Business group affiliation and internationalization of new ventures: Moderating role of industry and liberalization

Abstract

Internationalization of new ventures (INV) has been the interest of inquiry for more than three decades. Though many researchers have looked at different factors and their impact on the speed, scope, and intensity of internationalization in new ventures, this stream of research requires more attention in the context of emerging economies. The study examines the role of a firm’s business group affiliation and its impact on internationalization of new ventures in emerging economies. It also explains how industry concentration and liberalization of the economy change the relationship between business group affiliation and internationalization. Based on a dataset of new ventures from 67 industries founded in India during the period of 1996 to 2014, our results suggest that ventures with business group affiliation focus on the domestic market, and the focus changes from the domestic market to international when there is high industry concentration and with the liberalization of the economy.