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  • Series: The McGill International Entrepreneurship series x
  • Business 2016 x
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Edited by Hamid Etemad, Stefano Denicolai, Birgit Hagen and Antonella Zuchella

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Hamid Etemad

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Elena Cedrola, Loretta Battaglia and Anna Grazia Quaranta

The aim of this chapter is to identify and empirically analyze the factors that make international entrepreneurial business ventures (IEBVs) successful and lead to high performance. In particular, we focus on firms that operate in markets with high cultural distance. Literature on enterprise internationalization is abundant, albeit fragmented in various strands: international business, entrepreneurship, strategic management, network and marketing. Taking as reference the study of Kropp et al. (2006) wherein entrepreneurship, market and learning orientation are considered resources that potentially enhance the success of IEBVs, we develop an interpretative model that expounds all the elements that characterize a successful internationalization process. This model includes cultural orientation that operates transversely and virtuously across all elements of the business model. The study’s objectives are achieved by means of a dyadic approach, using quantitative and qualitative research involving entrepreneurs, enabling us to verify whether an entrepreneurial orientation toward relationships, cooperation and local market culture has a positive effect on business performance.

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Noémie Dominguez

In a business environment of ever growing uncertainty, SMEs are constrained, and have to find new markets to grow and survive. Pushed to internationalize, they are traditionally seen as reactive entities engaging gradually in foreign markets to reduce risk and uncertainty. Analyzing the role of risk in the internationalization process, some authors found that firms were not completely risk averse, but they were rather willing and ready to take risks up to a certain point, in order to maximize their returns or to gain market power. Contrary to previous findings, it appears that conscious risk-taking strategies could be one of the key variables explaining SMEs’ success abroad. The aim of this chapter is to analyse the importance of risk-seeking behaviours in SMEs’ internationalization. In this study we found that, contrary to risk-averse firms that only take subjective financial risks, if compelled to do so, risk-seeking entrepreneurs – that is, looking for risky alternatives when taking a decision to get greater outcomes – are targeting high-risk markets by taking objective political, financial, social and business risks abroad. Our findings indicate that, even if they look like natural risk-takers to outsiders, risk-seeking entrepreneurs are not gamblers. Their privileged access to unique assets and assessment of information allows them to identify a wider range of alternatives and therefore to enter untapped or overlooked markets. Expectedly, risk-seeking entrepreneurs manage to achieve greater performance and internationalization than their risk-averse counterparts, by implementing several efficient risk-management techniques.

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Huu Le Nguyen and Sören Kock

Most studies of internationalization of firms over the past forty years have focused on how firms choose markets and/or entry modes at the first attempt or at the subsequent attempts later to enter foreign markets following the first successful entry. At the same time, researchers have noted that there have been a high number of firms withdrawing from their international operations because of their failures in foreign markets. There have been a few studies dealing with the question of how firms can re-internationalize successfully after having failed in previous internationalization. However, studies dealing with the question of firm’s successful re-internationalization after having failed previously are lacking. More specifically, the knowledge of how small firms choose their products, markets, and entry strategies in re-internationalization has remained unclear. Researchers suggest that the success of small businesses depends on many factors. The key determinant is the entrepreneur himself/herself. According to school psychological characteristics, entrepreneurs would have unique values, attitudes, needs, and drives in order to succeed. Researchers also maintain that psychological traits may exhibit certain degree of entrepreneurial orientation and internationalization of small firms is directly related to personality and experience of business owners. This study investigates how psychological traits of entrepreneurs, including the need for achievement, locus of control, risk-taking propensity, and tolerance for ambiguity, influence entrepreneurs´ choices of product, markets, and entry strategy in their re-internationalization process. Our analysis suggests, entrepreneurs make different strategic choices in re-internationalization process based on their psychological traits. Moreover, experiences of entrepreneurs and foreign language knowledge play a mediating role in the relationship between psychological straits and their strategic choices and in the success of re-internationalization process.

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Vaiva Stanisauskaite and Sören Kock

Network studies aim to examine relationships between companies, and broadly analyze the structure of networks. The overtime dynamics of networking process, however, remain underexplored. The aims of this study are to explore main network research streams by identifying characteristics and measures of networks and to examine how the content of networks changes through different stages of the company creation process (motivation), planning and establishment. The goal is to incorporate networks into the international entrepreneurship literature and discuss a framework for network dynamics in the firms’ creation process. In this chapter we draw a model of main network research perspectives, analyze the characteristics and the measurements of networks, and review the literature of network dynamics. Finally, we generate four propositions from theoretical discussion concerning change by showing that networks do not remain static, which should serve to guide us toward future empirical research.

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Diala Kabbara

The crucial role of the entrepreneur and importance of the entrepreneur’s network for entering into new markets are widely reported. Similarly, business accelerators have been a rising organizational model in the last two decades. The aim of this chapter is to identify the role of the entrepreneur and accelerator programs in the internationalization process of web-based companies through a qualitative study of nine web-based firms from different countries. This chapter argues that in the internationalization process of web-based companies, entrepreneurs are relatively young and have an international experience (from 5 to 7 years). The most essential service for web-based companies offered within an accelerator program, is mentoring along with access to networks. In order to benefit from the largest networks, web-based start-ups should join both local and foreign accelerators programs.

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Selena Aureli and Mara Del Baldo

This chapter analyzes a new legislative instrument called the “network contract,” which was designed to support inter-firm cooperation, in order to verify whether this type of formal cooperation represents a relevant driver of change in small firms’ strategic orientation regarding internationalization. Results indicate that internationalization does not represent the main goal of firms participating in network contracts: Italian SMEs use this instrument to achieve different strategies of growth and long-term objectives. We found that some firms have increased their business activity abroad after joining the network. However, firms with a previous history of internationalization did not seem to have changed their approach regarding the international dimension. Consequently, the network contract is not qualified to be the most suitable tool for promoting internationalization among domestic firms, although internationalization may emerge as a by-product of inter-firm relationships.

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Mirella Migliaccio and Francesca Rivetti

Internationalization is driven by either the knowledge possessed by firms; or at the same time, it can be conducted by leveraging relationships with foreign partners to access and/or acquire their knowledge. This is particularly relevant to small and medium enterprises (SMEs), mainly due to their resource constraints. This chapter assumes that, under certain circumstances, the internationalization of SMEs can give rise to, and benefit from enhancement of, their knowledge base. Starting from the main literature on internationalization, particularly from studies on Born-again Global firms, as well as knowledge acquisition and organizational learning, this chapter will analyze the internationalization path and to understand how it relates to the evolution of the firm’s knowledge through the study of Gruppo Germani S.r.l., an Italian family firm operating in the fashion industry. More specifically, this chapter’s empirical research attempts to explore the following questions: What sources of knowledge are particularly critical to the internationalization of SMEs; and how does knowledge acquisition enhance the firm’s knowledge base? To answer these questions, a longitudinal case study of Gruppo Germani was conducted. This methodology allows analyzing internationalization from the beginning for a comprehensive period of seven years. The results of this research highlight that knowledge base of the firm can constitute a stimulus to the firm’s international growth, if useful knowledge is continuously acquired and used by the company, where the main effect would be the improvement of the firm’s performance over time. Consequently, we suggest that the organization should not only leverage its knowledge base, but also identify and acquire useful external knowledge in order to progressively and successfully internationalize. Although the methodology does not allow generalization of results, this study presents some interesting findings at the end, and particularly, it intercepts some aspects that can be framed within the Born-again Global phenomenon, and extends the spectrum of “critical” events/episodes from which internationalization can begin. In our view, a firm can give rise to internationalization, starting from events that are “critical” for the enterprise because they allow the acquisition of external knowledge, especially tacit knowledge. The relative importance of external sources depends mainly on the characteristics of the knowledge base. This chapter also points out that, to make organizational learning possible, the firm should activate specific mechanisms of learning, especially articulation and codification.