Prevalence and longitudinal trends of early internationalisation patterns among Canadian SMEs

Abstract

PurposeRecently, studies call for a more nuanced perspective on different internationalization patterns pursued by early internationalizers. These studies argue that most born global firms turn out to be born regional and that the proportion of true born global firms would be overestimated. Moreover, literature claims that the proportion of born global firms increases over time due to macroeconomic trends. The purpose of this paper is to investigate these assumptions by providing a dynamic perspective on the prevalence of different types of internationalization patterns among Canadian small and medium‐sized exporters (SMEs).Design/methodology/approachTo empirically examine the ideas above, the authors constructed a unique large‐scale longitudinal (1997‐2004) dataset. A multinomial logit model is employed to estimate a firm's predicted probability, Ceteris paribus, of choosing different internationalization patterns: born global, born regional, and gradual internationalization.FindingsIt is found that born global firms indeed account for a smaller proportion than born regional firms (16 per cent vs 27 per cent). However, evidence is found that born globals and born regionals are increasingly established over time and that macroeconomic factors seem to account for this development, at least partially.Originality/valueCombining a rigorous empirical analysis with a unique large‐scale longitudinal dataset, the paper addresses two fundamental research questions in the international entrepreneurship (IE) literature: which internationalization pattern prevails; and if the born global pattern is increasingly established over time. The paper therewith theoretically contributes by comparing the predictive value of different internationalization frameworks (international new venture (INV) framework, stage‐models and regionalization hypothesis), toward which there is considerable current debate.