Title: To grow or not to grow: international growth of Russian SMEs in the context of a local institutional environment for entrepreneurship

Authors: Daria Volchek; Daria Podmetina; Sami Saarenketo; Ari Jantunen

Addresses: School of Business, Lappeenranta University of Technology, Skinnarilankatu 34, 53850 Lappeenranta, Finland ' School of Business, Lappeenranta University of Technology, Skinnarilankatu 34, 53850 Lappeenranta, Finland ' School of Business, Lappeenranta University of Technology, Skinnarilankatu 34, 53850 Lappeenranta, Finland ' School of Business, Lappeenranta University of Technology, Skinnarilankatu 34, 53850 Lappeenranta, Finland

Abstract: The paper elaborates the model for testing the institutional determinants of growth strategy choices. It examines the influence of the domestic institutional environment on the growth strategy choices of Russian small- and medium-sized enterprises (SMEs) and their subsequent performance. Cross-sectional data was collected from 191 Russian SMEs. The results show that the cognitive component of the institutional environment affects SMEs' proclivity to internationally based growth, whereas the normative institutional component affect SMEs' proclivity to innovation-based growth. The performance analysis showed a disordinal interaction between firms' growth cluster membership, knowledge-intensity and the regional location of the firm. On average, middle and high knowledge-intensive firms achieve bigger sales growth, as well as higher returns on sales and assets. Internationalised SMEs have the highest realised growth. The paper demonstrates the complexity of the institutional determinants of growth strategy choices and performance in emerging economies, and provides recommendations concerning strategic policy objectives.

Keywords: institutional environment; entrepreneurship; internationalisation; innovation; SME growth; emerging economies; Russia; small and medium-sized enterprises; SMEs; industrial clusters; knowledge intensity; regional location; knowledge-intensive firms.

DOI: 10.1504/JIBED.2014.064449

Journal for International Business and Entrepreneurship Development, 2014 Vol.7 No.4, pp.266 - 288

Available online: 26 Aug 2014 *

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