Abstract
Newly established, technology-based firms entering international markets often have limited resources in terms of capabilities, time, and capital. As a consequence, these firms often use entry modes characterised by low resource commitment, including partnership agreements (strategic alliances). This paper, investigates which partner selection criteria that are important for this group of firms when they are selecting partners. Based on case studies of three Norwegian firms targeting the UK market, five selection criteria have been identified as important (trust, relatedness of business, access to networks, access to market knowledge, reputation), one has been identified as partly important (sharing of financial risk), and ten have been identified as having limited importance. Further, the paper discusses the implications of these results for managers of small firms entering international markets and presents recommendations for further research.
Highlights
Øystein Moen (Corresponding author) Norwegian University of Science and Technology (NTNU) Department of Industrial Economics and Technology Management
Introduction many new, technology-based firms remain relatively small over time, and only a small fraction of them grow into larger firms, several researchers have presented empirical evidence suggesting that this minority of fast growing companies generates a significant proportion of economic growth and new jobs (Rickne and Jacobsson, 1996; Jones-Evans and Westhead, 1996)
On the basis of these sections, a case study of three Norwegian firms entering the UK market is presented in order to gain insight into partner selection criteria and the partner selection process
Summary
Technology-based firms remain relatively small over time, and only a small fraction of them grow into larger firms, several researchers have presented empirical evidence suggesting that this minority of fast growing companies generates a significant proportion of economic growth and new jobs (Rickne and Jacobsson, 1996; Jones-Evans and Westhead, 1996) For many of these firms, international expansion is necessary to realise growth ambitions, while others are pushed into international markets due to significant R&D start-up costs and limited home market potential. Managers of internationally oriented new, technology-based firms need to navigate complex international environments, and their challenges are different from the challenges facing domestic and established firms Most importantly, these firms will have limited resources as well as limited time, capital, and capabilities; qualities that are all needed for entry into international markets (Doutriaux, 1992). On the basis of these sections, a case study of three Norwegian firms entering the UK market is presented in order to gain insight into partner selection criteria and the partner selection process
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