Abstract

Purpose of the article: The purpose is to create a new definition of a Born Global (BG) company, more relevant to contemporary global business situation. BG companies are the phenomenon which contributes to national economic development by fostering innovation, creating stocks of skills and knowledge, supporting industrial growth. It would be a right decision to study the options to develop BG companies in Latvia, as a small number of exportcapable sectors represent a factor that renders the Latvian economy sensitive to any changes in the external environment. Developing standard definitions helps to increase the research clarity as well as the comparability of firms across regions, countries and specific industries. Methodology/methods: The research is conducted through literature reviews, case studies, survey studies, and modelling. The focus group discussion was organized to clarify the standard definition of the BG with the aim of using this definition as a basis for further research. Scientific aim: The newly created definition of born global companies is based on scientific justification for all the features it contains. The authors would like to base the justification on the causation and effectuation theories which include all the features associated with orientation to revenues and international market capacity. Findings: The authors highlight the role of defining and predicting of the opportunities for a company to become a BG. The theories help to justify an inclusion of all the corresponding components in the definition. This theoretical justification could serve as the basis for the further investigation of the relationship between effectual conditions and the outcome (potential to be a born global company). Conclusions: Before studying the options to develop BG companies as the growth patterns in Latvia, it is necessary to find the most appropriate definition of the BG. The newly created definition is justified by causation and effectuation theories.

Highlights

  • Introduction and relevance of the topicThe changing organizational, environmental and strategic factors of the global world are likely to foster continued internationalization (Zahra, George, 2002), in addition to falling costs related to trade liberalization, dismantling of regulatory barriers and technological progress (Cavusgil, Knight, 2015)

  • Over the past 25 years, several terms have been used in the literature to qualify this new generation of SMEs: “Born Global” (Rennie, 1993), “International New Ventures (INV)” (Oviatt, McDougall, 1994), “Global start-ups” (Oviatt, McDougall, 2005) or “Born Internationals” (Johanson, Martin, 2015)

  • The entrepreneurial perspective is the part of the Born Global (BG) ecosystem, it is in close interaction with other components of this ecosystem, it would be valuable to investigate the factors in the firm’s external environment thought to drive early internationalization, including the liberalization of international markets, advances in information and communications technologies, and the emergence of the Internet that are in close interaction with external environment perspective as industry condition, geographic location and government policies

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Summary

Introduction and relevance of the topic

The changing organizational, environmental and strategic factors of the global world are likely to foster continued internationalization (Zahra, George, 2002), in addition to falling costs related to trade liberalization, dismantling of regulatory barriers and technological progress (Cavusgil, Knight, 2015). The new trend of the era – “born global” has been facilitated by globalization, the Internet, and other communications and innovations (Knight, Cavusgil, 2004; Eurofound, 2012), which have reduced the cost of internationalization, fostering foreign expansion of smaller, resource-poor companies (Oviatt, McDougall, 1994; Eurofound, 2012). Born global action requires the entrepreneur to make decisions under conditions of high uncertainty against a rapidly changing backdrop (Sarasvathy, 2001; Stroe et al, 2018). The objective of our study is, first of all, to examine the existing definitions of the BG in terms whether they include all the above-mentioned characteristics and create a new definition of the BG, more relevant to contemporary global business situation

Theoretical framework and research propositions
Defining born globals in relation to the theories
Focus group discussion to create a new definition for born global
Findings
Conclusion
Full Text
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