The role of international networks and foreign market knowledge in the internationalization of Czech entrepreneurial ventures

Several theorists have suggested that networks are important to the development of foreign market knowledge that is crucial for successful internationalization in the early stages of a venture's life cycle. However, to date, there has been virtually no research on the role of networks and foreign market knowledge in the internationalization of young, entrepreneurial ventures. Even less is known about how such knowledge impacts venture performance.; This dissertation seeks to fill this void in the literature. Drawing on theoretical perspectives from social network theory and the knowledge-based view of the firm, this study examines the role of international networks in the development of foreign market knowledge by young international ventures in the Czech Republic. Building on the rather limited and fragmented theoretical and empirical research on the relationships between small firm networks and knowledge acquisition, this study develops a theoretical framework that links embeddedness of international networks to foreign market knowledge and venture internationalization. Also examined is the impact that foreign market knowledge and internationalization has on venture performance.; This study uses a sample of 176 young ventures in the Czech Republic to test hypotheses using a combination of ordinary least squares (OLS) regression and structural equation modeling (SEM). Results indicate that international networks play an important role in young firms' learning about foreign markets prior to their first international entry. Moreover, they suggest that foreign market knowledge has an important influence on venture internationalization and, ultimately, performance. Specifically, findings indicate that large, internationally diverse international networks lead to greater foreign market knowledge. Likewise, stronger and linguistically similar international ties were found to have a positive impact on such knowledge. Foreign market knowledge, in turn, was found to positively influence first international sales, performance of first entry and also internationalization speed and performance. In addition, results show that internationalization mediates the relationship between foreign market knowledge and overall venture performance.; The dissertation and its findings make some important contributions to the literatures in international business, entrepreneurship and strategic management by providing new insights into the internationalization process of entrepreneurial ventures. In addition, it adds to social network research and the emerging stream of research on relationally-based competitive advantage. From the perspective of scholars in international entrepreneurship, the findings of this study suggest some interesting directions for future research. From a managerial standpoint, the dissertation highlights the importance of networks as an important resource.