Earliness of First Foreign Entry and Rapidness of Post-entry Process

Abstract

The phenomenon of early and rapid internationalization has been receiving increasing attention from scholars. However, in the extant research on international entrepreneurship (IE), it remains unclear how the earliness of first foreign entry relates to the rapidness of the post-entry process. Drawing Penrose’s theory of firm growth, we attempt to explain the effect of early internationalization on post-entry speed in terms of managerial learning and its imperfect fungibility. While early initiation of foreign entry imposes managerial constraints in the short term and slows the post-entry process, it enables entrepreneurs to quickly start managerial learning, which in turn accelerates the post-entry process in long term. Based on this premise, we hypothesize that accumulating operational experience has a U-shaped influence on the post-entry speed of early internationalizing firms. Furthermore, this study proposes that the effect of managerial learning takes place only in specific regions where the entrepreneur acquires operational experience. The results of our longitudinal 19-year (2000–2018) study on 91 Japanese firms that initiated internationalization from an early age provide evidence for our hypotheses.