International commitment,post-entry growth and survival of international new ventures

This paper makes several contributions to the emerging literature on the post-entry behavior of international new ventures. Based on an extensive longitudinal data set, we investigate the dynamics of commitment, growth and survival of different types of newly internationalizing Belgian firms. Global start-ups have the highest initial and rapidly rising export commitment per market and are also more likely to continue exporting over time than geographically focused start-ups, and traditional staged exporters. However, global start-ups also display the highest failure rate. This high failure rate appears to result primarily from the ‘liability of newness’ and less from the added complexity associated with rapid and wide scope internationalization.     

New venture adaptation in international markets: A goal orientation theory perspective

This study uses goal orientation theory to investigate why managers of international new ventures make adaptations to markets served, entry modes used, and the organization. We use the case method to identify the international adaptation behaviours of six new ventures and managers’ explanations regarding those adaptations. We infer two different profiles of managerial goal orientation. The goal orientation associated with proving one’s competence is common across managers, but firms only pursue international adaptation if their managers also hold a learning goal orientation. In contrast, if managers have the goal orientation associated with avoiding failure, firm-level adaptation is not apparent.     

International network formation,home market institutional support and post-entry performance of international new ventures

Effectuation and causation decision-making logics are noted to be major alternative approaches to international network formation. However, knowledge is lacking on how and the conditions under which the two approaches contribute to post-entry performance of international new ventures (INVs). We integrate the theory of effectuation and institutional development logic to explain how effectuation and causation approaches to international network formation individually and jointly contribute to post-entry performance under varying conditions of home market institutional support. We test our proposed framework on primary data from 228 INVs in a sub-Saharan African economy. Results suggest that greater uses of both effectuation and causation approaches to international network formation are associated with stronger post-entry performance. More interestingly, results show that the joint effect of the two international network formation approaches on post-entry performance is amplified under conditions of low home market institutional support. Our findings provide theoretical and managerial insights on the importance of complementing effectual and causal reasoning in international network formation in weak home market institutional environments.     

Learning in international new ventures: A systematic review

The present paper reports the findings of a systematic review on learning among International New Ventures (INVs). Learning has been studied fairly extensively by scholars in the field of organization theory. Learning is a prerequisite for internationalization, and the behavior of individuals working in INVs seems to indicate a strong predisposition or aptness to learning. In spite of this, research on learning among INVs has been limited and fragmented up to the present time. In seeking to advance the research niche of INV learning, we conducted a systematic review of articles published on learning within INVs. Our contributions are related to: (i) providing a review of current knowledge of learning among INVs; (ii) relating the findings of our review to the organizational learning theory proposed by March (1991); and (iii) a future research agenda.     

International new venture performance: Role of international entrepreneurial culture,ambidextrous innovation,and dynamic marketing capabilities

International new ventures (INVs) contend with environmental dynamism in global markets, compelling firms to enhance their innovation and marketing capabilities. While the INV literature is growing, it is not informative as to how INVs develop and utilize dynamic capabilities to overcome resource-constraints to enhance performance. We utilize the concept of international entrepreneurship culture (IEC) to better understand how INVs advance innovation and dynamic marketing capabilities to succeed in their internationalization activities. Building on the dynamic capabilities view (DCV), we empirically examine the relationships among IEC, ambidextrous innovation, dynamic marketing capabilities, and INV performance under varying levels environmental dynamism. The findings highlight that IEC influences both ambidextrous innovation and dynamic marketing capabilities; and, together, these link to INV performance gains. Furthermore, this research finds support for the mediating effects of ambidextrous innovation and dynamic marketing capabilities in the IEC – INV performance relationship. Additionally, the results indicate an international entrepreneurial culture is of greater significance in developing ambidextrous innovation when environmental dynamism is present. The study context is a sample of 286 high-technology INVs from India, a large and dynamic emerging market.     

Role of opportunity creation between reconfiguration and innovation: Insights from emerging market international new ventures

There exists a need to further examine capabilities that enable emerging market international new ventures (INVs) to create innovation offerings that drive performance. Although conceptual studies highlight the importance of reconfiguration capability towards innovation and performance, such relationships in the emerging market INV context require further empirical analysis. Moreover, there is a conflict in the literature as to whether reconfiguration capability supports innovation and performance directly or indirectly. As the pursuit of opportunities beyond domestic borders is central to INV research, opportunity creation is a key inquiry to advance our understanding of how reconfiguration capability facilitates innovation and performance in the emerging market INV context. Drawing on dynamic capabilities theory and creation theory, we empirically examine the interplay between reconfiguration capability, opportunity creation, innovation, and international performance. In addition, we study opportunity creation as a mediator between reconfiguration capability towards innovation and performance, respectively. The findings reveal reconfiguration capability does not directly support innovation but does shape innovation through opportunity creation. Reconfiguration capability directly supports performance objectives of emerging market INVs, and indirectly through opportunity creation.     

The resource dynamics of international new venture networks

Building on network theory and the resource-based view of the firm, this paper uses three case studies to explore how networks facilitate resource development in the international new venture. Set in the context of the conception, commercialization and growth stages of venture development, four propositions are advanced. These pertain to the dynamics of organizational, human, physical, financial and social capital, and the nature of these resource flows as they pertain to the INV network. Implications for research and INV management are discussed.     

Strategic ambidexterity and performance in international new ventures

We drew on the literature on ambidextrous organizations to propose that international new ventures (INVs) that concurrently pursue paradoxical pairs of strategies—known as the capability of strategic ambidexterity—can achieve superior performance. These paradoxical strategies are: (a) few investments and many countries, and (b) standardization and innovation. Our hypotheses were tested using data from 70 Canadian INVs. This is the first study that attempts to theoretically and empirically link ambidexterity and INV performance. Our findings suggest that INVs that are capable of pursuing and implementing paradoxical strategies achieve superior performance over those lacking such capability. Copyright © 2008 ASAC. Published by John Wiley & Sons, Ltd.     

Unleashing the dynamics of product-market ambidexterity in the pursuit of international opportunities: Insights from emerging market firms

Extending the current debate surrounding ambidexterity, this study examines how emerging market firms pursue international opportunities by leveraging the dynamics of strategic ambidexterity in product and market domains. The investigation draws on longitudinal and multiple sources of data from four Chinese multinational firms. Two follow traditional or incremental internationalization pathways, whilst the other two pursue rapid or accelerated internationalization. The study offers a more dynamic perspective to help understand the evolving nature of ambidexterity with respect to the routes of strategic product and market development options. In particularly, the findings reveal that incremental internationalization is characterized by structural ambidexterity combining product exploitation with market exploration at the initial stages, whereas accelerated internationalization is best explained by market exploration and exploitation (or market ambidexterity) when first entering foreign markets. Moreover, firms were found to maintain strategic priorities through structural and punctuated ambidexterity across product and market domains at later stages of internationalization. This study contributes to the dynamic perspective of strategic ambidexterity for seizing international opportunities among emerging market firms.     

The dynamics of experiential learning: Microprocesses and adaptation in a professional service INV

In international new ventures (INVs), experiential learning happens in quick succession and across a wide number of diverse contexts. Yet, we lack an empirical understanding of the microprocesses through which INVs learn and adapt in their foreign expansion. Understanding those microprocesses is important because timely adaptation can save the venture time and resources, thus promoting sustainable growth. In this study, we investigate the dynamics of experiential learning and adaptation in the internationalisation process of an INV in the professional service sector. Findings from our study illustrate that the firm applies deliberate experiential learning by developing, revising, and finalising criteria for important dimensions in the international growth process, and adapts its internationalisation practices accordingly. We further show that deliberate experiential learning is predicated on an actively and closely monitored learning process, involving critical evaluation, adjustment of criteria, and acceptance of affordable mistakes, as opposed to learning by default.     

International new ventures: The cross-border nexus of individuals and opportunities

We draw on entrepreneurship research to present a framework for international new ventures as the cross-border nexus of individuals and opportunities. Opportunities may be associated with cross-border combinations of resources and/or markets and therefore vary along these two dimensions. This framework accounts for the emergence of firms whose very existence stems from opportunities to engage in the cross-border combination of resources and/or markets. This perspective has important implications for whether internationalization follows competitive advantage or vice versa and also helps explain how the identification and exploitation of opportunities to create international new ventures may contribute to economic development.     

Institutional investors and international investments in emerging economy firms: A behavioral risk perspective

While the extant literature has examined the influence of controlling and non-controlling principals on the internationalization decisions of emerging market firms, heterogeneity among non-controlling principals is largely ignored. The risk characteristics of different groups of owners, shaped by their institutional environments, could contribute to the differences in their preferences for firm internationalization. In this paper, we draw insights from institutional theory and behavioral risk perspective to examine the risk propensities and risk perceptions of various non-controlling principals, such as pressure-resistant (FIIs and mutual funds) and pressure-sensitive (banks, insurance companies and lending institutions) institutional investors. Empirical results from a sample of 2364 unique Indian firms during the 2005–2014 time-period show that, after controlling for firm-level resources and capabilities identified in prior literature, the ownership share of different types of institutional investors is associated with firms’ international investments differently. While pressure-sensitive institutional investors, such as banks and insurance companies, are not supportive of foreign investments by firms, pressure-resistant institutional investors, such as FIIs and mutual funds, are supportive of this strategic decision. Furthermore, our results show that the family ownership in a firm (measured in terms of family shareholding) further lowers the preference of pressure sensitive institutional investors for internationalization, whereas family ownership positively moderates the pressure resistant investors towards internationalization.     

Developing brand identities for international new ventures under uncertainty: Decision-making logics and psychic distance

While many models describe efforts to build brand identity, none specifies the brand identity development for small firms facing uncertainty, such as rapidly internationalizing international new ventures. By examining four such case firms informed by interviews and archival data spanning five years, this study identifies three brand identity development states: unbranded, sporadically branded, and focused branded international new ventures. Brand values, brand personality, and brand relationships are critical brand identity dimensions that manifest in the three states. A related model and propositions help explicate how uncertainty owing to psychic distance moderates the impact of decision-making logics on brand identity development. We show how the role of decision-making logic affects the prominence given to different dimensions of brand identity in the developmental states. Moreover, we reveal the associated change and state mechanism allowing for the rapid advancement of brand identity states in international new ventures.     

Managing international joint ventures to improve performance: The role of structural and social mechanisms

Poor performance has been a major concern in research on international joint ventures (IJVs). This study integrates the IJV management mechanisms from transaction cost theory (TCT) and social exchange theory (SET) in order to gain insights into management mechanisms that improve IJV performance. The framework consists of three structural (i.e., symmetric dependence, symmetric equity share and resource complementarity) and three social (i.e., trust, communication and cultural adaptation) IJV management mechanisms, which are considered as potential determinants of IJV performance. Based on the analysis of data collected from 89 IJVs established by Nordic firms in Asia, Europe and the USA, results indicate that TCT-based symmetric dependence and resource complementarity on the one hand and SET-based trust, communication and cultural adaptation on another significantly improve IJV performance. However, impact of symmetric equity share on IJV performance remains negative and non-significant, explaining that IJV partners may consider it rather a safeguard to their own stake and interests in IJVs. In addition, SET-based IJV management mechanisms are found to be more effective than the TCT-based IJV mechanisms in improving IJV performance.     

Dual-edged tools of trade: How international joint ventures help and hinder capability building of Chinese firms

Forming international joint ventures (IJVs) with multinational corporations (MNCs) from advanced economies has been widely adopted by firms in emerging economies as an organizational approach to building up their innovative capabilities. In this paper, we emphasize that such an approach has both advantages (knowledge transfer from MNCs) and disadvantages (overdependence upon MNCs and reduction of innovation incentives) in the capability building of indigenous firms. Utilizing a longitudinal dataset consisting of 474 industries in China during 1998–2002, we find supporting evidence for the co-existence of the positive and negative impacts of IJVs. Specifically, we find that IJV presence has an inverted U-shape impact on innovative capabilities of indigenous firms; such an impact is stronger in industries with low (versus high) technology gap. We discuss the implications of our findings for research, managerial practice, and government policy.     

Exploring the role of internationalization knowledge in fostering strategic renewal: A dynamic capabilities perspective

Internationalization knowledge (IK) is important to successfully enter and develop competitive strategies abroad. Yet, how IK is advanced and improved across the multinational enterprise (MNE), and how this contributes to the MNE’s strategic renewal is less understood. This analysis is based on an in-depth case study of Microsoft International to explore how IK is advanced, improved, and integrated across the enterprise. Our findings suggest that IK plays a critical role in fostering strategic renewal of an MNE. More specifically, sensing, seizing, and transforming capabilities jointly provide the necessary basis that enable IK to facilitate strategic renewal. We contribute to the literature by (1) explicating three categories of IK and their hierarchical relationship; (2) reveal how three distinct capabilities required by MNEs capture and integrate the three categories of IK across the enterprise; and, (3) offering that strategic renewal is triggered by routines based on the development and integration of IK.     

Determinants of ownership preference of international joint ventures: new evidence from Chinese manufacturing industries

Given the large size and rapid growth of foreign direct investment in China, the subject of ownership preference is of great interest to academics as well as to firms intending to invest in China. This study focuses on two sets of variables: industry-specific factors and venture-specific factors. Statistical tests based on information of 818 international joint ventures (IJVs) in China show that duration and scale of IJVs are positively associated with the level of foreign ownership. Industry-specific factors such as skill intensity, market concentration, market potentials, and foreign business agglomerations also positively influence the ownership preference of foreign firms, while local industry R and D intensity and productivity are found to be significant but negatively associated with the ownership preference.     

On the internationalization of Turkish hospital chains: A dynamic capabilities perspective

How do professional service firms build the capabilities required for effective international operations? Although the internationalization of manufacturing firms is a widely studied topic, the literature on the internationalization of service firms remains scant. The problem is even more acute when it comes to studies of professional services such as healthcare organizations and hospitals. Yet, we encounter remarkable examples of international market expansion by professional service firms. In this paper, we report on a study of large privately-owned hospital operators from the emerging economy of Turkey, based on in-depth interviews with senior executives. Taking advantage of Turkey’s strategic location in the region, these firms have shown extraordinary entrepreneurial initiative expanding their operations beyond the home market over the past two decades. Even more impressive is the creative strategies these firms have been deploying in terms of market entry modes. These range from medical tourism to setting up diagnostic clinics abroad, operating full-service hospitals in key markets, management contracts, and attracting equity capital from international investment firms. We draw from the theory of dynamic capabilities in order to explain the success these firms have had in cultivating international market opportunities. We contend that it takes a variety of organizational capabilities for traditionally domestic-market focused firms to expand into international markets. We provide an integrative discussion and offer implications for advancing knowledge and managerial practice.     

Earliness of internationalization and performance outcomes: Exploring the moderating effects of venture age and international commitment

This study examines the impact of early foreign market entry on new ventures’ performance outcomes. Venture age and international commitment are theorized as moderators to address the inconsistent findings of previous research surrounding the performance implications of early internationalization. Results from a sample of international new ventures in China found that the earliness of internationalization positively contributes to firm performance in terms of sales growth, but not innovation and profitability. The performance advantage of early internationalization becomes obsolete as young ventures become mature, especially among those with a low level of international commitment. This study highlights the importance of incorporating time-based dimensions of international venturing for a better understanding of the performance implications of early internationalization.     

The determinants and performance of early internationalizing firms: A literature review and research agenda

As scholars have examined the antecedents, processes, and performance of early internationalizing firms in the past three decades, the domain has become a full-fledged research field. However, extant reviews have not yet provided a comprehensive picture of the determinants of early internationalizing firms and their performance although it is a relevant topic in the literature. In response, this paper seeks to systematically review and synthesize extant research on the determinants and performance of early internationalizing firms. The authors critically assess and examine 167 articles that have appeared in 28 academic journals over the last three decades. This study contributes to extant literature by highlighting the determinants of early internationalizing firms and their performance with a focus on the entrepreneur, firm, and environment factors. Furthermore, an integrative framework has been developed to account for the relationships among determinants, early internationalization, and outcomes. Finally, this paper reveals some significant gaps to advance an important research agenda for future research.