and venture internationalization

Dan Li*, Liqun Wei, Qing Cao, Deqiu Chen

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    30 Citations (Scopus)

    Abstract

    Informal institutions such as Guanxi play a critical role in compensating for insufficient formal institutions in emerging markets. Arising from the institutional evolution, Chinese entrepreneurs’ participation in political systems induces the emergence of new types of Guanxi that the entrepreneurs can draw on in internationalizing their new ventures. Drawing from institutional and cognitive decision-making theories, we theorize that the entrepreneurs’ political participation enhances their self-perceived status (willingness) and resource acquisition (ability) in their new ventures’ engagement in high-commitment entry modes. Our analysis of 5,999 Chinese private new ventures offers empirical support for the mediating effects of self-perceived status and resource acquisition on the association between entrepreneurs’ primary and secondary political participation and their ventures’ engagement in high-commitment entry modes. Our research contributes to the international business literature by examining the micromechanism of the interplay between formal and informal institutions and to the international entrepreneurship literature by highlighting the critical role that individual cognition plays in new ventures’ internationalization decision-making.

    Original languageEnglish
    Pages (from-to)1062–1090
    Number of pages29
    JournalJournal of International Business Studies
    Volume53
    Issue number6
    Early online date24 Feb 2021
    DOIs
    Publication statusPublished - Aug 2022

    Scopus Subject Areas

    • Business and International Management
    • General Business,Management and Accounting
    • Economics and Econometrics
    • Strategy and Management
    • Management of Technology and Innovation

    User-Defined Keywords

    • China
    • foreign entry mode
    • Guanxi
    • informal institution
    • political participation

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