International entrepreneurial orientation: the analysis of reliability and validity of the scale in the context of small and medium-sized enterprises of Bosnia and Herzegovina

Abstract

The focus of this research is on the operationalization of the concept of international entrepreneurial orientation (IEO) as the most common construction used for evaluating the determinants of entrepreneurial behavior of the organizations that intend or are already included in international business. Starting from the theoretical basis of the concept and the current empirically verified measurement scales, a modified measurement instrument has been developed, which is adjusted to the specific context of the research: a small and open post-transition country of upper middle income – Bosnia and Herzegovina (BiH). The aim is to determine whether and to what extent the modified instrument IEO is reliable and valid for small and medium-sized enterprises (SMEs) from post-transition countries which strive to realize entrepreneurial internationalization in the conditions of institutional discontinuity. In order to determine constructive reliability of the innovated scale of IEO, Cronbach’s alfa coefficient, with its accompanying indicators was used, while the technique of Principal Components Analysis (PCA) with Promax rotation was applied to check the validity. Empirical research was realized on a sample of 81 export-oriented Bosnia and Herzegovina SMEs. The research results show that modified IEO scale has good internal consistency, as well as subscales, that is, its dimensions: international innovativeness (5 items), international proactiveness (3 items) and international risk-taking (3 items). The rotated solution of PCA for IEO scale uncovered the existence of a simple structure as all three components (international innovativeness, international proactiveness and international risk-taking) have a lot of large factor loadings and all items provide big loadings only per one component. In accordance with the results, the modified IEO scale has a potential to contribute to the research of international entrepreneurship in developing countries, creating the basis for more intensive empirical research, with facilitating collecting, measuring, analyzing and interpreting data for a pragmatic purposes.