Digital governance voids and entrepreneurial internationalization

Abstract

Building on the institutional escape perspective, this study explains why the home-country digital governance voids – i.e., the absence, underdevelopment, or fragmentation of digital infrastructure and associated governance mechanisms – may foster the internationalization of entrepreneurial firms in developed economies. It further explains why and how this baseline prediction varies across differing firm sizes and home-country economic opportunities. Using a five-year panel dataset of entrepreneurial firms across European countries, it provides support for the escape perspective, showing that digital governance voids do boost the degree of entrepreneurial firms’ internationalization, particularly for larger entrepreneurial firms and in more opportunity-rich economies. This study offers important theoretical contributions to the institutional theory, the escape perspective, and research on entrepreneurial firm internationalization, and discusses practical implications as well as avenues for future research.