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Journal of International Entrepreneurship

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29-03-2023

Maturing international new ventures: Short- and medium-term Insights

Authors: María Agustí, Olli Kuivalainen, Encarnación Ramos-Hidalgo, Francisco J. Acedo

Published in: Journal of International Entrepreneurship | Issue 3/2023

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Abstract

This paper investigates whether the decision to internationalize early in a firm’s life affects its later development in new and adolescent venture phases. To observe this post-entry evolution, this paper analyzes a set of Spanish firms (N = 106) from a longitudinal perspective (8-year panel data), trying to depict these firms’ short- and mid-term behavior in relation to their sales growth and export intensity. The results show that early internationalization among Spanish firms lead to positive sales growth and increased export intensity, but the “age effect” phases out soon, and many international new ventures (INVs) may stagnate. The paper contributes to the discussion of the learning advantage on newness in early and adolescent phases of internationalization and, subsequently, to the discussion about the role of time and experience in the internationalization process.

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Oviatt and McDougall (1994) define an international new venture (INV) as “a business organization that, from inception, seeks to derive significant competitive advantage from…the sale of outputs in multiple countries” (p. 49).

Note that we are focusing on early and adolescent phases of INVs’ internationalization. As we focus on exporting firms, we believe this makes sense for our theorizing. As latter internationalization phases often include more foreign direct investments and changes in entry mode altogether, it would be more difficult to study the role of learning advantages of newness — as other entry modes bring different learning opportunities and costs.

For example, it could have been expected that firms that start to export sooner will do so with greater intensity (Hilmersson and Johansson 2016; Hilmersson et al. 2017), compared with those that take longer to begin exporting their products beyond their domestic markets.

This is an interesting result. Love et al. (2016) found that the effects from age and experience on internationalization were markedly different in their study of UK SMEs. In their study, export intensity was lower among older firms.

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Title: Maturing international new ventures: Short- and medium-term Insights
Authors: María Agustí
Olli Kuivalainen
Encarnación Ramos-Hidalgo
Francisco J. Acedo
Publication date: 29-03-2023
Publisher: Springer US
Published in: Journal of International Entrepreneurship / Issue 3/2023
Print ISSN: 1570-7385
Electronic ISSN: 1573-7349
DOI: https://doi.org/10.1007/s10843-023-00327-4

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