Home-based Innovation Internationalization: Regional embeddedness as driver of innovation & internationalisation

  • Project

    Based on the assertion that entering foreign markets is an especially attractive growth strategy particularly for medium-sized enterprises, this raises the question of why similar firms innovate and go international to varying degrees of success. Academic business research focuses on company-internal and economic factors and has so far provided insufficient answers. At the same time, sociological approaches have been gaining importance in innovation and internationalisation research. It is becoming increasingly clear that corporate strategy and thus innovation and internationalisation behaviour is significantly influenced by the company’s social embedding and the institutional setting. Entrepreneurial activity occurs at a certain place and time and can hence only be explained under these conditions.

    The project aims to contribute towards closing this gap by analysing the role of regional embedding for the innovation and internationalisation of small and medium-sized enterprises (SMEs) by means of an integrative combination of qualitative and quantitative methods. The research is guided by the thesis that the objective characteristics of the region, together with those (subjective) characteristics perceived by the corporate decision-makers, in which a firm is embedded, have a major influence on the firm’s strategic stance and therefore the objective and subjective degree and success of innovation and internationalisation. The (perceived) degree and success of the firm’s innovation and internationalisation in turn have an impact on the (perception of the) region’s characteristics.

    The theoretical backdrop for the project mainly consists of the current discourses in institutional entrepreneurship research (Fink et al. 2011a; Thornton et al. 2011; Veciana/Urbano 2008; Welter/Smallbone 2008; 2011) and geographical/socio-spacial entrepreneurship research (Bosma and Schutjens 2011; Fink et al. 2012b, Mugler et al. 2008, Stam 2010; Sternberg 2009; Trettin/Welter 2011), as well as research on international entrepreneurship (Cesinger et al. 2012; Fink et al. 2008, McDougall/Oviatt 2000). The sociological-institutional perspective (Scott 1995) of the embeddedness of entrepreneurs is extended by the aspects of space and time, following Johnstone/Lionais (2004). Through this lens, the various meanings that entrepreneurs ascribe to their social/spatial environment (González/Healey 2005; Healey 2002) can be recorded and, subsequently, their effects on companies’ innovation and internationalisation can be analysed.

    In doing so, we are heeding the call of Welter/Smallbone (2011) und Welter (2011), who highlight the need for more analysis of the interplay between institutional and spatial aspects of context regarding entrepreneurial activity. While national and regional contexts have at the same time diverged and converged, new variations of entrepreneurial activity have emerged (Bosma et al. 2008; Fritsch/Schmude 2006; Schmude et al. 2008; Tamásy 2006), which in turn alter the context (Thornton et al. 2011; Veciana/Urbano 2008). This increases the importance of local context for entrepreneurial activity that transcends regions/nations (Fink/Harms 2012; Malecki 2009; Schmude et al. 2008; Stam, E. 2007). Entrepreneurial activity in general and internationalisation in particular cannot be understood without taking into account the regional embedding of decision-makers (Bosma/Schutjens 2011; Freytag/Thurik 2007; Trettin/Welter 2011; Welter 2011; Welter/Smallbone 2011).

    Current research results show that not only context forms entrepreneurial activity, but also that entrepreneurial activity forms the context (Frederking 2004; Haugh 2007; Johannisson 1990; Spilling 2011). Welter/Smallbone (2011: 120) in this respect state that “entrepreneurs may act as change agents (sometimes involuntarily) but without having an explicit aim of changing institutions. Instead, their aim is to exploit institutional loopholes and deficiencies to their own profit, although collectively, such behaviour may contribute over time to increasing pressure for wider institutional change”. Traditionally, the option to design the context was only associated with large companies (Battilana et al. 2009; Fink et al. 2011). Now, the power of SMEs to act as a change agent in the region is increasingly acknowledged (Bruton et al. 2010; Welter/Smallbone 2011).

  • People

    • Richard Lang
    • Matthias Fink

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  • Cesinger, Beate, Fink, Matthias, Madsen, Tage Koed, Kraus, Sascha. 2012. Rapidly Internationalizing Ventures: How definitions can Bridge the Gap across Contexts (best conference paper award). CIMaR, Taipei, Taiwan, 15.05.-18.05.2012.
  • Cesinger, Beate, Fink, Matthias, Kraus, Sascha. 2010. A chellanging inquiry into international entrepreneurship – Born globals from an European and US perspective. 14th Annual Interdisciplinary Entrepreneurship Conference, Köln, Deutschland, 21.10.-22.10.