Does the Nature of Institutional Characteristics Matter? Disentangling Environmental Institutions for SME Internationalisation in an Advanced Versus a Developing Country

Environmental institutions are of the most crucial determinants of SME internationalization. These drivers might have a positive or negative influence on the performance of entrepreneurial businesses across borders. The objective of this paper is to assist the international entrepreneurs in considering what institutional characteristics are needed for the internationalization of SMEs in different places. Among environmental elements, this article focused on three categories of cultural determinants, legal and political conditions, and the economic clients including competitive pressures in international markets, nature of demands in international markets, domestic resources advantages, and domestic general economic characteristics. It is further expected to differentiate the universal factors that influence SMEs internationalization regardless the location of the firm from the context-based characteristics, which are dependent on the particular conditions of the people/ place of the firms. The study examined five cases from Italy and five other cases from Iran through conducting interviews with international entrepreneurs. Findings indicate that four out of twenty factors examined are universal, eight factors are Iranian context-based, and one factor is found to be specific to the Italian context. Also, our analysis suggests that seven determinants did not have significant influence in both countries.