International Ventures Research Articles

Do International Networks and Foreign Market Knowledge Facilitate SME Internationalization? Evidence from the Czech Republic

In this study we draw on the social network and international entrepreneurship literatures to examine the role of structural and relational embeddedness of international networks in firm internationalization. Based on a sample of 169 small– and medium–sized enterprises in the Czech Republic, we found that firms with chief executive officers who had developed strong and diverse international networks exhibited greater knowledge of foreign markets prior to internationalization. However, contrary to our expectations, no relationship was found between network density and such knowledge. In addition, our findings indicate that foreign market knowledge prior to the first international venture had a positive impact on venture performance.

Internationalisation patterns of border firms: speed and embeddedness perspectives

Purpose– The purpose of this paper is to provide new insight concerning a relatively understudied phenomenon in the medium sized enterprise (SME) internationalisation and international entrepreneurship literature; the internationalisation of firms crossing the border to only one adjacent foreign country. These firms are called border firms. This study explores the variety of internationalisation patterns of border firms.Design/methodology/approach– The study is based on theoretical perspectives related to speed of internationalisation and country embeddedness, and uses empirical data from seven Norwegian case companies operating across the border between Norway and Russia.Findings– Three different internationalisation patterns of border firms are empirically identified and described; an early single-country path, a born-again border path and a born border path. Then, a model of the distinctive cross-border pathway is developed.Research limitations/implications– Several limitations of this study have implications for further research, such as sample size and setting, the new perspective on country embeddedness and questions related to generalisation of the findings.Practical implications– The study has implications for both entrepreneurs and policy-makers. It demonstrates that internationalisation is not always about “going global” and is sometimes simply a matter of “hopping” across the nearest border. The model demonstrates different possible patterns for how to achieve or support this in practice.Originality/value– This study contributes to theory-building in the field of SME internationalisation and international entrepreneurship in three ways. First, it identifies and defines an interesting but neglected type of international venture; border firms. Second, it explores the different start-up patterns of these firms, their speed and embeddedness. Third, it offers a theoretical framework of the distinct cross-border pathway of internationalisation.

Venture Capital and Internationalization

Cross-border investments represent a substantial share of venture capital activities. We use a comprehensive dataset on investments worldwide to analyze the internationalization of venture capital financing. We postulate that cross-border activity is shaped by macroeconomic factors in the venture capitalists’ and the portfolio companies’ countries, as well as characteristics of the venture capitalists and the deals, which likely affect the costs and benefits of investing abroad. In order to analyze how country-specific, venture capitalist-specific and deal-specific factors affect cross-border activity, we use the country, venture capitalist and portfolio company perspectives. Our results suggest that factors capturing the benefits and costs of investing abroad determine international venture capital flows.

Does the Internationalization of Investors Provide Value for Private Firms?

We examine the impact of internationalizing the investor base of private firms through international venture capital syndication on portfolio company exit and exit success. Our empirical results suggest that an international scope in venture capital syndicates plays an important role in both portfolio firm outcome and exit success. Specifically, we find that relative to deals in which the investor base is purely domestic, private firms that have an international venture capital syndicate have a higher probability of exiting via IPO, higher total deal value when exiting via M&A and higher proceeds when exiting via IPO. Importantly, the amount of internationalization is important. In many cases, the relationship between internationalization and portfolio company outcome and exit success is nonlinear.

Do International Investors Enhance Private Firm Value?

We examine the impact of international venture capital investors on private firm success spanning 69 countries over the years 1995-2010. The data examined indicate that, relative to deals in which the investor base is purely domestic, private firms that have an international venture capital syndicate have a higher probability of exiting via IPO and higher IPO proceeds, as well as higher total deal M&A values. These relationships, however, depend on the level of internationalization and hence imply a tradeoff between the strategic benefits associated with international investors and the costs associated with geographic, cultural and legal differences across countries.

New ventures, product innovation and business intermediaries

Purpose – The purpose of this paper is to examine the impact of knowledge-intensive business services (KIBS) intermediary ties on new ventures’ product innovation. Product innovation is a critical strategy for new ventures’ survival and growth. However, as a result of smallness and newness, new ventures usually face considerable difficulties in product innovation and require support to help their innovation search and innovation activities. Design/methodology/approach – A questionnaire survey of 145 Chinese new ventures is used to test presented hypotheses empirically. Findings – This study finds that the intensity of KIBS intermediary ties has a positive influence on innovation, while the diversity of KIBS intermediary ties has no influence on new ventures’ product innovation. Moreover, the relationship between the intensity of KIBS intermediary ties and new ventures’ product innovation is moderated by the degree of their international venturing and ties with other firms. Originality/value – This study enriches understanding of the important roles of KIBS intermediary ties on new ventures’ product innovation.

Entrepreneurial strategic posture and learning effort in international ventures: The moderating roles of operational flexibilities

Drawing from the attention-based view, this article extends the study of international entrepreneurship by investigating how the contribution of international ventures’ entrepreneurial strategic posture to their actual learning efforts in foreign markets depends on various flexibilities that underlie their operations. The results from a sample of international Chinese ventures indicate that an entrepreneurial strategic posture enhances international learning effort more to the extent that the ventures possess greater cognitive and political flexibilities. Somewhat paradoxically, greater structural flexibility impedes the translation of an entrepreneurial strategic posture into international learning effort. The findings have important implications for the growing body of research that adopts an international new venture perspective.

Venture capitalist and entrepreneur knowledge of new venture internationalization: A review of knowledge components

This article offers a review of conceptual and empirical research on knowledge components during the process of new venture internationalization. A framework is developed to illustrate different knowledge components that constitute ‘international knowledge’. We focus specifically upon the interface between entrepreneur and venture capitalist knowledge respectively. Propositions are developed in relation to these knowledge components; based on our framework and the related propositions, suggestions for future research activities are outlined. Finally, we offer insights for managers and investors in the development of their internationalization strategy.

COMPETITIVIDAD DE LOS CLÚSTER TEXTIL PERÚ MÉXICO

El presente artículo es una síntesis del estudio de investigación denominado “Estudio comparativo en clúster textil Perú-México para determinar estrategias competitivas” que fuera desarrollado en el año 2010 por la autora con la colaboración de un equipo de investigadores de la Universidad de Guadalajara. Este artículo básicamente presenta los resultados en términos comparativos de la situación competitiva de los clúster textil: peruano y mexicano: “Gamarra” y “Zapotlanejo” respectivamente -representativos en el rubro textil de sus países- con la intención de compartir aspectos de la dinámica operativa existente en ambos escenarios para mantener u optimizar los niveles productivos lo cual finalmente permitió al equipo de investigación el planteamiento de estrategias competitivas para su respectiva consolidación en el mercado nacional con proyección a adentrarse en el internacional.

The mediating effect of learning competence between the entrepreneurship and export performance of international new ventures in global trade environment

The mediating effect of learning competence between the entrepreneurship and export performance of international new ventures in global trade environment

The Role of Partnerships in the Internationalisation Process of Small Knowledge Intensive Firms (SKIFs)

There is important evidence that Small Knowledge Intensive Firms (SKIFs) have demonstrated some unique characteristics in their internationalisation process. The process takes place earlier in the life of the firm and develops due to the role played by partnerships. The paper analyzes three different SKIFs through a cross case study method. We build on different process based models that have studied the internationalisation process of international ventures. The findings show that the SKIFs internationalisation consists of a series of phases characterised by triggering factors. The paper sheds new light into which type of partnerships mostly matter in the growth of SKIFs.

Beyond Single Opportunity Explanations in International Entrepreneurship Research

This article examines the idea sets framework to better understand the processes and mechanisms in international entrepreneurship through a longitudinal study of a serial entrepreneur. I fill in the “opportunity gaps” in international entrepreneurship research by introducing the concept of opportunity portfolio processing that involves discovery, creation, prototyping, pruning and broadening of opportunity sets. From here, I offer a set of opportunity portfolio measures as new measures of international entrepreneurship performance. In developing these arguments, I present five findings that, taken together, move us closer toward a theory of opportunity portfolio in international venturing.

Liabilities of Foreignness and New Venture Internationalization

We investigate the effect of intellectual property-based and product- based commercialization strategies on the liability of foreignness experienced by US start-ups. Using the longitudinal Kauffman Firm Survey we find that the liability of foreignness is significantly greater for start-ups using product-based than start-ups using intellectual property-based commercialization strategies. Start-ups that create value through licensing-out intellectual property are more likely to internationalise and exhibit a high international intensity. We find that the adopted commercialization strategy shapes the exposure to liabilities of foreignness in the context of internationalisation, leading us to distinguish between two types of liabilities of foreignness: liabilities of foreignness as a foreign operator and as a source of technology.

Uncovering the Antecedents of the Internationalization of Social Ventures

Social entrepreneurship, as a field of study, has attracted increasing research attention and is in need of grounded theory to understand today’s practice. An area requiring basic empirical grounding is the process of expansion to other countries. To provide such grounding, eight social ventures were interviewed in depth using the questions devised from current investigation and suggested theoretical hypotheses are offered. This qualitative study discovered several fruitful avenues for the future research.

The Role of Home Demand in the Internationalization of New Ventures

International New Ventures (INVs) have been documented to exist all around the world. But the literature is silent on the frequency of such companies in different parts of the world. We investigate whether the propensity of new ventures to internationalize is higher in small countries, as defined by the size of local demand. We test this hypothesis by studying collaborations in the health segment of the biotech industry in relatively small-domestic- demand countries (Australia, Israel, Taiwan) and by comparing the results with five large- domestic-demand countries (UK, Germany, France, US, and Japan). We find that young firms in the small local demand countries had 74% of their partnerships with international organizations, while young firms in the large countries on average only had 39% partnerships with international partners. Controlling for a variety of factors, young firms in the small local demand countries are 1.45 times more likely to enter into international partnerships than their counterparts in the large countries.

Responding to Market Failures: The Role of Business Models in Social Entrepreneurship

Social ventures operate in challenging environments that make it difficult to create financially sustainable businesses. We discuss four types of market failures that social ventures commonly seek to address, and suggest that each of these arises from a local institutional void. We then identify four common business models that are adopted by social entrepreneurs in pursuit of their hybrid mission. We predict that the presence of each of these types of market failures will result in demand that is unmet by traditional business firms and dictate the choice of a specific business model. We test our hypotheses using a sample of 202 international technology social ventures. Our findings have implications for the pre-founding capabilities that enable social entrepreneurs to build sustainable ventures for each type of market failure.

Resource management in international new ventures - developing a competitive advantage through internationalisation

Using a single-case study approach, this paper portrays and discusses the process of how a new venture develops a competitive advantage through instant and continuous internationalisation. We find that this process consists of three interrelated phases: 1) conceptualisation; 2) creation; 3) leveraging of competitive advantage. Arguing that resources need to be managed adequately to create a competitive advantage, we study various resource management activities employed during the various phases. We show that, whereas the new venture concentrates on identifying the appropriate (international) market during the first phase, the focus in the second phase is on the structuring and bundling of resources. During the final stage, the international new venture concentrates on leveraging; i.e., on applying its capabilities to create value for the firm and its customers.

International Entrepreneurship and the Theory of the (Long–Lived) International Firm: A Capabilities Perspective

This paper expands on the Oviatt–McDougall framework of sustainable international ventures. It does so by relating the elements of the framework to existing scholarship on the multinational enterprise (MNE), a category that encompasses foreign direct–invested new ventures (FDINVs). The paper then incorporates entrepreneurship and capabilities into MNE theory and applies them to the FDINV. Strong dynamic capabilities coupled with good strategy work together to generate and sustain superior enterprise performance in fast–moving global environments. The resulting framework is used to revisit key questions in MNE/FDINV research such as the timing and mode of FDI.

Transferability of Status and Experience Advantages in International Venture Capital Investments

What are the boundary conditions for the transferability of firm status and experience advantages to host countries in international expansion? Building on network, learning, and institutional theo...

Social Venture Internationalization: Drivers and Barriers

This paper seeks to explain why some social ventures go international whereas others do not. Drawing on insights from the extant literature, we build on a social psychology perspective to explore what factors motivate social entrepreneurs to internationalize their social ventures, and on a strategic choice perspective to understand what factors hold social ventures back from being internationalized. We test our theoretical framework on a survey study of 151 social ventures identified by Ashoka, Social Enterprise Alliance, and Social Venture Partner International. The results of our logistic regression analyses show that male social entrepreneurs with more overseas experience are more likely to internationalize their ventures. In terms of the barriers, social ventures are less likely to go international when they lack the international orientation. More surprisingly, social ventures are more likely, rather than less likely, to go international when the foreign environment is unfavorable. We discuss these innovative results and provide several avenues for future research.