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How New Ventures Exploit Trade-Offs Among International Risk Factors: Lessons For The Accelerated Internationization Of The 21St Century

Published on Dec 1, 2000in Academy of Management Journal 7.19
· DOI :10.5465/1556347
Rodney C. Shrader10
Estimated H-index: 10
(UIC: University of Illinois at Chicago),
Benjamin M. Oviatt18
Estimated H-index: 18
(GSU: Georgia State University),
Patricia P. McDougall33
Estimated H-index: 33
(IU: Indiana University)
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Abstract
The Organisation for Economic Co-operation and Development predicts that the internationalization of businesses will accelerate in the 21st century. Our study examined how the risks of accelerated internationalization may be managed in 212 foreign market entries by 87 new ventures based in the United States. Findings suggested that ventures managed strategic international risks by exploiting simultaneous trade-offs among foreign revenue exposure, country risk, and entry mode commitment in each country.
  • References (58)
  • Citations (419)
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References58
Newest
Published on Dec 31, 2010
John H. Dunning62
Estimated H-index: 62
,
Sarianna M. Lundan14
Estimated H-index: 14
This is the second edition of the celebrated volume by Professor John H. Dunning, first published in 1993, which has now been not only updated but also enriched with the addition of a number of new topics. This addition was not least due to the expertise of the co-author, Sarianna Lundan, in the institutional aspects of international business and the internal governance of transnational corporations (TNCs). It is a comprehensive synthesis of all the theories in International Business based on ex...
Published on Aug 1, 1999in Strategic Management Journal 5.57
Charles Tang7
Estimated H-index: 7
(Pace University),
Surinder Tikoo12
Estimated H-index: 12
(State University of New York at New Paltz)
This paper examines the association between the stock returns and accounting earnings of firms that have different levels of operational flexibility. Operational flexibility is a firm’s ability to respond profitably to environmental fluctuations by shifting factors of production within a multinational network of subsidiaries. The geographic breadth and depth of a firm’s multinational network are used as indicators of operational flexibility. We find a significantly greater coefficient relating s...
Published on May 1, 1999in Journal of Business Venturing 6.33
Stephen B. Preece6
Estimated H-index: 6
(WLU: Wilfrid Laurier University),
Grant Miles18
Estimated H-index: 18
(UNT: University of North Texas),
Mark C. Baetz7
Estimated H-index: 7
(WLU: Wilfrid Laurier University)
Abstract Early-stage technology-based firms are confronted with the complexity of foreign markets and global competition from their earliest stages of development. Not only must technology entrepreneurs keep pace with ever-changing technology-based product offerings, but they must also simultaneously stay abreast of competitors and industry trends in multiple countries. We surveyed 75 small technology-based firms in Ontario to evaluate their international activities and try to explain both the i...
Published on Nov 1, 1998in Strategic Management Journal 5.57
Kenneth C. Robinson3
Estimated H-index: 3
(KSU: Kennesaw State University),
Patricia P. McDougall33
Estimated H-index: 33
(Georgia Institute of Technology)
Using a sample of 115 manufacturing ventures, this study examined elements of industry structure which prior theory and research in the fields of industrial organization economics, strategic management, and entrepreneurship suggest are the most important structural characteristics of industries. Future researchers should carefully select the particular operationalization of industry structure as our research demonstrates that the influence of industry structural elements on measures of firm perf...
Published on Jun 1, 1998in Journal of International Business Studies 7.72
Subramanian Rangan13
Estimated H-index: 13
(Ad: INSEAD)
Do multinational enterprises operate flexibly, i.e., do they shift production in response to currency changes? Three theoretical perspectives are developed. Flexibility optimism, premised on information and sunk cost advantages, takes a macro efficiency perspective and predicts sizable responses. Flexibility pessimism, premised on inertia and internal opportunism, takes an organizational perspective and predicts sticky responses. Flexibility realism, premised on the view that to be flexible in t...
Published on Dec 1, 1997in Journal of International Business Studies 7.72
A. Rebecca Reuber20
Estimated H-index: 20
(U of T: University of Toronto),
Eileen Fischer34
Estimated H-index: 34
(York University)
Why are some small and medium-sized enterprises (SMEs) more successful in selling outside their domestic markets than are other SMEs in the same industry? Although the traditional explanation is that firms can gain valuable knowledge and resources as they become older and larger, small and young firms are not necessarily disadvantaged if they develop other mechanisms to acquire the requisite knowledge and resources. We examine the role of the management team's international experience as such a ...
Published on Aug 1, 1997in International Business Review 3.64
Nicole Coviello29
Estimated H-index: 29
(U of C: University of Calgary),
Hugh Munro9
Estimated H-index: 9
(WLU: Wilfrid Laurier University)
This paper examines the influence of network relationships on the internationalisation process of small firms, using multi-site case research on the software industry. The study empirically integrates the traditional models of incremental internationalisation with the network perspective. The findings show that the internationalisation process of small software firms reflects an accelerated version of the stage model perspective, and is driven, facilitated, and inhibited by a set of formal and i...
Published on Feb 1, 1997in Small Business Economics 3.56
Tomás O. Kohn1
Estimated H-index: 1
(BU: Boston University)
In this paper, using aggregate data from the U.S Bureau of Economic Analysis, the author explores the strategies small U.S.-based foreign investing firms follow in their international activities. The aggregate study supports the findings of an earlier study of a few small firms with international activities. These firms have a lower-than-expected tendency to form minority-owned affiliates abroad. An analysis of the industries in which these small foreign investing firms operate supports the noti...
Published on Jan 1, 1997in Journal of Business Venturing 6.33
Lowell W. Busenitz33
Estimated H-index: 33
(UH: University of Houston),
Jay B. Barney56
Estimated H-index: 56
(OSU: Ohio State University)
Executive Summary The purpose of this study was to further explore differences between entrepreneurs and managers in large organizations. However, rather than focusing on previously examined individual differences, this study examined differences in the decision-making processes used by entrepreneurs and managers in large organizations. Building on nonrational decision-making models from behavioral decision theory, we asserted that entrepreneurs are more susceptible to the use decision-making bi...
Cited By419
Newest
Published on Nov 1, 2019in Journal of World Business 5.79
Yimai Lewis (North Central College), Konstantinos Bozos5
Estimated H-index: 5
(University of Leeds)
Abstract Do international acquisitions increase acquirers’ risk? If so, can cross-border uncertainties interact and offset such risk? The perspective of integrated risk management suggests international acquirers could mitigate their overall risk through the interplay of various levels of uncertainties. Using asset pricing to measure shifts in risk and a large sample of international acquisitions by US firms during 2000–2014, we find that acquirers can reduce their risk by trading internal and d...
Satish Nambisan23
Estimated H-index: 23
(Case Western Reserve University),
Shaker A. Zahra84
Estimated H-index: 84
(UMN: University of Minnesota),
Yadong Luo64
Estimated H-index: 64
(UM: University of Miami)
The emergence of digital platforms and ecosystems (DPE) as a venue for value creation and capture for multinational enterprises holds considerable implications for the theory and practice of international business. In this paper, we articulate these implications by considering the dual perspectives of cross-border platforms and ecosystems – as a venue for multifaceted innovation and as multisided marketplace – and focusing on three overarching themes at the intersection of DPEs and international...
Published on Jun 26, 2019in Journal of International Entrepreneurship
Anne Domurath1
Estimated H-index: 1
(WLU: Wilfrid Laurier University),
Holger Patzelt31
Estimated H-index: 31
(TUM: Technische Universität München)
Generating international sales with high intensity and at an early point in time can significantly enhance a new venture’s performance and growth potential. This paper draws on human capital theory to develop and empirically test a model proposing that entrepreneurs’ prior founding experience enhances new ventures’ international sales intensity, while their prior domestic work experience diminishes such sales intensity. Further, our model proposes that prior founding and domestic work experience...
Published on Nov 1, 2018in Journal of Purchasing and Supply Management 3.09
Li Wan (University of Udine), Guido Orzes10
Estimated H-index: 10
(Free University of Bozen-Bolzano)
+ 2 AuthorsGuido Nassimbeni22
Estimated H-index: 22
(University of Udine)
Abstract The Entry Mode (EM) choice is a fundamental issue in reshoring initiatives. Despite several authors have studied the determinants of offshoring EM, no study has investigated so far the factors affecting the reshoring EM and its relation with the offshoring EM. The purpose of this paper is to examine which factors influence entry mode choice in reshoring initiatives. We develop a conceptual framework that explains the reshoring EM in terms of country-, industry-, firm- and project-specif...
Published on Jun 1, 2019in International Business Review 3.64
Teemu Tuomisalo (Lappeenranta University of Technology), Tanja Leppäaho2
Estimated H-index: 2
(Lappeenranta University of Technology)
Abstract The present paper reports the findings of a systematic review on learning among International New Ventures (INVs). Learning has been studied fairly extensively by scholars in the field of organization theory. Learning is a prerequisite for internationalization, and the behavior of individuals working in INVs seems to indicate a strong predisposition or aptness to learning. In spite of this, research on learning among INVs has been limited and fragmented up to the present time. In seekin...
Published on May 1, 2019in Journal of Business Research 4.03
Susanne Sandberg6
Estimated H-index: 6
(LNU: Linnaeus University),
Sui Sui4
Estimated H-index: 4
(RyeU: Ryerson University),
Matthias Baum23
Estimated H-index: 23
(TUK: Kaiserslautern University of Technology)
Abstract Globalization has led to increased competition and risk of business failure for firms venturing abroad over the last decades. A particularly challenging situation is seen for SMEs from developed economies entering emerging markets. We theorize and empirically show that prior market experience with domestic and developed countries helps to reduce the hazard of exit from emerging markets. We further develop competing hypotheses from complementary and compensatory perspectives about the mo...
Published on May 1, 2019in Entrepreneurship Theory and Practice 6.19
Ye Dai4
Estimated H-index: 4
(SIU: Southern Illinois University Carbondale),
Gukdo Byun2
Estimated H-index: 2
(CBNU: Chungbuk National University),
Fangsheng Ding2
Estimated H-index: 2
(ZJOU: Zhejiang Ocean University)
Women's interest and participation in entrepreneurship is growing. The limited and inconclusive findings on such growth have made it difficult to characterize its influence on new venture innovatio...
Published on Apr 1, 2019in Journal of Business Research 4.03
Joseph Amankwah-Amoah15
Estimated H-index: 15
(UKC: University of Kent),
Xiaojun Wang22
Estimated H-index: 22
(UoB: University of Bristol)
Abstract Risk-taking is a pivotal feature of entrepreneurship and business development. Poor management of business risk often leads to the loss of competitiveness with the consequence of business failure, and in contrast, it improves business sustainability when risks are managed effectively. In this editorial, we present an overview of the literature on conventional business risks and new emerging risk with an attempt to clarify some key issues on the subject. This introduction depicts an illu...