The Impact of Institutional Factors on the Rate of International Entrepreneurship in Developing Countries

International business development is important for economic growth and development. Nowadays, early-stage entrepreneurs enter foreign markets as well as large companies. Institutional theory focuses on the interaction between institutions and organizations and one group of factors that affect international entrepreneurship is institutions. On the other hand, the weakness of institutions can be compensated by organizational mechanisms. Concerning the weakness of institutions in developing countries, this research aims to study the impact of institutional factors on the internationalization of early-stage entrepreneurs in developing economies by considering the interaction between institutions and risk taking as an organizational mechanism. Descriptive-correlational method is used in this study. For this purpose, secondary data are used and data for 59 developing countries are collected from international reports which present economic and entrepreneurial indices of countries based on survey data. Data are modeled using structural equation approach by SmartPLS3 software. Results indicate that the rate of international entrepreneurship is positively affected by conducive institutions. In addition, findings of this study show that in the countries where entrepreneurs are more risk taking, the impacts of regulatory and cognitive institutions on international entrepreneurship are negatively moderated.