Internationalization, market forces and domestic sectoral institutionalization

Abstract

Purpose - The purpose of this paper is to investigate the influence of micro-environmental international entrepreneurship and the macro-environmental market forces on domestic institutionalization of the industrial sector. In doing so, the paper examines the moderating effect of the degree of internationalization on the relationship between domestic market forces and domestic sectoral institutionalization.Design/methodology/approach - Based upon the creation of the item pools "domestic sectoral institutionalization", "market forces" and "degree of internationalization" derived from previous research, an applied Delphi technique and a representative sample of 149 exporters in Turkey, a survey using a web-based questionnaire was conducted. All scales were designed and a number of hypotheses were validated. Results were analyzed by the principal components of factor analysis, confirmatory factor analysis and moderated hierarchical regression.Findings - The empirical analysis resulted in an interaction effect of two sub-elements of the market forces (trust and organization) and internationalization. The findings imply that internationalization can make an important contribution to the institutionalization of the domestic industrial sector. The paper confirms the findings of previous research on the significant importance of trust for institutionalization. Summarizing, it was found that internationalization significantly and positively moderates the effect of trust on institutionalization. Interestingly, however, internationalization negatively moderates the effect of organization on institutionalization implying that the learning process and experiences created by internationalization cause a higher level of structural adaptation.Originality/value - This paper innovatively sheds light upon the interrelationship between macro environmental market forces, internationalization of entrepreneurship and domestic institutionalization. In doing so, it relates various disciplines, as national and international entrepreneurial behavior, with sociological aspects such as institutionalization for the sake of achieving important macro economic objectives, especially for countries in transition. The comprehensive, reliable and valid research methodology can be applied when researching this topic with important economic implications for transitional economies in other research settings.