Are born global firms really a \u201cnew breed\u201d of exporters? Empirical evidence from an emerging market

Øystein Moen,Yan-Yin Lee,Mohammad Falahat

doi:10.1007/s10843-022-00307-0

Abstract

This study investigates and compares born global (BG) firms and non-BG firms in Malaysia. We employed the multigroup analysis technique with structural equation models to test six hypotheses to determine the differences and similarities between two proposed models of BG and non-BG firms across a wide range of industries. The study reveals differences between the antecedents of marketing capabilities for BGs versus non-BGs, indicating that the performance enabling mechanisms differ between the groups. More precisely, the ability of BG firms to convert digital and entrepreneurial orientations into marketing capabilities is found to be a distinguishing characteristic of these firms. Moreover, non-BGs utilize government support to build marketing capabilities and obtain superior performance in the international market. This result suggests that governmental export promotion initiatives in Malaysia should be adjusted to increase relevance for BGs. The findings indicate that marketing capabilities play an essential role in the international market performance of both BGs and non-BGs. An important implication is that managerial focus and actions need to be adjusted depending on the type of firm. The two types of firms are not equal; if they are managed similarly, misjudgment will arise.

Highlights

Interest in young firms with significant international involvement has been growing, with labels such as born globals (BGs) (Rennie 1993), international new ventures (McDougall et al 1994), or global start-ups (Jolly et al 1992)
Contributions: Since the inception of the literature focusing on born global (BG) firms, an important question has been how different these firms are from other exporting firms
We present an empirical study investigating how BG transforms different managerial orientations into marketing capabilities and international performance and compare this to what we find for non-BG firms

Summary

Introduction

Interest in young firms with significant international involvement has been growing, with labels such as born globals (BGs) (Rennie 1993), international new ventures (McDougall et al 1994), or global start-ups (Jolly et al 1992). Rennie (1993) described these firms as a new breed of exporters based on the difference between them and other exporting firms. The focus on BG firms in recent decades has been driven by their importance for growth in export revenues and employment, as described by Moen and Rialp (2018). Sleuwaegen and Onkelinx (2014) concluded that BG firms have had the highest rates of both growth and failure, while the importance of these firms and the need for public policy initiatives supporting them have been discussed in both Organisation for Economic Co-operation and Development publications (OECD 2013) and reports from the European Union (Eurofound 2012).

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Discussion

Conclusion