The 16th Annual McGill International Entrepreneurship Conference: Researching New Frontiers

Felzensztein, Parra - International Entrepreneurship in Latin-America: Analysis of the Country of Origin and its effect on Internationalization Dynamics

Christian Felzensztein & Gabriel Parra

Research Center for International Competitiveness

Business School, Universidad Adolfo Ibañez, Chile

[e-mail]
During the last two decades, the interest on International Entrepreneurship (IE) has increased rapidly due to the acceleration of the globalization process in the world economy (Shaker A Zahra & George, 2002). Several contributions to this field have emerged from the founding disciplines of International Business (IE) and Entrepreneurship (Autio, 2004; M. Jones & Coviello, 2005; McDougall & Oviatt, 2000; Shaker A. Zahra, 2004), but also from interrelated fields such as Strategic Management (Lu & Beamish, 2001; Meyer, Estrin, Bhaumik, & Peng, 2009; Mike W. Peng, 2004), Development Economics and Public Policy (Acs, Desai, & Hessels, 2008; Bannò, Piscitello, & Amorim Varum, 2013; Bengoa & Sanchez-Robles, 2003; Egger & Pfaffermayr, 2004; Globerman & Shapiro, 1999). This has increased the understanding of the relevance of IE at the firm and government level, revealing the necessity to comprehend it better (Lu & Beamish, 2001).
Prior research has focused mainly on large-sized firms (multinationals) from developed economies, primarily using a single theoretical perspective, and without providing deeper insights about the effect of the business environment (Marian V. Jones, Coviello, & Tang, 2011; Benjamin M. Oviatt & McDougall, 2005; Ramamurti, 2004; Yamakawa, Peng, & Deeds, 2008; Shaker A. Zahra, 2004). Therefore, this study seeks to contribute to the literature by conducting an empirical cross-country research with Latin-American SMEs, using an integrative approach with emphasis in the effect of the country of origin on the key dimensions of the IIS: Scope, Speed and Entry Strategy. Novel findings encourages to further research in a highly relevant subject for scholars, entrepreneurs, and especially for policy makers from emerging economies.
Our research focus on the emerging economies of Latin America, which are increasing their position in the world economy, mainly because their rapid pace of development and economic liberalization (M. Wright, Filatotchev, Hoskisson, & Peng, 2005), and consequently gaining importance in the management research agenda (Hoskisson, Eden, Lau, & Wright, 2000; Meyer, et al., 2009). Nevertheless, despite the increasing development of the Latin-America region, it is still under-represented in the IB literature (Perez-Batres, Pisani, & Doh, 2010). Furthermore, we use different perspectives about IE: Strategic Management, Development Economics and Public Policy (Marian V. Jones, et al., 2011; Kiss, Danis, & Cavusgil, 2012; Schumpeter, 1934; Shaker A Zahra & George, 2002).
An online survey was design and validated using a multi-step protocol, then distributed directly by email to 2.527 firms, and indirectly to an undetermined number of firms by requesting 842 public agencies, business associations and universities to forward the survey invitation. A total of 195 responses were gathered with 81 (42%) valid and complete surveys from SMEs originally from Latin-American countries. Probit econometric models were conducted using a set of independent variables to measure institutional development of the country of origin, controlling by firm and local-industry variables, and binary dependent variables for the IIS dimensions.

Figure 1: Theoretical Model

Findings suggests that countries of origin are significant factors for the (i) geographical scope of IIS, measured as the number and regional-global scope of initial targeted markets (Felzensztein, Ciravegna, Robson, & Amorós, 2013; Shaker A Zahra & George, 2002); (ii) propensity to reach developed economies during the IIS (Yamakawa, et al., 2008); but no supporting evidence was found for the effect of factors on speed, measured as propensity to become a ‘Born Global’ (Chetty & Campbell-Hunt, 2004); neither on the entry strategy, measured as propensity to use a high-equity entry mode (Marian V Jones, 2001; Mike W Peng, et al., 2008). Afterwards, a deep discussion is presented, concluding with practical implications for managers, and policy makers, which gain the most attractive findings about enhancing institutional development for IE.

Ghannad, Huber, Kaplar, Schlegel, Valassis - The Role of Personal and Business Networks in the Context of Born Global Firms

Navid Ghannad*,

Sebastian Huber,

Erik Kaplar,

Sarah-Jane Schlegel &

Kostantin Valassis

School of Business and Engineering,

Halmstad University,

Box 823, S-301 18 Halmstad, Sweden

Fax: [phone]

* Corresponding author: [e-mail]


Abstract: While most scholars strive to explain internationalization processes in relation to the stage models, which posit that a firm rather gradually enters foreign markets that are geographically, culturally and psychologically close, less research has been carried out on network theories. The aim of this study is to explore the interaction of personal and business networks and resources provided by those networks in the internationalization process of born global companies. Qualitative field research was carried out by interviewing three entrepreneurial born global firms, which are compared and contrasted within our theoretical framework. In this study empirical evidence suggests that internationalization of a born global firm cannot only be explained by a manifested sequence of steps but more as undertaken actions resulting from the company’s and entrepreneur’s relationships in a network. Not only can networks facilitate initial activities of potential entrepreneurs by providing resources necessary for venture creation but also open windows of opportunities in foreign markets, which they would otherwise have missed. The study has found that both personal and business networks can provide entrepreneurs with all kinds of resources. When looking at this finding in rather detail, the kind of resource provided depends on the strength of the tie between the embedded network actors. The improved recognition of international opportunities in combination with resources drawn from network partners is eventually accelerating the internationalization process. We propose a theoretically anchored and empirically guided model depicting the acceleration of the internationalization process by the interplay of networks and resources.

Keywords: born global; internationalization; entrepreneur; networks