Home country institutions and exports of emerging economy small firms: the role of internal R&D and acquisition of external knowledge

By integrating institution-based theory with resource-based view, this study investigates the relation between home country institutional development and exporting of small firms in emerging economies, including an examination of the moderating effect of internal R&D and acquisition of external knowledge. With data from the Business Environment and Enterprise Performance Survey on 6174 small firms from 29 emerging economies, this study uses Probit and Tobit regression to analyze the data. This study finds out that the development of home country institutions is positively related to exporting of small firms in emerging economies. Furthermore, higher-levels of internal and external knowledge resources weaken the positive influence home country institutions exert on small firms’ exports. This study enriches our understanding of the impact of home country institutions on exporting of small firms in emerging economies. More importantly, this study contributes to internationalization of small firms by integrating institution-based theory with resource-based view. This research focuses on internal R&D and acquisition of external knowledge resources and enables us to understand how the relation between home country institutions and small firms’ pursuit of exports varies depending on firm-specific resources.