Internationalization–Innovation Strategy in New Ventures: A Log-linear Analysis

Abstract

Despite the well-established empirical evidence of a positive mutual effect of internationalization and innovation, the extant literature provides a limited understanding of factors that could strengthen the adoption of a dual strategy in new ventures. This article addresses this critical gap through the examination of a large dataset on entrepreneurial activity from the Global Entrepreneurship Monitor, which covers 50 countries in both developed and developing contexts. This article advances an estimation of a hierarchical log-linear model designed to uncover the mutual influence of micro (i.e., entrepreneurs and firm particularities) and macro (i.e., industry and environment features) factors and to identify which variables are of great importance with respect to the innovation–internationalization strategy in new ventures. The results suggest that (a) combinations of micro and macro factors explain the adoption of the internationalization–innovation strategy in new ventures; (b) gender barriers to adoption appear in developed countries; (c) opportunity recognition is relevant to adoption in any country; and (d) business skills are significant to adoption only in low-technology sectors. This article adds to the extant literature by providing a comprehensive understanding of how micro- and macro-level factors concurrently affect innovation and internationalization strategies for new ventures.