Market imperfections,opportunity and sustainable entrepreneurship

This research develops the argument that four types of market imperfections (i.e., inefficient firms, externalities, flawed pricing mechanisms and information asymmetries) at once contribute to environmental degradation and that they also provide significant opportunities for the creation of radical technologies and innovative business models. We show that these opportunities establish the foundations for an emerging model of sustainable entrepreneurship, one which enables founders to obtain entrepreneurial rents while simultaneously improving local and global social and environmental conditions. To advance this new field, we offer suggestions for a research agenda focusing on two areas: the relationship between market imperfections and entrepreneurial opportunities, and the emerging field of sustainable entrepreneurship.     

Linking market orientation to international market selection and international performance

One key strategic decision in a firm's internationalization process is the international market selection (IMS). IMS must match the firm's own-specific resources and capabilities for optimal performance. This research, drawing on the resource-based view, investigates how a firm's market orientation (MO) resources and capabilities influence the firm's IMS between culturally close and distant markets and how the matching of MO and IMS impacts on its international performance. We hypothesize that market-oriented firms tend to choose culturally distant markets that help them exploit their MO. Firms with a fit between MO and IMS tend to perform better internationally than those without such a fit. Both hypotheses are supported by our database of Chinese manufacturing firms expanding internationally.     

Institutions,entrepreneurship and co-evolution in international business

A recent and promising trend in international business and international management research has been to consider institutions not only as taken-for-granted constraints that need to be accommodated, but also the outcomes of agency; purposive action by individuals, firms, coalitions and other actors. We elaborate the development of research in this vein, and advocate a more nuanced view of the nexus between agency and institutions of different kinds and residing at various levels of analysis, and the associated co-evolutionary processes. Recent developments from cognate fields – particularly, institutional entrepreneurship and institutional work – offer a theoretical foundation for further insights into the nexus of institutions, agency and co-evolution. We discuss the papers that appear in this special issue and how they further develop and expand our understanding of institutions, agency and co-evolution, and conclude with questions and directions for future research.     

Informal institutions and international entrepreneurship

This study examines the influence of three informal institutions, performance orientation, self-expression and social desirability, on the extent of internationalization by early stage entrepreneurial firms. We employed multi-level modeling techniques using 20,656 individual-level responses obtained from the Global Entrepreneurship Monitor (GEM) survey for 39 countries from 2001 to 2008, and supplementing with country-level data obtained from the World Values Survey (WVS) and the Global Leadership and Organizational Behavior Effectiveness (GLOBE) study. The results demonstrate that high performance orientation, high self-expression, and low social desirability of entrepreneurship in societies increase the extent of internationalization by early-stage entrepreneurial firms. The study promotes new theory and empirical findings on the relationship between informal institutions and entrepreneurial agency.     

The evolving international entrepreneurship orientations and international entrepreneurship capital in the rapidly changing and digitizing international environments

Journal of International Entrepreneurship - The relationship between entrepreneurial orientations and internationalization has been examined extensively, but the recent developments in the rapidly...     

Transnational entrepreneurship: opportunity identification and venture creation

The present case study focuses on entrepreneurs who have migrated from one developed economy (Sweden or Finland) to another developed economy (Hong Kong Special Administrative Region (HKSAR)). In contrast to the dominating understanding, we find that the transnational entrepreneurial incentives were opportunity driven rather than necessity based. The opportunity types identified varied, but indicate the importance of service opportunities, a type often left out of studies and classifications. A prevalent characteristic of transnational entrepreneurship is opportunity recognition based on introducing processes or products to the country of residence, familiar from the country of origin or based on use of the entrepreneurs’ contacts in the home country. This study showed, however, that although this was the case for two entrepreneurs, some identified opportunities for acting in the opposite direction, or did both import and export. Notably, there was also a fourth category, offering business-facilitating services, bridging differing cultural contexts in relationship-middlemen positions. For these entrepreneurs, there was thus no obvious “domestic market” from the start as assumed in traditional internationalization theories. Furthermore, although their businesses started on a limited scale between two countries, they quickly grew and entered other country markets. These transnational businesses thus represent forms of born globals not included in the high-tech business models often associated with such firms. Our findings finally lend support to arguments that a business-favorable institutional environment facilitates and encourages entrepreneurship.     

Hermeneutic phenomenology and international entrepreneurship research

It is not uncommon for business researchers to avoid discussion associated with the philosophy of science. In this paper, it is argued that this avoidance weakens the quality and insightfulness of entrepreneurship and international entrepreneurship research, which by definition should be concerned with human action and activity. This paper explores the implications of alternative research philosophies and argues that a dichotomy between objective and subjective meaning is manifestly inadequate for the study of opportunity recognition and exploitation and by implication for many other problems of international entrepreneurship research. In response, hermeneutic phenomenology is proposed as an underutilized, misunderstood, yet highly relevant research paradigm.     

Theoretical milestones in international business: The journey to international entrepreneurship theory

For many decades global business was considered the preserve of large multinationals and traditional international business theory was developed to explain the behaviour of these firms. However, increasingly there is a realization that the small entrepreneurial firm has an important role to play in international business especially given that there are strong globalization pressures that both pull and push the small firm into international markets to ensure its very survival. On the questions of how and why international business takes place, several theoretical approaches have been developed that appear to run parallel to each other. However, this paper posits that the point of convergence is international entrepreneurship.     

Using narrative sequence methods to advance international entrepreneurship theory

Narrative sequence methods offer the potential to advance research methods and develop a common vocabulary for theory development in international entrepreneurship. While variables-focused, variance-based methods currently dominate theory development, they are atemporal, yet entrepreneurship is what entrepreneurs do over time. We examine the assumptions of variance-based approaches and compare them to those of narrative methods, which leads to a discussion of the nature of causal mechanisms. We then illustrate the use of narrative sequence methods to identify some of the mechanisms underlying the internationalisation of an intermediary in the electronic component industry, where internationalisation is interpreted as a form of innovation and entrepreneurship. We illustrate how these methods, whose value is being increasingly recognised, allow us to introduce time, timing and temporal processes into the systematic analysis of business behaviour and evolution, and to generate usable knowledge for managers and policymakers.     

Individualism,collectivism, and entrepreneurship: A framework for international comparative research

This article presents a theoretical framework and seven related propositions linking national culture—specifically individualist and collectivist orientations—to entrepreneurship. The framework identifies how both orientations affect the functions of entrepreneurship. This perspective casts new light on cross-cultural research that, while generally confirming individualism-entrepreneurship ties, has had less success accounting for the entrepreneurial vitality of largely “collectivist” nations—especially Japan.There are two main streams of research on the effects of individualism and collectivism on entrepreneurship. The micro-level stream finds that those who generate variety—founders and corporate entrepreneurs—tend to be individualistic. This work does not identify proclivities for the other entrepreneurial function, leveraging resources. The macro-stream associates both individualism and collectivism with national levels of economic growth and innovation.The framework comprises two dimensions depicting (1) levels of individualism and collectivism, and (2) the entrepreneurial functions. I conceive of individualism and collectivism as two characteristic orientations distributed in varying proportions within and between cultures and individuals. These characteristic are not polar ends of a continuum, as commonly described. The second dimension recognizes that entrepreneurship requires two activities: generating variety through innovation or new ventures, and leveraging resources internally or by establishing external ties.This paper's main contribution comes from the recognition that two entrepreneurial functions are very different processes. Variety generation requires mostly individual creativity and initiative; resource leverage depends on efficient relationships that thrive under collectivism, but can be induced contractually between individualists. These differences reveal that individualism and collectivism neither categorically encourage nor discourage entrepreneurship; rather they influence how its functions are accomplished.The propositions outlined in this paper can sharpen future research on individualism, collectivism, and entrepreneurship. In short, the paper claims individualists produce breakthroughs that collectivists implement and improve. Individualists show proclivities for new venture formation and making major innovations. They tend to leverage their resources through contract-based relations. For example, resources are stretched internally using contingent, performance-based incentives, and outside funds can be acquired through venture-capital agreements. In contrast, collectivists generate variety through group-based, incremental improvements and changes. Collectivists leverage their own resources by harnessing “clanlike” affiliations, and securing the use of the resources of other firms by building close relational ties, like keiretsu. Theory acknowledging that individualism and collectivism are not negatively related allows us to recognize that both orientations can contribute to entrepreneurship.The framework has key implications for entrepreneur/managers and policymakers. Recognizing that individualism and collectivism both contribute to entrepreneurship can guide decision-makers to examine the inventory of these orientations in their firms or regions, and implement policies to address shortfalls. For example, Americans can concentrate more on building close network ties while Japanese can focus on encouraging individual innovations.     

Early international entrepreneurship in China: Extent and determinants

We use data on 3,948 Chinese firms obtained from the World Bank’s Investment Climate Private Enterprise Survey to investigate early international entrepreneurship (international new ventures) in China. The extent of early international entrepreneurship in China is significant: 62% of the exporting firms start export operations within 3 years. Foreign shareholders within the firm and an entrepreneur with previous exporting experience are noted to significantly increase the probability that a firm internationalizes early. We find marked differences in the behaviour of indigenous and foreign-invested firms, and between direct and indirect exporters. For example, for an indigenous firm the more foreign experience its entrepreneur has, the less likely it is to start exporting early. As far as indirect exporting is concerned, business networks are significant determinants of the extent of such exporting, but delays the internationalization process of indigenous firms. The more firms in China export, the more time their managers need to spend on government regulations, although perhaps counter-intuitively, this was not found to discourage exporting. Overall, the findings suggest that exporting by indigenous Chinese firms is often due to challenging or adverse domestic conditions.     

The emergence, advance and future of international entrepreneurship research — An introduction to the special forum

Since its genesis over twenty years ago, research in International Entrepreneurship has emerged as a field of study, and moved through the process of differentiation, mobilization and legitimacy building. Generally referred to as IE, research in this area is conducted by scholars worldwide and supported by various community structures, conferences and journals. In recognition of IE, this Special Forum was initiated to help clarify its parameters and history of development, the areas of research pertinent to it and critically, directions for future research.     

Integrating qualitative and quantitative methods in research on international entrepreneurship

Using mixed methods is an often proposed but rarely used research design. In this paper, I describe a mixed method approach to research on international entrepreneurship. Using a mixed methods design with a case study and a mail survey, I show how the two methods make it possible to reach a better understanding of the antecedents of organizational memory and how organizational memory affects perceived costs of further international expansion of Swedish small and medium-sized enterprises (SMEs). I also propose research designs for studying both novel phenomena and for developing established theory through a combination of case studies and structural equation modeling.     

Institutional and economic drivers of entrepreneurship: An international perspective

Entrepreneurial activity varies significantly across countries and over time. The economic and institutional context is a determining factor that can drive and lend shape to entrepreneurial activity. The search for a deeper understanding of the role of this factor constitutes a promising and important research stream. A thorough review of the specialist literature identifies groups of countries with similar economic and institutional environments. Subsequent analysis highlights differences in entrepreneurial activity and innovation outcomes between these homogeneous groups. Results indicate significant differences, not only in entrepreneurial activity, but also in the type of entrepreneurship and innovation results. These findings mark a relevant step forward in the identification of different environment types, and the effects of environment on entrepreneurial activity and innovation results.