Country of origin and network effects on internationalization: A comparative study of SMEs from an emerging and developed economy

This study examines the internationalization of high technology small and medium enterprises (HTSMEs). It explores how they develop and use networks to penetrate their first foreign market relying on information collected via direct interviews with the CEOs or founders of 58 high technology small firms that operate internationally. It uses mixed methods to discuss the network building mechanisms identified — client–supplier relationships, existing personal contacts, contacts acquired by chance, and contacts acquired through specific strategies. The findings provide the basis for developing propositions for further comparative analyses of the internationalization of HTSMEs based in emerging and developed markets. The study contributes to the literature on networks, internationalization and international entrepreneurship.

[1]  Arto Ojala,et al.  Internationalization of knowledge-intensive SMEs: The role of network relationships in the entry to a psychically distant market , 2009 .

[2]  Chris Styles,et al.  Executive Insights: Relationship Formation in International Joint Ventures: Insights from Australian–Malaysian International Joint Ventures , 2005 .

[3]  S. Shane,et al.  The Promise of Entrepreneurship as a Field of Research , 2000 .

[4]  Luciano Ciravegna,et al.  Born global or born regional? Evidence from an exploratory study in the Costa Rican software industry , 2009 .

[5]  P. P. McDougall,et al.  Toward a theory of international new ventures , 1994 .

[6]  G. Knight,et al.  Innovation, organizational capabilities, and the born-global firm , 2004 .

[7]  Alain Verbeke,et al.  Fifty Years of International Business Theory and Beyond , 2011 .

[8]  Luciano Ciravegna.  FDI, Social Ties and Technological Learning in New Silicon Valley Clones. Evidence from the Costa Rican ICT Cluster , 2011 .

[9]  D. S. Lim,et al.  The regional and global competitiveness of multinational firms , 2012 .

[10]  J. Johanson,et al.  The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership , 2009 .

[11]  T. Madsen,et al.  The internationalization of Born Globals: An evolutionary process? , 1997 .

[12]  Gillian Sullivan Mort,et al.  Networking capability and international entrepreneurship: How networks function in Australian born global firms , 2006 .

[13]  Arto Ojala,et al.  Network ties in the international opportunity recognition of family SMEs , 2011 .

[14]  Youmin Xi,et al.  How do interorganizational and interpersonal networks affect a firm's strategic adaptive capability in a transition economy? , 2009 .

[15]  C. Dhanaraj,et al.  The Dynamic Influence of Social Capital on the International Growth of New Ventures , 2010 .

[16]  C. Sabel,et al.  The Second Industrial Divide: Possibilities for Prosperity , 1984 .

[17]  Aino Halinen,et al.  Using case methods in the study of contemporary business networks , 2005 .

[18]  Dave Crick,et al.  The internationalisation of 'high performing' UK high-tech SMEs: a study of planned and unplanned strategies , 2005 .

[19]  F. Fukuyama.  Trust: The Social Virtues and the Creation of Prosperity Penguin London , 1995 .

[20]  Kent Eriksson,et al.  The perceived usefulness of network experiential knowledge in the internationalizing firm , 2004 .

[21]  R. Javalgi,et al.  Entrepreneurial orientation, management commitment, and human capital: The internationalization of SMEs in India , 2011 .

[22]  Peter R H Wood,et al.  International market selection by business service firms: Key conceptual and methodological issues , 1994 .

[23]  P. P. McDougall,et al.  International Entrepreneurship: The Intersection of Two Research Paths , 2000 .

[24]  S. Zahra,et al.  Cognition and international entrepreneurship: implications for research on international opportunity recognition and exploitation , 2005 .

[25]  P. Ellis,et al.  Social Ties and Foreign Market Entry , 2000 .

[26]  E. Autio,et al.  Social capital, knowledge, and the international growth of technology-based new firms , 2002 .

[27]  I. Wilkinson,et al.  The recognition of first time international entrepreneurial opportunities , 2009 .

[28]  Ø. Moen,et al.  The Born Globals: A new generation of small European exporters , 2002 .

[29]  Jim Bell,et al.  Rapid internationalisation among entrepreneurial firms in Australia, Canada, Ireland and New Zealand: An extension to the network approach , 2006 .

[30]  D. North.  Institutions, Institutional Change and Economic Performance: Economic performance , 1990 .

[31]  Ingemar Wictor,et al.  Innovative Internationalisation in New firms: Born Globals–the Swedish Case , 2003 .

[32]  P. Brewer.  International market selection: developing a model from Australian case studies , 2001 .

[33]  Sylvie K. Chetty,et al.  Internationalisation of small to medium-sized manufacturing firms: a network approach , 2000 .

[34]  Hartmut H. Holzmüller,et al.  Capturing institutional home country conditions for exporting SMEs , 2011 .

[35]  Nicole Coviello,et al.  Internationalisation: conceptualising an entrepreneurial process of behaviour in time , 2005 .

[36]  Harbir Singh,et al.  Learning and protection of proprietary assets in strategic alliances: building relational capital , 2000 .

[37]  P. Ellis,et al.  Social ties and international entrepreneurship: Opportunities and constraints affecting firm internationalization , 2011 .

[38]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[39]  Dave Crick,et al.  A comparative investigation into the internationalisation of Canadian and UK high‐tech SMEs , 2006 .

[40]  Luciano Ciravegna.  Linkages in the New ICT Clusters of Latin America: Evidence from Costa Rica , 2012, Journal of Latin American Studies.

[41]  R. Yin.  Case Study Research: Design and Methods , 1984 .

[42]  B. Uzzi,et al.  The Sources and Consequences of Embeddedness for the Economic Performance of Organizations: The Network Effect , 1996 .

[43]  Luis V. Dominguez,et al.  The internationalization of Latin American enterprises and market liberalization in the Americas: A vital linkage , 1997 .

[44]  M. Porter.  Competitive Advantage: Creating and Sustaining Superior Performance , 1985 .

[45]  John W. Creswell,et al.  Research Design: Qualitative, Quantitative, and Mixed Methods Approaches , 2010 .

[46]  C. Robson,et al.  Real World Research: A Resource for Social Scientists and Practitioner-Researchers , 1993 .

[47]  Abbas Tashakkori,et al.  Mixed Methodology: Combining Qualitative and Quantitative Approaches , 1998 .

[48]  Krishna G. Palepu,et al.  Winning in Emerging Markets: A Road Map for Strategy and Execution , 2010 .

[49]  S. Shane,et al.  Explaining the Formation of International New Ventures: The Limits of Theories from International Business Research , 1994 .

[50]  Nicole Coviello,et al.  Methodological issues in international entrepreneurship research , 2004 .

[51]  D. Sharma,et al.  The internationalization process of Born Globals: a network view , 2003 .

[52]  S. Ghoshal,et al.  Social Capital, Intellectual Capital, and the Organizational Advantage , 1998 .

[53]  N. Coviello.  The network dynamics of international new ventures , 2006 .

[54]  Choton Basu,et al.  The innovativeness of Born-Globals and customer orientation: Learning from Indian Born-Globals , 2011 .

[55]  Catherine C. Marshall,et al.  Designing Qualitative Research , 1996 .

[56]  J. Birkinshaw.  Publishing Qualitative Research in International Business , 2004 .

[57]  S. Shane,et al.  Entrepreneurship As a Field of Research: A Response to Zahra and Dess, Singh, and Erikson , 2001 .

[58]  Dave Crick,et al.  The internationalisation of born global and international new venture SMEs , 2009 .

[59]  Nicole Coviello,et al.  Network relationships and the internationalisation process of small software firms , 1997 .

[60]  S. Harris,et al.  Entrepreneurs' relationships for internationalization: functions, origins and strategies , 2005 .

[61]  A. Bryman.  Integrating quantitative and qualitative research: how is it done? , 2006 .

[62]  J. Dunning.  Location and the multinational enterprise: A neglected factor? , 1998 .

[63]  R. Grant.  The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation , 1991 .

[64]  Charlene L. Nicholls-Nixon,et al.  Latin America Management Research: Review, Synthesis, and Extension , 2011 .