Exploring the Role of a Country's Institutional Environment in Internationalization: Strategic Responses of SMEs in Russia

Based on the suggested five-pillar institutional framework, the study empirically investigates the impact of the institutional environment on internationalization aspirations of small and medium enterprises (SMEs) in emerging economies and maps their strategic responses against imposed institutional pressures. The data collected across five forest cluster SMEs in Saint Petersburg and Moscow are analyzed. Political instability, corruption, bounded cognition, over-patriotism, and high power distance act as the main constraints, while demands for new knowledge and funding are identified as the main drivers for internationalization. The classified institutional challenges are mapped against the possible strategic responses of the SMEs, such as acquiescence, compromise, avoidance, defiance, and manipulation.