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SME internationalization modes in the German biotechnology industry: The influence of imitation, network position, and international experience

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Abstract

In this article we reveal how network-enabled imitation processes impact young small- and medium-sized enterprises (SMEs) internationalization, and how a firm’s network position as well as its experiential knowledge moderate imitative behavior in internationalization modes. Building on institutional, network, and organizational-learning theory, we suggest that firms imitate the internationalization modes of their peers in their network. Moreover, we argue that a firm’s imitation propensity depends on two important boundary conditions: network position and past experience. Applying a longitudinal event history analysis to analyze the complete population of 977 German biotechnology firms between 1996 and 2012 largely supports our hypotheses. Our findings reveal that firms imitate the internationalization modes of their peers in a precise manner. This implies that the imitation of others can initially serve as a presumably convenient low-risk shortcut to a planned or experience-driven internationalization process. Furthermore, our results confirm that this imitation process is channeled through formal network relations and that central network positions that are associated with superior information access, enhanced legitimacy, and status may promote deviating behavior. Acknowledging the interplay of different learning sources, our findings additionally show that initial internationalization mode choices of SMEs can have a lasting effect on subsequent internationalization behavior. Overall, our study contributes to a more nuanced view of imitative behavior of internationalizing SMEs and its boundary conditions, and highlights future research opportunities that exist for considering imitation and its implications in international business research.

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Notes

  1. To be certain, we tested whether our results change when controlling for exporting firms or excluding exporting firms from our sample. Our results remained the same.

  2. Note that the actual units of our analysis are days. However, in order to provide a clearer picture, our graphical representation depicts the evolution of the hazard rate over the observed years. Since Stata records dates t=0 to 1 January 1960, the year 2005 is denoted with 45 in our graphics.

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  1. University of Mannheim, Mannheim, Germany

    Marie Oehme & Suleika Bort

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  1. Marie Oehme
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Correspondence to Marie Oehme.

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Accepted by Ulf Andersson, Area Editor, 5 February 2015. This article has been with the authors for three revisions.

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Oehme, M., Bort, S. SME internationalization modes in the German biotechnology industry: The influence of imitation, network position, and international experience. J Int Bus Stud 46, 629–655 (2015). https://doi.org/10.1057/jibs.2015.8

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  • DOI: https://doi.org/10.1057/jibs.2015.8

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