The internationalization process of Born Globals: a network view

This paper attempts to make a contribution to the theory of development of the internationalization process of Born Globals. We propose that models emphasizing knowledge and networks are suitable for this purpose. The findings show that Born Globals possess international market knowledge before their first foreign market entry. The selection of foreign market entry mode is based on their existing knowledge and the knowledge supplied by their network ties.     

Innovative Internationalisation in New firms: Born Globals–the Swedish Case

During the past few years, the phenomenon of Born Globals has been highlighted in many studies. Such firms adopt a global approach right from their inception or very shortly thereafter. This behaviour challenges the traditional internationalisation models of slow and gradual development with respect to geographical markets and market entry modes. In this paper a conceptual framework is developed from earlier research and includes the factors: globalisation, entrepreneurs, networks, and industry. A survey showed that Born Globals were still very uncommon in Sweden. However, four Born Global firms were identified and analysed with the framework. It was concluded that the ongoing globalisation has made it easier to conduct Born Global strategies. However, active entrepreneurs, who recognised the global opportunities, were crucial for the implementation of these strategies, in which personal networks were used as tools.     

The effect of experience and absorptive capacity on foreign market knowledge

Learning about foreign markets often occurs through collaboration with other firms who have this knowledge. In this paper, we focus on one aspect of foreign market knowledge, which is the knowledge a partner in a dyadic relationship, has of the other partner and of their respective business network relationships. The concept ‘absorptive capacity’ [Admin. Sci. Q. 35 (1990) 128] is used to describe the firm’s ability to use its prior related knowledge and diverse background to identify the value of new information and to develop this into something creative. We develop and empirically test a model of how depth and diversity of experience affect absorptive capacity, and how this absorptive capacity affects the way a lack of foreign market knowledge is perceived as an obstacle in carrying out the ongoing business activity.The results show that the lack of foreign market knowledge in the ongoing business is determined both by the firm’s absorptive capacity generated in dyadic relationships with foreign customers and the customer’s network. The dyadic and network absorptive capacities, however, appear to be used differently in the ongoing business. Dyadic absorptive capacity seems to decrease the lack of foreign market knowledge, whereas customer network absorptive capacity seems to increase it.     

The network model of internationalisation and experiential knowledge

This study operationalised the network model of internationalisation [Johanson, J., & Mattsson, L.-G. (1988). Internationalization in industrial systems—a network approach. In N. Hood, & J.-E. Vahlne (Eds.), Strategies In Global Competition (pp. 303–321). New York: Croom Helm] to test the association between experiential knowledge, firm degree of internationalisation and market degree of internationalisation. Adaptations of Eriksson et al.’s three knowledge constructs [J. Int. Bus. Stud. 28 (2) (1997) 337] were employed in regression and ANOVA tests. The regression results indicate that internationalisation knowledge is re lated to firm internationalisation, foreign institutional knowledge is associated with both firm and market internationalisation, and foreign business knowledge is strongly related to internationalisation knowledge. The ANOVA results confirm that foreign institutional knowledge levels differ for the Early Starter, Late Starter, Lonely International and International among Others firms. Implications are drawn relating to the effect of different international strategies on the generation of internationalisation knowledge, the vicarious acquisition of foreign institutional knowledge, especially in relation to parent companies and government organisations, and the need to more effectively measure the outcomes of the ac cumulation of foreign business knowledge.     

Commission deregulation and performance of securities firms: Further evidence from Japan

This study explores the impacts on small securities firms’ performance of the multi-stage commission deregulation in Japan from 1994 to 1999. Different from previous findings, market volume does not rise while commission rates fall following each phase of the deregulation. Therefore, securities firms’ stock performance tends to decline as the deregulation proceeds, contrasting with the stock price increase reported previously. Moreover, the negative price effect tends to vary with firm size and deregulation phase, consistent with the fact that securities firms of different sizes depend to different extent on commission income from transactions covered by different phases of the deregulation.     

Globalization and marketing strategies of Born Globals in SMOPECs

This research examines Born Global companies, which are facing tremendous entrepreneurial and managerial challenges related to instant or rapid globalization. A major research problem addressed is whether the strategies and processes of Born Globals differ essentially from those of other firms in respect to globalization and global marketing. Based on a literature analysis, we first examine the concept of Born Globals and then turn to a review of the research dealing with the globalization and marketing strategies of Born Globals. Survey results on 89 Finnish Born Globals from high‐tech, high‐design, high‐service, high‐know‐how, and high‐system business areas are presented. Their domestic stage lasts for an average of only 2.1 years. For conventional companies, the period is ten times longer. Furthermore, Born Globals can be classified on the basis of their development into three preliminary stages (research & development [RD], domestic, and entry) and into four major stages (starting, development, growth, and mature). The study then proceeds to examine the globalization and global marketing strategies of Born Globals through a multiple case study of 30 case companies representing the above development stages. Special attention is paid to the mature Born Globals, which were found to have passed quickly through the conventional internationalization stages, jumped over some stages, and, in some cases, even progressed in reverse order. After this, attention turns to a detailed examination of the challenges identified and their solutions for three particular interest groups: entrepreneurs, government policymakers, and academicians. The implications of the results for entrepreneurs should be of particular importance, as managerial, research and development, sales and marketing, and also financial challenges and solutions are covered in detail. Finally, this research concludes that although many of the Born Global findings deviate from the internationalization behavior of conventional companies, the holistic and company‐level stage models still seem to have a high degree of explanatory power for many companies originating in small and open economies (SMOPEC). © 2006 Wiley Periodicals, Inc.     

Playing away to win at home

This paper presents a model of the interaction between two rival firms based in the same country. Each firm must decide how to serve a foreign market (export or foreign production) and how much to invest in a corporate-wide asset that reduces production costs and/or augments the willingness-to-pay for their product. In this scenario, the firms’ foreign direct investment decisions are interdependent. Furthermore, strategic motives for FDI relate to a firm's domestic, as well as foreign, market profits. One possibility is that a firm sets up overseas production even though its foreign market profits would be higher by exporting.     

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.     

How foreign knowledge spillovers by returnee managers occur at domestic firms: An institutional theory perspective

Instead of treating the spillover process as a black box, this paper conducts a qualitative study of foreign knowledge spillovers by returnee managers at Chinese firms. Unlike mainstream spillover studies which adopt economics approaches, this paper uses an institutional theory perspective and regards returnee managers as boundary spanners. Results show that returnee managers' boundary-spanning activities in the form of social interaction, including building relationships with colleagues and transforming their identities from outsiders to insiders, help gain legitimacy for their new roles. Their boundary-spanning activities in the form of grafting foreign knowledge, including understanding existing knowledge resources, introducing foreign knowledge to colleagues, and integrating foreign knowledge with domestic firms, help gain legitimacy for foreign knowledge. Foreign knowledge' contributions in new product development at product, process, and cultural perspective levels reinforce its institutionalization at domestic firms. Absorptive barriers include domestic firms' administrative heritage and returnee managers' arduous relationship with others.     

The Internationalization of Small and Medium-Sized Firms

This paper contributes to the existing research by integrating the notions of organizational learning and entrepreneurial orientation into the body of international entrepreneurship. Our primary framework combines learning theory and the new venture theory of internationalization to study the extent to which small and medium-sized companies engage in international activities. We found that the firms’ international learning effort and entrepreneurial orientation are positively associated with internationalization intent whereas domestic learning effort is negatively related with internationalization intent. Overall, our results suggest (1) that intensive knowledge renewal and exploitation regarding foreign markets and the internationalization process itself may increase internationalization by affecting the perceptions of opportunities offered by further international expansion, and (2) that firms with an entrepreneurial mindset may be more likely to develop a long-term, substantial presence in the international arena, compared to firms that are more reactive or conservative.     

Network knowledge and business-relationship value in the foreign market

Based on the key assumptions that firms are opportunity seeking and that they gain critical knowledge operating in a network of relationships, this paper focuses on early expansion in foreign market networks. In particular, the paper examines the relation between experience and business-relationship value in a foreign market. While experience and experiential knowledge are central concepts in international business, little has been written about their effects on the value of business relationships. The paper formulates a set of interrelated hypotheses on the effects of international experience, experiential network knowledge and importance of customer and competitor knowledge on the value of business relationships in a foreign market. They are combined in a structural model, which is tested on a sample through LISREL. The main conclusion drawn from the study is that experiential network knowledge and knowledge about the importance of customers and competitors in the network influence the value of business relationships in a foreign market in different ways.     

Finance-specific factors as drivers of cross-border investment—An empirical investigation

In this paper we empirically test the role of firm-specific financial characteristics as drivers of international investment and production. We hypothesize that financial strength generates advantages that can be exploited through cross-border investment activity. The hypothesis is tested in a series of binary-response models, using a sample of 1379 European non-financial firms’ international acquisitions. Controlling for traditional firm- and target-country-specific foreign direct investment (FDI) determinants, we find strong evidence that financial factors play a significant role in explaining cross-border investment. We conclude that without explicit consideration of the financial dimension, firms’ FDI decisions cannot be properly understood.     

Green and competitive? An empirical test of the mediating role of environmental innovation strategy

This study examines links between the adoption of an environmental innovation strategy and firms’ business performance. It illustrates ways in which an environmental innovation strategy is itself influenced by significant environmental pressures, including government environmental regulation, perceived importance of stakeholder pressures, and managerial environmental concerns. Survey data from the chemical industry in Jordan show that (1) environmental innovation strategy is associated with improved perceived firms’ business performance; (2) the adoption of an environmental innovation strategy is influenced by certain environmental pressure forces, and (3) environmental innovation strategy fully mediates between certain environmental pressure forces and firms’ business performance.     

Market convergence and advertising standardization in the European Union

In this study, we draw on industrial organization and institutional research to explore the relationship between market convergence and standardization of advertising programs. We argue that environmental isomorphism, which maintains that the external market environment is a principal driver of firms’ institutional structures, places pressure on firms to adapt their organizational structures and strategies to changing institutional conditions. We propose that the convergence associated with European market integration will lead firms to emphasize three advertising strategies: creating a uniform brand image, appealing to cross-market segments, and increasing cost performance in advertising. Further, we hypothesize that these strategies will be associated with an overall tendency to standardize advertising strategy and execution. Results of a survey of managers of subsidiaries of Japanese and U.S. firms operating in the EU suggest that firms that believe the EU is converging are more likely to engage in these standardized advertising strategies. Additionally, our findings suggest that firms that seek to create a uniform brand image and appeal to cross-market segments are more likely to standardize their overall advertising programs. Finally, we find that firms’ desire to create a uniform brand image is a function of their goal of building brand equity, regardless of the level to which markets converge. We draw implications for research and practice regarding firm responses to market convergence.     

Post-entry internationalization speed of SMEs: The role of relational mechanisms and foreign market knowledge

Prior research shows that small and medium-sized enterprises (SMEs) can utilize domestic networks with internationally experienced partners to accelerate their internationalization process. Yet, there is a lack of clarity and limited empirical evidence regarding the role of relational mechanisms within these networks in driving post-entry internationalization speed (PIS) of SMEs. To address this gap, this study examines the relational mechanisms-PIS relationship by drawing insights from the relational view to argue that foreign market knowledge mediates the relationship between relational mechanisms and PIS. The hypothesized study model is tested using a structural equation modelling (SEM) technique on a sample of 394 UK based manufacturing SMEs. Our results show that foreign market knowledge acquisition from domestic networks fully mediates the relationship between relational mechanisms and PIS. Additionally, the linkage between foreign market knowledge acquisition and PIS is moderated by domestic environmental hostility, such that the relationship is strengthened when domestic environmental hostility increases. We discuss the contributions and implications of our results and suggest opportunities for future research.     

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.     

Small firm internationalization through experiential learning: The moderating role of socialization tactics

The importance of experiential knowledge for small firm internationalization has been emphasized in the process model of internationalization, the international new venture or born-global frameworks and the management characteristics perspective in the exporting literature. However, none examines in detail under what conditions experiential learning is more important for internationalization. We borrow insights from the socialization tactics literature to theorize how the context, content and social aspects of a foreign sojourn offer different opportunities for the acquisition of experiential knowledge to support the internationalization of small firms. We suggest that socialization tactics moderate the relationship between individual international experiential knowledge and small firm internationalization. We propose that the opportunities for international experiential learning are superior when the socialization context is individual and formal (rather than collective and non-formal), the socialization content is sequential and fixed (rather than random and variable) and when socialization involves serial and investiture (rather than disjunctive and divestiture) social aspects.     

Category membership,identity control,and the reevaluation of prosocial opportunities

We extend current knowledge on prosocial organizing by explaining how membership in organizational categories lead entrepreneurs to reevaluate their firms' activities and opportunities. Through a qualitative study of 46 firms that pursued B Corp certification, we developed an identity control model of prosocial opportunity. Our findings suggest that joining a prosocial category catalyzes identity-driven reflexivity, which can alter the firm's engagement in prosocial activity. This identity-driven process occurs in tandem with evaluations of opportunity viability and attractiveness, the potential for intra-organizational conflict, and the relative power and position that category legitimacy affords the firm. Our findings contribute to literature streams on prosocial organizing, identity, and categories.     

Partner nationality, market-focus and IJV performance: A contingent approach

This study examines how Taiwanese firms engaging in various types of international joint ventures (IJVs) have performed in China, and how different types of market-focus affect IJVs’ performance. Based on the IJV classification scheme suggested by [Makino S., & Beamish P. W. (1998). Performance and survival of joint ventures with non-conventional ownership structures. Journal of International Business Studies, 29(4): 797–818], this study outlines and examines three categories of IJVs, according to partner nationality: Taiwan-Taiwan (T-T) JVs, Taiwan-Local (T-L) (China) JVs, and Taiwan-Foreign (T-F) (third-country) JVs. We propose two hypotheses, with associated sub-hypotheses, to examine the major effects of partner nationality on performance, as well as the moderating effects of local market-focus on the relationship between partner nationality and performance. Through the analysis of 236 Taiwanese JVs in China, we find that (1) T-L JVs perform better than T-T JVs and T-F JVs; (2) T-L JVs focusing on the local market do not perform better than those focusing on foreign markets; and (3) T-F JVs focusing on foreign markets perform better than those focusing on the local market.     

Knowledge transfer, regulatory support, legitimacy, and financial performance: The case of foreign firms investing in China

This study aims to link the knowledge-based view and the legitimacy perspective in order to explore the determinants of knowledge transfer and regulatory support. We then examine their consequences within a systematic framework drawing upon the institutional view. Examining a sample of 102 Taiwanese manufacturing firms operating in China, the study finds that both knowledge transfer from local suppliers and regulatory support from local governments help foreign firms to enhance their financial performance. The combination of trusting relationships with local suppliers, a foreign firm's knowledge stock, and agglomeration encourage local suppliers to transfer knowledge. Additionally, foreign firms’ knowledge stock is significantly related to regulatory support.