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BORN GLOBAL ENTREPRENEURS Determinants of rapid internationalisation

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BORN GLOBAL ENTREPRENEURS Determinants of rapid internationalisation
BORN GLOBAL ENTREPRENEURS Determinants of rapid internationalisation
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Introduction

New Business Context

Business environment at the turn of the 21st century changed drastically due to globalisation processes. The development of technology, the advances of telecommunication engineering and new solutions in transport and logistics enabled entrepreneurs to con- duct business in the foreign markets on a bigger scale than ever before (Knight & Cavusgil, 2004). Rapid internationalisation became easier for companies and it became increasingly common even among small and medium-sized enterprises, the entities which before had been less prone to internationalisation due to their size and lack of financial and human resources. In the OECD area, SMEs are a predominant form of enterprise, accounting for approximately 99% of all firms. Being important players in the international trade (Knight, 2001), SMEs are now accounting for 25-35% of the world exports of manufactured goods and an increasing share in foreign direct investments (OECD, 2016).

Moreover, new actors entered the stage, namely the firms termed born globals. They represent an entirely new type of firms which redefined the international business theory (Rennie, 1993; Oviatt & McDougall, 1994; Knight & Cavusgil, 1996). Rapidly internationalising start-ups begin acting globally immediately after founding. Apparently, these firms undermine the traditionally established view on companies' internationalisation, as they manage to reach international markets rapidly and keep their competi- tive position despite significant resource limitations. Therefore, they deny traditional stage economic theories of internationalisation, like the Uppsala internationalisation model (Johanson & Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977).

The determinants of rapid internationalisation of firms have been widely discussed in the literature in many contexts and from numerous perspectives (Oviatt & McDougall, 1994; Moen, 2002; Zahra, 2005). They are commonly grouped into internal, external and entrepreneur-level factors. The internal ones relate to the characteristics of the product or the firm, like product life cycle, firm size and its resources, industry characteristics and international possibilities, specific product characteristics. External factors are understood as factors connected with business environment which are pulling companies to the international markets, like a technological progress and globalisation  process. The entrepreneur-level factors include the international vision of the founders, their international experiences, a desire to become an international market leader and other factors connected with the firm founders and their entrepreneurial mindsets.

Of all internationalisation determinants, the entrepreneur-level factors have been regarded indispensable for the rapid internationalisation and future international success of a firm (Oviatt & McDougall, 1994; Moen, 2002; Zahra, 2005). However, what is needed all the time is some better understanding of these factors as well as their mutual relations, especially in context of born global firms. And what is particularly missing is the empirical illustration of entrepreneur issues within the internationalisation processes in born global firms.

Problem and Purpose

The problem addressed in this study is the influence of the entrepreneur-level determinants on the rapid internationalisation of born global firms. The researchers of born global phenomena focus primarily on the external and internal determinants of rapid internationalisation (Oviatt & McDougall, 1994; Moen, 2002). The topic of individual- level analysis in those firms, however, has not been so widely discussed and empirically verified (Zahra, 2005; Evers, 2010). This study is aimed at filling this research gap and exploring the individual-level characteristics of born global firms.

Having done this, the study should enhance the understanding of the specificity of born global firms by investigating entrepreneur determinants of their rapid internationalisation. The study leading research question is:

How do entrepreneur-level determinants influence the rapid internationalisation of born global firms?

This leading research question refers to five specific research tasks aimed to:

1.  conduct a critical overview of the literature on the internationalisation process and born global firms phenomenon;

2. conduct a systematic literature review on entrepreneur-level determinants of the rapid internationalisation of born globals;

3. dentify the specificity of born global firms;

4. indicate and explain the entrepreneur-level factors of the emergence of born global firms;

5. build a framework of entrepreneur-level determinants of the rapid internationalisation of born globals.

Theoretical Background

The theoretical framework of the study is a combination of a resource-based view of a company (Wernerfelt, 1984; Barney, 1991; Conner, 1991), a network perspective on internationalisation (Coviello & Munro, 1997; Styles et al., 2008) and an international entrepreneurship perspective (Jones & Coviello, 2005; Zahra & George, 2002; Oviatt & McDougall, 1994).

The resource-based view is considered to be the dominant perspective in international entrepreneurship research (Young et al., 2003). It focuses on the firm, its internal resources and capabilities (Barney, 1991). This study focuses mainly on the organisational and human capital, as born global firms do not tend to possess tangible physical assets at the beginning of their operation (Knight & Cavusgil, 2004; Mudambi & Zahra, 2007). Intangible entrepreneur-related assets however can be a strong source of competitive advantage for born global firms as they are unduplicable.

The second main theoretical framework adopted in this study is a network approach to internationalisation. This theory views market as a set of relationships among firms, so that organisations are interconnected and interdependent (Johanson & Mattson, 1988). A network perspective has been adopted in born global research in a number of studies (Sharma & Blomstermo, 2003; Chetty & Campbell-Hunt, 2004; Freeman et al., 2006).

Finally, the perspective of international entrepreneurship, focuses on entrepreneurs, their characteristics, knowledge and competences, as the key element of the model (Oviatt & McDougall, 1994; Etemad, 2004). The firm internationalisation and export activities primarily result from the entrepreneurs' decisions and behaviour, and not from firm characteristics or resources, especially at the beginning of the firm operation (Kundu & Katz, 2003).

Research Design

The explorative nature of the research problem and theory-building goal require the application of a qualitative methodological approach. The study adopts an abductive reasoning, allowing for setting the framework proposition based on the literature review and for its modification following the case analysis. Case study has been selected as the research method. Case studies are based on a semi-structured questionnaire addressing key issues on the entrepreneurial and organisational capabilities of entrepreneurs. The research is based on 8 case studies of born global firms. They have been selected according to the criteria of born global firms established by Gabrielsson et al. (2008), they:

(1) are SMEs with a global vision at inception;

(2) have unique products a global market potential;

(3) are independent and autonomous firms;

(4) have demonstrated the capability of accelerated internationalisation, i.e. their international activities featured both precocity and speed.

The data obtained during interviews are analysed with the use of the cross-case analysis, i.e. a method which reveals commonalities and differences in the events, activities and processes which are the units of the case study analyses (Khan & VanWynsberghe, 2008).

Expected Contribution

The study is expected to contribute to the most recent research streams related to firms' internationalisation processes. The research clarifies the emerging concept of born global firms, which so far has been mainly investigated in relation to the external determinants of early internationalisation. Thus, the findings fill the knowledge gap on the individual-level determinants of early internationalisation. The understanding of the individual-level mechanisms of early internationalising firms sets a theoretical framework for further empirical research on born globals and allows for the indication of potential fields for public policy and support in this respect. The study may be also valuable for born global firms, as following its findings will allow them to enhance the process of the firm international development.

Key Definitions

To clarify some of the concepts used in the book, the following definitions are presented:

Born Global - a young entrepreneurial company launching international business activity very early in its evolution, moving rapidly into foreign markets (Cavusgil et al., 2012).

Dynamic Capabilities - the ability to integrate, build and reconfigure internal and external competences to address rapidly changing environments. Thus, dynamic capabilities reflect the organisation's ability to achieve new and innovative forms of competitive advantage, given path dependencies and market positions (Teece et al, 1997).

Effectuation - entrepreneurial logic which includes a set of decision-making behaviours employed in the situations of uncertainty (Sarasvathy, 2001).

Entrepreneurial Orientation - entrepreneurial behaviour associated with innovative- ness, proactiveness and risk-taking initiated by a strong leader (Lumpkin & Dess, 1996).

International Business - trade and investment activities conducted by firms across national borders (Cavusgil et al., 2012).

International Entrepreneurship - a combination of innovative, proactive and risk seeking behaviour that crosses national borders and is intended to create value in organisations (Oviatt & McDougall, 2000).

International Entrepreneurship View of the Firm - the perspective of international

entrepreneurship focused on entrepreneurs, their characteristics, knowledge, competences, as the key element of the model (Oviatt & McDougall, 1994; Etemad, 2004).

Internationalisation - a cumulative process in which business network relations are created and developed according to the company goals (Johanson & Mattsson, 1993).

Multinational Enterprise (MNE) - a large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries (Cavusgil et al., 2012).

Network Perspective of Internationalisation - the theory which views market as a set of relationships among firms, so that organisations are interconnected and dependent on each other (Johanson & Mattson, 1988).

Resource-Based View (RBV) - a theory which states that the competitive advantage and superior performance of an organisation are explained by the distinctiveness of its capabilities [and resources] (Johnson, 2014).

Small and Medium-sized Enterprise - non-subsidiary, independent firms which employ fewer than a given number of employees. This number varies across national statistical systems. The most frequent upper limit is 250 employees. Small firms are generally those with fewer than 50 employees, while micro-enterprises have at most ten, or in some cases five, workers. Financial assets are also used to define SMEs. In the European Union, SMEs must have an annual turnover of EUR 40 million or less (European Commission, 2015).

Stage Internationalisation Models - models which argue that the firm's international involvement gradually increases as it gains knowledge and experience in the international arena (Johanson & Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977).

Structure of the Study

The book consists of four chapters. The first chapter presents the theoretical foun- dations of understanding of the firm internationalisation process and the born global phenomenon. Internationalisation theories and models are critically examined - stage internationalisation models, rapid internationalisation models, and entrepreneurship- based perspective on the internationalisation process. The specificity of born global firms and the determinants of born global firm rapid internationalisation are reviewed.

The second chapter presents a systematic literature review on entrepreneur factors of rapid internationalisation of born global firms. The overview of entrepreneur-related factors influencing rapid internationalisation includes innovation and technology orientation, entrepreneurial and managerial knowledge, entrepreneurial orientation, effectuation logic, international networks and dynamic capabilities. The chapter ends with a proposition of the framework to explain rapid internationalisation of born globals.

The third chapter presents and justifies the methodology design. The research perspective and strategy are discussed and data collection procedures are presented. The criteria for cases selection are presented and the interview process described.

The fourth chapter includes data analysis leading to the discussion on the research question - How do entrepreneur-related determinants influence the rapid internationalization of born globals. Eight case studies are presented and analysed. Entrepreneur-level fac- tors and their influence on rapid internationalisation are discussed. The model explaining the influence of entrepreneur-related factors on rapid internationalisation of born globals is outlined.

The last part of the study is the conclusion section, which presents final statements, study theoretical and practical implications as well as its research limitations.

 

 

 

[[[separator]]]

 

Table of Contents

Introduction

 

Chapter 1

Theoretical Foundations of Understanding of the Firm Internationalisation Process and Born Globals Phenomenon

1.1. Review of Internationalisation Theories and Models

1.1.1. Historical Perspective on Firm Internationalisation in Economics

1.1.2. Stage Internationalisation Models

1.1.3. Rapid Internationalisation Theories

1.1.4. Entrepreneurship-based Perspectives on the Internationalisation Process

1.2. Specificity of Born Global Firms

1.2.1. Main Research Themes in Studies on Born Globals

1.2.2. Born Globals Internationalisation Models

1.2.3. Characteristics of Born Global Firms

1.3. Determinants of Born Global Rapid Internationalisation

1.3.1. Internal Determinants

1.3.2.     External Determinants

1.3.3. Entrepreneur-related Determinants

1.4. Summary

 

Chapter 2

A Systematic Literature Review of Entrepreneur-level Determinants of the Rapid Internationalisation of Born Global Firms

2.1. Method: Systematic Literature Review

2.2. Overview of Entrepreneur-related Factors Influencing Rapid Internationalisation

2.2.1. Innovation and Technology Orientation

2.2.2. Entrepreneurial and Managerial Knowledge

2.2.3. Entrepreneurial Orientation

2.2.4. Effectuation Logic

2.2.5. International Networks

2.2.6. Dynamic Capabilities

2.3. A Proposed Framework to Explain the Rapid Internationalisation of Born Globals

2.4. Summary

 

Chapter 3

Methodology Design

3.1. Methodological Choices

3.1.1. Research Paradigm

3.1.2. Research Strategy

3.2. Data Collection Procedures

3.2.1. Process of Cases Selection

3.2.2. Description of the Cases

3.2.3. Questionnaire Design

3.2.4. Personal Interviews

3.2.5. Secondary Data

3.2.6. Coding and Data Analysis

3.2.7. Validityand Reliability of the Study

3.3. Summary

 

Chapter 4

Data Analysis and Discussion: How Do Entrepreneur-related Determinants Influence the Rapid Internationalisation of Born Globals?

4.1. Analysis of Case Studies

4.1.1. Firm 1

4.1.2. Firm 2

4.1.3. Firm 3

4.1.4. Firm 4

4.1.5. Firm 5

4.1.6. Firm 6

4.1.7. Firm 7

4.1.8. Firm 8

4.2. The Influence of Entrepreneur-level Factors on Rapid Internationalisation

4.2.1. The Role of Innovation and Technology

4.2.2. The Role of Entrepreneurial and Managerial Knowledge

4.2.3. The Role of Entrepreneurial Orientation

4.2.4. The Role of Effectuation Logic

4.2.5. The Role of International Networks

4.2.6. The Role of Dynamic Capabilities

4.3. The Model Explaining the Impact of Entrepreneur-related Factors on the Rapid Internationalisation of Born Globals

4.4. Summary

 

Conclusions

References

Appendix

 

Opis

Wydanie: I
Rok wydania: 2020
Wydawnictwo: Oficyna Wydawnicza
Oprawa: miękka
Format: B5
Liczba stron: 153

Wstęp

 

Introduction

New Business Context

Business environment at the turn of the 21st century changed drastically due to globalisation processes. The development of technology, the advances of telecommunication engineering and new solutions in transport and logistics enabled entrepreneurs to con- duct business in the foreign markets on a bigger scale than ever before (Knight & Cavusgil, 2004). Rapid internationalisation became easier for companies and it became increasingly common even among small and medium-sized enterprises, the entities which before had been less prone to internationalisation due to their size and lack of financial and human resources. In the OECD area, SMEs are a predominant form of enterprise, accounting for approximately 99% of all firms. Being important players in the international trade (Knight, 2001), SMEs are now accounting for 25-35% of the world exports of manufactured goods and an increasing share in foreign direct investments (OECD, 2016).

Moreover, new actors entered the stage, namely the firms termed born globals. They represent an entirely new type of firms which redefined the international business theory (Rennie, 1993; Oviatt & McDougall, 1994; Knight & Cavusgil, 1996). Rapidly internationalising start-ups begin acting globally immediately after founding. Apparently, these firms undermine the traditionally established view on companies' internationalisation, as they manage to reach international markets rapidly and keep their competi- tive position despite significant resource limitations. Therefore, they deny traditional stage economic theories of internationalisation, like the Uppsala internationalisation model (Johanson & Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977).

The determinants of rapid internationalisation of firms have been widely discussed in the literature in many contexts and from numerous perspectives (Oviatt & McDougall, 1994; Moen, 2002; Zahra, 2005). They are commonly grouped into internal, external and entrepreneur-level factors. The internal ones relate to the characteristics of the product or the firm, like product life cycle, firm size and its resources, industry characteristics and international possibilities, specific product characteristics. External factors are understood as factors connected with business environment which are pulling companies to the international markets, like a technological progress and globalisation  process. The entrepreneur-level factors include the international vision of the founders, their international experiences, a desire to become an international market leader and other factors connected with the firm founders and their entrepreneurial mindsets.

Of all internationalisation determinants, the entrepreneur-level factors have been regarded indispensable for the rapid internationalisation and future international success of a firm (Oviatt & McDougall, 1994; Moen, 2002; Zahra, 2005). However, what is needed all the time is some better understanding of these factors as well as their mutual relations, especially in context of born global firms. And what is particularly missing is the empirical illustration of entrepreneur issues within the internationalisation processes in born global firms.

Problem and Purpose

The problem addressed in this study is the influence of the entrepreneur-level determinants on the rapid internationalisation of born global firms. The researchers of born global phenomena focus primarily on the external and internal determinants of rapid internationalisation (Oviatt & McDougall, 1994; Moen, 2002). The topic of individual- level analysis in those firms, however, has not been so widely discussed and empirically verified (Zahra, 2005; Evers, 2010). This study is aimed at filling this research gap and exploring the individual-level characteristics of born global firms.

Having done this, the study should enhance the understanding of the specificity of born global firms by investigating entrepreneur determinants of their rapid internationalisation. The study leading research question is:

How do entrepreneur-level determinants influence the rapid internationalisation of born global firms?

This leading research question refers to five specific research tasks aimed to:

1.  conduct a critical overview of the literature on the internationalisation process and born global firms phenomenon;

2. conduct a systematic literature review on entrepreneur-level determinants of the rapid internationalisation of born globals;

3. dentify the specificity of born global firms;

4. indicate and explain the entrepreneur-level factors of the emergence of born global firms;

5. build a framework of entrepreneur-level determinants of the rapid internationalisation of born globals.

Theoretical Background

The theoretical framework of the study is a combination of a resource-based view of a company (Wernerfelt, 1984; Barney, 1991; Conner, 1991), a network perspective on internationalisation (Coviello & Munro, 1997; Styles et al., 2008) and an international entrepreneurship perspective (Jones & Coviello, 2005; Zahra & George, 2002; Oviatt & McDougall, 1994).

The resource-based view is considered to be the dominant perspective in international entrepreneurship research (Young et al., 2003). It focuses on the firm, its internal resources and capabilities (Barney, 1991). This study focuses mainly on the organisational and human capital, as born global firms do not tend to possess tangible physical assets at the beginning of their operation (Knight & Cavusgil, 2004; Mudambi & Zahra, 2007). Intangible entrepreneur-related assets however can be a strong source of competitive advantage for born global firms as they are unduplicable.

The second main theoretical framework adopted in this study is a network approach to internationalisation. This theory views market as a set of relationships among firms, so that organisations are interconnected and interdependent (Johanson & Mattson, 1988). A network perspective has been adopted in born global research in a number of studies (Sharma & Blomstermo, 2003; Chetty & Campbell-Hunt, 2004; Freeman et al., 2006).

Finally, the perspective of international entrepreneurship, focuses on entrepreneurs, their characteristics, knowledge and competences, as the key element of the model (Oviatt & McDougall, 1994; Etemad, 2004). The firm internationalisation and export activities primarily result from the entrepreneurs' decisions and behaviour, and not from firm characteristics or resources, especially at the beginning of the firm operation (Kundu & Katz, 2003).

Research Design

The explorative nature of the research problem and theory-building goal require the application of a qualitative methodological approach. The study adopts an abductive reasoning, allowing for setting the framework proposition based on the literature review and for its modification following the case analysis. Case study has been selected as the research method. Case studies are based on a semi-structured questionnaire addressing key issues on the entrepreneurial and organisational capabilities of entrepreneurs. The research is based on 8 case studies of born global firms. They have been selected according to the criteria of born global firms established by Gabrielsson et al. (2008), they:

(1) are SMEs with a global vision at inception;

(2) have unique products a global market potential;

(3) are independent and autonomous firms;

(4) have demonstrated the capability of accelerated internationalisation, i.e. their international activities featured both precocity and speed.

The data obtained during interviews are analysed with the use of the cross-case analysis, i.e. a method which reveals commonalities and differences in the events, activities and processes which are the units of the case study analyses (Khan & VanWynsberghe, 2008).

Expected Contribution

The study is expected to contribute to the most recent research streams related to firms' internationalisation processes. The research clarifies the emerging concept of born global firms, which so far has been mainly investigated in relation to the external determinants of early internationalisation. Thus, the findings fill the knowledge gap on the individual-level determinants of early internationalisation. The understanding of the individual-level mechanisms of early internationalising firms sets a theoretical framework for further empirical research on born globals and allows for the indication of potential fields for public policy and support in this respect. The study may be also valuable for born global firms, as following its findings will allow them to enhance the process of the firm international development.

Key Definitions

To clarify some of the concepts used in the book, the following definitions are presented:

Born Global - a young entrepreneurial company launching international business activity very early in its evolution, moving rapidly into foreign markets (Cavusgil et al., 2012).

Dynamic Capabilities - the ability to integrate, build and reconfigure internal and external competences to address rapidly changing environments. Thus, dynamic capabilities reflect the organisation's ability to achieve new and innovative forms of competitive advantage, given path dependencies and market positions (Teece et al, 1997).

Effectuation - entrepreneurial logic which includes a set of decision-making behaviours employed in the situations of uncertainty (Sarasvathy, 2001).

Entrepreneurial Orientation - entrepreneurial behaviour associated with innovative- ness, proactiveness and risk-taking initiated by a strong leader (Lumpkin & Dess, 1996).

International Business - trade and investment activities conducted by firms across national borders (Cavusgil et al., 2012).

International Entrepreneurship - a combination of innovative, proactive and risk seeking behaviour that crosses national borders and is intended to create value in organisations (Oviatt & McDougall, 2000).

International Entrepreneurship View of the Firm - the perspective of international

entrepreneurship focused on entrepreneurs, their characteristics, knowledge, competences, as the key element of the model (Oviatt & McDougall, 1994; Etemad, 2004).

Internationalisation - a cumulative process in which business network relations are created and developed according to the company goals (Johanson & Mattsson, 1993).

Multinational Enterprise (MNE) - a large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries (Cavusgil et al., 2012).

Network Perspective of Internationalisation - the theory which views market as a set of relationships among firms, so that organisations are interconnected and dependent on each other (Johanson & Mattson, 1988).

Resource-Based View (RBV) - a theory which states that the competitive advantage and superior performance of an organisation are explained by the distinctiveness of its capabilities [and resources] (Johnson, 2014).

Small and Medium-sized Enterprise - non-subsidiary, independent firms which employ fewer than a given number of employees. This number varies across national statistical systems. The most frequent upper limit is 250 employees. Small firms are generally those with fewer than 50 employees, while micro-enterprises have at most ten, or in some cases five, workers. Financial assets are also used to define SMEs. In the European Union, SMEs must have an annual turnover of EUR 40 million or less (European Commission, 2015).

Stage Internationalisation Models - models which argue that the firm's international involvement gradually increases as it gains knowledge and experience in the international arena (Johanson & Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977).

Structure of the Study

The book consists of four chapters. The first chapter presents the theoretical foun- dations of understanding of the firm internationalisation process and the born global phenomenon. Internationalisation theories and models are critically examined - stage internationalisation models, rapid internationalisation models, and entrepreneurship- based perspective on the internationalisation process. The specificity of born global firms and the determinants of born global firm rapid internationalisation are reviewed.

The second chapter presents a systematic literature review on entrepreneur factors of rapid internationalisation of born global firms. The overview of entrepreneur-related factors influencing rapid internationalisation includes innovation and technology orientation, entrepreneurial and managerial knowledge, entrepreneurial orientation, effectuation logic, international networks and dynamic capabilities. The chapter ends with a proposition of the framework to explain rapid internationalisation of born globals.

The third chapter presents and justifies the methodology design. The research perspective and strategy are discussed and data collection procedures are presented. The criteria for cases selection are presented and the interview process described.

The fourth chapter includes data analysis leading to the discussion on the research question - How do entrepreneur-related determinants influence the rapid internationalization of born globals. Eight case studies are presented and analysed. Entrepreneur-level fac- tors and their influence on rapid internationalisation are discussed. The model explaining the influence of entrepreneur-related factors on rapid internationalisation of born globals is outlined.

The last part of the study is the conclusion section, which presents final statements, study theoretical and practical implications as well as its research limitations.

 

 

 

Spis treści

 

Table of Contents

Introduction

 

Chapter 1

Theoretical Foundations of Understanding of the Firm Internationalisation Process and Born Globals Phenomenon

1.1. Review of Internationalisation Theories and Models

1.1.1. Historical Perspective on Firm Internationalisation in Economics

1.1.2. Stage Internationalisation Models

1.1.3. Rapid Internationalisation Theories

1.1.4. Entrepreneurship-based Perspectives on the Internationalisation Process

1.2. Specificity of Born Global Firms

1.2.1. Main Research Themes in Studies on Born Globals

1.2.2. Born Globals Internationalisation Models

1.2.3. Characteristics of Born Global Firms

1.3. Determinants of Born Global Rapid Internationalisation

1.3.1. Internal Determinants

1.3.2.     External Determinants

1.3.3. Entrepreneur-related Determinants

1.4. Summary

 

Chapter 2

A Systematic Literature Review of Entrepreneur-level Determinants of the Rapid Internationalisation of Born Global Firms

2.1. Method: Systematic Literature Review

2.2. Overview of Entrepreneur-related Factors Influencing Rapid Internationalisation

2.2.1. Innovation and Technology Orientation

2.2.2. Entrepreneurial and Managerial Knowledge

2.2.3. Entrepreneurial Orientation

2.2.4. Effectuation Logic

2.2.5. International Networks

2.2.6. Dynamic Capabilities

2.3. A Proposed Framework to Explain the Rapid Internationalisation of Born Globals

2.4. Summary

 

Chapter 3

Methodology Design

3.1. Methodological Choices

3.1.1. Research Paradigm

3.1.2. Research Strategy

3.2. Data Collection Procedures

3.2.1. Process of Cases Selection

3.2.2. Description of the Cases

3.2.3. Questionnaire Design

3.2.4. Personal Interviews

3.2.5. Secondary Data

3.2.6. Coding and Data Analysis

3.2.7. Validityand Reliability of the Study

3.3. Summary

 

Chapter 4

Data Analysis and Discussion: How Do Entrepreneur-related Determinants Influence the Rapid Internationalisation of Born Globals?

4.1. Analysis of Case Studies

4.1.1. Firm 1

4.1.2. Firm 2

4.1.3. Firm 3

4.1.4. Firm 4

4.1.5. Firm 5

4.1.6. Firm 6

4.1.7. Firm 7

4.1.8. Firm 8

4.2. The Influence of Entrepreneur-level Factors on Rapid Internationalisation

4.2.1. The Role of Innovation and Technology

4.2.2. The Role of Entrepreneurial and Managerial Knowledge

4.2.3. The Role of Entrepreneurial Orientation

4.2.4. The Role of Effectuation Logic

4.2.5. The Role of International Networks

4.2.6. The Role of Dynamic Capabilities

4.3. The Model Explaining the Impact of Entrepreneur-related Factors on the Rapid Internationalisation of Born Globals

4.4. Summary

 

Conclusions

References

Appendix

 

Opinie

Twoja ocena:
Wydanie: I
Rok wydania: 2020
Wydawnictwo: Oficyna Wydawnicza
Oprawa: miękka
Format: B5
Liczba stron: 153

 

Introduction

New Business Context

Business environment at the turn of the 21st century changed drastically due to globalisation processes. The development of technology, the advances of telecommunication engineering and new solutions in transport and logistics enabled entrepreneurs to con- duct business in the foreign markets on a bigger scale than ever before (Knight & Cavusgil, 2004). Rapid internationalisation became easier for companies and it became increasingly common even among small and medium-sized enterprises, the entities which before had been less prone to internationalisation due to their size and lack of financial and human resources. In the OECD area, SMEs are a predominant form of enterprise, accounting for approximately 99% of all firms. Being important players in the international trade (Knight, 2001), SMEs are now accounting for 25-35% of the world exports of manufactured goods and an increasing share in foreign direct investments (OECD, 2016).

Moreover, new actors entered the stage, namely the firms termed born globals. They represent an entirely new type of firms which redefined the international business theory (Rennie, 1993; Oviatt & McDougall, 1994; Knight & Cavusgil, 1996). Rapidly internationalising start-ups begin acting globally immediately after founding. Apparently, these firms undermine the traditionally established view on companies' internationalisation, as they manage to reach international markets rapidly and keep their competi- tive position despite significant resource limitations. Therefore, they deny traditional stage economic theories of internationalisation, like the Uppsala internationalisation model (Johanson & Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977).

The determinants of rapid internationalisation of firms have been widely discussed in the literature in many contexts and from numerous perspectives (Oviatt & McDougall, 1994; Moen, 2002; Zahra, 2005). They are commonly grouped into internal, external and entrepreneur-level factors. The internal ones relate to the characteristics of the product or the firm, like product life cycle, firm size and its resources, industry characteristics and international possibilities, specific product characteristics. External factors are understood as factors connected with business environment which are pulling companies to the international markets, like a technological progress and globalisation  process. The entrepreneur-level factors include the international vision of the founders, their international experiences, a desire to become an international market leader and other factors connected with the firm founders and their entrepreneurial mindsets.

Of all internationalisation determinants, the entrepreneur-level factors have been regarded indispensable for the rapid internationalisation and future international success of a firm (Oviatt & McDougall, 1994; Moen, 2002; Zahra, 2005). However, what is needed all the time is some better understanding of these factors as well as their mutual relations, especially in context of born global firms. And what is particularly missing is the empirical illustration of entrepreneur issues within the internationalisation processes in born global firms.

Problem and Purpose

The problem addressed in this study is the influence of the entrepreneur-level determinants on the rapid internationalisation of born global firms. The researchers of born global phenomena focus primarily on the external and internal determinants of rapid internationalisation (Oviatt & McDougall, 1994; Moen, 2002). The topic of individual- level analysis in those firms, however, has not been so widely discussed and empirically verified (Zahra, 2005; Evers, 2010). This study is aimed at filling this research gap and exploring the individual-level characteristics of born global firms.

Having done this, the study should enhance the understanding of the specificity of born global firms by investigating entrepreneur determinants of their rapid internationalisation. The study leading research question is:

How do entrepreneur-level determinants influence the rapid internationalisation of born global firms?

This leading research question refers to five specific research tasks aimed to:

1.  conduct a critical overview of the literature on the internationalisation process and born global firms phenomenon;

2. conduct a systematic literature review on entrepreneur-level determinants of the rapid internationalisation of born globals;

3. dentify the specificity of born global firms;

4. indicate and explain the entrepreneur-level factors of the emergence of born global firms;

5. build a framework of entrepreneur-level determinants of the rapid internationalisation of born globals.

Theoretical Background

The theoretical framework of the study is a combination of a resource-based view of a company (Wernerfelt, 1984; Barney, 1991; Conner, 1991), a network perspective on internationalisation (Coviello & Munro, 1997; Styles et al., 2008) and an international entrepreneurship perspective (Jones & Coviello, 2005; Zahra & George, 2002; Oviatt & McDougall, 1994).

The resource-based view is considered to be the dominant perspective in international entrepreneurship research (Young et al., 2003). It focuses on the firm, its internal resources and capabilities (Barney, 1991). This study focuses mainly on the organisational and human capital, as born global firms do not tend to possess tangible physical assets at the beginning of their operation (Knight & Cavusgil, 2004; Mudambi & Zahra, 2007). Intangible entrepreneur-related assets however can be a strong source of competitive advantage for born global firms as they are unduplicable.

The second main theoretical framework adopted in this study is a network approach to internationalisation. This theory views market as a set of relationships among firms, so that organisations are interconnected and interdependent (Johanson & Mattson, 1988). A network perspective has been adopted in born global research in a number of studies (Sharma & Blomstermo, 2003; Chetty & Campbell-Hunt, 2004; Freeman et al., 2006).

Finally, the perspective of international entrepreneurship, focuses on entrepreneurs, their characteristics, knowledge and competences, as the key element of the model (Oviatt & McDougall, 1994; Etemad, 2004). The firm internationalisation and export activities primarily result from the entrepreneurs' decisions and behaviour, and not from firm characteristics or resources, especially at the beginning of the firm operation (Kundu & Katz, 2003).

Research Design

The explorative nature of the research problem and theory-building goal require the application of a qualitative methodological approach. The study adopts an abductive reasoning, allowing for setting the framework proposition based on the literature review and for its modification following the case analysis. Case study has been selected as the research method. Case studies are based on a semi-structured questionnaire addressing key issues on the entrepreneurial and organisational capabilities of entrepreneurs. The research is based on 8 case studies of born global firms. They have been selected according to the criteria of born global firms established by Gabrielsson et al. (2008), they:

(1) are SMEs with a global vision at inception;

(2) have unique products a global market potential;

(3) are independent and autonomous firms;

(4) have demonstrated the capability of accelerated internationalisation, i.e. their international activities featured both precocity and speed.

The data obtained during interviews are analysed with the use of the cross-case analysis, i.e. a method which reveals commonalities and differences in the events, activities and processes which are the units of the case study analyses (Khan & VanWynsberghe, 2008).

Expected Contribution

The study is expected to contribute to the most recent research streams related to firms' internationalisation processes. The research clarifies the emerging concept of born global firms, which so far has been mainly investigated in relation to the external determinants of early internationalisation. Thus, the findings fill the knowledge gap on the individual-level determinants of early internationalisation. The understanding of the individual-level mechanisms of early internationalising firms sets a theoretical framework for further empirical research on born globals and allows for the indication of potential fields for public policy and support in this respect. The study may be also valuable for born global firms, as following its findings will allow them to enhance the process of the firm international development.

Key Definitions

To clarify some of the concepts used in the book, the following definitions are presented:

Born Global - a young entrepreneurial company launching international business activity very early in its evolution, moving rapidly into foreign markets (Cavusgil et al., 2012).

Dynamic Capabilities - the ability to integrate, build and reconfigure internal and external competences to address rapidly changing environments. Thus, dynamic capabilities reflect the organisation's ability to achieve new and innovative forms of competitive advantage, given path dependencies and market positions (Teece et al, 1997).

Effectuation - entrepreneurial logic which includes a set of decision-making behaviours employed in the situations of uncertainty (Sarasvathy, 2001).

Entrepreneurial Orientation - entrepreneurial behaviour associated with innovative- ness, proactiveness and risk-taking initiated by a strong leader (Lumpkin & Dess, 1996).

International Business - trade and investment activities conducted by firms across national borders (Cavusgil et al., 2012).

International Entrepreneurship - a combination of innovative, proactive and risk seeking behaviour that crosses national borders and is intended to create value in organisations (Oviatt & McDougall, 2000).

International Entrepreneurship View of the Firm - the perspective of international

entrepreneurship focused on entrepreneurs, their characteristics, knowledge, competences, as the key element of the model (Oviatt & McDougall, 1994; Etemad, 2004).

Internationalisation - a cumulative process in which business network relations are created and developed according to the company goals (Johanson & Mattsson, 1993).

Multinational Enterprise (MNE) - a large company with substantial resources that performs various business activities through a network of subsidiaries and affiliates located in multiple countries (Cavusgil et al., 2012).

Network Perspective of Internationalisation - the theory which views market as a set of relationships among firms, so that organisations are interconnected and dependent on each other (Johanson & Mattson, 1988).

Resource-Based View (RBV) - a theory which states that the competitive advantage and superior performance of an organisation are explained by the distinctiveness of its capabilities [and resources] (Johnson, 2014).

Small and Medium-sized Enterprise - non-subsidiary, independent firms which employ fewer than a given number of employees. This number varies across national statistical systems. The most frequent upper limit is 250 employees. Small firms are generally those with fewer than 50 employees, while micro-enterprises have at most ten, or in some cases five, workers. Financial assets are also used to define SMEs. In the European Union, SMEs must have an annual turnover of EUR 40 million or less (European Commission, 2015).

Stage Internationalisation Models - models which argue that the firm's international involvement gradually increases as it gains knowledge and experience in the international arena (Johanson & Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977).

Structure of the Study

The book consists of four chapters. The first chapter presents the theoretical foun- dations of understanding of the firm internationalisation process and the born global phenomenon. Internationalisation theories and models are critically examined - stage internationalisation models, rapid internationalisation models, and entrepreneurship- based perspective on the internationalisation process. The specificity of born global firms and the determinants of born global firm rapid internationalisation are reviewed.

The second chapter presents a systematic literature review on entrepreneur factors of rapid internationalisation of born global firms. The overview of entrepreneur-related factors influencing rapid internationalisation includes innovation and technology orientation, entrepreneurial and managerial knowledge, entrepreneurial orientation, effectuation logic, international networks and dynamic capabilities. The chapter ends with a proposition of the framework to explain rapid internationalisation of born globals.

The third chapter presents and justifies the methodology design. The research perspective and strategy are discussed and data collection procedures are presented. The criteria for cases selection are presented and the interview process described.

The fourth chapter includes data analysis leading to the discussion on the research question - How do entrepreneur-related determinants influence the rapid internationalization of born globals. Eight case studies are presented and analysed. Entrepreneur-level fac- tors and their influence on rapid internationalisation are discussed. The model explaining the influence of entrepreneur-related factors on rapid internationalisation of born globals is outlined.

The last part of the study is the conclusion section, which presents final statements, study theoretical and practical implications as well as its research limitations.

 

 

 

 

Table of Contents

Introduction

 

Chapter 1

Theoretical Foundations of Understanding of the Firm Internationalisation Process and Born Globals Phenomenon

1.1. Review of Internationalisation Theories and Models

1.1.1. Historical Perspective on Firm Internationalisation in Economics

1.1.2. Stage Internationalisation Models

1.1.3. Rapid Internationalisation Theories

1.1.4. Entrepreneurship-based Perspectives on the Internationalisation Process

1.2. Specificity of Born Global Firms

1.2.1. Main Research Themes in Studies on Born Globals

1.2.2. Born Globals Internationalisation Models

1.2.3. Characteristics of Born Global Firms

1.3. Determinants of Born Global Rapid Internationalisation

1.3.1. Internal Determinants

1.3.2.     External Determinants

1.3.3. Entrepreneur-related Determinants

1.4. Summary

 

Chapter 2

A Systematic Literature Review of Entrepreneur-level Determinants of the Rapid Internationalisation of Born Global Firms

2.1. Method: Systematic Literature Review

2.2. Overview of Entrepreneur-related Factors Influencing Rapid Internationalisation

2.2.1. Innovation and Technology Orientation

2.2.2. Entrepreneurial and Managerial Knowledge

2.2.3. Entrepreneurial Orientation

2.2.4. Effectuation Logic

2.2.5. International Networks

2.2.6. Dynamic Capabilities

2.3. A Proposed Framework to Explain the Rapid Internationalisation of Born Globals

2.4. Summary

 

Chapter 3

Methodology Design

3.1. Methodological Choices

3.1.1. Research Paradigm

3.1.2. Research Strategy

3.2. Data Collection Procedures

3.2.1. Process of Cases Selection

3.2.2. Description of the Cases

3.2.3. Questionnaire Design

3.2.4. Personal Interviews

3.2.5. Secondary Data

3.2.6. Coding and Data Analysis

3.2.7. Validityand Reliability of the Study

3.3. Summary

 

Chapter 4

Data Analysis and Discussion: How Do Entrepreneur-related Determinants Influence the Rapid Internationalisation of Born Globals?

4.1. Analysis of Case Studies

4.1.1. Firm 1

4.1.2. Firm 2

4.1.3. Firm 3

4.1.4. Firm 4

4.1.5. Firm 5

4.1.6. Firm 6

4.1.7. Firm 7

4.1.8. Firm 8

4.2. The Influence of Entrepreneur-level Factors on Rapid Internationalisation

4.2.1. The Role of Innovation and Technology

4.2.2. The Role of Entrepreneurial and Managerial Knowledge

4.2.3. The Role of Entrepreneurial Orientation

4.2.4. The Role of Effectuation Logic

4.2.5. The Role of International Networks

4.2.6. The Role of Dynamic Capabilities

4.3. The Model Explaining the Impact of Entrepreneur-related Factors on the Rapid Internationalisation of Born Globals

4.4. Summary

 

Conclusions

References

Appendix

 

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