World Encyclopedia of Entrepreneurship
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World Encyclopedia of Entrepreneurship

Edited by Léo-Paul Dana

This comprehensive reference work, written by some of the most eminent academics in the field, contains entries on numerous aspects of entrepreneurship.
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Chapter 30: Intermediated Internationalization Theory

Zoltan J. Acs and Siri Terjesen


Zoltan J. Acs and Siri Terjesen This entry outlines Acs and Terjesen’s (2008) theory of intermediated internationalization and offers suggestions for future research. Intermediated internationalization is ‘the channeling of a venture’s innovation through an existing multinational enterprise, located at home or abroad’ (Acs and Terjesen, 2008: 1). TWO PATHS TO INTERNATIONALIZATION: DIRECT AND INTERMEDIATED International new ventures (INVs) are firms that, from their beginnings, pursue the use of resources and the sale of goods in multiple countries and are discussed by Ben Oviatt in this encyclopedia. When considering international markets for their goods and services, entrepreneurs face a variety of entry modes including export, license, joint venture, wholly owned subsidiary and greenfield investment. In the case of exporting, firms have two channel options: (1) export directly to customers abroad or (2) export indirectly through an intermediary (Peng and York, 2001). Direct exporting is a common path to internationalization and is well addressed in the extant literature.1 The direct mode leads to the international new venture, however it is not always optimal given new venture’s high trade barriers abroad, low levels of innovation, predominant focus on domestic niches and lack of necessary financial capital, information and ability to protect property rights abroad. Faced with these barriers, new ventures may choose the second path, intermediating their innovation through an established multinational enterprise. This process creates a feedback mechanism from new ventures to existing organizations, as new ventures become a part of existing multinationals’ supply chains. Supply chain management takes place through formal...

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