The influence of entrepreneurial capabilities on mode of entry of small and medium firms expanding internationally

Abstract

Previous research (Chen&Mujtaba, 2007) on entry mode considered the influence of country, industry, location, firm specific factors on the entry mode. However to date limited research has attempted to examine the entrepreneurial capabilities and the influence on the strategic entry mode decision. This study will provide an empirical investigation of the contingent influence of small to medium sized firms’ entrepreneurial capability on the entry mode decision for internationalisation. The research aimed to determine whether entrepreneurial capabilities influence the choice of entry mode for international firms. In addition, the study investigated which entrepreneurial capabilities will lead to financial growth in the international market. The population for the study was small to medium-large firms in South Africa that had international operations. A combination of three non-probability sampling techniques was used, namely convenience, quota and snowball techniques (Blumberg, Cooper,&Schindler, 2008), which provided a sample of 175 firms. The questionnaire consisted of two sections, the first section consisted of corpographics, entry mode and performance information. The second section used a seven point Likert scale to determine the entrepreneurial capabilities of the firm. Descriptive and inferential statistics were used to analyse the data. Empirical results indicate that certain international entrepreneurial capabilities influence the choice of entry mode. In other words, it is the efforts to build the right mix of capabilities that may enhance the firm’s output and ability to recognise international opportunities.