Local vs. non-local institutional embeddedness, corporate entrepreneurship, and firm performance in a transitional economy

Previous studies have examined performance implications of institutional network for firms inlarge complex transition economies. However, these studies are silent on the underlyingmechanisms through which embeddedness in such network is translated into firmperformance. To fill this gap, we propose that corporate entrepreneurship (CE)(i.e. innovation and corporate venturing) can be viewed as a dynamic capability. Then, weargue that CE integrates institutional capital derived from institutional network with otherinternal and external organisational resources to create new resources and capabilities thatrespond to changing opportunities and challenges in the environment, thereby promotingperformance outcomes. Based upon a sample of firms in China, our results support thesearguments.