This study aims to investigate how entrepreneurial orientation (EO) influences international expansion and examines how appropriability – defined as a firm’s ability to capture and protect the returns from its innovations – moderates this relationship. By integrating Upper Echelon Theory and Dynamic Capabilities Theory, this research explores the cognitive origins of EO and how its strategic effects are shaped by the appropriability environment, particularly in the context of Korean manufacturing firms.
This study used a logit model and tested the hypotheses using cross-sectional data from the Korean Innovation Survey 2020. The survey was conducted among CEOs of 4,000 manufacturing companies in South Korea. The data provides a broad sample of firms at different stages of international expansion, offering valuable insights into the mechanisms that drive successful global growth.
By conducting logistic regression analysis, the authors found that firms’ EO and appropriability had a positive effect on international expansion; however, the interaction effect of the variables was not significant. To further investigate the contextual effect, the authors conducted multinomial logistic regression and revealed a moderating effect of appropriability on the relationship between EO and international expansion, only when the firm expanded into more than two different regions.
International expansion not only offers firms the potential for substantial competitive advantage but it also presents numerous challenges that require careful strategic management. This study contributes both theoretically and practically to the internationalization literature by identifying the key characteristics and activities necessary for effective international expansion. Examining the roles of EO and appropriability sheds light on the nuanced relationship between entrepreneurial characteristics and the firm’s ability to navigate international markets, ultimately enhancing the understanding of the internationalization process.
