Browsing by Person "Scheu, Maximilian"

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Venturing into the unknown : exploring the frontiers of foreign entrepreneurship in the 21st century
(2024) Scheu, Maximilian; Kuckertz, Andreas
Entrepreneurship is vital in fostering economic growth, social mobility, and innovation. An essential impact on entrepreneurial activity in a country comes from foreigners who discover and pursue opportunities in the country they are staying. Prior studies have investigated the antecedents, processes and outcomes of foreign entrepreneurship, often emphasizing the context of developed economies. However, the role of foreign entrepreneurs who venture from a developed economy to another developed, emerging, or developing economy and deliberately choose to start a venture has been largely neglected. It thus remains to be seen how the foreign entrepreneurial process looks in light of the increased liabilities foreigners encounter when operating in a distanced cultural and institutional system. This direction of foreign entrepreneurship is essential, as it can drive innovation circulation, contribute to economic and social welfare, and help address the grand challenges of our times by adopting a global perspective. Therefore, I argue that understanding foreign entrepreneurship from developed economies to developed, emerging, and developing economies is vital to better understanding how foreigners can contribute to productive entrepreneurship. Given this background, this dissertation aims to shed light on the foreign entrepreneurial process, raising the research question: How do entrepreneurs from developed economies venture into host countries? Three studies explore the phenomenon from different departure points and thus contribute new perspectives and insights on the entrepreneurial process in a foreign context. Study 1 reviews the current literature on foreign entrepreneurship, focusing on what drives foreign entrepreneurial activity from developed economies to other developed, emerging or developing economies and with what consequences by following a three-phase systematic literature review process. The analysis emphasized the nascency of the topic. Of the over 30,000 initially identified articles, only 33 met the criteria of foreign entrepreneurship from developed economies outgoing to others. Therefore, the analysis led to the creation of a unifying framework, offering one of the first comprehensive overviews of foreign entrepreneurship from developed economies. The study categorizes the impacts of foreign entrepreneurship on social and economic dimensions, explores the relationship between these impacts and the entrepreneurs' local embeddedness, and highlights the influence of cultural and institutional contexts. Additionally, it introduces various archetypes of foreign entrepreneurs from developed economies. Study 2 builds on the identified prior knowledge and focuses on the micro-level process of how a foreign entrepreneur from Europe establishes legitimacy when venturing into China. It investigates the research question of how opportunity-driven entrepreneurs acquire legitimacy in a foreign institutional context. In the study, the foreign context complicates the legitimacy acquisition process due to differing cultural and institutional environments and target audiences an entrepreneur needs to engage with, for example, customers, partners, and employees. However, foreign entrepreneurs who venture into a foreign country might pursue a strategy different from the lengthy process of embedding within a foreign environment before entering mainstream markets. The study uses process tracing to investigate how entrepreneurs adapt to foreign and local institutional logic to gain legitimacy in the host country. The results indicate that foreign entrepreneurs must alternate between local and foreign audiences to legitimize their ventures. This dual legitimation process shows that foreign entrepreneurs can use their foreignness to build legitimate networks, differentiating their approach from that of small ethnic businesses. Study 3 expands this understanding by examining the entrepreneurial ecosystem perspective. Entrepreneurial ecosystems provide institutional arrangements and resources for entrepreneurship, but access to these can be unequal. Therefore, study 3 investigates what ecosystem constraints foreign entrepreneurs encounter and how they respond to them. Thus, study 3 observes foreign entrepreneurs in Shanghai's entrepreneurial ecosystem from 2019 to 2024, using over 50 interviews, field notes, and archival data. The study shows that foreign entrepreneurs encounter cultural and institutional barriers that limit their access to local resources and networks. The results indicate two response strategies: increasing local embeddedness through acculturation and participating in a foreign entrepreneurial sub-ecosystem to access initially constrained resources and networks. Pursuing the dual adaptation strategy helps foreign entrepreneurs overcome constraints and engage in productive entrepreneurship simultaneously. The dissertation closes with a synthesized model about the dual adaptation strategy to manage the institutional pluralism surrounding foreign entrepreneurs, synthesized from the findings of the three studies and prior literature of the fields. The dissertation discusses the relevance of foreign entrepreneurship for future research and practice and offers several contributions.