Early Internationalization Of New Ventures From Emerging Countries: The Case of Transition Economies

This article investigates the factors that influence early internationalization of new ventures in the context of emerging economies. More specifically, our research builds on the theoretical and empirical literature on International New Ventures (INV) to develop an original conceptual framework and formulate hypotheses concerning the environment, industry and firm-related factors that enhance or constrain rapid internationalization of new firms from emerging countries. We tested our hypotheses on a sample of more than 23000 firms from 27 transition countries in Central and Eastern Europe and Central Asia between 2002 and 2009. The empirical study shows that several factors are positively related to the probability that a firm will internationalize from inception: access to ICT infrastructure, being located in an EU country, industry competition, a better-educated workforce, networks in the home country and international networks. In contrast, early internationalization is negatively affected by insecurity and, more surprisingly, by a firm’s knowledge intensity. These results contribute to a better understanding of the specificities of the internationalization of firms from emerging economies. ! Over the last two decades, there has been increasing evidence that numerous entrepreneurial firms are aiming at early internationalization, despite their small size and limited resources (Kuivalainen, Sundquist & Servais, 2007). These firms have typically been defined as International New Ventures (INVs) (Oviatt & McDougall, 1994, 2005) or Born Globals (Knight & Cavusgil, 1996). Theoretical and empirical studies have focused on the understanding of factors that determine the rapid-internationalization-oriented rather than domesticmarket-focused behavior of these firms. These investigations have led to the identification of three main categories of factors (Aspelund, Madsen & Moen, 2007; Evers, 2011; Keupp & Gassmann, 2009; Rialp, Rialp & Knight, 2005): push or internal factors (characteristics of the entrepreneurs and firm resources), pull or external factors (features of the industry and of the competitive environment), and mediating or facilitating factors (such as entrepreneur’s mental model, i.e. mindset, behavior, alertness). These different factors have been combined into the conceptual frameworks that have been put forward to explain the INV phenomenon (Johnson, 2004; Oviatt and McDougall, 2005; Zucchella, Palamara & Denicolai, 2007; among others). ! However, although the literature on INVs or Born Globals has been growing rapidly, the existing empirical studies, both qualitative and quantitative, have mainly focused on one particular country (e.g. Andersson & Wictor, 2003; Chetty & Campbell-Hunt, 2004; Evers, 2010; Kuivalainen et al., 2007; Zucchella et al., 2007) or one particular sector (e.g. Evers, 2010). More importantly, M@n@gement 2015, vol. 18(1): 8-30