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Born local: toward a theory of new venture’s choice of internationalization

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  • Zoltan Acs
  • Siri Terjesen
Abstract
This manuscript offers a theory regarding two distinct avenues to new venture internationalization: a direct path described in much of the extant literature and an intermediated one in which new ventures and multinational firms create symbiotic relationships in order to expand internationally. The term “born local”, as opposed to “born global”, describes how new ventures are created from knowledge spillovers and other resources in a geographically bounded environment. The theory suggests that the greater the number of value chain activities and the greater the number of countries involved, the more likely that the new venture will pursue the intermediated mode of internationalization. We suggest that new ventures frequently specialize and use existing MNEs as conduits for international expansion; however the greater the perceived ex-post costs of protecting intellectual property, transaction costs, and extraction costs related to hold-up, agency, and monopoly rents, the more likely the new venture will pursue a direct mode of internationalization. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Zoltan Acs & Siri Terjesen, 2013. "Born local: toward a theory of new venture’s choice of internationalization," Small Business Economics, Springer, vol. 41(3), pages 521-535, October.
    • Handle: RePEc:kap:sbusec:v:41:y:2013:i:3:p:521-535
    DOI: 10.1007/s11187-012-9446-8
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    Cited by:

    1. Wim Naudé, 2009. "'Rushing in where Angels Fear to Tread?': The Early Internationalization of Indigenous Chinese Firms," WIDER Working Paper Series RP2009-27, World Institute for Development Economic Research (UNU-WIDER).
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    3. Wim Naudé & Stephanié Rossouw, 2010. "Early international entrepreneurship in China: Extent and determinants," Journal of International Entrepreneurship, Springer, vol. 8(1), pages 87-111, March.
    4. Child, John & Karmowska, Joanna & Shenkar, Oded, 2022. "The role of context in SME internationalization – A review," Journal of World Business, Elsevier, vol. 57(1).
    5. Naldi, Lucia & Criaco, Giuseppe & Patel, Pankaj C., 2020. "Related and unrelated industry variety and the internationalization of start-ups," Research Policy, Elsevier, vol. 49(10).
    6. David B. Audretsch & Christina Guenther, 2023. "SME research: SMEs’ internationalization and collaborative innovation as two central topics in the field," Journal of Business Economics, Springer, vol. 93(6), pages 1213-1229, August.
    7. Miguel A. Hernandez, 2019. "Unveiling International New Ventures’ Success: Employee’s Entrepreneurial Behavior," Administrative Sciences, MDPI, vol. 9(3), pages 1-32, August.
    8. Hadia Fakhreldin, 2018. "Examining the Effect of Cultural Intelligence on the Internationalization of Swiss Small and Medium Enterprises," International Business Research, Canadian Center of Science and Education, vol. 11(6), pages 89-101, June.
    9. Francisco Liñán & Justin Paul & Alain Fayolle, 2020. "SMEs and entrepreneurship in the era of globalization: advances and theoretical approaches," Small Business Economics, Springer, vol. 55(3), pages 695-703, October.
    10. Leo-Paul Dana & Mehdi Tajpour & Aidin Salamzadeh & Elahe Hosseini & Mahnaz Zolfaghari, 2021. "The Impact of Entrepreneurial Education on Technology-Based Enterprises Development: The Mediating Role of Motivation," Administrative Sciences, MDPI, vol. 11(4), pages 1-17, September.
    11. Gripsrud, Geir & Hunneman, Auke & Solberg, Carl Arthur, 2023. "Speed of internationalization of new ventures and survival in export markets," International Business Review, Elsevier, vol. 32(4).
    12. Ko Wai Wai & Catherine Liston-Heyes & Weixi Liu & Gordon Liu & Marc Cowling, 2022. "Organizational capabilities and SME exports: the moderating role of external funding intentions and managerial capacity," Small Business Economics, Springer, vol. 58(1), pages 247-261, January.
    13. Teruel Carrizosa, Mercedes & Coad, Alexander & Domnick, Clemens & Flachenecker, Florian & Harasztosi, Péter & Janiri, Mario Lorenzo & Pál, Rozália, 2021. "The birth of new high growth enterprises: Internationalisation through new digital technologies," EIB Working Papers 2021/02, European Investment Bank (EIB).
    14. Mercedes Teruel & Alex Coad & Clemens Domnick & Florian Flachenecker & Peter Harasztosi & Mario Lorenzo Janiri & Rozalia Pal, 2022. "The birth of new HGEs: internationalization through new digital technologies," The Journal of Technology Transfer, Springer, vol. 47(3), pages 804-845, June.
    15. Mattia Cattaneo & Michele Meoli & Silvio Vismara, 2015. "Cross-border M&As of biotech firms affiliated with internationalized universities," The Journal of Technology Transfer, Springer, vol. 40(3), pages 409-433, June.
    16. Rubina Romanello & Maria Chiarvesio, 2019. "Early internationalizing firms: 2004–2018," Journal of International Entrepreneurship, Springer, vol. 17(2), pages 172-219, June.
    17. Silveli Cristo-Andrade & João J. Ferreira, 2020. "Knowledge spillovers and strategic entrepreneurship: what researches and approaches?," International Entrepreneurship and Management Journal, Springer, vol. 16(1), pages 263-286, March.
    18. Marleen McCormick & Stephanie A. Fernhaber, 2018. "Are growth expectations being met? Implications for the internationalization of micro-sized ventures," Small Business Economics, Springer, vol. 50(3), pages 591-605, March.
    19. Nikhil Ghag & Padmanav Acharya & Vivekanand Khanapuri, 2022. "Prioritizing the Challenges Faced in Achieving International Competitiveness by Export-Oriented Indian SMEs: a DEMATEL Approach," International Journal of Global Business and Competitiveness, Springer, vol. 17(1), pages 12-24, December.
    20. In Hyeock (Ian) Lee, 2022. "Startups, relocation, and firm performance: a transaction cost economics perspective," Small Business Economics, Springer, vol. 58(1), pages 205-224, January.
    21. Maciejewski Marek & Wach Krzysztof, 2019. "International Startups from Poland: Born Global or Born Regional?," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 27(1), pages 60-83, March.
    22. Nunez-Picado, Adriana & Martinus, Kirsten & Sigler, Thomas, 2022. "Junior Miner internationalisation in the globalising mining industry," Resources Policy, Elsevier, vol. 79(C).

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