This overview chapter begins by defining how we have used some terms in order to make the discussion that follows clear to all readers of the Handbook of Research on International Entrepreneurship Strategy: Improving SME Performance Globally. We start with internationalization and globalization, after which we follow with strategy, SMEs, born globals, performance and entrepreneurial. Then the various theories and strategies regarding internationalization are outlined in order to lay down the parameters of what strategies are available to the usual SME. Overall, this Handbook more specifically researches which factors influence the pace at which SMEs enter foreign markets, and, once having entered them, which factors cause those SMEs to increase their commitment to that foreign market.
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V.H. Manek Kirpalani and Pervez N. Ghauri
Edited by Pervez N. Ghauri and V. H. Manek Kirpalani
Nuno Fernandes Crespo, Vítor Corado Simões and Margarida Fontes
In recent years, several authors (Aspelund, et al., 2007; Keupp and Gassmann, 2009) pointed out that most of the literature on international new ventures (INVs) internationalization process focuses on the direct relationship between the antecedents – particularly the entrepreneur, the firm and/or the industry – and the outcomes of this process, namely internationalization (degree, scope and/or speed) and performance. They argue that this dominant literature stream has overlooked the important role of managerial processes leading from antecedents to outcomes. This chapter is in this vein, and provides an integrative framework of international entrepreneurship (IE) process, highlighting the relevance of managerial decisions or actions. It responds to the plea for more research about the nature of managerial decision-making and organizational behaviour of early internationalizing firms (Rialp et al., 2005). It also addresses Keupp and Gassmann’s (2009) claim for the development of an integrated or holistic framework to analyse the IE process. We intend to open the ‘black box’ of new ventures’ internationalization process. The framework encompasses managerial decisions related to absorptive capacity, competitive generic strategies, entrepreneurial alertness and networking, together with environmental, industry and market-wise moderating forces. The framework is expected to contribute to stimulate further research along these lines, enabling the enhancement of knowledge about how new ventures’ internationalization processes develops. This is a promising and exciting research avenue, whose progress demands further work, both on the theoretical and empirical fronts.
Miria Lazaris, Nurul Efifi Mohamad Ngasri and Susan Freeman
Several theoretical perspectives have been used to explain the early internationalization of born global SMEs from small, developed economies, depending on the factors underlying their decision to enter and compete in international markets. Positioned within the field of international entrepreneurship, this chapter argues that observed internationalization patterns of SMEs relate to two distinct entrepreneurial approaches: causation and effectuation. Causation, consistent with a planned approach, describes a situation where international businesses opportunities are recognized and pursued based upon a plan, while effectuation denotes an emergent strategy, whereby founders experiment and make decisions based on loss affordability and flexibility (Sarasvathy, 2001; Chandler et al., 2011). We draw on this latter theory to explain proactive and reactive internationalization behaviours, reported widely in the extant literature, in terms of two salient and widespread factors: knowledge and networks of founders. We identify effectuation theory as a relevant and valuable emerging theory in international entrepreneurship. We argue that effectuation logic prevails during initial internationalization of born global SMEs. Interestingly, however, internationally experienced managers are more likely to engage in proactive behaviours, supported by causation logic, thereby employing both approaches simultaneously.
Seung Hoon Jang, Jung Seek Kim and Jonathan Ohn
This study aims to examine the mechanisms that influence how Korean high-tech ventures are formed. For this purpose, the authors begin by reviewing major determinants of entrepreneurial activities based on relevant theories and literature of entrepreneurship. The history and characteristics of the Korean economy, especially in regard to entrepreneurial firms, are further investigated, supporting the theory that Korean ventures are essentially nurtured by the Korean and local governments. The literature review and case analysis provide that these major institutional factors act as mechanisms that contribute to the birth of high-tech firms, resulting in innovative results and new value creation. Both scholars and practitioners can gain insight by focusing on how revolutionary new firms have been in shaping one of the most innovative countries in the world.
Izaias Martins, Alex Rialp-Criado and Yancy Vaillant
Globalization pushes companies to operate abroad and a successful innovative posture could be a key to accessing the export market in a global economy. In turn, innovativeness reflects the tendency to new-idea generation, novelty and creative processes, which may be supported by experiences and knowledge acquired in international markets. Based on the Spanish GEM dataset, our study investigates the mutual effects between innovativeness and exports. Ordinal and logistic regression analyses were used for such evaluations. Our findings show that innovativeness may push small firms to go abroad, as well as increasing their sales in foreign markets. Equally important, the findings also suggest that export propensity influences the innovativeness manifested by small firms. The chapter ends with a brief sketch of the implications for scholars and practitioners.
Leonidas C. Leonidou, Saeed Samiee and Valeska V. Geldres
This chapter focuses on the instrumental role of national export promotion programs in helping smaller firms to enhance their international entrepreneurial initiatives. Drawing a parallel between innovative behavior, entrepreneurship and the exporting process, we identify the critical roles of risk-taking, innovativeness and a proactive posture in successfully instilling an entrepreneurial spirit in exploiting export markets. We subsequently illustrate how government export assistance, categorized in terms of financial, informational, education/training, legal, market targeting, marketing and miscellaneous programs, can help firms overcome international entrepreneurship hurdles and achieve superior export performance. Finally, we draw conclusions regarding each component of international entrepreneurship and provide implications for business managers and public policy-makers.
Geir Gripsrud, Auke Hunneman and Carl Arthur Solberg
Based on a rich database of all 2390 Norwegian new ventures established in 2003 that export in the period 2003–11, we explore two research questions: (1) Do new ventures follow the incremental internationalization process by starting to export to countries close to the domestic market and gradually expanding to more geographically distant markets? (2) Does the speed of export start-up matter for the firms’ future export success and expansion? Both these research questions are answered with a yes. In particular, the speed of export start-up reveals interesting patterns. Firms starting to export already in the first year of operation are more successful in exporting than firms starting a year later. The latter firms, in turn, are more successful than those starting in year three, and those starting in year three are more successful than firms starting to export in year four. We conjecture that success of first-year exporters is mainly explained by better resources (management, products and networks). We also propose that the later the firm starts exporting the more it is engrained in idiosyncrasies of the domestic market, constraining its perception of opportunities abroad.