Emerging economies, sub-national institutional differences and international expansion of firms: the case of tourism SMEs in Brazil

Abstract

This work studies the existence of sub-national institutional differences in emerging economies and examine if they relate to differences in the decisions adopted by entrepreneurs regarding international expansion. Theoretical framework. In contrast to institutional studies based on comparisons between countries and based on a deterministic perspective that analyses the influence of institutions on the performance of the individual in emerging economies, the present research looks to the New nstitutional Theory and to the literatures on entrepreneurship and international business. Method. This study takes evidence from a sample of 296 entrepreneurs who founded their businesses in Sergipe (Brazil). We carried out the analyses from a comparative perspective for six tourist municipalities located in that state. Results/Implications. The results allow us to identify the existence of differences in the regulative, normative and cognitive institutional dimensions between sub-national territories, and how such differences relate to the commitment of companies located in each sub-national territory to international expansion. The work suggests that the formulation of specific policies and isolated programs, or their general application to the whole of a country, may be insufficient to promote the activity of international expansion if such policies and programs do not consider the institutional idiosyncrasies of each territory