To read this content please select one of the options below:

The interactive effect of cultural values and government regulations on firms’ entrepreneurial orientation

Tze Cheng Chew (Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, Kota Kinabalu, Malaysia)
Yee Kwan Tang (Adam Smith Business School, University of Glasgow, Glasgow, UK)
Trevor Buck (Adam Smith Business School, University of Glasgow, Glasgow, UK)

Journal of Small Business and Enterprise Development

ISSN: 1462-6004

Article publication date: 21 September 2021

Issue publication date: 4 April 2022

542

Abstract

Purpose

Considering that the social-cultural context is important as in which the entrepreneurs are embedded to conceptualise entrepreneurial orientation (EO), the purpose of the study is to explicate the influence of the key decision-makers’ internalised cultural values and perceptions of government regulations, to offer nuanced explanations of micro-level variations in EO of firms embedded in the same institutional context.

Design/methodology/approach

Using a quantitative approach, relationships are explored in a sample of 201 Malaysian small- and medium-sized enterprises (SMEs). Partial least squares structural equation modelling (PLS-SEM) is used for the sample, and an additional test is conducted for a robustness check.

Findings

The study finds that three cultural values of the key decision-maker, namely individualism, masculinity and uncertainty avoidance, exhibit a significant association with the EO of the firms. Further, the analysis reveals that the positive effects of individualism and masculinity are enhanced when moderated by favourable perceptions of government regulations to entrepreneurship.

Research limitations/implications

The study uses a single key informant in data collection, therefore, the possibility of single-respondent bias. The results must be interpreted in light of these limitations.

Originality/value

The study contributes to the existing literature regarding the relationship between institutions and entrepreneurship. Specifically, it articulates a microfoundations lens to explain the influence of institutions in terms of key decision-makers’ internalised cultural values (informal institutions) and their perceptions of government regulations (formal institutions) on the EO of the firm. It further elucidates the need to embrace informal and formal institutions as interdependent factors instead of treating them as standalone constructs in entrepreneurship research and policy design.

Keywords

Acknowledgements

Conflict of interest: The authors of this paper certify that they are not affiliated or involved with any organisation or entity and have neither financial nor non-financial interests associated with the subject matter and materials discussed in this manuscript.

The authors would like to thank two anonymous reviewers for their constructive feedback and insightful comments. The authors are also grateful to the late Professor Pavlos Dimitratos, who was the primary supervisor of the doctoral thesis from which this paper is derived. The scholarship by the Ministry of Higher Education Malaysia is acknowledged with gratitude.

Citation

Chew, T.C., Tang, Y.K. and Buck, T. (2022), "The interactive effect of cultural values and government regulations on firms’ entrepreneurial orientation", Journal of Small Business and Enterprise Development, Vol. 29 No. 2, pp. 221-240. https://doi.org/10.1108/JSBED-06-2021-0228

Publisher

:

Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

Related articles