The role of professional service providers during the initial stages of international entrepreneurship: a neo-institutionalist view

Examined through the lens of institutional theory, entrepreneurs choosing to do business beyond their home national boundaries are choosing to operate under host country institutions that are likely to be different from their home country institutions. Given the strong normative pressures that these foreign institutions bring to bear on organisations and individuals, we suggest that the decision to expand into different national markets raises interesting questions of whether to succumb to these pressures or find ways to counteract them. In this conceptual paper, we suggest that professional service firms (PSFs) play an important role in resolving this institutional dilemma. Focusing on the initial decision to explore international expansion and looking at PSFs as institutional translators, we suggest that the decision to hire PSFs depends upon the characteristics of the firm, industry and home institutions, moderated by the institutional distance between the home and host nation dyad.