The Effects of Early Internationalization on Performance Outcomes in Young International Ventures: The Mediating Role of Marketing Capabilities

Abstract

In an emerging market context, this article examines the impact of early international market entry on marketing capability development and performance outcomes in young and small entrepreneurial firms. The authors identify the importance of marketing capabilities and the boundary conditions associated with international commitment, as well as the type of international market entered (developed vs. emerging market), to determine performance outcomes in early internationalization. With survey data from more than 300 senior managers in China, the results indicate that early foreign market entry enhances a young venture's marketing capabilities, which in turn leads to international growth. The findings also reveal that young ventures tend to be in a better position to improve their marketing capabilities when their senior management demonstrates a high level of commitment to foreign markets. Furthermore, the impact of marketing capabilities on the performance outcomes of early internationalization seems more salient among ventures that target developed, rather than emerging, foreign markets. Theoretically, through the lens of organizational learning and the development of marketing capabilities, this article contributes to the study of international new ventures by demonstrating that marketing capabilities serve as enabling factors that help young international ventures mitigate their liabilities of foreignness to achieve international performance outcomes.