Born Local: Two Avenues to Internationalization

Are firms born Global? Because knowledge spillovers that lead to new venture creation are geographically constrained we believe that firms are born local. It follows that the decision to create sustainable new ventures is independent from the decision to internationalize, even if that is the ultimate goal of the firm. We explore two avenues to internationalize new ventures, a direct path described in much of the extant literature and an intermediated one. New ventures face high entry barriers and intellectual property rights protection to internationalization, which are circumvented by intermediating activities using existing multinational enterprises as facilitators of internationalization. However, new ventures using the intermediated mode of internationalization face transaction costs and rent extraction from multinational enterprises. Therefore, sustainable new ventures face a strategic decision on how to internationalize.

[1]  Ana Monica Pop,et al.  Corruption , 2008 .

[2]  Jeffery S. McMullen,et al.  Strategic Entrepreneurs at Work: The Nature, Discovery, and Exploitation of Entrepreneurial Opportunities , 2007 .

[3]  Julian Birkinshaw,et al.  WHY DO SOME MULTINATIONAL CORPORATIONS RELOCATE THEIR HEADQUARTERS OVERSEAS , 2006 .

[4]  D. Audretsch,et al.  Entrepreneurship, Innovation and Technological Change , 2005 .

[5]  Z. Ács,et al.  The knowledge spillover theory of entrepreneurship , 2005 .

[6]  Alex Rialp,et al.  The Born-Global Phenomenon: A Comparative Case Study Research , 2005 .

[7]  Lee Li,et al.  Research note: The internet's impact on export channel structure , 2004 .

[8]  Keith D. Brouthers,et al.  SME Entry Mode Choice and Performance: A Transaction Cost Perspective , 2004 .

[9]  Keith D. Brouthers,et al.  Why Service and Manufacturing Entry Mode Choices Differ: The Influence of Transaction Cost Factors, Risk and Trust , 2003 .

[10]  W. Mitchell,et al.  Foreign direct investment and host country productivity: the American automotive component industry in the 1980s , 2003 .

[11]  A. Rugman,et al.  Extending the theory of the multinational enterprise: internalization and strategic management perspectives , 2003 .

[12]  Z. Ács,et al.  Local Geographic Spillovers , 2002 .

[13]  Peter J. Buckley,et al.  Is the International Business Research Agenda Running Out of Steam? , 2002 .

[14]  Walter Kuemmerle,et al.  Home base and knowledge management in international ventures , 2002 .

[15]  Andrew Pettigrew,et al.  The Handbook of Strategy and Management , 2001 .

[16]  Mike Wright,et al.  The internationalization of new and small firms: A resource-based view , 2001 .

[17]  Anne S. York,et al.  Behind Intermediary Performance in Export Trade: Transactions, Agents, and Resources , 2001 .

[18]  M. Hitt,et al.  International expansion by new venture firms: International diversity, mode of market entry, technological learning, and performance. , 2000 .

[19]  G. Balabanis.  Factors Affecting Export Intermediaries' Service Offerings: The British Example , 2000 .

[20]  N. Dawar,et al.  Competing with giants. Survival strategies for local companies in emerging markets. , 1999, Harvard business review.

[21]  Mike W. Peng,et al.  Export Intermediary Firms: A Note on Export Development Research , 1998 .

[22]  J. Birkinshaw,et al.  BUILDING FIRM-SPECIFIC ADVANTAGES IN MULTINATIONAL CORPORATIONS: THE ROLE OF SUBSIDIARY INITIATIVE , 1998 .

[23]  Attila Varga,et al.  Local Geographic Spillovers between University Research and High Technology Innovations , 1997 .

[24]  R. Ogden.  An open secret. , 1997, Nursing standard (Royal College of Nursing (Great Britain) : 1987).

[25]  Andrew Zacharakis.  Entrepreneurial Entry into Foreign Markets: A Transaction Cost Perspective , 1997 .

[26]  Masataka Fujita,et al.  Small and medium-sized transnational corporations: Trends and patterns of foreign direct investment , 1995 .

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

[28]  B. Kogut,et al.  Knowledge of the firm and the evolutionary theory of the multinational corporation , 1993 .

[29]  Vern Terpstra,et al.  Border Crossings: Doing Business in the U.S. , 1993 .

[30]  Peter J. Buckley,et al.  Foreign direct investment by small and medium sized enterprises: The theoretical background , 1989 .

[31]  W. Dugger.  The Economic Institutions of Capitalism , 1987 .

[32]  Oliver E. Williamson.  The Economic Institutions of Capitalism , 1986, The Antitrust Bulletin.

[33]  William B. Gartner,et al.  A Conceptual Framework for Describing the Phenomenon of New Venture Creation , 1985 .

[34]  Zvi Griliches,et al.  Issues in Assessing the Contribution of Research and Development to Productivity Growth , 1979 .

[35]  O. Williamson,et al.  Markets and Hierarchies: Analysis and Antitrust Implications. , 1977 .

[36]  J. Dunning.  The future of the multinational enterprise , 1974 .

[37]  S. Terjesen,et al.  Why do some multinational corporations relocate their corporate headquarters overseas , 2006 .

[38]  Richard J. George.  Competing with Giants , 2006 .

[39]  B. Kogut.  International Management and Strategy , 2006 .

[40]  S. Zahra.  A theory of international new ventures: a decade of research , 2005 .

[41]  W. Kuemmerle.  The entrepeneur's path to global expansion , 2005 .

[42]  E. Autio.  Creative tension: the significance of Ben Oviatt's and Patricia McDougall's article ‘toward a theory of international new ventures’ , 2005 .

[43]  Orley Ashenfelter,et al.  THE QUARTERLY JOURNAL OF ECONOMICS , 2001 .

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

[45]  Zoltan J. Acs,et al.  Small and Medium-Sized Enterprises in the Global Economy , 1999 .

[46]  Z. Ács,et al.  The Internationalization of Small and Medium-Sized Enterprises: A Policy Perspective , 1997 .

[47]  M. Lindqvist,et al.  Infant multinationals : the internationalization of young, technology-based Swedish firms , 1991 .

[48]  S. Hymer.  international operations of national firms , 1976 .