International exposure through network relationships: Implications for new venture internationalization

Drawing on the network literature and attention-based view, we examine the extent to which international exposure from key informal (geographically proximate firms) and formal (alliance partners) network relationships impacts new venture internationalization. Our findings are three-fold. First, international exposure from both types of network relationships positively influence new venture internationalization, and serve as substitutes for each other. Second, the effects differ based on the age of the venture. While older ventures benefit more from international exposure from alliance partners, younger ventures are more influenced by international exposure from geographically proximate firms. Third, our analysis confirms a three-way interactive effect of age and international exposure from informal and formal relationships on new venture internationalization.     

Selecting the country in which to start internationalization: The non-sequential internationalization model

The paper analyses the selection of the country in which a firm starts internationalization. It proposes that some firms strategically choose a non-sequential internationalization, that is, they select a country that is dissimilar to their country of origin for their first foreign expansion. The reason for this is that some firms develop, in their home country, three types of knowledge that are useful to overcome foreign expansion difficulties: knowledge to manage complexity, developed by having multiple operations at home; knowledge to manage differences in competitive conditions, developed by operating in business-to-business industries, and knowledge to manage differences in institutional environments, developed by allying to a foreign firm at home.     

Linking knowledge, entry timing and internationalization strategy

This paper contributes to the current internationalization theory by linking the characteristics of the firm's resource-base, its market-entry timing orientation and international growth orientation so as to shed more light on internationalization strategies. By employing multi-industry data, we find that the nature of the firm's knowledge, its entry timing orientation and international growth orientation are related to its internationalization strategy. Among other results, we find that the firm's accumulated expertise is positively related for both the international growth orientation and entry timing orientation. The international growth orientation, in turn, is related both to the path type of internationalization the firm employs as well as the geographical diversification in market entry. In other words, the results suggest that the firm's resource-base influences on both its entry timing orientation and to the internationalization strategy. These and other findings are discussed with regard to their scholarly and managerial implications.     

Speed of internationalization of new ventures and survival in export markets

Speed of internationalization may refer to how early a new venture goes abroad as well as how fast it expands its activities post-entry. The present paper incorporates both aspects and analyzes to what extent several dimensions of speed influence the ability of new ventures to survive in export markets. Based upon extant theories, two perspectives are deduced – a Learning perspective and a Resource perspective – leading to partly contrasting hypotheses. The hypotheses are tested based upon a unique data set consisting of all new ventures established in Norway a specific year that started to export goods in the following nine years. Among the findings are that survival rates increase when ventures go international immediately after inception and when they expand rapidly into new countries rather than focusing on expanding their export share in a limited number of markets, thus lending support to the Resource perspective.     

Learning and knowledge in early internationalization research: Past accomplishments and future directions

This article provides an evaluative overview of international entrepreneurship literature, in which the issues of learning and knowledge feature as central components underlying the causes, processes, and outcomes of early internationalization. We rely on Huber's (1991) categorization of five knowledge acquisition types - experiential learning, vicarious learning, searching, grafting, and congenital learning - to organize our review and to guide our examination of the literature. We discuss convergent findings in terms of conceptual and empirical issues and set forth areas for future research.     

The internationalization of Born Globals: An evolutionary process?

Recently, the phenomenon of Born Globals has been highlighted in many articles concerning the internationalization processes of firms. Such firms adopt an international or even global approach right from their birth or very shortly thereafter. Some authors consider this phenomenon as being in strong opposition to the traditional models of internationalization. This is, of course, true if one considers the manifestations of these models, namely the so-called stages model, according to which the firm should internationalize like “rings in the water”, i.e. in a slow and gradual manner with respect to geographical markets, market entry mode and product policy. This article contributes to the field in three ways: it summarizes the empirical evidence reported about Born Globals; it interprets the phenomenon at a deeper theoretical level and offers a new conceptionalization of the research issue; and it generates propositions about the antecendents of as well as the necessary and sufficient conditions for the rise of the phenomenon. In doing so, the conclusion is that Born Globals grow in a way which may be in accordance with evolutionary thinking.     

Retrospective and prospective learning: Accelerating the internationalization process

This paper contributes theoretical understanding to the learning processes adopted by firms for successful internationalization. Drawing from the internationalization process and organizational learning research, our longitudinal case study examines a firm’s learning processes as it grows internationally. In different phases and in different areas the firm learned at different paces, gradual and steep, and by responding retrospectively to past failings, and prospectively to anticipated challenges. From case data we identify and develop four constructs of internationalization learning: Gradual Retrospective, Steep Retrospective, Gradual Prospective, and Steep Prospective learning. The appropriateness of each depends on the urgency towards addressing challenges, and the firm’s learning capabilities. Firms can develop and steepen retrospective learning capability, enabling rapid identification and response to internationalization problems. Firms can also employ prospective learning to plan the development of knowledge capabilities ahead of future internationalization activity, to accelerate their learning, and increase the speed and effectiveness of internationalization.     

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.     

A co-evolution perspective of EMNE internationalization and institutions: An integrative framework of 5Cs

While significant progress has been made on the contextual role of institutions, scholarly research on the dynamic process of emerging economy multinational enterprises’ (EMNEs) international activities interacting with home country and host country institutions still seems to be in its infancy. Therefore, in order to move the current academic debate forward, we examine the intersection between the internationalization of EMNEs and their institutional environments by undertaking a critical review of the existing literature, given that institutional forces not only shape organizational behavior but also affect EMNEs’ internationalization strategies and organizational outcomes. We propose an integrative framework of 5Cs (context, capability, change, concomitance and configuration) underlying the co-evolution of EMNEs’ internationalization and institutions, and position all the papers included in this Special Issue within this framework in order to point towards a number of directions for future scholarship.     

A multidimensional perspective of SME internationalization speed: The influence of entrepreneurial characteristics

This paper contributes to a multidimensional perspective on the speed of SME internationalization. It examines the influence of entrepreneurial characteristics – experience, rationales and innovation strategies – on multiple dimensions of internationalization speed. Findings from a sample of 180 SMEs show that earliness, speed of deepening, and speed of geographic diversification can be viewed as three different strategic alternatives and that each dimension is predicted by a different set of entrepreneurial antecedents. Earliness of internationalization is associated with entrepreneurs’ international business experience and their perception of opportunities abroad as well as preference for an innovation strategy characterized by ambidextrous innovation. Speed of deepening is related to entrepreneurs’ international business experience, their orientation towards differentiation vis-à-vis competitors, and commitment to innovation and a strategy focusing on exploration. These results indicate the importance of distinguishing between different forms of innovation. Speed of geographic diversification is predicted only by entrepreneurs’ orientation towards differentiation vis-à-vis competitors.     

DIY: How internationalization shifts the locus of indigenous innovation for Chinese firms

We elaborate theories of indigenous innovation by explaining how internationalization choices help emerging market firms transition from dependence on external knowledge to self-reliance on internal knowledge. Using a 1998–2007 census dataset of Chinese manufacturing firms, we theorize and test the moderation effect of foreign equity and export orientation on the relationship between knowledge and indigenous innovation. We show that foreign equity dis-incentivizes, while export orientation incentivizes, investments in internal knowledge. We contribute by showing that internationalization choices may radically change indigenous innovation outcomes by shifting the locus of problem solving outside or inside the firm. Our study corroborates the negative direct and indirect effects of external knowledge on indigenous innovation at the firm level previously suggested by China-centric scholars but also shows how two types of internationalization choices may gradually relieve firm-level dependence on imported technology. We bridge the gap between Western research and Chinese thought and practice by introducing a do-it-yourself (DIY) explanation of how firms may implement China’s indigenous innovation (zizhu chuangxin) policy.     

Entrepreneurial growth: The role of international knowledge acquisition as moderated by firm age

In line with repeated recent calls for research on specific forms of growth rather than on an undifferentiated notion of “total growth,” our study contributes to the understanding of entrepreneurial growth. By this we mean growth through expansion into new geographic markets and/or via the introduction of new products or services. Building on Penrose's theory of the growth of the firm and on the research streams she has in part inspired, we investigate the impact of knowledge acquisition from international markets on entrepreneurial growth both at home and abroad. We further suggest that the effects of international knowledge acquisition on entrepreneurial growth will vary with firm age. Utilizing longitudinal data on 138 small and medium-sized enterprises (SMEs), we find that the acquisition of knowledge from international markets fuels growth through market development, and that this effect is stronger for international expansion than domestic expansion. Our results also show that firm age negatively moderates the relationship between international knowledge acquisition and entrepreneurial growth via the introduction of new products or services. Specifically, international knowledge acquisition has a positive effect on growth via new products/services development in young firms, but a negative effect in mature firms. We assume this reflects changes over time in how international knowledge is managed.     

Rapid internationalization of emerging market firms—The role of geographic diversity and added cultural distance

In this study, we examine drivers of internationalization speed of emerging market multinational enterprises who have been known to internationalize rapidly, even to culturally distant countries. Drawing on the organizational learning theory, we argue that, devoid of a pre-existing knowledge base before they begin their international expansion, these firms are unencumbered by the pathologies and traps that are likely to slow a firm with pre-existing knowledge. We posit inverted U-shaped relationships between geographic scope and added cultural distance on the one hand, and internationalization speed of Indian software multinationals, on the other hand. We also hypothesize a moderating effect of the regularity of added cultural distance on the relationship between added cultural distance and internationalization speed. Our analyses of 650 internationalization expansions of 32 largest Indian software firms over a ten-year period support our hypotheses.     

基于企业国际经验的国外市场选择和进入模式研究

国际经验对企业选择国外市场进入模式的影响是企业国际化管理研究的重点之一,然而这一问题并没有引起国内理论研究的广泛关注。为了弥补这个缺陷,本文对288家国内上市公司的国际经营数据进行了研究。研究发现,企业国际经验,特别是决策团队的国际经验对国外市场选择和国外市场进入模式存在积极的影响。同时,规模越大、技术含量越高的企业,越倾向于选择资源投入较大的国外市场进入模式。     

An entrepreneurial cognition perspective on the internationalization of SMEs

Drawing from entrepreneurship, cognition, and international business theory, this paper develops a model integrating individual-level and firm-level characteristics to provide an entrepreneurial cognition perspective on the internationalization of small and medium size ventures. The model is tested on a sample of Spanish ventures using structural equation modeling techniques (partial least squares). Support is found for the central role of cognition and risk perception of CEOs in explaining the implementation of international expansion strategies for their firms.     

‘Expect the unexpected’: Implications of effectual logic on the internationalization process

International entrepreneurship literature has indicated that entrepreneurs often increase international activities along unexpected lines of reasoning without having a precise goal, resulting in “unplanned” internationalization. We argue that “unplanned” internationalization does not necessarily involve non-logical decisions; but, entrepreneurs can follow an effectual rather than causal logic and may base their decisions on the affordable loss principle rather than on the maximization of expected returns. Based on five case-studies, we discuss the implication of effectual decision-making on the internationalization process. We find that switching from causal to effectual logic allows firms to rapidly increase the level of commitment in the foreign market and could assist in overcoming liabilities of outsidership and, therefore, successfully increase the level of commitment in the foreign market.     

Keeping up with the neighbors: The role of cluster identity in internationalization

This paper explores the implications of the collective identity of a regional cluster on firms’ internationalization. Prior research has established the value of cluster “insidership” through access to knowledge and resources. Through a longitudinal study, we find that cluster identity, through distinct identity claims, provides imperatives and shapes the motivation of firms to internationalize. These imperatives, we argue, stem from cluster identity seen as defined features of regional collectives, extending reference theory to encompass the role of social cues from similar firms located geographically close. The imperatives are particularly salient in the early stages of firms’ internationalization, adding the role of cluster identity to explain the differences between inexperienced and experienced firms in internationalization.     

Cognitive foundations of firm internationalization: A systematic review and agenda for future research

Managerial cognition has a fundamental role in the internationalization of firms. However, there exists no coherent understanding of how prior research has examined and captured the cognitive foundations of internationalization. This paper provides a systematic review of this body of literature. The review identifies three main streams of research that, overall, consists of nine more specific research areas. We show that especially the areas addressing (1) managerial learning, (2) characteristics of upper echelons, (3) intra-organizational perceptions, and (4) external actors’ perceptions provide opportunities for the further advancement of internationalization literature. For harnessing these opportunities, we find that the microfoundational approach could support the empirical examination of the cognitive foundations and would notably contribute to the Uppsala model-based theorization of the firm internationalization process.     

New venture internationalization: The role of venture capital types and reputation

This study examines how different types of venture capital relate to new venture internationalization. Using a sample of 646 U.S. new ventures that executed IPOs between 1995 and 2010, we find that ventures with foreign or corporate venture capital have higher levels of international intensity. We also investigate the moderating role of VC reputation on the relationship between foreign venture capital and international intensity and corporate venture capital and international intensity. Our results suggest that VC reputation weakens the positive relationship between corporate VC and international intensity.