Internationalization Of Entrepreneurial Firms Research Articles

Configuring international entrepreneurial orientation and dynamic internationalization capability to predict international performance

In recent years, the dynamics of international business have changed. This has largely been attributed to uncertainties caused by the COVID-19 pandemic and global trends towards individualistic behaviours. To remain competitive, international entrepreneurial firms (IEFs) renew their behaviours and reconfigure their capabilities. However, scholars have hitherto not uncovered the configurational interplay connecting behaviours and capabilities between the pre-and-post-COVID periods. Drawing on the configurational perspective of dynamic capability theory, we explored the configurational specificities of dynamic internationalisation capability and an international entrepreneurial orientation (IEO) as the behavioural aspect of IEFs. Adopting a longitudinal approach, we applied fsQCA to data drawn from Malaysia. Results show that whereas, in the pre-COVID period, IEFs exhibited an IEO along with threshold and disruption capabilities, in the wake of the pandemic, they are gingerly manifesting an IEO with an overwhelming priority on value-adding and consolidation capabilities suited to weather crises and secure international performance.

Innovation and commercialisation: the role of the international dynamic marketing capability in Malaysian international entrepreneurial firms

PurposeThis study aims to investigate how international entrepreneurial firms (IEFs) successfully commercialise innovative products/services internationally. In doing so, the authors examined the role played by the international dynamic marketing capability (IDMC) in the relationship between explorative and exploitative innovation and commercialisation. In addition, the authors also evaluated how the breadth and depth of international networks facilitate IEFs in upholding the effects of the IDMC to influence commercialisation.Design/methodology/approachTo test the research model, structural equation modelling is used based on time-lagged survey data drawn from 201 Malaysian IEFs. To validate the results, additional robustness tests and endogeneity analyses have been performed.FindingsThe findings show that the IDMC positively mediates the relationship between explorative and exploitative innovation and commercialisation. Furthermore, the finding exhibits that the effects of the IDMC on commercialisation are positively moderated by the breadth and depth of international networks.Originality/valueGiven the fragmented and general nature of the extant marketing research on the IDMC, the study contributes to the international marketing literature by providing rich and nuanced pertinent knowledge. This study advances dynamic capability theory in relation to IEFs by establishing the IDMC as a functional capability suited to enable them to successfully commercialise the products/services resulting from explorative and exploitative innovation.

The Context Sensitivity of International Entrepreneurial Orientation and the Role of Process and Product Innovation Capabilities

AbstractDrawing on a contingency perspective of the resource‐based view of the firm, we test the thesis that a relationship between international entrepreneurial orientation (IEO) and the international performance of export‐manufacturing firms is context‐sensitive and contingent on innovation capabilities. Using time‐lagged survey data from 369 Bangladeshi export‐manufacturing firms in a least developed country (LDC) as an extreme empirical context, we predict that process and product innovation capabilities are essential to the relationship between IEO and international performance among export‐manufacturing firms. We find that the effect of IEO on international performance is not positive; however, the relationship becomes positive when moderated by process and product innovation capabilities. International entrepreneurial firms in an LDC succeed when they can better align IEO‐driven efforts with these capabilities. Our study advances knowledge on the context sensitivity of IEO and embellishes a resource‐based theory of IEO.

Somebody is hiding something: Disentangling interpersonal level drivers and consequences of knowledge hiding in international entrepreneurial firms

This research is set to address the scant research on the relationship between the key drivers and consequences of knowledge hiding within international entrepreneurial organisations at the interpersonal level. It further aims to compare knowledge hiding behaviour among international entrepreneurs in two diverse contexts of emerging countries versus advanced economies. Therefore, this research employs a total number of ten international entrepreneurs in Iran and Italy and takes advantage of the Multi-Criterion Decision-Making (MCDM) approach. In this regard, DEcision-MAking Trial and Evaluation Laboratory (DEMATEL) method is applied to disentangle the cause-effect relationship between knowledge hiding components and present conceptual frameworks for the interrelationship of knowledge hiding factors in each context. Furthermore, in order to assess the importance and ranking of factors in Italy and Iran Weight Assessment Ratio Analysis (SWARA) is performed. As such, this research provides different contributions to the knowledge hiding literature as well as key implications for practitioners.

Internationalization of entrepreneurial firms: Leveraging real options reasoning through affordable loss logics

Using a transaction-level analysis of 1,040 small lumber exporters from 52 countries, we develop and test a framework wherein internationalizing entrepreneurs pair affordable loss logics (ALL) with real options reasoning (ROR) to generate value-creating opportunities while substantively forestalling the unfavorable impacts of trade partner opportunism. Through this, our study extends the literature on international market entry by identifying novel mechanisms employed by entrepreneurs to navigate the cross-currents lying between opportunity and opportunism. In addition, we offer fresh insights to the ongoing debate concerning the applicability ROR to business venturing contexts. By bridging ROR and ALL, our study extends and enhances efforts to apply ROR as a descriptor and predictor of market entry decisions.

WHAT DRIVES INTERNATIONAL ENTREPRENEURIAL FIRMS TO EXPAND OVERSEAS: A CASE STUDY APPROACH

Despite the lack of resources, entrepreneurial firms are able to expand internationally from an early stage of establishment. This study aims to explore and identify the drives of expansion for international entrepreneurial firms. This study employed a multi-case analysis approach through in-depth interviews to identify the drivers of international expansion of such firms. Based on our findings we propose a model to enrich the current understanding on the factors that drive young entrepreneurial firms’ expansion to international markets.
 
 JEL: L10; L20; M16; F22
 
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Potential international competitiveness and co-innovation of technology-based international SMEs

This paper contributes to an integrated entrepreneurship perspective in the cross-section of research on networks, innovation and internationalisation. The study promotes a conceptualisation based on international competitiveness literature in order to further such an integrated entrepreneurship perspective. By focusing on potential international network competitiveness, delineated as network-based sources of international competitiveness, the sustainability of international entrepreneurial firms is emphasised. The paper specifically draws attention to the relationship between network-based sources of international competitiveness and international technology development. Three hypotheses are developed and tested on 142 technology-based internationalising SMEs by means of linear structural relations (LISREL). The results indicate that there are direct- and indirect positive effects between network-based sources of international competitiveness and international technology development.

The Involvement of Venture Capital and the Internationalization of Entrepreneurial Firms: An Empirical Study Based on China's Listed High-tech Companies

Venture capital has very important influences on entrepreneurial firms' growth. Then, what would be the impact of venture capital on firms' internationalization? Based on RBV, agent theory, and signal transition theory, this paper analyzes the mechanism of the effect of venture capital on the internationalization of entrepreneurial firms, and the relation between characteristics of venture capital institutions and the internationalization of entrepreneurial firms, and empirically tests the hypotheses by unbalanced panel data from China's 300 listed high-tech companies. It comes to the results as follows:firstly, the involvement of venture capital not only improves the breadth of firms' internationalization, but also strengthens the depth of internationalization; secondly, the characteristics of venture capital institutions have different influences on entrepreneurial firms' internationalization, and entrepreneurial firms with foreign venture capital, venture capital with high industrial expertise, and syndication venture capital, have the advantages of broadening the breadth of the internationalization of entrepreneurial firms and promoting deep roots of entrepreneurial firms in international market. This paper not only extends existing firm internationalization theory, but also has reference for internationalization practice of entrepreneurial firms.

International opportunity recognition as a critical component for leveraging Internet capabilities and international market performance

Recent research in the field of international entrepreneurship has emphasized the need for a better conceptualization of international opportunity recognition. Further, with advancements in information and communication technologies, such as the Internet, there has been a profound impact on the way in which international business is conducted, for example, enabling entrepreneurial firms to capitalize on the economic opportunities of an Internet environment. In this study, we propose a model, highlighting the importance of international opportunity recognition, as a critical component for leveraging Internet capabilities and international market performance. Through the lens of a resource capabilities approach a quantitative, online survey was used to collect data from Australian, international entrepreneurial firms. Structural equation modelling results indicate that international opportunity recognition plays a central role in explaining how resources and Internet capabilities combine for the firm’s realization of international opportunities, and subsequent international performance. The findings enrich current understanding of how international entrepreneurial firms realize opportunities in Internet-based environments.

Subnational institutions, political capital, and the internationalization of entrepreneurial firms in emerging economies

This study advances the institution-based view of strategy by integrating it with firm-specific capability considerations. In particular, we investigate the integrative influence of subnational-level home country institutional environments and firm-level political capital, as an important way to seek resources, on emerging economy entrepreneurial firms’ internationalization. With data from Chinese entrepreneurial firms, we find that the development of subnational institutional environments in the home country is related to firms’ degree of internationalization. Furthermore, while political capital with low-level governments enhances the effect of subnational institutions on internationalization, political capital with high levels of government has no such moderation effect. Theoretical and empirical contributions and implications are discussed.

International entrepreneurial firms in Chile: An exploratory profile

The internationalization of new small and medium-sized enterprises is a challenge for many developing countries, especially those with open economies and small internal markets like Chile. This study, in an exploratory way, analyzes some of the factors that determine how new ventures are oriented to international markets from their early stages. This paper develops a model that integrates variables related to firm characteristics like industrial sector, competitiveness, and size of the firm with a degree of internationalization. The empirical analysis uses data from the Global Entrepreneurship Monitor's (GEM) adult population survey carried out in Chile during the period 2007–2013 (n=4208). An ordinal logit regression model was used to test the hypotheses. Descriptive results show that 12.8% of Chilean entrepreneurs in the sample have a relatively high tendency towards internationalization and that the factors related to competitiveness are significant with respect to this tendency. The size of the firm and the propensity to create employment are also significant. Practical implications are discussed.

Family Control, International Accounting Standards, and Access to Foreign Banks: Evidence from International Entrepreneurial Firms

This article aims to understand if a change in accounting standards offers new avenues for helping entrepreneurial firms, especially those family-controlled ones, to obtain debt financing from foreign banks. We find that amid the global wave of adopting International Accounting Standards (IAS), family-controlled firms tend not to voluntarily switch from local generally accepted accounting principles to IAS. After self-selection issues are taken into account, furthermore, entrepreneurial firms adopting IAS experience less difficulty accessing loans from international banks. However, IAS adoption differentially influences private firms, family owned versus nonfamily controlled, in terms of their access to debt capital.

The role of international experience in business models of SMEs - evidence from software companies

This paper examines the role of international experience in value creation in business models in internationalising software SME's. While business models as such have been subject to extensive research their study in the context of international entrepreneurial firms has remained scant. The empirical part of the paper focuses on eight Finnish international entrepreneurial software companies. The findings suggest that business models of software companies incorporate many similarities. However, the degree of international experience seems to influence the companies' value creation and the way they organise their activities both upstream and downstream of their value chains. Moreover, as international experience grows the firms tend to outsource more of their core activities, affecting the business model design.

How international entrepreneurship characteristics influence Internet capabilities for the international business processes of the firm

This research explores the relationship between international entrepreneurship characteristics and the use of Internet capabilities for the international business processes of the firm. It has been suggested, that the accumulation of a firms Internet capability can assist international operations, especially when operating in fast changing dynamic Internet environments. However, international entrepreneurship characteristics which are seen as a precursor to leveraging Internet capabilities are still vague. Given this finding, eight case studies of small and medium sized travel and tourism firms were selected to investigate the influence of international entrepreneurship characteristics, and Internet capabilities for international business processes. Based on the eight in-depth case studies, the results signify that successful international entrepreneurial firms which encompass high levels of international innovativeness and proactiveness behaviour integrate Internet capabilities to a greater degree. Our findings also indicate that the prior international business experience, international risk-taking propensity and international networking characteristics are not necessarily precursors to successful integration of Internet capabilities for international business processes. On the contrary, international business experience and international networks actually lead to a reliance on traditional mechanisms of internationalisation and can dilute the development of Internet capabilities for international business processes.

The internationalization of entrepreneurial firms from emerging economies: The roles of institutional transitions and market opportunities

This paper examines the influence of institutional transitions and market opportunities in emerging economies on the internationalization of entrepreneurial firms from these economies. We conceptualize and examine a three-stage model of institutional transition in emerging economies, and their effects on the internationalization strategies of new venture firms. Propositions are developed in examining how the different stages of the institutional transition can influence the strategic choices for the internationalization of new venture firms. In responding to the calls for more research on institutions and international entrepreneurship, this paper is an attempt extending the linkages between the two to the context of emerging economies. The paper also has managerial implications for entrepreneurs and the associated policy implications in international entrepreneurship.

How Digitalization Changes the Internationalization of Entrepreneurial Firms: Theoretical Considerations and Empirical Evidence

The internationalization of firms has mainly been analyzed and explained by considering observations in a pre-digital business environment. Thus, the applicability of the internationalization theories to digital ways of conducting business needs to be challenged. Recent research on the internationalization of digital firms attempts to adapt existing international business literature to the digital market. However, these studies consider internet-based companies predominantly as a homogeneous group. It is a popular opinion that digital internationalization is faster, cheaper, and easier for digital companies. The purpose of this article is to develop a comprehensive understanding of how internet-based companies internationalize in the digital market and why their internationalization processes differ from one another. Based on an overview of the specificities of the digital marketplace and their impacts on the applicability of the traditional international business theories, we develop a differentiated view of digital internationalization. Subsequently, the theoretical results are compared with primary data derived from six semi-structured interviews with representatives of digital companies. So far, the business internationalization theory has focused on variables such as efficiencies of the value chain, internal capabilities, and resource endowments. Our results show that even if these theories still have high impacts on the internationalization strategies of internet-based companies, in the highly dynamic digital markets, further variables need to be considered. In addition to the impacts of value creation and delivery infrastructure (e.g., firm-specific capabilities and resources), the specific way of creating value and the individual customer interface used by a digital business play key roles in digital internationalization.

Internationalization Processes and Links with Capital Factors: the Case of South Africa

Several different theoretical perspectives were examined in terms of the internationalisation processes of entrepreneurial firms. This article is built on past studies that recognize the case that when an entrepreneurial firm undertakes an internationalization strategy, financial, social and human capital factors all play a major role in its success or failure. Based on a survey of 136 internationalized and non-internationalized firms the study conducts a comparative analysis of capital factors that may act as inhibitors or promoters of internationalization. Descriptive and multivariate statistical analyses were used to analyse various features of internationalization and perception of capital factors. Results confirm that financial capital items are perceived as inhibitors to the firm’s ability to internationalize in the emerging market context. Findings provide organisations and practitioners with additional insights into the key capital constraints on internationalization of entrepreneurial firms.

Value creation of an internationalizing entrepreneurial firm

PurposeIn order to respond to the call for a broader perspective on the internationalization of entrepreneurial firms, this study aims to bring the business model concept to the context of international entrepreneurship, with special emphasis on the notion of value formation and value exchange at company interfaces.Design/methodology/approachThis is a cross‐case study based on qualitative data from business model workshops with key company informants in each case firm.FindingsThe findings of the study indicate that, although the business models of firms with comparable positions may appear similar, there are fine‐grained differences both in their activities and in their value formation. In addition, the data collection workshops revealed that firms tend to neglect the inspection of their incentives to their partners, as they concentrate on value formation to end‐customers.Practical implicationsFrom the managerial point of view, the study shows how the managers of international entrepreneurial firms may describe and analyze their business model, including the whole value chain, systematically from the perspective of value exchange. Firms may gain insights from examining the business models of similar organizations.Originality/valueEven though the role of the business model has also been discussed in previous studies, it has not been so explicitly pronounced in the domain of international entrepreneurship. The paper contributes to previous business model conceptualizations by adding the notion of value exchange at the company interfaces.

Network development and knowledge creation within the foreign market: A study of international entrepreneurial firms

The aim of this paper is to contribute to international entrepreneurship theory by adopting a foreign market perspective when examining the links between network development and knowledge creation. Network development is argued to enhance the understanding of regional market structures and make firms more inclined − and better able − to create knowledge in foreign market business relationships (business relationships represent focal points in networks). The basis of this argument is that networks provide a multitude of opportunities for the exploitation of previously unexploited combinations of knowledge. Data were gathered from surveys conducted with an effective random sample of 188 small and medium-sized enterprises (SMEs) in Sweden. A LISREL-based analysis was performed to test the three hypotheses deduced from theory. Findings showed that network development has a direct positive impact on knowledge creation and that knowledge combination functions as a mediating construct between network development and knowledge creation.

The International Entrepreneurial Firms’ Social Networks

This paper investigates theoretically the importance and impact of the international entrepreneurial firms’ (IEFs) social networks on selected firms’ strategies. We focus specifically on some core attributes of IEFs and the impact of social networks on such strategies as the choice of the foreign markets to operate and the foreign entry modes. The social networks are a major driver of the internationalization from inception and help in overcoming a variety of physical and social resource limitations as well as transactional hazards. We conclude that it is likely that both some fundamental characteristics of the IEFs and those of the foreign markets entered account for these firms reliance on their social networks.