درجه جهانی شدن شرکت ها ، گرایش کارآفرینی بین المللی و عملکرد صادرات
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|9626||2007||15 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of World Business, Volume 42, Issue 3, September 2007, Pages 253–267
Despite the recent increase in ’born-global’ studies, there has been little research on how the scale and scope of being a born-global firm affects performance: most of the earlier research takes no account either the number of or the distances between the countries on firm or export performance. This article begins with a review of the existing literature on born-globals, and subsequently explores the relationship between entrepreneurial orientation (EO) and two different born-global strategies, namely true born-global and apparently born-global (born-international), and the effectiveness of these two born-global pathways. The results of our empirical study on 185 Finnish exporting firms show that those that qualified as true born-globals had better export performance. Furthermore, depending on the degree of born-globalness, different dimensions of EO were of importance.
The emergence of firms variously referred to as born-globals, international new ventures or global start-ups has been the focus of increasing interest over the last decade (Knight and Cavusgil, 1996 and Knight and Cavusgil, 2004; Madsen & Servais, 1997; Moen, 2002; Oviatt & McDougall, 1994; Rennie, 1993). There is an increasing amount of evidence that entrepreneurial firms, which despite being small or at an early stage in their development and possessing limited resources, are aiming at rapid internationalization. The existing literature adequately covers ‘what type of firms tend to become born-globals’: they are often influenced by the globalization of markets and customer needs, for example, and by the impact of new communication and transportation technologies that make international operations less costly than before (Knight and Cavusgil, 1996 and Knight and Cavusgil, 2004). Despite the recent increase in born-global studies, there are areas of research that have not been comprehensively addressed. To us it seems that the most striking shortcoming of the extant research is that there has been little research on how the scale (extent) and scope of being a born-global firm affects performance. It is important to note that even though Oviatt and McDougall (1994, p. 49) use the wording ‘multiple countries’ in their definition of international new ventures, most of the earlier research on early and rapid internationalization takes no account of either the number of or the distances between the countries on firm performance. For example, we do not have much knowledge if is it better for a born-global firm to aspire to go to multiple markets and distant markets or whether it is better to focus and stay closer at home. One of the main reasons for this unanticipated lack of research is the fact that there is no clear definition – neither theoretical nor empirical – of what it means to be a born-global firm (Rasmussen & Madsen, 2002). Another culprit may be that many authors have used the born-global criteria presented by Knight (1997) and Knight et al. (2004) as a basis for their large-scale empirical research. Researchers have defined a born-global firm by stating only that 25 percent of its total sales should come from exporting and it has to have internationalized within a few (most often three) years after its inception, the scope or the ‘market effect’ has been excluded or not analyzed thoroughly.3 Although we know that rapid internationalization from or near founding can yield positive returns, some of the findings are contradictory or ambiguous (for different results, see Aspelund & Moen, 2005; Autio, Sapienza, & Almeida, 2000; Bloodgood, Sapienza, & Almeida, 1996; McDougall & Oviatt, 1996; Zahra, Ireland, & Hitt, 2000). Part of this ambiguity in the relationship between internationalization of born-global firms and performance again stems from the conceptual confusion. It is not easy to distinguish what are the performance consequences of the internationalization strategy if firms which have been labeled as early internationalizing firms or born-globals differ from each other in many extant studies regarding scale and scope of their internationalization, the only common factor being the early internationalization. Zahra et al. (2000) studied ‘new ventures’ and used the following criteria in defining their sample: firms had to be less than six years old, and only 5 percent of their sales had to come from abroad. As these firms were young the actual mean of their measure for the number of foreign markets within the respondent firms was just above two (2.17). These criteria and accordingly the sample differ notably from the earlier mentioned criteria associated with Knight and his colleagues. For example, the respondent firms in the study conducted by Knight and Cavusgil (2004) targeted approximately 20 countries at the median and were notably larger and more mature than the firms in the sample of Zahra et al. (2000). An investigation focusing on the importance of scale and scope of internationalization among born-global firms is overdue. As a starting point, we define born-global firms as rapidly internationalized firms (within three years from the foundation) with a high share of foreign sales out of the total turnover (more than 25 percent). This definition is consistent with Knight et al. (2004). However, even this group of born-globals can include firms with different internationalization strategies depending on the level of the degree of internationalization (DOI) and markets served. Certain differences may exist among the antecedents or drivers of the chosen strategy among different types of born-global firms; it may be that the management of the firm which follows market diversification strategy is more entrepreneurially oriented, for example, as internationalization can be seen as an entrepreneurial activity per se (McNaughton, 2003; Zahra & George, 2002). We propose that there are differences not only between firms following the incremental ‘traditional internationalization pathway’ (Johanson & Vahlne, 1977) and born-globals which fulfill the above-mentioned criteria of Knight et al. (2004), but also between different types of born-global firms. Globality or globalness can be seen as a continuous variable (Govindarajan & Gupta, 2000); consequently, Servais, Madsen, and Rasmussen (2007). There are different types of born-globals according to their degree of involvement in international sourcing and selling activities. In this paper we will separate between those born-global firms following an ‘apparently born-global’, that is a ‘born-international pathway’ (exporting only to close markets with an export ratio close to the arbitrary 25% cut-off rate) and those on the ‘true born-global pathway’ (i.e. genuine born-globals operating in distant markets and multiple regions, fulfilling more or less the definition of the global firm, Levitt, 1983). These two born-global pathways can be seen as two different outcomes of born-global internationalization strategy and although their existence has been recognized (the typology of Oviatt & McDougall, 1994) the effectiveness of these paths remains largely un-researched. Our aim in this study is to fill this gap by studying differences among born-global firms regarding their entrepreneurial orientation (EO) and export performance. The focus is on mature born-global firms that have a track record of exporting over a number of years. In order to make a distinction between the two mentioned born-global pathways and subsequent strategies, we introduce the concept ‘degree of born-globalness’ (DBG).4 By this we mean the DOI of rapidly internationalizing firms, i.e. firms which have internationalized within three years from their foundation.
نتیجه گیری انگلیسی
Earlier studies have shown that there is enormous variability among internationalizing firms regarding their patterns or pathways of internationalization (Jones, 1999). The literature has studied the differences between traditional and born-global firms in a detailed manner (Rialp, Rialp, & Knight, 2005) However, it has mostly ignored the differences among the born-global firms, although the typology of Oviatt and McDougall (1994) gives us a description of four types of international new ventures. Partially this lack of research can be seen based on the conceptual disarray, ‘what a born-global firm is’.The framework presented in this paper emphasizes the three dimensions which have an uttermost importance if the intention is to seek a coherent perspective of the internationalization of born-global firms, i.e. scale, scope and time of internationalization. Although these dimensions can be found from the earlier work of Oviatt and McDougall (1994) and from the conceptual review of Zahra and George (2002), they are often studied separately in the papers which have utilized a survey method (McNaughton, 2003), or they have not been linked with performance implications (Preece, Miles, & Baetz, 1999). The most common born-global definition is based on the work of Knight and Cavusgil (1996) and is commonly used in the large empirical surveys emphasizes the scale dimension by giving an export-turnover criterion and by not giving any detailed criteria for the scope. Thus, the market scope dimension is less studied and the importance of it should be highlighted, given the fact that research regarding scope mostly concerns established multinational enterprises (Rugman & Verbeke, 2004) and not born-globals. In this, our DBG measure which includes both scale and scope measures, and as the scope measure is a market/country-distance measure containing also the cultural-distance dimension and not just number of regions/countries, could be useful. Furthermore, the findings in this study make a contribution to the theoretic discussion on the internationalization process by presenting and targeting two distinctive categories of born-globals: true born-globals that operate in more distant markets, and apparently born-globals, so-called born-internationals firms, which go into culturally closer markets and follow strategies which resemble more the traditional incremental internationalization pathway. This distinction was made regarding the scale and scope of internationalization; in contrast there was no difference regarding the timing of internationalization: all the firms in our sample had internationalized rapidly after the foundation and fulfilled the earlier working definition of born-globals. This type of congruence hopefully enables future comparative studies in the field. 4.1. Entrepreneurial orientation It is evident that born-globals from different parts of the world have many things in common: an international mindset (i.e. an IEO), and management and personnel motives have been emphasized in many studies (Knight, 2001). We measured the differences between true born-globals and born-internationals along the three dimensions of EO: risk taking, proactiveness and competitive aggressiveness. Risk taking was higher among the born-internationals. Although this result contradicts our hypothesis H1a, there are some possible reasons for this. For one thing, as our true born-globals possess already a high DBG, that is they are operating in many markets (on average in more than 60 countries) and receiving a large share of their turnover from these markets, they may no longer qualify as ‘risk takers’. Their management knows the environment they operate in and many of the market's operations are routine. Employees have mastered the skills and capabilities needed to sustain their competitive advantage. The risk-taking behavior is not seen as a necessary part of the job of export managers. It could also be discussed why the smaller and less diverse born-internationals were found to be higher risk takers. Many rapidly internationalized small firms could be considered niche firms. There may be some customers in regions and markets that these apparently born-global firms have not yet reached. Thus, they may be more willing to take risks targeted for further market expansion. This type of geographical-market-spread strategy could be seen as a wise move for smaller firms. Madsen (1989) found that it would actually be better for very small firms to spread their efforts over several markets as they may not have the resources to follow a concentration strategy successfully. On the other hand, the larger and more mature true born-global firms in our sample may be more satisfied with their current market scope. This could be one possible explanatory factor in the non-supportive result regarding proactiveness (H1b). However, although they are not proactively looking for new opportunities and markets, they may compete in a more aggressive manner in their present markets and subsequently may follow a market-penetration strategy. If a firm is operating globally it possesses qualities of competitive aggressiveness. This, in turn, may explain the support found in our sample for hypothesis H1c. Thus, although our results are limited and only partially supportive of our hypotheses related to EO in born-globals, it is of note that its various dimensions had different effects on the firms in our sample. This type of result supports the argument of Lumpkin and Dess (1996) who argued that the dimensions of EO may vary independently of each other in a given context. In line with this, it can be that the younger and smaller born-internationals may be better able to benefit from the other type of EO than larger firms and vice versa. 4.2. Export performance There should be many potential benefits for a firm following a born-global pathway to internationalization, such as increased sales, profits and market presence. However, the relationship between international expansion/DOI and performance is often context-specific and there are contradictory results (Grant, 1987). Furthermore, we do not know much about the performance consequences of the true born-global strategy based on the earlier research as some extant studies which have focused on scope of internationalization among rapidly internationalized firms have not taken performance effects into consideration (McNaughton, 2003 and Preece et al., 1999). However, in this study, there were significant differences in export performance between the true born-global and the born-international firms: the former performed better than their less international counterparts on all three measures (sales, profit and sales efficiency). These results support the notion that increased multinationality is for most of the time beneficial for a firm in the form of superior performance (Contractor, Kundu, & Hsu, 2003). 4.3. Managerial implications Two main implications for practicing managers can be highlighted. First, it is clear from the results of our study that entrepreneurial behavior has an effect on international strategy of born-global firms. This finding has also been supported in earlier research (Knight, 2001; Knight & Cavusgil, 2004). However, what the managers need to realize is that certain types of entrepreneurial behavior (i.e. various elements of the EO can be seen as contingent factors, Lumpkin & Dess, 1996) are more important than others in different stages of the firm's life cycle. When a firm is smaller and still focusing on the opening of new geographical markets, it seems to possess different qualities of EO than a more mature [born-global] firm. For example, risk taking, in the form of heavy debt taking or large resource commitment, seems to be more important for less-internationalized firms (which may have to take risks to be able to gain a niche market which is large enough) than for more global firms. Furthermore, to become a true born-global, it may be that the entrepreneurial mindset in general is an important and required element, but not sufficient alone. This notion is supported by Preece et al. (1999) who found out that management attitudes were significant indicators of international intensity (a construct equivalent to our scale dimension). In contrast the attitudes did not explain the global diversity in their study focusing on young technology-based ventures. They conclude that a shift from international intensity to more diverse global strategy requires more (e.g. resources) than an attitude and desire (Preece et al., 1999). Second, true born-globals and born-internationals differ from each other in the case of experience and size of the firm, with the former being larger and more experienced. The true born-globals in our sample were older and had more international operations than the smaller and younger born-internationals. However, they had also better export performance; based on our results the more intensive and diverse internationalization strategy is something managers of the born-global firms should aim for. This would mean that the true born-global strategy enables firms to gain higher sales growth than the industry average, benefit from economies of scale through learning, and make them satisfied with export profits as far as our sample is concerned. Accordingly, one possible interpretation of the born-internationals with less turnover from foreign markets and less target countries is that they may be ‘failed born-globals’ (Aspelund & Moen, 2005). Such firms can also be seen as export/import start-ups from the typology of Oviatt and McDougall (1994). In comparison the true born-globals could be seen as multinational traders or global start-ups. Born-internationals, in some cases, even if they possess a high-level of IEO, may have failed; they have not have reached their growth objectives. However, to be able to analyze such firms in an in-depth manner, the contextual environment and resources of the firm should also be given more consideration. Nevertheless our study supports, at least partially, the findings in previous studies suggesting that EO is important for internationally growth-oriented firms (Knight, 2001). We did not utilize the traditional growth strategies in this paper, such as market seeking, but it is evident that EO should lead to higher growth objectives. On the international level, therefore, it could be an important antecedent or driver of export performance (Knight & Cavusgil, 2004). Consequently, practicing managers should emphasize and nurture this type of behavior. 4.4. Limitations and further research If the findings of this study are put into their proper perspective, several limitations need to be pointed out. First, the study focused on a single-country sample in that the data was collected in Finland. Second, the fact that our analysis is based on cross-sectional retrospective empirical data consisting of rather mature and experienced born-global firms could be considered a limitation due to the loss of institutional memory, for example: longitudinal data would provide valuable insights in terms of measuring and analyzing the effects of internationalization (Jones, 1999). We believe that, by pursuing certain types of entrepreneurial strategies and by virtue of experience, born-internationals could turn out to be the true born-globals of the future. This notion is in line with Preece et al. (1999) who found out that global diversity increased over time within their sample of small technology-based firms. Autio et al. (2000) also note that due to resource constraints, it is unlikely that young firms are capable of taking larger, bolder steps than their older counterparts; they should be able to take smaller incremental steps more rapidly. Correspondingly DBG can be seen evolving over time; a born-global pathway can also be seen as an incremental process (Madsen & Servais, 1997). However, as our study was cross-sectional we do not know the future paths of these firms. Third, a limitation related to the data and the discussion above is that all the firms in question have survived the stage of being a small firm: they are all currently at least medium-sized and export their products and services to international markets. Thus, the characteristics of the firms that did not survive are not taken into account and there may be a ‘survival bias’ in the sample (see Vermeulen & Barkema, 2002). One way to counteract this bias would be to focus on the sub-categories in our sample, such as including case studies highlighting the differences between young and old firms. Fourth, this study is based on the idea that a born-global firm can be called a mature born-global firm still after some years after the initial entry and subsequent international operations. This creates problems with organizational memory as mentioned previously but there are also other consequences: partially the extant research has focused on younger new ventures and partially older and more mature; these results cannot be compared with each other without a difficulty (Rasmussen & Madsen, 2002; Zahra et al., 2000). However, as mentioned above, larger and more mature sample, such as the sample in this study enables a researcher to have more things to observe, in the role of larger pool of target markets, for example (Knight & Cavusgil, 2004; Zahra et al., 2000, and characteristics of their samples). It would also be of interest to add more variables to the definition of DBG. For example, if more detailed measures of geographic scope were used it might be possible to develop more sophisticated measures of multinationality and DBG. In particular, there is a need for integrated frameworks that are better formulated in the study of rapid internationalization. While acknowledging the importance and usefulness of the born-global criteria presented earlier by Rennie (1993), Oviatt and McDougall (1994), Knight and Cavusgil (1996), and Moen and Servais (2002), among others, we claim that there is a need to improve our operational indicators in order to be able to study the born-global phenomenon more effectively in the future. To be more precise, the aim of future research should be to determine the optimal number of measures of ‘born-globalness’, which should be a trade-off between the number of measures that are empirically manageable and the number that gives us a good enough understanding. It is hoped that by promoting comparison of the consequences of being a ‘different type of born-global firm’ and independent effects of various EO dimensions on born-global strategy, this study has opened up new perspectives for further research. Although discussed partially here, the time dimension is especially something we should give more consideration. This type of research could focus, for example, on questions, such as ‘when does the born-globalness end,’ and ‘what is the proper speed of internationalization for a born-global firm’.