Globalization and Performance Impact in New Ventures: An Analysis of Capabilities and Institutional Factors

Purpose - We attempted to develop a theoretical system to explain the phenomenon of global growth of new ventures by utilizing concepts such as resource-based view and institutional- based view. Design/Methodology - This study addresses this gap by integrating resource-based and institutional-based perspectives to comprehensively understand their collective impact on the globalization and performance of INVs. In doing so, we conduct a thorough review of existing literature to construct a comprehensive theoretical framework. Then, we validated the influence of INVs globalization and performance through a structured questionnaire targeting companies registered with the InnoBiz Association in Korea, using covariance structure analysis to verify the validity and research model. Findings - From a resource-based perspective, it was found that international entrepreneurship, technological development capabilities, and organizational learning capabilities significantly influence the entry of INVs into various countries. From an institution-based perspective, formal institutions significantly affect the degree of globalization, but the significance of the impact of informal institutions on globalization was not confirmed. However, the interaction between formal and informal institutions was found to have a significant influence on the degree of globalization of INVs. As proven in many previous studies, the more diverse the countries a venture enters, the more significant the impact on performance. Originality/value - This study aimed to supplement prior research by presenting an integrated approach suggesting that resources/capabilities and institutions have a significant impact on the degree of globalization of INVs. Specifically, the study is meaningful in highlighting the importance of the interaction between formal and informal institutions in influencing a firm’s globalization.