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Small Bus Econ (2013) 41:521535 DOI 10.1007/s11187-012-9446-8
Born local: toward a theory of new ventures choice of internationalization
Zoltan J. Acs Siri Terjesen
Accepted: 8 August 2012 / Published online: 4 September 2012 Springer Science+Business Media, LLC. 2012
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 rms 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.
Keywords Intermediated internationalization
Born local Born global Transaction costs
JEL Classications L26Entrepreneurship
L30General N30General, International, or
Comparative
1 Introduction
Traditional internationalization theories focused on large, established multinational rms foreign market entry and, with the exception of export theories, were less pertinent to new ventures at early stages in their life cycle. Whereas research on multinational enterprises (MNEs) initially dominated international business studies, a growing literature has extended arguments relating to the entry mode, timing, and route of internationalization of new rms (Zahra et al. 2000; Keupp and Gassmann 2009).
In one of the seminal articles, Oviatt and McDougall (1994) present a framework explaining how international new ventures (INVs) t within the theory of the MNE. Whereas much attention has been given to Oviatt and McDougalls (1994, 1997) argument about the theory of INVs, less attention has been devoted to how new ventures go overseas and the
Z. J. AcsSchool of Public Policy, George Mason University, 4400 University Drive, Fairfax, VA 22030, USA e-mail: [email protected]
Z. J. AcsImperial College Business School, London, UK
S. Terjesen (&)
Department of Management and Entrepreneurship, Kelley School...