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Micro-multinational enterprises in Malaysia: the role of entrepreneurial orientation and regulatory institutions

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Abstract

The research on international new ventures, particularly born global enterprises, has consistently held a central position in the internationalisation of small and medium-sized enterprises (SMEs). While a surge of studies has focused on the accelerated internationalisation of SMEs, less attention has been given to their entry modes. This oversight is rooted in the traditional belief that SMEs, due to their small size, are best suited for exclusive concentration on exporting. Contrary to this notion, researchers advocate for the consideration of higher-commitment entry modes, such as licensing, franchising, and joint ventures, leading to the conceptualisation of ‘mMNEs’ to describe this evolving category of internationalised SMEs. Consequently, there is a call for future studies to challenge traditional perceptions of SMEs and explore the determinants of mMNEs. Addressing this research gap, this study aims to examine the impact of entrepreneurial orientation (EO), encompassing innovativeness, proactiveness and risk-taking, as well as regulatory institutions on the likelihood of internationalised SMEs transitioning into mMNEs. Specifically, this study investigates two primary relationships: (1) the direct influence of innovativeness, proactiveness and risk-taking on mMNEs and (2) the moderating role of regulatory institutions on the association between EO and mMNEs. Drawing on a survey of 253 Malaysian internationalised SMEs and employing logistic regression analysis, the findings indicate that proactiveness and a propensity for risk-taking facilitate the adoption of higher-commitment entry modes. Additionally, supportive regulatory institutions enhance the likelihood of SMEs with high proactiveness and risk-taking propensity becoming mMNEs. These results contribute to a deeper understanding of how both internal factors (EO) and external factors (regulatory institutions) play crucial roles in explaining mMNEs behaviour.

Résumé

L'étude des nouvelles entreprises internationales ou des entreprises ‘born global‘ a toujours été à l'avant-garde de l'internationalisation des PME. En conséquence, la littérature existante a connu une prolifération d'études, notamment sur l'internationalisation accélérée des PME, tandis que moins d'attention a été accordée au mode d'entrée des PME. Cela est dû à l'idée traditionnelle selon laquelle les PME sont mieux adaptées pour se concentrer exclusivement sur l'exportation en raison de leur petite taille. Cependant, des chercheurs ont fait valoir que les PME pourraient adopter des modes d'entrée à plus fort engagement (par exemple, la concession de licence, la franchise et les coentreprises). Ils ont inventé le terme ‘mMNEs‘ pour représenter cette nouvelle catégorie de PME internationalisées. Ils ont ensuite appelé à des études futures pour remettre en question l'idée traditionnelle des PME et explorer les déterminants des mMNEs. Dans le cadre de cette lacune de recherche, cette étude vise à examiner les effets de l'EO (qui englobe l'innovation, la proactivité et la prise de risque) et des institutions réglementaires sur la probabilité que les PME internationalisées deviennent des mMNEs. Plus précisément, cette étude examine deux ensembles centraux d'associations : 1) l'association directe entre l'innovation, la proactivité et la prise de risque sur les mMNEs ; et 2) le rôle modérateur des institutions réglementaires sur l'association entre l'EO et les mMNEs. S'appuyant sur une enquête auprès de 253 PME internationales malaisiennes et utilisant une analyse de régression logistique, cette étude suggère que la proactivité et la propension à prendre des risques facilitent l'adoption de modes d'entrée à plus fort engagement. De plus, des institutions réglementaires favorables augmentent la probabilité que les PME ayant une proactivité élevée et une propension à prendre des risques deviennent des mMNEs. Les résultats enrichissent la compréhension de l'importance à la fois des facteurs internes (EO) et externes (institutions réglementaires).

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  1. Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, 88400, Kota Kinabalu, Sabah, Malaysia

    Tze Cheng Chew

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Chew, T.C. Micro-multinational enterprises in Malaysia: the role of entrepreneurial orientation and regulatory institutions. J Int Entrep (2023). https://doi.org/10.1007/s10843-023-00344-3

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