Entrepreneurial Orientation and Internationalization of Indigenous Firms: The Mediating Role of Institutional Environment

Abstract

Despite that several nations of the world have been able to generate wealth through internationalization, the Nigeria indigenous firms are far behind in internationalization. Hence, having observed that much has not been done by prior literature to examine the extent to which this could be as a result of entrepreneurial orientation and institutional environment of Nigeria indigenous firms, this study examines the mediating role of institutional environment in the relationship between entrepreneurial orientation and internationalization of indigenous firms in Nigeria. It explicates how indigenous firms that are entrepreneurially oriented can enhance internationalization by leveraging on institutional drivers and making efforts to overcome institutional barriers in the process of internationalization. Using a survey design and a snowball sampling method, 384 responses from respondents that have fulfilled the condition for internationalization were used in the analysis. Data were analyzed using percentages and the hypotheses were tested using partial least square structural equation modeling (PLS-SEM). Our findings revealed that entrepreneurial orientation has a statistically significant influence on internationalization and institutional environment. Also, institutional environment partially mediates between entrepreneurial orientation and internationalization. We concluded that indigenous firms in Nigeria need to consolidate on their entrepreneurial orientation strength in order to reduce the effect of institutional barriers that are capable of frustrating international expansion. Hence, we recommend a collaborative effort between government and indigenous firms in Nigeria towards international expansion of indigenous firms so as to create wealth for the nation.