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

Born local: toward a theory of new venture’s choice of internationalization 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

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

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Publisher
Springer Journals
Copyright
Copyright © 2012 by Springer Science+Business Media, LLC.
Subject
Economics / Management Science; Management/Business for Professionals; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-012-9446-8
Publisher site
See Article on Publisher Site

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.

Journal

Small Business EconomicsSpringer Journals

Published: Sep 4, 2012

References

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