International New Ventures, The Growing Mechanism

With the emergence of entrepreneurial economy and deepening of economic globalization in recent years, international new venture, a brand-new form of international organizations, which is quite different from traditional multinational corporations appeared and developed quickly. International new venture is a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries. The development of international new ventures or start-ups presents challenges of traditional internationalization theory and indicates that managerial implication can be drawn from the exploration investigation of their high-rate growth.As a distinct type of organization, international new ventures possess several different features, follow different internationalization path and growth mode. This thesis explains two connected and step-up questions about international new ventures: First, Existence mechanism of international new ventures, that is, how small entrepreneurial firms involve international business during the early stages of their life circle. Second, Growth mechanism of international new ventures, that is, by establishing an international position early on, new ventures may also enjoy internationalization competitive advantage, which may offset the various liabilities and give rise to long term competitive advantage.To answer the above questions, this thesis describes the basic characteristics and theoretically explores the driving growth forces of international new ventures by conducting case studies, furthermore, building theoretical research framework of international new venture by integrating the academic fields of international business, entrepreneurship and strategic management. This thesis holds that recognition and exploitation of oversea opportunities is the starting point of the emergence and growth of international new ventures, international social capital and network relationships are channels and bridges of involving into the international business by international new ventures, which can be regarded as realization path of internationalization by new ventures under the condition of resource scarcity. Acquisition of foreign market knowledge and organizational learning is an important source of competitive advantage when they enter international markets.Research model, which is constructed on the theoretical analysis, investigates the role of social capital and entrepreneurship in the acquisition of foreign market knowledge and further investigates the positive influences of foreign market knowledge on internationalization and growth of new ventures. The relationship between different variables and growth mechanism of international new ventures are discussed and propositions are presented based on logical reasoning. And then, survey is conducted according to some criteria, with 92 valid questionnaires received. The analysis process of this thesis follows steps of the part first then the whole, i.e. analyze the relationships between two variables according the hypothesis then integrates the variables into a whole model considering the inter-relationships between several variables, and further examine the role of foreign market knowledge and internationalization in the transmitting mechanism and realization path of promoting firm growth by exploring their own resources.This thesis makes several contributions by theoretical exploration of the growth of international new ventures and empirical research.First, we get a better understanding of the nature and growth mechanism of international new ventures as a distinct type of organization. Extant literatures has pointed out the driving forces behind the high-rate growth of international new ventures, however, few research focus on "how it works", and empirical research is rarer. This thesis not only explores the driving forces of the growth of international new ventures, but also discusses how these forces work to transmit to the growth results. In detail, the relationship between the driving forces and internationalization, and then, the consequent performance of international new ventures is analyzed. The growth mechanism of international new ventures is explored which is the deepening of the determinant theory of international new ventures and broadening of the research domain of entrepreneurship.Second, the levels of analysis in international business theory is enriched, at the level of analysis, the entrepreneur is absent in traditional internationalization theory whatever economic school or behavioral school of international business. Extant theories explore the antecedents and consequent performance from macro level, middle level and firm level without the position of individuals, let alone the entrepreneur's role in the internationalization decision of firms. Based on the survey and case studies of international new venture, this thesis points out entrepreneur (and/or the team)'s experiences and backgrounds demonstrate significant influence on the internationalization strategy of new ventures and then discusses the role of entrepreneur(and/or the team) in the process of new venture internationalization. The discussion of entrepreneur's role at the individual level enriches and broadens the research domain of the international business theoryThird, we have developed a comprehensive framework drawing on three leading perspectives on strategy to better address how international new ventures grow. This compares favorably with most existing work, which often invokes one of these perspectives. At the intersection of the literature on entrepreneurship, strategy, and international business, it is evident that we are dealing with some very complex phenomenon. Therefore, any single perspective is not likely to sustain itself. The combined insights of these three perspectives—especially the contribution from the more recent, knowledge-based view—are likely to generate more synergy than when trying to advance our research based on any single perspective.Finally, international new venture, which is investigated in western developed countries, can be found sufficient evidence from emerging economies. This thesis demonstrates the theory of international new venture and contributes to the cross-cultural research of the existence and growth of international new venture.