The Role of National Culture in the Transnatioal Entrepreneurship Process

ABSTRACTTransnational entrepreneurship (TE) is a relatively unexplored field of study. Although researchers emphasize that TE is socially and culturally embedded, research to date has not examined the role of national culture in the TE process. This study builds on Hofstede's (1980) framework of national culture and proposes that power distance and collectivism dimensions of national culture affect the TE process. We propose relationships between national culture and resource availability, opportunity recognition, venture creation and business growth in the TE process.Keywords: Transnational entrepreneur, national culture, Hofstede, dual embeddedness, bifocality.INTRODUCTIONTransnational entrepreneurship (TE) is a new phenomenon that has been gaining attention in the last few years (Porters, Guamizo & Landolt, 1999; Sequeira, Carr, & Rasheed, 2006; Urbano, Toledano, Ribeiro-Soriano, 2011). Increasing globalization, coupled with decreasing transportation and communication costs, has contributed to the abilities of entrepreneurs to conduct venture activities across national borders (Patel & Conklin, 2009). TE results from different causes and has various consequences. Some Transnational Entrepreneurs (TEs) are pushed out of their countries and into TE whereas others see opportunities in another country and are pulled into those countries to pursue opportunities. Some of them are highly skilled whereas others are not. Regardless of their background, TEs are unique in the sense that they have greater ability than entrepreneurs in discovering profitable international trade opportunities because investment information is embedded in immigrants' transnational networks. Researchers have argued that some of the benefits of TE include reduction of poverty and economic growth in the developing world, increase in bilateral trade, capital investment, and technology and know-how transfer (Robinson, 2005).TEs are immigrants who take advantage of opportunities that cross national borders and simultaneously operate businesses in their countries of origin and host countries where they engage in cross-border business activities (Portes, Guamizo, & Haller 2002; Robinson, 2005). Dual embeddedness and bifocality differentiates TEs from other entrepreneurs located in a single geographical location. TEs are embedded in at least two different social and economic arenas and they have been socialized both in their culture of origin and the culture of the country they migrated to (Drori, Honig, & Wright, 2009; Ireland & Webb, 2007; Sequeira, Carr, & Rasheed, 2009; Urbano, Toledano, & Ribeiro-Soriano, 2011).Context plays an important role in the emergence and success of TEs (Comer & Pavlovich, 2007). Researchers have identified a number of macro level factors that either encourage or inhibit TE. For example political turbulence, violence, economic disruptions, and technological developments such as high-speed jet travel, inexpensive long-distance communication have been identified as factors that encourage TE (Castells, 1996; Levitt, 2001; Roberts, Frank, & Lozano-Ascencio, 1999; Urbano, Toledano, & RibeiroSoriano, 2011; Vertovec, 1999). Although researchers recognize that TE process is "culturally oriented, culturally derived, and reliant on the specific community and relationships within which the immigrant is embedded" (Sequeira et al., 2009, p. 1026), studies that relate national culture to the TE process are scarce. This study will contribute to our understanding of the TE process by examining it from a national cultural perspective. This framework will help us evaluate how culture affects the resources available to the TEs, their opportunity recognition, venture creation decision, and TEs' venture growth, which are comer stones of the entrepreneurial process. It will increase our understanding of environmental factors that support transnational entrepreneurship, contribute to bilateral trade, and knowledge transfer as well as make international markets more efficient (Robinson, 2005). …