Characteristics of Immigrant Entrepreneurs and Their Involvement in International New Ventures

We studied 561 young firms in Australia to understand the involvement of immigrant entrepreneurs (IEs) in international new ventures (INVs). We found that IEs are overrepresented in INVs and have many characteristics known to facilitate INV success, including more founders, university degrees, international connections, and technical capability. Our study has implications for immigration policy and economic policy and the efficient use of a nation's human capital. This research challenges a necessity‐based stereotype of immigrant entrepreneurs by identifying areas in which immigrant entrepreneurs have natural competitive advantages over native entrepreneurs (NEs). This research makes a contribution to the theory of immigrant entrepreneurship by identifying the significant role of immigrant entrepreneurs in INVs and the suitability of immigrant entrepreneurs for the development of INVs. We inform diverse streams of research in transnational and immigrant entrepreneurship with broader strategic work on the creation of INVs. © 2013 Wiley Periodicals, Inc. This research was partly funded by an Australian Academy of Social Sciences research grant. A previous version of this paper was presented at Babson College Entrepreneurship Research Conference (BCERC), 2011, Syracuse.     

Explaining the formation of international new ventures: The limits of theories from international business research

International new ventures (INVs) represent a growing and important type of start-up. An INV is defined as a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries (Oviatt and McDougall 1994). Their increasing prevalence and important role in international competition indicates a need for greater understanding of these new ventures (Oviatt and McDougall 1994).Logitech, as described in a case study by Alahuhta (1990), is a vivid example of an INV. Its founders were from two different countries and had a global vision for the company from its inception. The venture, which produces peripheral devices for personal computers, established headquarters in both Switzerland and the U.S. Manufacturing and R&D were split between the U.S. and Switzerland, and then quickly spread to Taiwan and Ireland. The venture's first commercial contract was with a Japanese company.Using 24 case studies of INVs, we found that their formation process is not explained by existing theories from the field of international business. Specifically, neither monopolistic advantage theory, product cycle theory, stage theory of internationalization, oligopolistic reaction theory, nor internalization theory can explain the formation process of INVs. These theories fail because they assume that firms become international long after they have been formed, and they therefore highlight large, mature firms. They also focus too much on the firm level and largely ignore the individual and small group level of analysis (i.e., the entrepreneur and his or her network of business alliances).We propose that an explanation for the formation process of INVs must answer three questions: (1) who are the founders of INVs? (2) why do these entrepreneurs choose to compete internationally rather than just in their home countries? and (3) what form do their international business activities take?Who are the founders of INVs? We argue that founders of INVs are individuals who see opportunities from establishing ventures that operate across national borders. They are “alert” to the possibilities of combining resources from different national markets because of the competencies (networks, knowledge, and background) that they have developed from their earlier activities. Following the logic of the resource-based view of the firm, we argue that the possession of these competencies is not matched by other entrepreneurs. Only the entrepreneur possessing these competencies is able to combine a particular set of resources across national borders and form a given INV.Why do these entrepreneurs choose to compete internationally rather than just in their home countries? The founders of INVs recognize they must create international business competencies from the time of venture formation. Otherwise, the venture may become path-dependent on the development of domestic competencies and the entrepreneur will find it difficult to change strategic direction when international expansion eventually becomes necessary. As the founder of one INV explained, “The advantage of starting internationally is that you establish an international spirit from the very beginning” (Mamis 1989:38).What form do their international business activities take? Founders of INVs prefer to use hybrid structures (i.e., strategic alliances and networks) for their international activities as a way to overcome the usual poverty of resources at the time of start-up.This study has important implications for the practice of management. In financing decisions relating to INVs, venture capitalists and other venture financiers should look for entrepreneurs who have a global vision, international business competence, and an established international network. When entrepreneurs start INVs they should create hybrid structures to preserve scarce resources. Finally, given the path-dependence of competence development, founders of new ventures should consider whether establishing a domestic new venture with plans to later internationalize will be as successful a strategy as establishing a new venture that is international from inception.     

Factors enhancing the choice of higher resource commitment entry modes in international new ventures

The choice of entry mode in foreign markets is an important strategic decision with major consequences for the success of international new ventures (INVs). It is generally accepted that these firms choose relatively low-resource commitment entry modes to operate in foreign markets. Nevertheless, some researchers have suggested that higher resource commitment entry modes in foreign markets also seem to be competitive strategies for INVs. In this study, from a marketing/international entrepreneurship interface perspective and focusing on organizational issues, we center our attention on international market orientation as a neglected yet important factor in INVs’ choice of higher resource commitment entry modes in foreign markets. We suggest that an entrepreneurial orientation and the timing of international entry are important correlates to an international market orientation. We also suggest that the international learning effort of INVs through their international market orientation has a direct, positive impact on the resources these companies commit to their foreign markets through the use of higher resource commitment entry modes. Accordingly, the model proposes a positive effect of entrepreneurial orientation and early international entry on international market orientation which, in turn, is positively related to higher resource commitment entry modes. The hypotheses were tested on country-level data from Spain, using a structural equation model to analyze relationships between the latent variables.This study extends previous international entrepreneurship research, including insights on antecedents of international new ventures’ choice of resource commitment entry modes in foreign markets. The paper also goes further than previous international entrepreneurship research, by addressing the strategic consequences of rapid entry into foreign markets. Additionally, the results of this work encourage international entrepreneurs to look beyond the explicit value of experiential market knowledge to realize the potential value of international market orientation as an antecedent to higher resource commitment entry modes.     

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.     

Broadening the concept of international entrepreneurship: ‘Consumers as International Entrepreneurs’

We integrate theories from international business, entrepreneurship, innovation, marketing and network economics to develop a four-part typology of ‘consumers as international entrepreneurs’. This broadens the concept of international entrepreneurship and complements the firm-level focus customary in research on international new ventures and entrepreneurs within those ventures. We develop our arguments in the context of the new economy and discuss areas for investigation in this emerging area of inquiry.     

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.     

Entrepreneurial Narratives in Sustainable Venturing: Beyond People,Profit, and Planet

Sustainable venturing, the process of starting a new sustainable enterprise, has been studied extensively through the triple‐bottom‐line lens. The narratives employed by sustainable entrepreneurs, however, have proven to be more complex and diverse. In this paper, we set out to inductively explore the narratives underlying sustainable venturing. We conducted an interpretative analysis to elucidate how these entrepreneurs perceive, think about and give meaning to sustainability as they develop their ventures. Findings allow for an expansion of the role of narratives in business venturing toward a more sophisticated conceptualization grounded in how actual entrepreneurs experience and enact sustainability in the context of their ventures.     

A corporate entrepreneurship perspective of pre‐entry strategies for internationalization: A case study of a Chinese business conglomerate

The international expansion of Chinese firms is a remarkable phenomenon of contemporary international business. However, international expansion is particularly challenging for firms expanding from emerging market economies such as China because they have relatively few ownership advantages and suffer disadvantages. We apply a corporate entrepreneurship perspective to explore this under‐researched topic via a longitudinal case study of a large Chinese business conglomerate. Thirty‐one semistructured interviews and seven focus‐group discussions were conducted with 55 informants; company documents were also analyzed. We found sophisticated pre‐entry entrepreneurial initiatives are critical for successful internationalization, as they enable emerging market firms to overcome some constraints, leverage their assets, and build competences for international venturing.     

What happens to international new ventures beyond start-up: An exploratory study

Since its inception, research in international entrepreneurship has focused mainly on how and why international new ventures internationalize early on. To date, there has been hardly any research regarding the issue of continuing corporate growth in such ventures beyond their start-up phase or initial internationalization. Theoretically, we ground our study within the dynamic capabilities view of the firm and through an inductive theory building research explore how and whether international new ventures made-it beyond the start-up phase, aiming to generate early theoretical constructs to guide international entrepreneurship research in this substantive area. Grounded in data, we develop the following constructs related to made-it points: strategic experimentation, tensions in organizational gestalt, and legitimacy lies. To get to a made-it point, entrepreneurs experiment with their venture at several levels: organizational, business model, and operational. These experimentation efforts are fueled by tensions that exist in the organizational gestalt, such as ownership structure, business proposition to the market, and product development process. To legitimate themselves and their venture in the stakeholders’ eyes, entrepreneurs may tell legitimacy lies. We maintain that international new ventures do not reach a made-it point if they only manage to develop substantive capabilities to produce desired outputs at various levels within the venture but fail to create dynamic capabilities to change and reconfigure existing substantive capabilities.     

Born global or local? Factors influencing the internationalization of university spin-offs—the case of Halmstad University

A wealth of research in the past decades has examined born globals or international new ventures, which are firms that from inception view the whole world as a market and as a source to access resources. Many of these firms build their competitive advantage on high-tech knowledge. However, although many studies have shown how born globals can achieve success if they access resources through their relationships from actors in their networks, few studies have explored the relationship between born globals and universities. Universities are important actors in creating new technology knowledge, and many studies have shown how new firms, or so-called university spin-offs (USOs), are formed around universities. The current study explores why some USOs are successful in their international growth strategy and discusses the factors that influence and facilitate the internationalization process. The study investigates 10 USOs around the newly established Halmstad University in Sweden and finds that universities have a positive effect on firm creation and initial international growth. The regional competence base increases from the establishment of a local university, primarily by strengthening the regional human capital and by increasing university research. This study shows that researcher entrepreneurs’ ventures start as born globals, but that these firms do not continue to grow. Born global business models, per se, do not lead to competitive advantage and successful internationalization. Instead, a strategy built on customer focus and an ability to adapt to different customer demands lead to growth, and the location of growth is dependent on the size of the home market. This study also shows that student entrepreneurship can be a successful growth strategy for USOs focusing on both international and local markets.     

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.     

Networks,Entrepreneurial Orientation,and Internationalization Scope: Evidence from Chilean Small and Medium Enterprises

During the last 20 years, the literature on internationalized small firms discussed at length the speed of internationalization, illustrating the importance of born globals. The geographic scope of small firm internationalization and its implications for international business and entrepreneurship theories has however been overlooked, especially with regard to firms based in Latin America. This study expands the research agenda on the effects of networks and entrepreneurship orientation for the internationalization strategy of small firms by examining their effects on internationalization scope. It uses survey data from small firms based in Chile. The findings suggest that the greater the number of networks utilized, the more entrepreneurs are likely to target markets based in diverse regions of the world. The study has managerial and policy implications, suggesting that nurturing diverse international networks can help entrepreneurs reach a broader number of markets.     

The Dilemma of Growth: Understanding Venture Size Choices of Women Entrepreneurs

In recent years the number of women-owned firms with employees has expanded at three times the rate of all employer firms. Yet women remain underrepresented in their proportion of high-growth firms. A number of plausible explanations exist. To develop richer insights, a two-stage research project was undertaken. A mail survey was sent to a sample of female entrepreneurs to assess motives, obstacles, goals and aspirations, needs, and business identity. Based on the survey results, follow-up, in-depth interviews were conducted with entrepreneurs, selecting equally from modest-growth and high-growth ventures. In terms of quantitative findings, growth orientation was associated with whether a woman was "pushed" or "pulled" into entrepreneurship, was motivated by wealth or achievement factors, had a strong women's identity in the venture, had equity partners, and believed women faced unique selling obstacles. The qualitative research made clear that modest- and high-growth entrepreneurs differ in how they view themselves, their families, their ventures, and the larger environment. The results of both stages suggest that growth is a deliberate choice and that women have a clear sense of the costs and benefits of growth and make careful trade-off decisions.     

Environment,corporate entrepreneurship,and financial performance: A taxonomic approach

This study examined the association between a firm's external environment, corporate entrepreneurship, and financial performance. The study emphasized three propositions: (1) perceived—rather than objective-characteristics of the environment significantly influenced entrepreneurship activities; (2) a multidimensional definition of a firm's environment was essential to unravel the interplay between the environment, orporate entrepreneurship activities, and financial performance; and (3) a taxonomic approach had the advantage of accounting for the interrelationships among the dimensions of the environment in classifying firms.Using data from 102 companies in six4-digit industrial classification codes (SIC),cluster analysis was used to distinguish four environmental settings: “dynamic growth,” “hostile and rivalrous but technologically rich,” “hospitable, product-driven growth,” and “static and impoverished” environments. These four environments varied in their characteristics.The four empirically derived environment clusters were then used to examine variations in corporate entrepreneurship—operationalized as corporate innovation and venturing, and corporate renewal activities. The first dimension—corporate innovation and venturing—had four components: new business creation, new product introduction, percent of revenue from new products, and technological entrepreneurship. The renewal dimension had three components: mission reformulation, reorganization, and system-wide change. The data were used to test six hypotheses:

• 1.H1: In dynamic or growth environments, companies will emphasize new business creation and innovation.
• 2.H2: Environmental hostility is positively associated with the redefinition of business through venturing activities.
• 3.H3: Hospitable business environments are positively associated with business venturing and renewal activities.
• 4.H4: Static environments are inversely associated with corporate venturing and renewal activities.
• 5.H5: Corporate entrepreneurship activities are positively associated with company financial performance.
• 6.H6: Corporate entrepreneurship activities emphasised in HI through H4 will be significantly and positively associated with company financial performance in their respective environmental clusters.

The results provided general support for the six hypotheses. They showed that: (1) each environmental cluster had a distinct combination of activities relating to corporate innovation and venturing, and renewal; (2) corporate entrepreneurship activities varied in their associations with measures of company growth and profitability; and (3) the associations between corporate entrepreneurship and company financial performance varied among the four environment clusters. The results from this study can help executives in selecting specific entrepreneurial activities that match the demands of success in their business environment to improve their company's performance.     

Toward a Contingency Framework of Export Entrepreneurship: Conceptualisations and Empirical Evidence

This paper reports the findings of a study, which employed a contingency, export-entrepreneurial approach to investigate the critical influences on export venture creation among a sample of Nigerian small firms. Responding to the repeated calls in the literature for multi-disciplinary research frameworks, the paper draws on perspectives from entrepreneurship, exporting, and contingency literatures to examine the antecedent and moderating influences on the export behavior of small firms. It explores, in particular, the effect of entrepreneurial orientation and external environmental moderators in the export venture creation process of small firms. The findings suggest that an entrepreneurial orientation is associated with better export venturing, and is the appropriate strategic posture for small firms operating in hostile environments. It would appear, also, that this orientation is associated with certain decision-maker characteristics (including international orientation and contacts and previous business experience) and firm-level competencies. By thus highlighting the entrepreneurial dimensions of export venturing, this paper makes the case for greater policy focus on strengthening the entrepreneurial foundations/capacities of small firms.     

Is success hereditary? Evidence on the performance of spawned ventures

A common phenomenon in entrepreneurship is that employees turn away from employment to found their own businesses. Prior literature discusses the former employers’ characteristics that influence the creation of entrepreneurial ventures. An investigation of whether these characteristics also affect the success of the spawned ventures is missing so far. This paper contributes to the literature by showing that entrepreneurial ventures spawned by well performing firms are financially more successful than ventures stemming from poorly performing firms. This suggests that spawned entrepreneurs are able to exploit valuable knowledge from their previous employers which impacts their ventures’ performance positively. The analysis is based on a linked employee–employer data set for the Netherlands for the period 1999–2004.     

Chinese immigrant entrepreneurs’ involvement in internationalization and innovation: Three Canadian cases

In international entrepreneurship literature, entrepreneurs moving across borders have received less attention than other entrepreneurs. Also, only scant attention has been paid to immigrant entrepreneurs’ contributions to their organizations. This paper aims to contribute to the emerging international immigrant entrepreneurship literature by studying Chinese immigrant entrepreneurs’ roles in their firms’ international and innovative activities in Canada, China, and other countries. It is based on three cases of Chinese entrepreneurs who established businesses in Canada. We conclude that these immigrants’ experience of doing business in China and Canada, their network relationships and knowledge of these markets quickened their firms’ internationalization considerably. Moreover, these firms became active in product or service innovation as the case immigrants also involved other immigrants and locals. Consequently, immigrant entrepreneurs should actively use their connections both in their new country of residence and also in their previous home country, but to become even more successful, they should also reach beyond their ethnic ties.     

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.     

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.     

A theory of serial entrepreneurship

The contribution of serial entrepreneurs to entrepreneurial activity is significant: in Europe, 18–30% of entrepreneurs are serial; in the US, their contribution is about one-eighth. Yet, theories of entrepreneurship and industry dynamics presume that all firms are launched by novice entrepreneurs and firm failure is synonymous with exit from entrepreneurship. We propose a theory of serial entrepreneurship in which an entrepreneur has three occupational choices: maintain his business in operation, shut it down to enter the labor market to earn an exogenous wage, or shut it down to launch a new venture while incurring a serial startup cost. In equilibrium, a high-skill entrepreneur shuts down a business of low quality to become a serial entrepreneur, launching and subsequently closing firms until a high quality business is found; a low-skill entrepreneur shuts down a business of low quality to enter the labor market, never to become a serial entrepreneur. A decrease in the wage or serial startup cost, or an increase in the startup capital, enhances the contribution of serial entrepreneurs to entrepreneurial activity and promotes new firm formation (by increasing entrepreneurship and the number of new firms that survive), but its effect on the exit rate of new firms is ambiguous. We show the model is consistent with evidence relating to the impact of an entrepreneur’s characteristics and prior experience in entrepreneurship on the survival of his firm and his entry into and survival in entrepreneurship.