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International network formation,home market institutional support and post-entry performance of international new ventures
Institution:1. School of Business and Economics, Loughborough University, LE11 3TT, United Kingdom;2. University of Strathclyde, G1 1XQ, United Kingdom;3. Kwame Nkrumah University of Science & Technology, University Post O?ce, Kumasi, Ghana; Gordon Institute of Business Science, University of Pretoria, 26 Melville Rd, Illovo, Johannesburg, 2196, South Africa;1. National Research Base of Intelligent Manufacturing Service, Chongqing Technology & Business University, Chongqing 400067, China;2. Haub School of Business, Saint Joseph’s University, Philadelphia, PA 19131, USA;1. School of Economics, Business Administration and Accounting in Ribeirão Preto (FEA-RP), University of São Paulo (USP), Brazil;2. Department of Accounting, School of Economics, Business Administration and Accounting in Ribeirão Preto (FEA-RP), University of São Paulo (USP), Av. dos Bandeirantes, 3900, FEA-RP, ZIP, 14040-905 Ribeirão Preto, São Paulo, Brazil;1. School of Management, Xi’an Jiaotong University, 28 West Xianning Road, Xi’an 710049, China;2. Jindal School of Management, University of Texas at Dallas, 800 West Campbell Road, SM 43, Richardson, TX 75080, USA;1. University of Massachusetts, Amherst, Isenberg School of Management, 121, Presidents Drive, Amherst, MA 01003, USA;2. Newcastle University Business School, 5 Barrack Road, Newcastle upon Tyne NE1 4SE, United Kingdom;1. The Open University Business School, Walton Hall, Milton Keynes, MK7 6AA, United Kingdom;2. Cork University Business School, University College Cork, College Road, Cork, T12 K8AF, Ireland;3. Surrey Business School, University of Surrey, Guildford, Surrey, GU2 7XH, United Kingdom;1. Stockholm Business School, Stockholm University, Sweden;2. Beedie School of Business, Simon Fraser University, Canada;3. Graduate School of Management, St. Petersburg University, Russia
Abstract:Effectuation and causation decision-making logics are noted to be major alternative approaches to international network formation. However, knowledge is lacking on how and the conditions under which the two approaches contribute to post-entry performance of international new ventures (INVs). We integrate the theory of effectuation and institutional development logic to explain how effectuation and causation approaches to international network formation individually and jointly contribute to post-entry performance under varying conditions of home market institutional support. We test our proposed framework on primary data from 228 INVs in a sub-Saharan African economy. Results suggest that greater uses of both effectuation and causation approaches to international network formation are associated with stronger post-entry performance. More interestingly, results show that the joint effect of the two international network formation approaches on post-entry performance is amplified under conditions of low home market institutional support. Our findings provide theoretical and managerial insights on the importance of complementing effectual and causal reasoning in international network formation in weak home market institutional environments.
Keywords:International network formation  Effectuation approach  Causation approach  Home market institutional support  Post-entry performance  International new ventures
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