Cultural and Institutional Context, Entrepreneurship, and International Venturing
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This dissertation examines cultural and institutional context on entrepreneurial activities and international venturing through three essays. The first essay investigated the role of individualism-collectivism as a continuum and institutional variables on entrepreneurship. Drawing upon signaling theory and institutional theory, this study proposes that the relationship between individualism-collectivism and entrepreneurial activities is positive curvilinear or U-shaped. The paper also examines the interaction effect of institutional determinants such as transparency level and business freedom. Using ten years of panel data for this cross-country study, this study finds that at intermediate levels of the continuum, individuals will face a dilemma or "get stuck in the middle" which in turn results in the U-shape relationship. The second essay examines the distance context in both formal and informal institutional environments as well as infrastructure factors on the cross-border alliance governance mode. Building on institutional distance and institutional theory, this study focuses on the dyad alliance between MNEs base in emerging economies (EMNEs) and MNEs based in developed economies (DMNEs). Using 1,334 dyadic alliances between EMNEs and DMNEs, both formal and informal institutional distance affect the alliance governance mode. Moreover, infrastructure distance significantly plays a moderating role on the relationship between formal institutional distance and propensity of choosing equity alliance mode. Given EMNEs possess an adversity advantage, when host countries are developed economies, the effect of the distances on governance mode becomes trivial. The third essay investigates the value creation of cross-border alliances when EMNEs alliance with DMNEs. Building on a springboard perspective, EMNEs have incentive to ally with DMNEs. Using 122 cross-border alliance events and long-term event study, the results indicate that they do create value from such alliances. Further, given the nature of EMNEs, the contractual alliance governance enhances the value creation of the EMNEs while the cultural distance does not. This study also examines the influence of risk level inhabited in EMNEs before the alliance events due to shareholders are recognized a great benefit of risk sharing through value creation. Moreover, the interaction effect between cultural distance and risk level on value creation is explored.