International new ventures as “small multinationals”: The importance of marketing capabilities

This paper explores how marketing capabilities contribute to the international expansion of international new ventures, and influence their choice of entry mode. The study examines how marketing capabilities help international new ventures to use entry modes involving higher resource commitment in international markets. The proposed model was tested on country-level data from Spain. The results show that marketing capabilities contribute to a firm's decision to choose entry modes involving higher resource commitment in foreign markets. The paper also includes insights on antecedents of international new ventures’ choice of entry modes in foreign markets.     

Entrepreneurial strategic posture and learning effort in international ventures: The moderating roles of operational flexibilities

Drawing from the attention-based view, this article extends the study of international entrepreneurship by investigating how the contribution of international ventures’ entrepreneurial strategic posture to their actual learning efforts in foreign markets depends on various flexibilities that underlie their operations. The results from a sample of international Chinese ventures indicate that an entrepreneurial strategic posture enhances international learning effort more to the extent that the ventures possess greater cognitive and political flexibilities. Somewhat paradoxically, greater structural flexibility impedes the translation of an entrepreneurial strategic posture into international learning effort. The findings have important implications for the growing body of research that adopts an international new venture perspective.     

Antecedents and outcomes of digital platform risk for international new ventures’ internationalization

With the growing trend of using digital platforms for internationalization, the management of digital platform risks in international markets has become a critical issue. However, academic research in this area is sparse. This study develops and tests a theoretical framework of the drivers and outcomes of digital platform risk for international new ventures (INVs). Specifically, drawing on transaction cost theory, we identify sets of antecedents of digital platform risk including product specificity, foreign market uncertainty, foreign market competition, and home market institutional voids. We examine the effect of digital platform risk on the internationalization scope of INVs. Based on a unique sample of Chinese INVs, our empirical findings indicate that digital platform risk tends to reduce INVs’ internationalization scope. However, the negative effect is mitigated by INVs’ entrepreneurial orientation. Our proposed drivers of digital platform risk are supported. The paper ultimately discusses the theoretical and managerial implications.     

Entrepreneurial orientation and international commitment

This paper contributes to the development of the field of international corporate entrepreneurship (ICE) by examining the influences that the time lapse between foundation and first international market entry may have on the development of an entrepreneurial orientation (EO). Moreover, the paper highlights the existence of a positive relationship between the development of an entrepreneurial orientation and both internationalization decision and dimensions (degree, scope) in established companies. Based on a sample of 155 Spanish firms, our findings suggest that an entrepreneurial orientation positively influences a firm’s propensity to internationalize activities. The results obtained confirm the idea that fast entry into foreign markets is positively related to the development of an entrepreneurial orientation in established firms, and that firms with a marked entrepreneurial orientation have higher relative international sales and operate in a greater number of foreign countries.     

A Comparison of International and Domestic New Ventures

Differences between international new ventures (INVs) and domestic new ventures (DNVs) were examined using a sample of 214 IPO new ventures (ventures 6 years old or less). INVs were found to be significantly different on the basis of their entrepreneurial team experience, strategy, and industry structure. Specifically, the entrepreneurial team of INVs exhibited higher levels of previous international and industry experience. The strategies of INVs were more aggressive, and they operated in more channels of distribution than did DNVs. INVs competed on the basis of differentiation, placing greater emphasis on product innovation, quality, service, and marketing as strategic weapons. In addition, INVs were more likely than DNVs to operate in industries characterized by a high degree of global integration.     

Entrepreneurial marketing strategies during the growth of international new ventures originating in small and open economies

This research provides new knowledge on the development of marketing strategies in international new ventures (INVs) by applying the concept of entrepreneurial marketing to these early internationalizing firms. Using a qualitative approach, the authors identify the key dimensions of this concept in INVs, namely innovativeness and adaptation, and elaborate on both the defining elements and the development of these dimensions. They suggest that the innovativeness and adaptation of marketing strategies decrease during the global growth of INVs. Other contextual issues also underlie the development of international entrepreneurial marketing strategies; in particular, they appear to reflect the turbulence and global diversity of the environment and the market orientation of the INV. The marketing performance of INVs is determined by the fit between international entrepreneurial marketing strategies and the internal and external contingencies of the firm. Propositions for future research and managerial implications are provided.     

Post-entry survival of developing economy international new ventures: A dynamic capability perspective

Recent research suggests that the capabilities needed for the survival of international new ventures (INVs) may be at odds with the original aims that had brought them into the international markets. INV mortality is exacerbated by uncertainty and lack of familiarity with the host market environment, which elevates the liabilities of newness, smallness, and foreignness in the initiating companies. We investigate the key factors that determine the post-entry survival of developing economy INVs by analyzing in-depth seven software INVs originating in the developing economy of Pakistan. These INVs survived the 2000 dotcom crisis and the 2008 global financial crisis, and continue to grow. Based on a dynamic capability view on the INVs’ internationalization and survival from sensing-seizing-reconfiguration angles, we find the founders’ entrepreneurial orientations and network development capabilities (sensing), specialized product focus and niche market development (seizing), and transformation and renewal capabilities (reconfiguration) are the key capabilities that enhance the post-entry survival of these INVs. Importantly, we find that a stable leadership and the post-entry international experience of the leadership team continuously feed into facilitating the creation and maintenance of dynamic capabilities. This paper identifies key strategic aspects that determine the post-entry survival of the developing economy INVs.     

The effect of early international commitment on international positional advantages in Spanish and Belgian international new ventures

Past research into internationalisation processes assumes that prior experience influences both a firm’s capability to absorb foreign market knowledge and its international competitiveness. However, recent international entrepreneurship research seems to suggest that an early international commitment can also contribute to develop competitive advantages. Further study of this relationship will provide a better understanding of the competitive behaviour of international new ventures. This paper focuses on how international new ventures acquire market knowledge from foreign markets and develop sustainable positional advantages there. The hypotheses derived from our model were tested using extended data gathered from samples of Spanish and Belgian new ventures. To support the validity of the scale content used, all the items were taken from a review of related literature. We attempted to ensure that they meet the conceptual definition and reflect all the relevant dimensions. We used confirmatory analysis to evaluate convergent validity. A structural equation model was used to test the research hypotheses. The results of the data analysis allow us to confirm that an early international commitment influences the positional advantages of international new ventures, since it facilitates the development of market orientation.     

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.     

Strategy antecedents of modes of entry into foreign markets

Although a firm's choice of mode of entry to a foreign market is central to the implementation of international strategy, we have only limited understanding of the effects of international strategy on the choice. This study explores the effects of business relatedness and corporate international experience. Data were collected on 173 ventures of Swedish manufacturing firms that were present on the German market, and multivariate techniques were applied to test hypotheses. It was found that product/market relatedness and intangible resource relatedness between the foreign business unit and the industrial firm's core business unit favored a full control entry mode based on sole ownership. This finding was also valid for importance of foreign markets. Further, market importance moderated the two relationships regarding business relatedness. Contributions to the literature are discussed.     

International versus domestic entrepreneurship: New venture strategic behavior and industry structure

International entrepreneurship is defined in this study as the development of international new ventures or start-ups that, from their inception, engage in international business, thus viewing their operating domain as international from the initial stages of the firm's operation.One hundred and eighty-eight new venture firms in the computer and communications equipment manufacturing industries are classified according to the percentage of their sales in the international market. Ventures with no sales derived from international activities are considered “domestic” new ventures, and ventures with sales from international activities comprising greater than 5% of total sales are considered “international” new ventures.The strategy and industry structure profiles of international new ventures are significantly different from domestic new ventures. The internationals pursue much broader market-based strategies, seeking a strategy of broad market coverage through developing and controlling numerous distribution channels, serving numerous customers in diverse market segments, and developing high market or product visibility. The internationals also emphasize a more aggressive entry strategy, building on outside financial and production resources to enter numerous geographical markets on a large scale. Securing patent technology is also an important component of their strategy. This suggests that the internationals compete by entering the industry on a large scale, seeking to penetrate multiple markets, with the recognition that external resources are necessary to support such an entry.Whereas both the domestics and the internationals characterize domestic competition as being relatively intense, the international new ventures compete in industries with higher levels of international competition. It is not clear from this research whether the new venture selects an industry with a high degree of international competition and therefore responds with an international orientation or, because the new venture has an international orientation, it perceives or recognizes a higher degree of international competition. Another industry structure difference is the internationals' perceived higher degree of restrictiveness due to government regulation. It is unclear whether this restrictiveness motivates new ventures to seek less-regulated international environments or if it indicates that when competing internationally, the new venture is confronted with increased regulatory requirements.Domestic new ventures are distinguished by their emphasis on a production expansion strategy and customer specialization strategy. The production specialization strategy consists of focusing on limited geographical markets, maintaining excess capacity, and pursuing forward integration. The customer specialization strategy incorporates the production of a specialty product that is purchased infrequently. Thus, for both of the domestic strategies, a consistent “closeness” between the producer and consumer is implied. This may be an important basis underlining the new venture's decision to compete in an exclusive domestic context.This study offers initial support for the notion of international entrepreneurship by its findings that there are significant differences between new venture firms competing domestically and new ventures choosing to also enter international markets.     

Organizational entrainment and international new ventures from emerging markets

Organizational entrainment captures the temporal fit in the activity cycles between exchange partners. We argue that organizational entrainment between international new ventures (INVs) and their most important international customers positively moderates the relationship between the degree, scope, and speed of internationalization and performance of INVs. We test our hypotheses on INVs from China, India and South Africa. The results support the contingent role of entrainment for degree and scope of internationalization but not for speed. Findings suggest that, when INVs attain temporal fit with their most important international customers, they can implement their strategic goals in international markets more effectively.     

Strategic Commitment and Timing of Internationalization from Emerging Markets: Evidence from China,India, Mexico,and South Africa

In a study of 257 new ventures from China, India, Mexico, and South Africa, we find support for the mediating effect of strategic early internationalization on international sales intensity. We argued that when new ventures from emerging markets internationalize early and with commitment, the legitimacy they acquire helps them overcome liabilities of newness and foreignness. We develop a typology of international new ventures that, based on strategic intent and timing of internationalization, distinguishes strategic early internationalizers from persistent, serendipitous, and long‐term internationalizers. We show that strategic early internationalization accounts for over half of the explained variance in international sales intensity and either fully or partially mediates the effects of managerial knowledge and market orientation on international sales intensity.     

Predictive and effectual decision-making in high-tech international new ventures – A matter of sequential ambidexterity

This study investigates the international opportunity exploration and exploitation processes of high technology international new ventures (INVs) operating in the global medical devices sector. Drawing upon the effectuation and causation perspectives, we contribute to the micro-foundations of international entrepreneurship research in the early innovation development space by focusing on decision-making logics of techno-entrepreneurs of INVs. Specific focus is afforded to the phases of their exploration and exploitation of international opportunities leading to international new venture creation. In the pre-start-up and start-up stages of international new ventures, we find that sequential ambidexterity applies to how the subject firms manage the exploration and exploitation of opportunities in the delivery of their innovations to global markets.This research advances prior international entrepreneurship studies by focusing on the opportunity and innovation processes on the individual level. We identify different decision-making logics in the different phases and contrary to earlier findings in the international entrepreneurship (IE) area, we found causation logic to dominate the initial stages of exploration and effectuation logic, in the latter stages. Prior commercial experience presented itself as a key determining factor in the decision-making path chosen by international techno-entrepreneurs. Our study further extends the view of organizational ambidexterity by offering empirical insights into the relevance of sequential ambidexterity for understanding the processes of innovation exploration and exploitation in high-tech INVs and the decision-making logics driving these processes.     

Functional and contextual dimensions of INVs’ alliance partner selection

Prior research on the selection of international alliance partners calls for investigation of the potential specificity of selection criteria for evaluating partners for alliances with different objectives or functions. The present study responds to this need and contributes to the development of the field of international entrepreneurship by examining the relation between the alliance function and the criteria chosen. We studied three alliance functions: R&D, production, and marketing. Second, for each alliance function, we analyzed the criteria selected within two contexts: developing countries and those that consider emerging markets in their partner choice set. Data were collected through semi-structured interviews with 25 executives from international new ventures (INVs) in two major North American biotechnology clusters, representing 239 alliances; 65.7 % of these were signed with international partners. Results indicate that, aside from compatibility/complementarity of resources (R&D and production alliances), all criteria used within a single function are unique to that function. Furthermore, these criteria differ somewhat when the potential partners considered by a firm include those from both emerging and developed markets, compared with firms that limit potential partners to those in developed market contexts. Finally, the study reveals that respondent firms integrate country, industry, and market attractiveness factors with partner selection criteria for marketing alliances. This suggests that, for many firms, market choice and partner selection are not successive steps. The study’s originality lies in its focus on the relationship between alliance function and partner selection criteria used by INVs as well as within different contexts.     

The entrepreneurial experience and strategic orientation of high-tech born global start-ups: An analysis of novice and habitual entrepreneurs

A new type of “born global” (BG) firm has attracted the attention of international business researchers, encouraging the development of international entrepreneurship theory as a separate field of research. This theory proposes that the development of BG start-ups depends on their entrepreneurs, such that their strategic orientation can explicate their accelerated foreign growth and performance abroad. However, empirical analyses of BG start-ups are rare, with a few studies that examine their different manifestations. This study therefore investigates the role of entrepreneurial experience in influencing the different manifestations of strategic orientation, through a comparison of eight Italian, Internet-based BG start-ups founded by either novice or habitual entrepreneurs. Following a case-based approach, the conceptual framework presents the strategic orientation of BG start-ups as a multidimensional construct, comprising learning, market, and entrepreneurial orientations. Some propositions suggest how the different levels of entrepreneurial experience among novice and habitual entrepreneurs may influence the strategic orientation of their BG start-ups and offer insights for researchers interested in strategic orientation and entrepreneurial experience.     

Entrepreneurial orientation and international scope: The differential roles of innovativeness,proactiveness, and risk-taking

This research integrates the international business and entrepreneurship literatures by examining the independent influences of innovativeness, proactiveness, and risk-taking on the ability of a firm to broaden its scope across international markets. For each dimension of entrepreneurial orientation, a cost–benefit framework is applied to highlight the trade-offs associated with different levels in the internationalization context. Based on a unique dataset of 500 SMEs spanning 10 industries, the results reflect the consequences of being “stuck in the middle” with respect to their strategic posture on innovativeness and proactiveness, but reveal a nuanced role for risk-taking behavior. The non-uniform and non-linear relationships from the findings contribute to a better understanding of when the individual dimensions of entrepreneurial orientation help or hinder entrepreneurial firms in the internationalization process.     

The effects of entrepreneurial proclivity and foreign market knowledge on early internationalization

Recent international entrepreneurship literature suggests an apparent tension in regard to the role of foreign market knowledge between the process models of internationalization and the early internationalization of born-global firms. From an entrepreneurial learning perspective, we argue that the tension can be resolved by understanding the source of the knowledge. For early internationalizing firms, foreign market knowledge tends to emanate from the innovative and proactive pursuit of entrepreneurial opportunities across national borders, rather than from incremental accumulation of experience in foreign markets. Using survey data from young international entrepreneurial firms in mainland China, we test and support a mediating mechanism of foreign market knowledge as it relates to the pace and performance of early internationalization. This study contributes to the theoretical development in the emergent field of international entrepreneurship.     

The inception of internationalization of small and medium enterprises: The role of activeness and networks

This study analyzes how exporters begin their internationalization leveraging information collected through interviews with 109 Chinese textile manufacturers. It examines whether firms that found their first international clients through a “proactive” search are likely to export faster, more intensively, and to a larger number of markets. The findings illustrate that the proactiveness of the search for the first client in a foreign market is an important predictor of the intensity and geographic scope of the firm's internationalization path but not of its speed. They support the view of internationalization as an actively pursued entrepreneurial process, which may also be affected by serendipitous events. This study provides new evidence on the first international business discovery of Chinese exporters, contributing to the literature on international entrepreneurship, international new ventures and the network approach to internationalization.     

Foreign market entry mode of service firms: The case of U.S. MBA programs

While international expansion has become an important strategic imperative on the part of knowledge intensive service firms such as U.S. business schools, little empirical support is available on how these business schools enter foreign markets. If U.S. based business education programs are expected to prosper in light of the potential onslaught of international competition, expansion to overseas markets will be one of the most sought after options available. A poor choice in market entry strategy, or the lack of international market entry, can result in a negative impact on the educational institution. This research focuses on developing, measuring, and empirically testing a framework of key factors influencing international market entry mode choice of U.S. business schools by using primary data from faculty and administrators of U.S. Master of Business Administration (MBA) schools.