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Edited by Mika Gabrielsson and V. H. Manek Kirpalani
Chapter 12: An Institutional Perspective on the Strategic Behavior of Chinese New Ventures
12 An institutional perspective on the strategic behavior of Chinese new ventures Huan Zou and Pervez N. Ghauri INTRODUCTION Over the past decades, international entrepreneurship (IE) researchers have shown great interest in understanding the growth of new and young firms that choose to compete in the international marketplace (Vahlne and Johanson 2002). Previous research acknowledges that entrepreneurs’ knowledge and capabilities play a role in guiding the firm in identifying appropriate target markets, localizing the target market, and ultimately, distributing products within the newly targeted market (Sandberg and Hofer 1987; Zhu et al. 2006). However, there is insufficient knowledge about differences between international new ventures (INVs) and domestic new ventures (DNVs) (McDougall et al. 2003). With a few exceptions (for example, McDougall 1989; McDougall et al. 2003), most IE research has focused exclusively on samples of INVs (Shrader et al. 2000), or made comparisons with older internationalized firms (Reuber and Fischer 1997) and do not have direct comparisons with domestic ventures. Inspired by previous new venture research, this chapter will investigate the factors that determine and distinguish INVs’ orientation from domestic ventures. Coming from an institutional perspective, two main research questions will be focused on: (i) do institutional structures between home country and host country affect entrepreneurial experience and relationship; and (ii) do entrepreneurial experience and relationship influence the strategic behavior of INVs and DNVs? The institutional perspective suggests that strategic choices are not only driven by industry variations or firm-specific advantages, but are also a reflection of the formal and...
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