Purpose: While service-based enterprises possess significant inherent potential for internationalization—thanks to their knowledge-intensive nature, digital scalability, and operational flexibility—their global expansion in Iran remains notably limited. Traditional international business literature has predominantly emphasized structural and institutional barriers such as financial constraints, sanctions, or logistical inefficiencies. However, emerging scholarship underscores that cognitive and attitudinal factors of entrepreneurs often exert a more profound and decisive influence on internationalization decisions than objective constraints. This study addresses a critical research gap by investigating the subjective, internal barriers that shape the internationalization mindset of Iranian service entrepreneurs. Specifically, it seeks to identify, interpret, and contextualize the cognitive schemas, emotional responses, and attitudinal dispositions that prevent or delay global engagement even when structural conditions appear favorable. By doing so, the research shifts the analytical lens from external obstacles to the entrepreneur’s inner world, offering a nuanced understanding of internationalization as a psychological and interpretive process rather than a purely economic one.
Design/Methodology/Approach: Guided by an interpretative phenomenological approach (IPA), this qualitative study prioritizes deep, context-sensitive exploration of lived experiences and meaning-making processes. IPA was selected because it enables researchers to go beyond surface-level descriptions and delve into how entrepreneurs subjectively construct the reality of internationalization through their beliefs, fears, and cultural frames. Data were collected through 18 in-depth, semi-structured interviews with service entrepreneurs actively operating in Gilan Province, Iran—a region with growing entrepreneurial activity but limited international presence. Participants represented diverse service sectors, including information technology, online education, tourism, business consulting, and creative industries (e.g., content creation and graphic design). This sectoral diversity ensured rich, cross-cutting insights while maintaining contextual coherence. Interviews, lasting 45 to 75 minutes, were conducted face-to-face or online, with full transcription and anonymization. The interview guide featured open-ended, exploratory questions such as: “What comes to mind when you imagine taking your service abroad?”, “What mental or emotional barriers have held you back?”, and “How do your personal beliefs about Iranian identity shape your view of global markets?” Data analysis followed Braun and Clarke’s six-phase thematic analysis, allowing both inductive emergence and theoretical reflexivity. The process began with iterative familiarization, proceeded through initial coding, clustering into organizing themes, and culminated in the development of seven overarching interpretive themes. Rigor was ensured through peer debriefing, member checking (returning summaries to participants for validation), audit trails, and purposeful sampling until theoretical saturation was reached.
Findings: The analysis revealed seven interrelated cognitive and attitudinal barriers: Limiting Mental Attitudes: Entrepreneurs exhibited strong risk aversion, preference for domestic stability, and self-sabotaging beliefs such as “The local market is enough” or “Only big firms can go global.” These reflect cognitive biases like status quo preference and confirmation bias. Psychological Impact of Sanctions: Beyond legal restrictions, sanctions have become internalized as a psychological trauma. Many expressed beliefs like “The world has closed its doors to Iranians” or “My nationality alone will get me rejected,” indicating a deep-seated sense of collective stigma and systemic exclusion. Cultural and Linguistic Barriers: Participants feared miscommunication, cultural offense, and the inability to navigate foreign business etiquette. Language limitations were not just practical but symbolic of broader anxieties about cultural illegitimacy. Stereotypical Perceptions of Global Markets: Markets were often viewed homogenously (e.g., “If it works in Turkey, it works in Germany”) or through polarized lenses, either overly idealized (“Quality will speak for itself”) or demonized (“Westerners don’t trust Iranians”). This reflects cultural myopia and a lack of market-specific intelligence. Lack of Strategic Knowledge: Despite motivation, entrepreneurs lacked procedural knowledge, unaware of international service export regulations, pricing models, digital platforms, or legal frameworks, leading to paralysis by uncertainty. Environmental Uncertainties: Deep distrust of international partners, fear of intellectual property theft, and anxiety over unenforceable contracts created a pervasive sense of vulnerability, especially in knowledge-based services. Low Self-Efficacy: Many doubted their personal capacity to compete globally, stating, “I can’t handle the complexity” or “My service isn’t world-class.” This aligns with Bandura’s theory: low self-efficacy reduces willingness to engage with challenges, regardless of actual capability.
Discussion and Conclusion: These findings collectively demonstrate that internationalization in the Iranian service context is less hindered by external structures and more constrained by internal mental models. The entrepreneur’s psyche—shaped by historical trauma, cultural insecurity, and cognitive limitations—acts as a powerful gatekeeper. This resonates with international entrepreneurship literature on cognitive biases (Müller & Bouncken, 2023) and self-efficacy (Li & Zahra, 2012), but extends it by highlighting the psychosocial legacy of sanctions as a unique, context-specific barrier rarely addressed in Western studies. Notably, the internalization of sanctions as a psychological barrier, not just a legal one, suggests that policy interventions targeting infrastructure or finance alone will be insufficient. If entrepreneurs believe global markets are inherently closed to them, they will not seek available opportunities. Similarly, the prevalence of cultural myopia and low cultural intelligence underscores that technical training must be paired with intercultural competence development. The study concludes that internationalization is not merely a strategic choice but a psychological journey. For Iranian service entrepreneurs, crossing borders begins in the mind. Thus, effective support systems must integrate psychological empowerment—through mindset training, confidence-building workshops, and exposure to success stories—with practical resources. Policymakers and incubators should prioritize: Programs that enhance cultural intelligence and intercultural communication, Safe, low-risk international pilot projects (e.g., with neighboring countries) to build experiential confidence, Trusted information hubs on global service export procedures, Initiatives that reframe Iranian identity as a competitive asset—not a liability. Future research could employ mixed methods to quantify the impact of cognitive barriers or conduct cross-regional comparisons. Nonetheless, this study makes a timely contribution by revealing that in volatile, sanctioned environments, the most resilient infrastructure for globalization may well be the entrepreneur’s transformed mindset.