The Context Sensitivity of International Entrepreneurial Orientation and the Role of Process and Product Innovation Capabilities

Abstract

Drawing on a contingency perspective of the resource-based view of the firm, we test the thesis that a relationship between international entrepreneurial orientation (IEO) and the international performance of export-manufacturing firms is context-sensitive and contingent on innovation capabilities. Using time-lagged survey data from 369 Bangladeshi export-manufacturing firms in a least developed country (LDC) as an extreme empirical context, we predict that process and product innovation capabilities are essential to the relationship between IEO and international performance among export-manufacturing firms. We find that the effect of IEO on international performance is not positive; however, the relationship becomes positive when moderated by process and product innovation capabilities. International entrepreneurial firms in an LDC succeed when they can better align IEO-driven efforts with these capabilities. Our study advances knowledge on the context sensitivity of IEO and embellishes a resource-based theory of IEO.