International New Ventures Research Articles

Do international new ventures have attraction advantages? Insights from a recruitment perspective

This study applies a recruitment lens to examine how the proactive internationalization of new ventures might influence job seeker perceptions of organizational attractiveness. Using signaling theory and person-environment fit theory to develop our hypotheses, we employ a metric conjoint experiment with 209 job seekers (making 3344 decisions). Our multilevel regression results suggest that the international new venture (INV) strategy of proactive internationalization presents an ambivalent recruiting signal to job seekers. However, this effect is positively moderated by job seekers’ personal initiative and international experience. We offer implications for signaling theory in international entrepreneurship, and practical implications for staffing INVs.

A chip off the old block: Founders' prior experience and the geographic diversification of export sales in international new ventures

Integrating the cognition literature in entrepreneurship and strategy with the career imprinting literature, we propose that the geographic diversification of export sales in international new ventures (INVs) resembles that of their founders' most recent (geographically diversified) employer because founders bear a repertoire of the ‘logics of action’ from their employers regarding how to diversify geographically. We then propose two boundary conditions that influence the relationship between the geographic diversification of export sales of founders' most recent employers and that of their INVs: length of exposure and time since last exposure to their most recent geographically diversified employer. We test these hypotheses using longitudinal data on a sample of 3420 INVs. Our findings broadly support our theoretical propositions except for the moderating role of founders' length of exposure.

Governance considerations and non-linear international scale-up behaviour among INVs

Underpinning this instrumental case study is an effectuation lens. It investigates how a firm’s governance affects decision-making within international new ventures (INVs), which rapidly withdrew from markets abroad, regarding their re-internationalisation activities. Interviews with founding owners, exhibiting growth-oriented objectives, provide unique insights regarding a combination of effectuation and causation-oriented decision-making. In comparison to earlier studies that focus on the role and mind-set of the founding management team, findings suggest stakeholders like angel investors may exhibit an influence on certain INVs’ internationalisation decisions. Some decision-makers view risks/rewards against objectives in subjective ways like ‘loss of credibility’ and the ‘fear of missing out,’ rather than simply economic terms like growth. New light is shed on the importance of decision-makers validating internationalised business models and exhibiting an ability to pivot product-market strategies. Non-linear international scale-up behaviour may include a temporary domestic market focus and potentially re-internationalising to different countries targeted prior to de-internationalisation.

On-ramp or speed bump? How boards influence the internationalisation of international new ventures

This article aims to explore how the boards of international new ventures (INVs) develop throughout the internationalisation and growth phases of the firm. Specifically, the study explores how the nature and extent of the board’s role changes over time in facilitating the INV’s knowledge and network acquisition. We draw on qualitative data, including 18 interviews with INVs and three interviews with experts on New Zealand’s high-technology sector. The data analysis yielded four main patterns. INVs that relied on an informal board during the initial market entry phase remained flexible in exploring multiple markets before transitioning to a formal board (Pattern 1). INVs that established a formal board during the initial market entry phase achieved accelerated internationalisation only when the board remained flexible (Pattern 2a). Where the formal board did not remain flexible, they became a ‘speed bump’ in the post-entry phase growth process, unless the management team could counter-balance this deceleration effect with bringing in informal board members (Pattern 2b). The findings suggest that the absence of a formal board also reduces internationalisation speed if the founder does not have the discipline to follow through with the exploitation of the perceived opportunities (Pattern 3).

Corporate governance in international new ventures and born global firms

International new ventures (INVs) and born globals (BGs) play a significant role in the global economy. These firms have rapidly expanded into foreign markets offering unique products and services. Despite the role such ventures play in the global economy, we know relatively little about the role of corporate governance (CG) in INVs and BGs and the challenges these firms face in foreign markets. This introductory article and the papers included in this Special Issue provide important insights into the role of corporate governance and the rapid rise of INVs and BGs and their evolutionary process, and highlight the topics where more research is needed. We also contribute to the current literature by examining corporate governance in early internationalising firms and discussing what sets them apart from well-established multinational enterprises.

The role of political connections in rapid internationalisation: A study among Chinese international new ventures

Drawing upon the attention-based view, we examine whether political connections facilitate or hinder the speed of new venture internationalisation. Given the limited managerial attention and information-processing capacities of decision-makers, international new ventures (INVs) need to make a trade-off between domestic business activities and rapid foreign expansion. We hypothesise that INVs with political connections, being embedded in political networks in their home market, tend to focus their attention on domestic business activities rather than rapid internationalisation. We also hypothesise that a high level of subnational trade openness mitigates the baseline negative relationship. Analyses based on the longitudinal data of INVs publicly listed in China support the hypotheses. Our study contributes to the literature by unveiling the dilemma of INVs which are developing board political connections at home and seeking rapid internationalisation abroad.

International entrepreneurship without investor protection: Evidence from initial public offerings in Belgium before the First World War

AbstractWe investigate the financing and performance of international entrepreneurship in an environment that was characterized by severe information problems and very weak investor protection. Despite these problems, new ventures could raise large amounts of equity and debt on the Belgian capital market between 1890 and 1914. Many of these firms were international new ventures (INVs) with their main operations abroad, often far away from Belgium. We find that INVs raised much more capital but were less likely to pay a dividend than domestic new ventures (DNVs). They were less likely to issue a bond and had a higher cost of debt when operating further away from Belgium. Performance after listing was generally bad for new ventures throughout the period, but it was much worse for INVs than for DNVs. Our findings confirm contemporary arguments that unprotected, financially illiterate investors were expropriated by INV founders.

International corporate social responsibility and post-entry performance of developing market INVs: The moderating role of corporate governance mechanisms

Building on the stakeholder, agency, and resource dependence theories; this paper investigates the role of international corporate social responsibility (CSR) for the post-entry performance of developing market international new ventures (INVs) in the presence of corporate governance mechanisms to overcome their agency and environmental problems. We test and validate the conceptual model using survey data collected from 110 INVs operating in the developing market of Pakistan. Our results show that international CSR promotes the post-entry performance of developing market INVs. Further, we found that this association is moderated by corporate governance mechanisms of ownership, board independence, and returnee board members. Specifically, the relationship between international CSR and post-entry performance is weaker when ownership is concentrated but stronger when outsider and returnee board members are present in developing market INVs. The findings of this study have important theoretical and practical implications for INVs' social strategies and international performance contingent upon corporate governance.

The ‘bright’ side of innovation management for international new ventures

All businesses are finding it difficult to figure out how to enhance the environment and society. Following the co-generation of social, ethical, and corporate aims, new sustainable inventions have evolved since the COVID-19 pandemic event, similar to new solutions into a workable, viable, and ethical business. The positive and negative aspects of inventions are a topic of discussion among innovation management academics. In particular, how innovation may be more sustainable even when job inequities caused by automation have sparked a feeling of the importance of upholding human rights. Despite that, the innovation management literature is still far from being pedantic in studying automation and human rights towards sustainable innovations in the context of international new ventures (INVs). The article challenges a pessimistic view of innovations by examining automation and human rights for 3000 INVs through the perspective of the micro-foundations. Multiple linear regression analysis is used to evaluate hypotheses, demonstrating how social entrepreneurship can play a constructive mediating role in upholding human rights and promoting automation. This demonstrates the necessity for additional research on a business’s individual level to create social breakthroughs. The study encourages policymakers and the government to support sustainable innovations by utilizing technology to boost job quality, uphold human rights, and foster global entrepreneurship.

Digital international new ventures targeting developing countries: the role of networks during the start-up process

ABSTRACT Over the last years, an increasing number of new ventures centered on digital platforms have emerged and expanded internationally. Despite the increasing relevance of digital technologies in the business context, less is known about the network relationships established by a digital international new venture (INV) with external parties, particularly when entering developing countries. Based on a longitudinal single case study of a digital INV targeting developing countries, this paper explores the role of networks during the INV’s stand-up, start-up, and scale-up phases. The study illuminates the evolution of the portfolio of network relationships in terms of the actors involved, the levels at which the actors operate, and the types of support they provide. It also derives a set of propositions that can guide further studies on this topic.

Speed of internationalization of new ventures and survival in export markets

Speed of internationalization may refer to how early a new venture goes abroad as well as how fast it expands its activities post-entry. The present paper incorporates both aspects and analyzes to what extent several dimensions of speed influence the ability of new ventures to survive in export markets. Based upon extant theories, two perspectives are deduced – a Learning perspective and a Resource perspective – leading to partly contrasting hypotheses. The hypotheses are tested based upon a unique data set consisting of all new ventures established in Norway a specific year that started to export goods in the following nine years. Among the findings are that survival rates increase when ventures go international immediately after inception and when they expand rapidly into new countries rather than focusing on expanding their export share in a limited number of markets, thus lending support to the Resource perspective.

Born global in 1847: International entrepreneurship at Siemens

AbstractThe early internationalization of new ventures has been described as a contemporary phenomenon enabled by globalization and digital technologies. However, today's multinational enterprise Siemens, founded in 1847, fits extant definitions of born globals. Based on this historical case, this study seeks to answer the question: What are enduring and contextually invariant aspects of early internationalization processes? An abductive analysis of the company's first 3 decades finds six relevant and emergent themes. We contribute to international entrepreneurship research by presenting evidence that early internationalization is not a new phenomenon, showing support for multiple extant findings, and providing new insights for otherwise underexplored themes. We also provide future research directions regarding personal‐level processes in international new ventures based on the analyzed 30 years.

Role of opportunity creation between reconfiguration and innovation: Insights from emerging market international new ventures

There exists a need to further examine capabilities that enable emerging market international new ventures (INVs) to create innovation offerings that drive performance. Although conceptual studies highlight the importance of reconfiguration capability towards innovation and performance, such relationships in the emerging market INV context require further empirical analysis. Moreover, there is a conflict in the literature as to whether reconfiguration capability supports innovation and performance directly or indirectly. As the pursuit of opportunities beyond domestic borders is central to INV research, opportunity creation is a key inquiry to advance our understanding of how reconfiguration capability facilitates innovation and performance in the emerging market INV context. Drawing on dynamic capabilities theory and creation theory, we empirically examine the interplay between reconfiguration capability, opportunity creation, innovation, and international performance. In addition, we study opportunity creation as a mediator between reconfiguration capability towards innovation and performance, respectively. The findings reveal reconfiguration capability does not directly support innovation but does shape innovation through opportunity creation. Reconfiguration capability directly supports performance objectives of emerging market INVs, and indirectly through opportunity creation.

Business group affiliation and internationalization of new ventures: Moderating role of industry and liberalization

Internationalization of new ventures (INV) has been the interest of inquiry for more than three decades. Though many researchers have looked at different factors and their impact on the speed, scope, and intensity of internationalization in new ventures, this stream of research requires more attention in the context of emerging economies. The study examines the role of a firm’s business group affiliation and its impact on internationalization of new ventures in emerging economies. It also explains how industry concentration and liberalization of the economy change the relationship between business group affiliation and internationalization. Based on a dataset of new ventures from 67 industries founded in India during the period of 1996 to 2014, our results suggest that ventures with business group affiliation focus on the domestic market, and the focus changes from the domestic market to international when there is high industry concentration and with the liberalization of the economy.

Internationalization Speed and International Performance among International New Ventures: The Moderating Role of Resource Synchronization

AbstractDrawing upon the extended resource‐based view, we examine the moderating effects of resource synchronization on the performance implications of the speed at which international new ventures (INVs) internationalize into emerging economies (EEs) versus developed economies (DEs). Using a sample of INVs from China, we discover that both speeds of internationalization into EEs and into DEs positively affect international performance, but the speed of internationalization into DEs has a greater influence. We also find that although resource synchronization positively moderates the relationships between the two speeds and international performance, it has a greater moderating role in the link between the speed of internationalization into DEs and international performance. Our findings not only contribute to the INV approach by addressing the inconsistencies about the internationalization speed and performance relationship, but also advance the resource‐based view by offering a more complete understanding of resource‐based performance advantages.

Digitalization, institutions and new venture internationalization

This study examines the effect of digitalization on the internationalization of new ventures and further investigates the influence of a home country's presence of institutional voids and digital infrastructure on the extent of internationalization by new ventures, with the prediction that a home country's institutional voids and a weak digital infrastructure strengthen the positive relationship between new ventures' digitalization and internationalization. Applying multilevel modeling on a sample of more than 6000 entrepreneurs from 62 countries the study offers empirical support for these predictions. The findings are robust to alternative specifications. Entrepreneurs using the internet to sell their products and services are more likely to focus on customers in foreign markets when they face institutional voids and a lack of digital infrastructure in their home countries. The study contributes as follows: From a theoretical view, it provides a better understanding of the boundary conditions of the digitalization-new venture internationalization linkage. From a practical perspective, the findings of the study suggest the complementary roles of institutional voids and digital infrastructure at home to help entrepreneurs grow domestically and facilitate their internationalization.

신생벤처기업의 국제화와 성과에 관한 연구

Purpose: The purpose of study is sheds light on the internationalization/globalization and performance factors of international new ventures (INVs), which have recently attracted a lot of attention in the field of international business. This study aims to present an important theoretical framework for the internationalization of INVs and their impact on performance. In particular, theoretical research is conducted from the perspective of integrating the industrial-based perspective, resource-based perspective, and institutional-based perspective. These studies intend to motivate future empirical studies.
 Research design, data, and methodology: As for the method of the study, existing prior studies are considered and complements the theoretical deficiencies of these studies. What the study argues is that existing fragmentary studies do not produce consistent results in identifying the influencing factors on internationalization and performance of INVs, making it difficult to accurately understand the behavior of INVs, so it is necessary to understand the industry-resource-institution based view from an integrated perspective. Therefore, an integrated model for the antecedents of internationalization//globalization and performance of INVs.
 Results: The results of the study are expected to be a guide for empirical analysis in the future. However, the limitations to sufficiently consider factors other than industry, resources, and Institutions is a limitation.
 Implications: This study was conducted from an integrated perspective to overcome the fragmentation of studies that investigated the impact of existing studies on the internationalization and performance of INVs from a specific perspective and the inconsistency of research results. Through this study, it can be said that the implications are great in that the foundation for empirical analysis has been developed in subsequent studies.

E-commerce Policy Environment, Digital Platform, and Internationalization of Chinese New Ventures: The Moderating Effects of Covid-19 Pandemic.

Drawing on institutional theory, this study investigates how institutional pressure can affect digital platform risk. Specifically, it examines whether two types of institutional pressure - domestic market e-commerce policy uncertainty and foreign market e-commerce policy uncertainty - affect the perceived digital platform risk for international new ventures (INVs) and its relationship with their scope of internationalization. The recent crisis caused by the Covid-19 pandemic has further impacted this new phenomenon, thus we examine its effects on the relationships between/among domestic and foreign market e-commerce policy uncertainties, digital platform risk, and the internationalization scope of INVs. We conduct four waves of a survey to test the Covid-19 effects as well as to minimize common method bias, analyzing the final sample of 394 responses from 260 Chinese INVs using structural equation modeling. The results show that domestic and foreign market e-commerce policy uncertainties positively affect the digital platform risk for INVs, with foreign market e-commerce policy uncertainty having a stronger positive impact. Moreover, we find that the Covid-19 pandemic interacts asymmetrically with the relationship between domestic vs. foreign market e-commerce policy uncertainty and the digital platform risk for INVs. In addition, the pandemic strengthens the negative relationship between digital platform risk and the internationalization scope of INVs. This research broadens and strengthens our understanding of e-commerce policy and international business in the context of INVs' internationalization.

Multiple principal conflicts and technological innovation performances of international new ventures: Moderating role of founder's experiences

To examine technological innovation performances of international new ventures (INVs), this study investigates how and under what conditions insider and institutional ownership might matter. Building on the perspective of multiple principal conflicts, we theoretically and empirically address this central question by developing an understanding of how insider and institutional ownership could improve and hinder technological innovation performances of INVs. We also examine the influence of INV founding entrepreneurs’ experience to determine whether their prior professional and startup-founding experience could constrain or enhance innovation performance implications of insider and institutional ownership. Empirical results obtained from a sample of 219 Korean INVs demonstrate that insider ownership and institutional ownership can differentially affect INVs’ technological innovation performances by providing positive and negative innovation contributions, respectively. We also found that founders’ prior experience was an important aspect of enhancing the technological innovation of INVs. Specifically, prior professional experience and startup-founding experience of INVs’ founders were found to negatively and positively affect the contribution of institutional ownership to technological innovation performances of INVs, respectively. By contrast, we discovered that the contribution of INVs’ insider ownership to technological innovation performances of INVs had no relationship with their founders’ experience. We ultimately draw meaningful contributions to the literature by examining roles of corporate governance structure of INVs and their founders’ experience in explaining innovation performances of INVs.

Incentive for Speed: an Incentive-Based View of Post-Entry Internationalization Speed of New Venture

While the initial international expansion of new ventures has received substantial research interest in extant international entrepreneurship research, our understanding of the pace of international expansion of new ventures after they already expand abroad – the post-entry internationalization speed (PEIS) – is limited, despite its theoretical and practical importance. For new ventures that have already expanded abroad, or international new ventures (INVs), PEIS acts as a double-edged sword that can bring tremendous upside potential and at the same time substantial downside risk for INVs. Using agency arguments, this study theorizes that stock options given to the CEO and outside directors of INVs insulate these individuals from downside risk but still expose them to tremendous upside potential associated with faster PEIS. Empirical analyses from the population of publicly held U.S. INVs over the 2005-16 period show that while INVs expand faster abroad when their CEO or outside directors are compensated with more stock options, PEIS becomes slower when both the CEO and outside directors are compensated with more stock options. By developing an incentive-based view of PEIS of INVs, this study departs from and complements previous studies in the international entrepreneurship literature that have predominantly focused on the role of firm-level resources or capabilities as a driver of internationalization speed of INVs.