International Business Review – DOI: https://doi.org/10.1016/j.ibusrev.2020.101767
Microfoundations of network exploration and exploitation capabilities in international opportunity recognition
Faroque, A. R., Morrish, S. C., Kuivalainen, O., Sundqvist, S., & Torkkeli, L.
While international entrepreneurship (IE) recognizes opportunity recognition (OR) as a central activity and the prominent role of network capabilities in OR, it is not informative as to how different network capabilities influence OR in international markets. We utilize dual network capability through the lens of exploration-exploitation to better understand how these two different capabilities influence the identification of international opportunities. Given that microfoundations perspective and prior experience in IE are under-developed and under-theorized, we explore founder’s prior experience as an essential microfoundation for the dual network capability. By employing structural equation modeling on a sample of 647 early internationalizing firms from a developing country, the study demonstrates that founders’ prior experience is a significant microfoundation of dual network capability in international OR. However, both exploration and exploitation capabilities fail to bring new opportunities in a changing market environment. A post-hoc analysis reveals that at a higher level of market change, younger firms benefit more from network exploration, whereas older firms achieve greater success when leveraging benefits from network exploitation. The study concludes with implications and future research avenues.
Journal of Small Business Management – DOI: https://doi.org/10.1080/00472778.2020.1816432
Unpacking the emergence of born global founders: A careers perspective
Pidduck, R. J., Shaffer, M. A., Zhang, Y., & Clark, D. R.
New ventures that internationalize aggressively from or near founding have been of continued interest in international entrepreneurship. A rich literature now exists in which researchers make numerous distinctions between types or subcategories of rapidly internationalizing firms and how these relate to nuances in performance outcomes. Conversely, little progress has been made toward a theoretical understanding of why these seemingly unique firms emerge in the first place. We contend that a key question remains unanswered: Why do some entrepreneurs from the outset compound the liability of newness, inherent in entrepreneurship, with the liability of foreignness, inherent in internationalization? Drawing from social cognitive careers theory, we developed a model explaining the emergence of entrepreneurial intentions to found explicitly global ventures. We tested our model across two distinct studies, using a multiwave multicountry approach, and found consistent support for an interest pathway to these entrepreneurial intentions. The simple, yet novel, implication is that noneconomic logic shaping entrepreneurs’ vocational choices can help explain why some founders take additional risks by overtly focusing on aggressive global growth from inception.
Journal of Small Business Management – DOI: https://doi.org/10.1080/00472778.2020.1824529
Entrepreneurial orientation and international opportunity development by SMEs: The mediating role of decision-making logic
Karami, M., Ojala, A., & Saarenketo, S.
Research on international entrepreneurship has studied entrepreneurial orientation’s influence on the international performance of small and medium-sized firms (SMEs), but scholars need to learn more about the mechanisms that allow a firm to translate its entrepreneurial orientation into new opportunities to enter foreign markets. In this study, we employ effectuation theory to investigate this association and to enhance the understanding of international opportunity development by resource-poor SMEs. Our analysis of 164 SMEs in New Zealand supported the mediating role of effectual and causal decision-making logics in the association between entrepreneurial orientation and international opportunity. Our study contributes to the literature on international entrepreneurship and entrepreneurial orientation and helps SMEs to successfully translate their entrepreneurial orientation to foreign market entries.
Multinational Business Review — Vol. 28 No. 4, pp. 447-461
Internationalisation theory and Born Globals
Wadeson, N.
It has been claimed that Born Globals are incompatible with the Uppsala model, which is based on the firm having a maximum tolerable risk level. This assumption was used to explain observed incremental commitments, with further commitments being made as experiential learning reduces the level of risk faced. This study aims to show that adding a consideration of the role of expected value, including the effects of resource constraints, can reconcile the Born Global and internationalisation process literatures. While the effects of risk and expected value coincide when firms limit their downside risks by taking an incremental approach to commitments, other factors impacting on expected value can shift the balance of incentives towards earlier and more rapid internationalisation. For instance, some firms are specialised and have high costs of R&D, and so need to achieve early and rapid growth but face small home markets. While resource constraints can lead a firm to expand for some time in its home market before internationalising, the effect can be reversed in the case of the finance constraint for some firms.