What Do We Know About Going Global Early? Liabilities of Foreignness and Early Internationalizing Firms

Abstract

In this chapter, we embrace the recent phenomenon of early internationalizing firms with the goal of understanding these firms in light of decades of research on multinational firms, which has long stressed
liabilities of foreignness. It is often implicitly assumed that the only way to reduce liabilities of foreignness is by doing business in foreign markets and learning about the local business environment. However, in this
chapter, we focus on several distinctive antecedent firm characteristics that have been shown to facilitate early international expansion by firms, but which are not commonly considered in the international business
literature. We perform a systematic review of the literature on early internationalizing firms (following David & Han, 2004), based on the seminal work of Oviatt and McDougall (1994) to guide our analysis of early internationalizing firms and to identify important ways in which these firms differ from multinational firms. We argue that long-standing arguments about the impact of liabilities of foreignness on firm foreign expansion apply to newly internationalizing firms, but that these liabilities are reduced by the experiences and knowledge of the founders and top managers in these firms acquired prior to the inception of these firms.

Full text

1
Final Submitted Version of: Bals, L., Berry, H., Hartmann, E. and G. Rattich, 2013. What Do We
Know About Going Global Early: Liabilities of Foreignness and Early
Internationalizing Firms in Devinney, T., T. Pedersen and L Tihanyi (eds) Advances in
International Management Volume 26, Springer, pp. 397-433 (authors listed
alphabetically)
What Do We Know About Going Global Early?
Liabilities of Foreignness and Early Internationalizing Firms
ABSTRACT
In this chapter, we embrace the recent phenomenon of early internationalizing firms with
the goal of understanding these firms in light of decades of research on multinational firms,
which has long stressed liabilities of foreignness. It is often implicitly assumed that the only way
to reduce liabilities of foreignness is by doing business in foreign markets and learning about the
local business environment. However, in this chapter, we focus on several distinctive antecedent
firm characteristics that have been shown to facilitate early international expansion by firms, but
which are not commonly considered in the international business literature. We perform a
systematic review of the literature on early internationalizing firms (following David and Han,
2004), based on the seminal work of Oviatt and McDougall (1994) to guide our analysis of early
internationalizing firms and to identify important ways in which these firms differ from
multinational firms. We argue that long-standing arguments about the impact of liabilities of
foreignness on firm foreign expansion apply to newly internationalizing firms, but that these
liabilities are reduced by the experiences and knowledge of the founders and top managers in
these firms acquired prior to the inception of these firms.
Keywords: Early internationalizing firms, EIFs, international new ventures, INVs, born global
firms, liability of foreignness

2
INTRODUCTION
Over the past fifteen years, there has been an evolution in the literature on multinational
firms regarding the speed at which firms internationalize. Traditional approaches in the
international business literature, including the Uppsala school (Johanson & Vahlne, 1977 &
2009) and the product life cycle model (Vernon, 1966 & 1979), have long suggested that firms
need to approach international expansion with a slow and sequential pace because firms need to
learn about foreign countries, and product cycles and consumer demand needs to evolve to create
appropriate market conditions for firm international sales and operations. These more traditional
approaches emphasize both differences across countries and the difficulties that firms face in
foreign locations, leading to what has been termed “liabilities of foreignness” (Hymer, 1976;
Zaheer, 1995). However, despite these constraints, recent studies have documented a much
quicker pace of international expansion by many firms (Knight, 1997; Fan & Phan, 2007; Oviatt
& McDougall, 1994; Weerawardena, Mort, Liesch & Knight, 2007; Zhou, Wu & Luo, 2007).
Studies on early internationalizing and born global firms, for example, suggest that firms can be
more efficient and competitive right from the start by exploiting opportunities in foreign
countries much earlier in the firm’s life cycle. In fact, there is a rather substantial body of
research that calls into question the impact of liabilities of foreignness on firm international
expansion, dating from the seminal article of Oviatt and McDougall (1994) on early
internationalizing firms to the over one hundred subsequent articles that have examined and
documented firms that go global early.
In this paper, we embrace the recent phenomenon of early internationalizing firms with
the goal of understanding these firms in light of decades of research on multinational firms that
has long stressed liabilities of foreignness. It is often implicitly assumed that the only way to
reduce liabilities of foreignness is by doing business in foreign markets and learning about the
local business environment over time (Johanson & Vahlne, 1977; Zaheer & Mosakowski, 1997).
However, in this paper, we examine how several distinctive antecedent firm characteristics that

3
have been shown to facilitate early international expansion by firms, but which are not
commonly considered in the more traditional approaches provide firms with advantages that can
be used in their international expansion. In this sense, we are similar to a recent study by Jones,
Coviello and Tang (2011) in considering how the aspect of timing can be used to understand
global start-ups and born global firms. However, we go beyond that study by focusing on both
specific venture types and several firm characteristics that have been shown to impact early
internationalizing firms.
In this paper, we perform a systematic review of the literature on early internationalizing
firms (following David & Han, 2004), based on the seminal work of Oviatt and McDougall
(1994) to guide our analysis of early internationalizing firms and to identify important ways in
which these firms differ from multinational firms. From our extensive review of the literature,
we organize several findings across this literature to explain how individual characteristics lessen
the impact of liabilities of foreignness for early internationalizing firms. We argue that long-
standing arguments about the impact of liabilities of foreignness on firm foreign expansion apply
to newly internationalizing firms, but that these liabilities are reduced by the experiences and
knowledge of the founders and top managers in these firms acquired prior to the inception of
these firms.
We contribute to the literature that examines speed of foreign expansion in two ways.
First, we analyze early internationalizing firms in a way that is more comparable to traditional
multinational firms. Though early internationalizing firms have been studied for almost two
decades, it can be difficult to compare the internationalization strategies of these firms to existing
studies on multinational firms because of the different approaches and frameworks that have
been used to describe each of these types of firms. We incorporate speed and mode of entry into
our analysis of early internationalizing firms to analyze how the concept of liabilities of
foreignness relates to early internationalizing firms. Second, by focusing on founder, firm and
country characteristics, we highlight factors that are not commonly considered in the

4
international business and management literature but that have been shown to impact the early
internationalizing strategies of firms. Though early internationalizing firms may appear to be at
odds with the more traditional approaches in the international business literature, by considering
founder and firm characteristics that have been accumulated prior to a firm’s inception, we
explain how these firms overcome what have long been considered to be significant liabilities of
foreignness in the traditional international business literature early in their life cycle and
“appear” to skip this difficult stage in their growth and international expansion. Though
advances in information technology and communication more generally will lower information
costs for all firms, the importance of firm-specific experiences and knowledge about foreign
markets remains for all firms who are expanding into international markets. By explaining how
several founder and firm characteristics that have been accumulated prior to a firm’s inception
are used by newly internationalizing firms, we resolve an important tension across the more
traditional and more recent literatures on speed of foreign entry.
INTERNATIONAL EXPANSION
In the international business literature, it is commonly assumed that the pace or speed at
which firms internationalize their operations should be slow and deliberate. Hymer first
introduced the concept of the “liability of foreignness” in his doctoral dissertation (published in
1976). He and others have argued that local firms have advantages in their home countries that
come from being better informed about their country in terms of the economy, the language, the
culture, the laws and the politics (Hymer, 1976; Zaheer, 1995; Zaheer & Mosakowski, 1997). In
contrast, foreign firms are at a disadvantage vis-à-vis local firms due to their unfamiliarity with
the local environment. Zaheer (1995) argued that these disadvantages result from spatial
distance, firm-specific lack of knowledge about local markets, additional costs that can come
from doing business in host country markets and even costs imposed by a home country
government (i.e., high technology sales). Several authors have examined how differences across
markets and the need for local market knowledge can impact the pace of foreign expansion by

5
firms (Johanson & Vahlne, 1977 & 1990; Zaheer, 1995; Mezias, 2002), with Zaheer and
Mosakowski (1997) estimating that it takes more than 15 years for foreign enterprises to
overcome the disadvantage of being foreign in the currency trading industry.
The Process Theory of Internationalization (also called the Uppsala School), which has
its origins in Johanson and Vahlne’s (1977) classic study, begins with assumptions about the
cognitive limitations and behaviors of individual managers (Cyert & March 1963) and seeks to
understand how firms can move beyond their national borders (Johanson & Vahlne, 1977) by
focusing on the relationship between the level of knowledge about a foreign country and
decisions regarding committing to foreign markets. According to the Uppsala School, firms will
only gradually increase their commitment and control in foreign markets because of a tendency
to avoid uncertainty. Starting with exporting, firms would only move toward wholly owned
subsidiaries when they are more familiar with the local market. Vahlne and Johanson (2002,
2009) have argued that this approach is still relevant and useful for understanding the
internationalization process of firms despite changes in the global environment over the last three
decades. Further, analyzing a panel of Dutch firms over a 26 year time period, Vermeulen and
Barkema (2002) have shown that the speed with which a firm establishes foreign subsidiaries is
negatively related to the performance benefits that come from international operations.
Another classic approach that offers a slow pace for international expansion can be found
in Vernon’s (1966, 1979) product life cycle model. In the first stage of this model, a firm
manufactures and sells in its home market. As the firm’s products mature, low-cost production
becomes important because foreign competitors have access to lower cost inputs. Though lower
cost production may be initially directed toward the foreign host country, it can also be exported
back to the home country. Finally, once host country costs are uncompetitive, this model
predicts that all production will be shifted to a lower-cost host country. This approach suggests
that firms will focus their innovative activities in their home market and only invest in foreign
markets to produce or sell their products in mature production stages and the firm can benefit

6
from lower production costs in these markets. Importantly, demand and production cost
evolution determines the timing of foreign expansion in this approach, with market changes
occurring only gradually across many countries.
Because of the complexities involved with international expansion, traditional arguments
in the international business literature have tended to focus on a slow and sequential pace when
expanding abroad (Vermeulen & Barkema, 2002), and an incremental commitment to foreign
markets through entry mode choices. Despite these arguments research over the last fifteen
years has increasingly recognized a quick pace of internationalization by firms (Fan & Phan,
2007; Oviatt & McDougall, 1994; Weerawardena, Mort, Liesch & Knight, 2007; Zhou, Wu &
Luo, 2007). Several studies now argue that quick and early internationalizing of firm value chain
activities can provide firms with business models that allow them to be as efficient, effective and
competitive as possible right from the start. For example, by becoming an early
internationalizing firm, a firm can benefit from an accelerated process of accessing competitive
advantages across national borders, like increased demand, access to cheaper inputs, access to
managerial talent or macro-economic diversification, for example. These early internationalizing
firm arguments are at odds with the more traditional arguments that focus on the importance of
firm learning and competitive advantages.
SYSTEMATIC LITERATURE REVIEW
One challenge in analyzing early internationalizing firms comes from the difficulty of
gathering data on these firms. Much of what we know about early internationalizing firms comes
from case studies and it can be difficult to analyze more qualitative studies systematically.
However, given the extensive literature that exists on these firms, we offer a systematic literature
review of these to explore how firms within these studies have overcome liabilities of
foreignness. The purpose of a systematic literature review is to provide as systematically as
possible, a review of all the literature that relates to a research issue. In the medical field, so-

7
called systematic reviews have been applied to assess the results of individual studies and to
develop clinical guidelines and evidence-based policies. Among others, Higgins and Green
(2008) provide with their handbook of systematic reviews a process for conducting a systematic
review. In the management literature, a systematic literature review approach has been developed
by David and Han (2004) and enhanced by Newbert (2007). The benefit of a systematic review
is to use as objective as possible of an approach to synthesize research while minimizing bias
(David & Han, 2004). Through our review of the literature on early internationalizing firms, we
offer a structured approach to examining how these firms overcome liability of foreignness early
in their life cycle.
We conducted our literature review with a fairly wide scope and followed a seven step
process to search for relevant studies – including seven of the nine steps laid out by David and
Han (2004). We focused on articles published in scholarly journals, using ABI/Inform and
EconLit databases and searched on the terms that have been used to describe early
internationalizing firms, including the following 12: Export Start-up, Import Start-up,
Multinational Trader, Geographically Focused Start-up, Global Start-up, born global*, Born
Global Firm*, BGF, Early Internationalizing Firm*, EIF, International New Venture* or
International entrepreneur* (the asterisk at the end of a word indicates that variations of the word
were permitted). The first five keywords stem directly from Oviatt and McDougall’s typology of
international new ventures from their seminal 1994 article (shown in Fig.1) and the others come
from highly cited articles in this literature (including McDougall et al., 1994; Oviatt &
McDougall, 2005; Knight & Cavusgil, 2004). We review the approach we followed in Table 1.
We did not include two of the steps of David and Han (2004) because we did not feel the need to
use secondary keywords to further limit our search (they were searching in the much larger
transaction cost economics literature) and we did not use a methodological filter to limit our
search to empirical studies only. Our approach yielded 107 articles on early internationalizing
firms that we use below to identify important antecedent characteristics of these firms.

8
The most common dimensions for analyzing early internationalizing firms come from the
Oviatt and McDougall framework and include the multinationality and function dimensions (see
Fig.1). These dimensions are useful when considering the different types of firms that we
reviewed and we will use these dimensions in our discussion of early internationalizing firms.
Below, we start by considering how these dimensions have been treated across the 107 articles
we analyzed. We also go beyond these dimensions and introduce notions of speed and entry
mode from the broader international business literature into our discussion to allow for a deeper
consideration of how early internationalizing firms overcome liabilities of foreignness.
--------------------------------------
Insert Table 1 and Fig.1 about here
--------------------------------------
Function
The first dimension that Oviatt and McDougall (1994) incorporated in their framework is
the “type of activity” that firms perform in foreign markets. Of the 107 studies we examined, we
found 28 studies that mentioned only exporting as the type of activity of the firms in their sample
(e.g., Lopez, Kundu & Ciravegna, 2009; Moen & Servais, 2002). There are 39 studies in our
sample that do not give any information on value chain activity (e.g., Casillas, Moreno, Acedo,
Gallego & Ramos, 2009; Zhou, Wu & Luo, 2007). In the marketing literature, born globals often
have a clear functional marketing focus (Knight et al., 2004). In fact, some studies use the term
‘born exporters’ to describe this type of firm (e.g., Quelch & Klein, 1996; Sharma, 2001). When
information on value chain activities is given (43 out of 107), it tends to be too broad to really
capture what activity the firm is performing in foreign markets. 35 out of the 43 studies
mentioning the business function dimension describe value chain activities of the studied firms
simply as including more than just export activities without further specification. Notable
exception include, for example, biotech firms with major shares of their development activities
on another continent (Gassmann & Keupp, 2007) or computer accessories manufacturing firms

9
having their administrative activities spread over three continents (McDougall, Shane, & Oviatt,
1994). Across these studies, the most often mentioned activities performed internationally are
research and development, marketing, sales, distribution and after sales services. In addition,
production was mentioned in 19 of the 43 studies that give some information on value chain
activities.
Multinationality
Although the wording ‘multiple countries’ was used in the original definition of
international new ventures, most of the research on early and rapid internationalization does not
specify what multinationality means; i.e., either the number of countries or the distances across
countries (Kuivalainen, Sundqvist & Servais, 2007). Twenty-two of the articles provide
information on the exact number of countries accessed by the firms in our studies. The number
of countries accessed by the 1070 total firms covered across the studies ranged from two to 70
countries. To illustrate the difference between those firms we revert to two representative cases
from different studies. On the one end of our range we can find firms starting in Switzerland,
expanding international activities to two geographically close countries; e.g., Germany and the
Czech Republic (Gassmann & Keupp, 2007). On the other end of the range we found a firm
expanding more radically from Sweden to various countries in Europe, North America, South
America, Asia, Africa and Oceania across value chain activities (R&D, production marketing
and distribution) in the respective foreign markets (Nordman & Melen, 2008). Beyond these 22
studies, 33 of our remaining 110 studies simply use the term ‘multiple countries’ to define the
scope of a firm’s international activities. We find that this concept has been used more to
distinguish a domestic or multinational focus by firms, but not to refer to the few or many
countries in the Oviatt and McDougall framework.

10
In addition to the two dimensions that form the axes of Oviatt and McDougall’s
framework, we believe that there are two additional dimensions that underlie this framework and
early internationalizing firms more generally – namely, speed to internationalization and mode of
entry. As reviewed above, the timing dimension has long been approached from an
Internationalization Process School point of view, which has suggested a slow and incremental
approach to international expansion by firms. Mode of entry and ownership issues have also
been a mainstay in the international business literature. An important focus in the internalization
theory (Buckley & Casson, 1976; Hennart, 1982) is on ownership of foreign operations because
it provides firms with the ability to not only reduce risk but also increase their abilities to
appropriate the returns from its proprietary assets.
Speed
Though speed is an underlying concept for all early internationalizing firms, our review
of the literature suggests that issues of time and speed are somewhat ambiguous concepts. There
is generally a wide spectrum of how the time dimension has been operationalized. Some studies
keep their operationalization of time to internationalization rather vague by using terms as “in
their early life cyles” (Zahra, Ireland & Hitt, 2000), or “almost from birth” (Casillas et al., 2009).
Considering the 31 studies using the term Born Global exclusively, the mean time between
inception of the firm and its first international activities is 1 year, but includes a range of 0 to 6
years. Of the 63 studies of our sample using the terms “Born Global Firms” combined with
others, the variation of the exact time, used to define the firm as their research objectives, is
immense. McDougall, Shane and Oviatt (1994) use an eight-year definition, others suggest that
Born Globals enter foreign markets between two and six years after inception (Coviello &
Munro, 1995).
To be fair, issues of speed and timing are not clear-cut for more traditional multinational
firms either. Though the international business literature has long argued that firms need to

11
approach international expansion with a systematic and sequential approach (Johanson &
Vahlne, 1977), the speed of international expansion is not a clearly articulated aspect of either
the Uppsala approach or the product life cycle approach. Instead, the focus is on the importance
of gathering knowledge about foreign markets to reduce liabilities of foreignness, or on the life
cycle of a firm’s products.
Mode of Entry
The second underlying issue that we consider is mode of entry. The majority of the
analyzed studies do not mention an ownership dimension (in our sample, only 19 of 107 studies
provided information about the ownership dimension). Nevertheless, the ownership dimension
has been implicitly taken into account in some (more IB-oriented) studies, when for example
studies exclude from the analysis companies that only rely on other companies on a
subcontractor or private-label manufacturer basis (Fan & Phan, 2007).
In Table Two, we indicate how the studies we analyzed have incorporated issues of
multinationality, function, speed and mode of ownership. While our review of these studies
reveal that there is no common approach to defining early internationalizing firms, this table
reveals which studies incorporate each of these issues (even if the study does not provide an
exact definition, the study needed to use one of the dimensions to describe or define early
internationalizing firms to have an X in the corresponding dimension box).
--------------------------------------
Insert Table 2 about here
--------------------------------------

12
While Oviatt and McDougall (1994) provide an important tool for analyzing early
internationalizing firms, we suggest that we can better understand early internationalizing firms
by also using the more common dimensions of speed to international expansion and mode of
entry. While our approach is more complicated than the Oviatt and McDougall framework, this
complexity allows us to focus more broadly on how early internationalizing firms have
overcome liabilities of foreignness early in their life cycle, including the more traditional
dimensions in the international business literature. Therefore, we now turn to a specific
examination of our analysis of antecedent firm characteristics from the 107 studies.
ANTECEDENT FIRM CHARACTERISTICS AND
EARLY INTERNATIONALIZING FIRMS
Our systematic review of the literature on early internationalizing firms revealed several
firm, founder and country characteristics that have been shown to influence the speed and mode
of entry decisions of early internationalizing firms. In Table 3, we summarize each of the
antecedent characteristics and the articles that highlight these characteristics that are included in
our discussion. We start by discussing the firm-specific advantages that allow firms to overcome
liabilities of foreignness and then move on to country and industry pressures that increase the
need for these firms to go global quickly.
--------------------------------------
Insert Table 3 about here
--------------------------------------
Firm-specific advantages
Founders and Managers. Based on the influential writings of Hymer (1976) and the transaction
cost approach (following Williamson, 1985; Buckley & Casson, 1976), the internalization theory
in the international business literature argues that a firm will expand abroad when it can organize
interdependencies between agents located in different countries more efficiently than markets

13
(Hennart, 1982). Most applications of the transaction cost/internalization theory have focused on
firm know-how (Buckley & Casson, 1976; Hennart, 1982; Hymer, 1976). Markets for firm
knowledge suffer from the problem of information asymmetry (Arrow, 1962; Buckley & Casson,
1976). Because of the importance of ownership and control over firm proprietary assets, these
firms need to own operations abroad to successfully exploit their intangible assets in foreign
markets and to appropriate the returns from their investments in these assets (Berry &
Sakakibara, 2008; Buckley & Casson, 1976; Dunning, 1980; Pugel, Kragas & Kimura, 1996).
When thinking about firms that internationalize quickly, however, these firms are likely
to lack the R&D or advertising intensities or capabilities that are generally examined in the
international business literature. Instead, an important asset that these firms have is founders and
managers who bring important experiences and knowledge to a firm’s plans to create
competitive advantage by accessing multi-market inputs or sales. The entrepreneurship literature
adds an important dimension in this respect by highlighting the important capabilities and
experiences of firm founders to help new ventures enter foreign markets early in their evolution.
For example, an entrepreneurial owner-manager with a global mindset, prior international
experience or a learning orientation (Weerawardena et al., 2007) can provide important sources
of advantages for early internationalizing and born global firms. The aggressive pursuit of
international growth opportunities is a function of the founding entrepreneurs’ international
competences, their vision, and awareness regarding growth opportunities at an international level
(Autio, Sapienza & Almeida, 2000; Bloodgood, Sapienza & Almeida, 1996). Founders of early
internationalizing firms were also recognized to be more likely to have traveled and to be
educated overseas (Birley & Norburn, 1987). Prior founders’ international experience has been
spelled out as a vital aspect of early internationalizing firms (e.g., Harveston, Kedia & Davis,
2000; Madsen & Servais, 1997; Oviatt & Phillips McDougall, 1997) because the experience and
exposure of the managers prior to the start of a new venture can play an important role in the
early internationalization decision (e.g., Busenitz & Barney, 1997; Harveston et al., 2000;

14
Madsen & Servais, 1997; Shrader, 2001). Further, founders of early internationalizing firms are
often immigrants with family and personal contacts overseas (McDougall et al., 1994).
Founder international experiences prior to the inception of the firm can lead firms to
make early internationalizing firm choices. Extant literature shows that the founders of early
internationalizing firms are more likely to have experiences within foreign countries. These
founders may also have been born in a foreign country. This antecedent founder characteristic of
international experience provides advantages to an early internationalizing firm in the sense that
these countries are known to the founder. The business norms, local culture, government
regulations (Hymer, 1976; Johanson & Vahlne, 1977; Zaheer, 1995) that create distance across
countries for most firms, do not have the same impact when a founder has lived and worked in
different country settings. As Sapienza et al. (2005) argue, knowledge embedded in prior
managerial experiences with internationalization is likely to influence the choices that managers
make in their new positions. This suggests that founder and manager international experiences
can provide early internationalizing firms with knowledge about foreign countries that can allow
them to expand into these countries much earlier than firms without such experiences. One way
that firms can skip the learning phases of international expansion is by focusing on those
countries they already know. Having lived or worked in a particular country, these founders have
already accumulated knowledge that allows them to be an international firm very close to
inception and reduce their liability of foreignness. Taken together, existing studies have shown
that early internationalizing firms tend to have top managers and founders that leverage their
international experiences.
Organizational Inertia: It is also interesting to consider how the literature on early
internationalizing firms portrays what has been called the “liability of newness” of young
organizations (Stinchcombe, 1965). While internalization theory in the international business
literature focuses primarily on how firms can exploit competencies created in their home market,
early internationalizing firms may have little or no existent organizational routines to unlearn

15
while they pursue foreign opportunities (Autio et al., 2000; Cohen & Levinthal, 1990). Some
authors have even gone so far as to state that the learning advantages of newness (Autio et al.,
2000; Oviatt & McDougall, 2005) may actually represent a counterpoint to liabilities of newness
for young organizations (Stinchcombe, 1965). Also, it has been suggested that the fast-paced
learning of these companies that are resource-constrained and technology-oriented would allow
them to internationalize early (e.g. Knight & Cavusgil, 2004; Zahra & George, 2002).
Importantly, the youth of these early internationalizing firms does not suggest that these
firms have no experience in their industry. On the contrary, previous research has found that
entrepreneurs tend to create companies that produce the same goods and services as that of their
previous employers (e.g. Cooper & Dunkelberg, 1986; Aldrich, 1990).
A founder’s knowledge can be crucial in allowing firms to for realize opportunities that
are available (Oviatt & McDougall, 2005). Early internationalizing firms have been portrayed as
having high organizational dynamism (McDougall et al., 1994) and less organizational inertia
when moving into new countries. Existing studies suggest that early internationalizing firms are
less likely to have organizational inertia or vested managerial interests against international
expansion than more traditional multinational corporations.
Social networks. Networks are essential for the discovery of opportunities, the testing of ideas,
and the gathering of resources for establishing the new organizational structures (Aldrich and
Zimmer 1986). Prior research has shown the importance of networks to information and
knowledge flows (see for example, Burt, 1992; Ellis & Pecotich, 2001; Granovetter, 1985;
Sharma & Blomstermo, 2003; Yeoh, 2000). Oviatt and McDougal have highlighted the
important role of an entrepreneur’s international network while Zhou et al. (2007) have identified
three types of benefits from (home-base) social networks, including: knowledge of foreign
market opportunities; advice and experiential learning; and referral trust and solidarity. Extant
studies show that early internationalizing firms are more likely to have social networks that allow
them to access business opportunities in foreign countries. These ties can allow a firm to enjoy

16
advantages such as trust, status and reputation (Blankenburg, Eriksson & Johanson, 1996;
Sapienza et al., 2005). These founders are likely to have “excellent network leverage to foreign
markets that allows accelerated pace of internationalization” (Freeman & Cavusgil, 2007), and to
use extensive personal networks and contacts (Freeman et al., 2006; Mort & Weerawardena,
2006; Rialp et al., 2006). These personal contacts are different from international experiences
because they provide local contacts that can run the operations of an early internationalizing
firm, or at least are on-site to manage the activities of the firms in the country. While
international experiences provide knowledge of the norms, culture and regulations in a local host
country, a founder’s social network can provide the actual people who can run the local
operations. Existing studies that have examined social networks have found that early
internationalizing firms are more likely to have founders with dense international social
networks.
Venture capitalist funding: Studies taking an entrepreneurship approach also highlight the role
of venture capitalists in encouraging early internationalization by firms. Many international new
ventures receive financial resources from venture capitalists (Mäkelä & Maula, 2005) and
venture capitalists with an international background themselves can put pressure on the
founder(s) to internationalize quicker (McDougall et al., 1994). Also, apart from financial
resources, the entrepreneurship literature highlights how venture capitalists can contribute to, and
influence, the strategic direction of their portfolio companies (e.g. MacMillan, Kulow &
Khoylian, 1989; Sapienza, 1992; Sapienza, Manigart, & Vermeir, 1996). Venture capitalists can
contribute international knowledge and reputation resources for firms (Fernhaber & McDougall-
Covin, 2009). Several studies have argued that venture capitalists can play an important role in
pushing firms to internationalize to receive funding (e.g., Fried et al., 1998; MacMillan, Kulow
& Khoylian, 1989; Sapienza, 1992; Sapienza, Manigart & Vermier, 1996). Early
internationalizing firms can thus skip incremental international expansion because of the
networks and experiences of venture capitalists.

17
Country and industry-specific pressures
Extant research on early internationalizing firms has paid less attention to how country
factors can allow firms to overcome liabilities of foreignness, but this literature does suggest that
there are country deficiencies and industry globalization pressures that can increase the pressures
on these firms to go global early. Regarding considerations that are relevant to a firm’s sales, the
size of the product market in a firm’s home market has been identified as an important influence
on the internationalizing activities of that firm (Fan & Phan, 2007; Knight & Cavusgil, 2004;
McDougall et al., 1994; Madsen & Servais, 1997). The home country setting of a firm can
impact the need for value chain activities to be located and owned across different countries in
particular product markets. Differences in factor costs, availability of inputs, differences in the
knowledge assets across different country locations and differences in market size can impact the
need for firms to locate activities in different country locations. Early internationalizers may
come from countries that offer fewer resources for their products or smaller market size for their
products. Very specific niche markets can be quite important to early internationalizing firms
(Rialp et al., 2005) and the country specific deficiencies to which we are referencing may be
quite industry specific – i.e., the size of market for specific products or knowledge assets for
particular processes or inputs.
Even though the early internationalizing firms we reviewed may come from large
markets in general, the specific product niche of these firms may require either cheaper inputs or
greater demand- than one market can offer. Foreign markets can allow firms to overcome both
supply and demand deficiencies (Yamakawa et al., 2008). Arenius et al. (2005) examined a
Finnish company that aimed to focus its specialized software products in the US market from
inception given the demand conditions in this foreign market. If the domestic market is too
small, founders will look to international market opportunities much earlier. Other factors found

18
in this context are market scale and domestic inertia (McDougall & Oviatt, 1991). An adequate
and efficient supply of inputs (e.g. raw materials or low-cost or talented labor pools) suggest that
there can be important differences in where a firm may want to locate value chain activities such
as R&D or manufacturing to benefit from the most competitive country locations. External
country characteristics can play an important role in the choices of early internationalizing firms
and these studies suggest that early internationalizing firms are more likely to originate from
countries with deficiencies (i.e., more expensive factor inputs, smaller size of product market or
lack of technology resources for products) in their home country
The level of global integration in an industry can also push firms to early
internationalization (McDougall, Oviatt & Schrader, 2003). Global integration refers to the
international exchange of resources among firm units resulting from the increased specialization
and geographic dispersion of value-added activities (Bartlett & Ghoshal, 1989; Kobrin, 1991).
When other firms in an industry benefit from cheaper inputs or expanded sales across country
locations, this impacts the competitive advantages of firms without access to such factors
(Fernhaber, McDougall & Oviatt, 2007). Moreover, the presence of global competitors can
motive firm to internationalize quickly (Oviatt & McDougall, 2005).
In Table 4, we summarize these factors and contrast them with the more traditional focus
in the international business literature on factors that slow international expansion by firms.
While founder and management experiences in foreign markets and international social networks
and family ties help firms to overcome their lack of knowledge of foreign markets, more limited
home country supply and demand factors can also push firms to access larger markets and
additional inputs from other source countries.
--------------------------------------
Insert Table 4 about here
--------------------------------------

19
As discussed above, there are several founder-specific characteristics that can influence
the early international expansion strategies of firms that need to be examined prior to the
inception of a firm, including founder international experience and founder social networks. In
addition, the home country of a firm suggests that external conditions in terms of demand
conditions, related and supporting industries, factor endowments and competition (Porter, 1985)
can also provide important stimulus for firms that are based in smaller, less endowed countries to
seek these inputs and demand conditions elsewhere. Given the findings from these studies, we
argue that the time perspective should be extended beyond a firm’s birth for early
internationalizing firms and moved to the level of the individual. This conception of antecedent
characteristics can provide an important difference between more traditional and early
internationalizing firms that allows early internationalizing firms to appear to skip growth stages
that are commonly assumed to exist in the international business literature. By considering the
individuals within firms, we argue that long-standing arguments about the impact of liabilities of
foreignness on firm foreign expansion still hold for newly internationalizing firms, but they are
tempered by the experiences and knowledge of the individuals in these firms. We suggest that
early internationalizing firms benefit from the experience and knowledge at the firm and
individual levels at t-1, substituting for long-term accumulation normally occurring after t0 in
traditional multinational firms
--------------------------------------
Insert Fig.2 about here
--------------------------------------
Throughout this paper, we have considered how several of the antecedent firm
characteristics we identified above can impact the strategic decisions of early internationalizing
firms. Fig.2 includes both these antecedent characteristics and the important dimension of time to
highlight how firm characteristics, and industry and country pressures exist prior to the formation
of the firm. Though all of the firm, founder and country characteristics we identified through our

20
literature review do not need to exist at the same time, the ones that do exist have been shown to
pre-date the formation of early internationalizing firms.
DISCUSSION
Traditional approaches to studying the pace of international expansion by firms
(Johanson & Vahlne, 1977; Vernon, 1966 & 1979) suggest that firms will make incremental and
sequential steps when they expand into foreign countries in order to learn about these countries
and/or allow country markets to evolve in their demand for a firm’s products. In this paper, we
embrace notions of liabilities of foreignness (Hymer, 1976; Zaheer, 1995) that underlie the more
traditional approaches to studying the international expansion of multinational corporations and
focus on how firms can accumulate foreign learning and experiences prior to inception and
appear to skip the stages that have long been highlighted in the international business literature.
In this sense, we analyze early internationalizing firms within the scope of the long-standing
Uppsala school while at the same time carving out distinctive characteristics that stand in
contrast to the more traditional multinational firm competitive advantages. In so doing, we
follow Autio’s (2005) approach of focusing more on enabling conditions that can give rise to
early internationalizing firms. We also extend the recent study by Jones et al (2011) that has
highlighted the important aspect of timing to understand global start-ups and born global firms.
While several studies have documented a quick pace of international expansion by firms
(Fan & Phan, 2007; Oviatt & McDougall, 1994; Weerawardena, Mort, Liesch & Knight, 2007;
Zhou, Wu & Luo, 2007), we believe that it is important to acknowledge that “liabilities of
foreignness” (Hymer, 1976; Zaheer, 1995) are relevant to all firms that expand across country
borders. We have argued that by expanding not only the set of firm characteristics but also the
time frame from when a firm can accumulate firm-specific competitive advantages (prior to
inception), we can better understand both entrepreneurial early internationalizing firms and when
and how these firms can overcome liabilities of foreignness early in their life cycle. We have

21
focused on several founder and pre-inception characteristics that involve founder international
experiences and networks. Though these characteristics are underexplored in the current
international business literature, we have considered how these antecedent firm characteristics
can give rise to important advantages for early internationalizing firms. Further, by using a
systematic literature review to ground our study in extant literature on early internationalizing
firms, we have offered far more characteristics than is possible in an empirical study of early
internationalizing firms.
We have also contributed to the literature on early internationalizing firms by comparing
these firms with dimensions that are more commonly used to analyze the international expansion
decisions of more traditional multinational firms. Though there are many studies on early
internationalizing firms, it is not easy to compare early internationalizing firms to more
traditional multinational firms because of the different frameworks that are used to describe each
of these types of firms. By incorporating speed and mode of entry into our analysis of early
internationalizing firms along with Oviatt and McDougall’s dimensions of multinationality and
functions, we have extended our understanding of firms that go global early using a more
traditional international business lens for these firms. While issues of speed and entry mode
underlie the Oviatt and McDougall framework, we believe that they have received much less
attention in the literature on early internationalizing firm over the last decade. For future studies,
we would also suggest that differences across which firm value chain activities are being
internationalized (the functions that are in the Oviatt and McDougall framework) are also
understudied. Exporting has received much attention in the early internationalizing firm
literature, while production and R&D have been much less studied. R&D is a particularly
interesting activity because some countries do not offer either advanced technological
capabilities in certain industries (for example, biotechnology) or the institutional protections that
are necessary for firms to perform R&D. R&D is generally the last activity that multinational

22
firms internationalize and it would be useful to understand how both firm and country level
characteristics impact the decision to internationalize a firm’s R&D.
With our focus on entrepreneurial global firms, our study also contributes to the
entrepreneurship and international business literatures by considering founder characteristics in a
global setting. For the entrepreneurship literature, the focus on a founder’s social network has
not often been extended into global markets. While global expansion strategies may be more
difficult to implement, they can provide young, entrepreneurial firms with new markets, inputs
and advantages that can be exploited across that firm’s operations. Unlike the common focus on
technology and marketing abilities in the international business literature (Berry & Sakakibara,
2008; Buckley & Casson, 1976; Morck & Yeung, 1991; Pugel et al., 1996), these entrepreneurial
early internationalizing firms provide new firm and founder characteristics that give important
firm advantages that can be exploited through in foreign markets.
Regarding future research, we regard as a highly interesting avenue for further research is
to study the “strategic intent” of the founding teams. This was a dimension hardly found in the
studies explicitly, but would warrant an interesting object of study to more exactly classify the
set-up intended by the functions involved as well as speed. Moreover, it is not only the
individual, but also the founding team formulating this intent. This also resonates with the results
the literature review of Jones et al. (2011, p. 646), in which they suggested “[…] the
entrepreneurial team, not just the entrepreneur, is relevant […]”.
Considering that the founder teams bring along the mentioned antecedent characteristics,
the design of the early internationalizing firms can also already virtually take place a
considerable time before the official founding. Taking this into account in studies as well when
clarifying the pre-foundation process could yield interesting insights on the different paths
chosen by firms instead of bringing them all under one very general heading of early
internationalizing firms. Autio et al., (2000) argued that early internationalizers are more likely

23
to grow more rapidly than older entrants because of “learning advantages of newness.” They
suggest that younger firms tend to adopt more novel approaches to internationalization than older
firms. While we agree that younger firms are less likely to be hampered by competency traps
(Cohen & Levinthal, 1990), we offer a broader perspective on what gives rise to early
internationalizing firms that complements the learning advantages of newness view. By focusing
on how antecedent firm characteristics can provide resources and capabilities that can both be
exploited by early internationalizing firms and offset liabilities of foreignness, we focus on
advantages that early internationalizing firms possess that can be complemented with novel
approaches that older and more traditional firms cannot explore due to embedded approaches to
operations (Bettis & Prahalad, 1995) that can constrain exploitation of growth opportunities by
older firms.
Finally, by considering the speed of foreign entry, our research considers how firms deal
with uncertainty in foreign markets and how relationships and knowledge about relevant
networks is necessary for firms to succeed (Johanson and Vahlne, 2009). The Uppsala school
tradition focuses on the importance of learning and building trust in firm internationalization. In
contrast, the born global literature embraces an accelerated process of accessing competitive
advantages across national borders. These literatures offer very different views regarding how
risk and uncertainty impact firm international expansion decisions. On the one hand, the slow
and sequential view captures the more measured and steady approach to limit risk and
uncertainty. On the other hand, the accelerated view embraces the opportunities that are
available across country markets to allow firms to become efficient, effective and competitive at
a much quicker pace. Though in many ways, the born global literature questions the risk and
uncertainty assumptions of the Uppsala school, our findings suggest that what is more accurately
questioned is how much information and learning firms need before entering different foreign
markets. While some might suggest that the risk assumption of the Uppsala model is not valid,
our review suggests that a more fruitful area for inquiry involves how much experience firms

24
need in foreign markets before committing to these markets. In highly competitive global
industries in particular, how long can firms afford to wait before accessing competitive resources
that are not available in their home country markets or larger populations who demand their
products? The Uppsala model may suggest a slower pace than is possible in several globally
competitive industries.
Overall, early internationalization has gained momentum during the last decade. As these
firms appear to challenge the conventional wisdom on speed and pace of international expansion,
we believe that they deserve more attention. Understanding how these firms go about gaining
and leveraging competitive advantages is relevant to a variety of fields – including international
business, entrepreneurship as well as strategic management research. With the approach we have
taken in this paper, we hope to foster more interdisciplinary efforts to better understand the
choices and behaviors of early internationalizing firms.

25
REFERENCES
Acedo, F.J., & Casillas, J.C. (2007). Age at entry in international markets of Spanish
SMEs. International Journal of Entrepreneurial Behaviour & Research, 13, 130–150.
Acedo, F.J., & Jones, M.V. (2007). Speed of internationalization and entrepreneurial
cognition: Insights and a comparison between international new ventures, exporters and
domestic firms. Journal of World Business, 42, 236–252.
Aldrich, H. (1990). Using an ecological perspective to study organizational founding
rates. Entrepreneurship Theory and Practice, Spring, 7–24.
Aldrich, H., & Zimmer, C. (1986). Entrepreneurship through social networks. In D.
Sexton & R. Smilor (Ed.), The art and science of entrepreneurship (pp. 3-23).
Cambridge, MA: Ballinger.
Andersson, S. (2004). Internationalization in different industrial contexts. Journal of
Business Venturing, 19, 851–875.
Andersson, S., & Evangelista, F. (2006). The entrepreneur in the born global firm in
australia and sweden. Journal of Small Business and Enterprise Development, 13(4),
642–59.
Andersson, S., & Wictor, I. (2003). Innovative internationalisation in new firms: Born
globals - the swedish case. Journal of International Entrepreneurship, 1, 249–275.
Arenius, P., Sasi, V., & Gabrielsson, M. (2005). Rapid internationalisation enabled by the
internet: The case of a knowledge intensive company. Journal of International
Entrepreneurship, 3, 279–290.
Arrow, K. (1962). Economic welfare and the allocation of resources for invention. In
Arrow, K. (Ed.), The Rate and Direction of Inventive Activity (pp. 609-625). Princeton:
Princeton University Press.
Aspelund, A., & Moen, O. (2005). Small international firms: Typology, performance and
implications. Management International Review, 45, 37–57.
Autio, E. (2005). Creative tension: the significance of Ben Oviatt’s and Patricia
McDougall’s article ‘toward a theory of international new ventures’. Journal of
International Business Studies, 36, 9-19.
Autio, E., Sapienza, H., & Almeida, J. (2000). Effects of age at entry, knowledge
intensity, and imitability on international growth. Academy of Management Journal, 43,
909-24.
Bartlett, C.A., & Ghoshal, S. (1989). Managing across borders: The transnational
solution. Boston: Harvard Business School Press.
Bell, J., McNaughton, R., & Young, S. (2001). “Born-again global” firms: An extension
to the “born-global” phenomenon. Journal of International Management, 7, 173–189.
Berg, M., Aspelund, A., & Sørheim, R. (2008). The hybrid structures of international new
ventures: A social capital approach and research agenda. International Journal of
Entrepreneurship and Innovation, 9, 33–42.

26
Berry, H., & Sakakibara, M. (2008). Resource Accumulation and Overseas Expansion by
Japanese Multinationals. Journal of Economic Behavior and Organization, 65(2), 277–
302.
Bettis, R.A., & Prahalad, C.K. (1995). The dominant logic: Retrospective and extension.
Strategic Management Journal, 16, 5–14.
Birley, S., & Norburn, D. (1987). Owners and Managers: The Venture 100 Vs The
Fortune 500. Journal of Business Venturing, 2(4), 351-363.
Blankenburg, H.D., Eriksson, K., & Johanson, J. (1996). Business Networks and
Cooperation in International Business Relationships. Journal of International Business
Studies, 27(5), 1033-1053.
Blesa, A., Monferrer, D., Nauwelaerts, Y., & Ripolles, M. (2008). The effect of early
international commitment on international positional advantages in spanish and belgian
international new ventures. Journal of International Entrepreneurship, 6, 168–187.
Bloodgood, J.M., Sapienza, H.J., & Almeida, J. G. (1996). The Internationalization of
New High-Potential U.S. Ventures: Antecedents and Outcomes. Entrepreneurship
Theory and Practice, 20(4), 61-76.
Brännback, M., Carsrud, A., & Renko, M. (2007). Exploring the born global concept in
the biotechnology context. Journal of Enterprising Culture, 15, 79–100.
Buckley, P.J., & Casson, M. (1976). The future of the multinational enterprise. London:
Macmillan.
Burt, R. (1992). Structural Holes. Cambridge, MA: Harvard University Press.
Burgel, O., & Murray, G.C. (2000). The international market entry choices of start-up
companies in high-technology industries. Journal of International Marketing, 8(2), 33–
62.
Busenitz, L.W., & Barney, J.W. (1997). Differences between entrepreneurs and managers
in large organizations: biases and heuristics in strategic decision-making. Journal of
Business Venturing, 12 (6), 9–30.
Cabrol, M., Favre-Bonté, V., & Fayolle, A. (2009). The influence of the entrepreneur's
network on the internationalization of young french firms. International Journal of
Entrepreneurship and Innovation, 10, 213–221.
Callaway, S.K. (2004). Elements of infrastructure: Factors driving international
entrepreneurship. New England Journal of Entrepreneurship, 7(1), 27–37.
Casillas, J.C., Moreno, A.M., Acedo, F.J., Gallego, M.A., & Ramos, E. (2009). An
integrative model of the role of knowledge in the internationalization process. Journal of
World Business, 44, 311–322.
Chandra, Y., Styles, C., & Wilkinson, I. (2009). The recognition of first time
international entrepreneurial opportunities. International Marketing Review, 26, 30–61.
Chetty, S., & Campbell-Hunt, C. (2004). A strategic approach to internationalization: A
traditional versus a "Born-Global" approach. Journal of International Marketing, 12(1),
57–81.

27
Clercq, D. de, Sapienza, H.J., & Crijns, H. (2005). The internationalization of small and
medium-sized firms. Small Business Economics, 24, 409–419.
Cohen, W.M., & Levinthal, D. (1990). Absorptive capacity: A new perspective on
learning and innovation. Administrative Science Quarterly, 35(1), 128–152.
Contractor, F., Hsu, C., & Kundu, S. (2005). Explaining export performance: A
comparative study of international new ventures in indian and taiwanese software
industry. Management International Review, 45, 83–110.
Cooper, A.C., & Dunkelberg, W.C. (1986). Entrepreneurship and paths to
business ownership. Strategic Management Journal, 7(1), 53-68.
Coviello, N.E., & Munro, H.J. (1995). Growing the entrepreneurial firm: Networking for
international market development. European Journal of Marketing, 29, 49–61.
Coviello, N.E. (2006). The network dynamics of international new ventures. Journal of
International Business Studies, 37, 713–731.
Coviello, N.E., & Cox, M.P. (2006). The resource dynamics of international new venture
networks. Journal of International Entrepreneurship, 4, 113–132.
Cyert, R., & March, J. (1963). A Behavioral Theory of the Firm. Englewood Cliffs, New
Jersey: Prentice-Hall.
Dana, L., Chan, T., & Chia, D. (2008). Micro-enterprise internationalization without
support: the case of angus exports. International Journal of Entrepreneurship and
Innovation, 9, 5–10.
David, R.J., & Han, S.K. (2004). A systematic assessment of the empirical support for
transaction cost economics. Strategic Management Journal, 25, 39–58.
Di Gregorio, D., Musteen, M., & Thomas, D.E. (2008). International new ventures: The
cross-border nexus of individuals and opportunities. Journal of World Business, 43, 186–
196.
Dimitratos, P., Johnson, J., Slow, J., & Young, S. (2003). Micromultinationals: New
types of firms for the global competitive landscape. European Management Journal,
21(2), 164–174.
Dimitratos, P., & Plakoyiannaki, E. (2003). Theoretical foundations of an international
entrepreneurial culture. Journal of International Entrepreneurship, 1, 187–215.
Dunning, J. (1980). Toward an eclectic theory of international production: some
empirical tests. Journal of International Business Studies, 11, 9–31.
Drori, I., Honig, B., & Wright, M. (2009). Transnational entrepreneurship: An emergent
field of study. Entrepreneurship Theory and Practice, 33, 1001–1022.
Ellis, P., & Pecotich, A. (2001). Social Factors Influencing Export Initiation in Small and
Medium-Sized Enterprises. Journal of Marketing Research, 38(1), 119–130.
Etemad, H., & Salmasi, K.S. (2001). The rugged entrepreneurs of iran's small-scale
mining. Small Business Economics, 16, 125–139.

28
Evangelista, F. (2005). Qualitative insights into the international new venture creation
process. Journal of International Entrepreneurship, 3, 179–198.
Fan, T., & Phan, P. (2007). International new ventures: revisiting the influences behind
the 'born-global' firm. Journal of International Business Studies, 38, 1113–1131.
Fernhaber, S., Gilbert, B., & McDougall, P. (2008). International entrepreneurship and
geographic location: An empirical examination of new venture internationalization.
Journal of International Business Studies, 39, 267–290.
Fernhaber, S.A., & McDougall, P.P. (2009). Venture Capitalists as Catalysts to New
Venture Internationalization: The Impact of Their Knowledge and Reputation Resources.
Entrepreneurship Theory & Practice, 33(1), 277-295.
Fernhaber, S.A., McDougall, P.P., & Oviatt, B.M. (2007). Exploring the role of industry
structure in new venture internationalization. Entrepreneurship Theory and Practice, 31,
517–542.
Ferro, L., Préfontaine, L., & Skander, D. (2009). How do social networks make a
difference in the internationalization of high-tech SMEs? The case of Colombia.
International Journal of Entrepreneurship and Innovation, 10, 201–212.
Fletcher, D. (2004). International entrepreneurship and the small business.
Entrepreneurship and Regional Development, 16, 289–305.
Freeman, S., & Cavusgil, S. (2007). Toward a typology of commitment states among
managers of born-global firms: A study of accelerated internationalization. Journal of
International Marketing, 15(4), 1–40.
Freeman, S., Edwards, R., & Schroder, B. (2006). How smaller born-global firms use
networks and alliances to overcome constraints to rapid internationalization. Journal of
International Marketing, 14(3), 33–63.
Freeman, S., & Reid, I. (2006). Constraints facing small western firms in transitional
markets. European Business Review, 18, 187–213.
Gabrielsson, M. (2005). Branding strategies of born globals. Journal of International
Entrepreneurship, 3, 199–222.
Gabrielsson, M., & Gabrielsson, P. (2003). Global marketing strategies of born globals
and globalising internationals in the ICT field. Journal of Euro-Marketing, 12(3,4), 123–
45.
Gabrielsson, M., Kirpalani, V.H.M., & Luostarinen, R. (2002). Multiple channel
strategies in the european personal computer industry. Journal of International
Marketing, 10(3), 73–95.
Gabrielsson, M., & Pelkonen, T. (2008). Born internationals: Market expansion and
business operation mode strategies in the digital media field. Journal of International
Entrepreneurship, 6, 49–71.
Gabrielsson, M., Sasi, V., & Darling, J. (2004). Finance strategies of rapidly-growing
Finnish SMEs: Born internationals and born globals. European Business Review,16, 590–
604.

29
Gassmann, O., & Keupp, M.M. (2007). The competitive advantage of early and rapidly
internationalising SMEs in the biotechnology industry: A knowledge-based view.
Journal of World Business, 42, 350–366.
Gleason, K.C., & Wiggenhorn, J. (2007). Born globals, the choice of globalization
strategy, and the market's perception of performance. Journal of World Business, 42,
322–335.
Granovetter, M. (1985). Economic Action and Social Structure: The Problem of
Embeddedness. American Journal of Sociology, 91, 481–93.
Hallbäck, J., & Larimo, J. (2006). Variety in international new ventures - Typological
analysis and beyond. Journal of Euro-Marketing, 16(1/2), 37–57.
Han, M. (2008). Achieving superior international new venture (INV) performance:
Exploiting short-term duration of ties. Journal of Enterprising Culture, 16, 1–18.
Han, M. (2007). Achieving superior internationalization through strategic ambidexterity.
Journal of Enterprising Culture, 15, 43–77.
Han, M., & Celly, N. (2008). Strategic ambidexterity and performance in international
new ventures. Revue Canadienne des Sciences de l'Administration/Canadian Journal of
Administrative Sciences, 25, 335–349.
Hansen, E.L., & Witkowski, T.H. (1999). International new venture founders: Who are
they? New England Journal of Entrepreneurship, 2(1), 11–18.
Harveston, P.D., Kedia, B. L., & Davis, P. S. (2000). Internationalization of born global
and gradual globalizing firms: The impact of the manager. Advances in Competitiveness
Research, 8 (1), 92–99.
Hennart, J.F. (1982). A theory of multinational enterprise. Ann Arbor MI: University of
Michigan Press.
Higgins, J.P., & Green, S. (2009, September). Cochrane Handbook for Systematic
Reviews of Interventions. Retrieved from http://www.cochrane-handbook.org.
Hymer, S.H. (1976). The international operations of national firms: A study of direct
foreign investment. Cambridge, MA: MIT Press.
Ibeh, K. (2005). Toward a greater level of international entrepreneurship among smaller
agribusiness firms: Resource levers and strategic options. Management International
Review, 45, 59–81.
Ibeh, K., Johnson, J.E., Dimitratos, P., & Slow, J. (2004). Micromultinationals: Some
preliminary evidence on an emergent 'Star' of the international entrepreneurship field.
Journal of International Entrepreneurship, 2, 289–303.
Ibrahim, A.B., & McGuire, J. (2001). Technology transfer strategies for international
entrepreneurs: A typology. Management International, 6, 75–83.
Jantunen, A., Nummela, N., Puumalainen, K., & Saarenketo, S. (2008). Strategic
orientations of born globals - Do they really matter?. Journal of World Business, 43, 158–
170.

30
Johanson, J., & Vahlne, J.E. (1977). The internationalization process of the firm: A
model of knowledge development and increasing foreign market commitments. Journal
of International Business Studies, 8, 23–32.
Johanson J., & Vahlne, J.E. (1990). The Mechanism of Internationalization. International
Marketing Review, 7(4), 11–24.
Johanson, J., & Vahlne, J.E. (2009). The Uppsala Internationalization Process Model
revisited: From liability of outsidership to liability of outsidership. Journal of
International Business Studies, 40(9), 1411–1432.
Jones, M.V., & Coviello, N.E. (2005). Internationalisation: Conceptualising an
entrepreneurial process of behaviour in time. Journal of International Business Studies,
36, 284–303.
Jones, M.V., Coviello, N.E., & Tang, Y.K. (2011). International entrepreneurship
research (1989-2009): a domain ontology and thematic analysis. Journal of Business
Venturing, 26 (6), 632-659.
Katz, J.A., Safranski, S.R., & Khan, O. (2003). Virtual instant global entrepreneurship.
Journal of International Entrepreneurship, 1, 43–57.
Knight, G.A. (1997). Emerging paradigm for international marketing: The born global
firm. Dissertation, Department of Marketing and Supply Chain Management. Michigan:
Michigan State University.
Knight, G.A., & Cavusgil, S. (2005). A Taxonomy of born-global firms. Management
International Review, 45, 15–35.
Knight, G.A., Madsen, T.K., & Servais, P. (2004). An inquiry into born-global firms in
Europe and the USA. International Marketing Review, 21, 645–665.
Knight, G.A., & Cavusgil, S.T. (2004). Innovation, organizational capabilities, and the
born-global firm. Journal of International Business Studies, 35, 124–141.
Knight, G.A., & Cavusgil, S.T. (1996). The born global firm: A challenge to traditional
internationalization theory. Advances in International Marketing, 8, 11–26.
Kobrin, S.J. (1991). An Empirical Analysis of the Determinants of Global Integration.
Strategic Management Journal, 12, 17-31.
Kropp, F., Lindsay, N.J., & Shoham, A. (2006). Entrepreneurial, market, and learning
orientations and international entrepreneurial business venture performance in South
African firms. International Marketing Review, 23, 504–523.
Kropp, F., Lindsay, N.J., & Shoham, A. (2008). Entrepreneurial orientation and
international entrepreneurial business venture startup. International Journal of
Entrepreneurial Behaviour & Research, 14, 102–117.
Kuivalainen, O., Sundqvist, S., & Servais, P. (2007). Firms' degree of born-globalness,
international entrepreneurial orientation and export performance. Journal of World
Business, 42, 253–267.
Loane, S. (2005). The Role of the internet in the internationalisation of small and medium
sized companies. Journal of International Entrepreneurship, 3, 263–277.

31
Lopez, L., Kundu, S., & Ciravegna, L. (2009). Born global or born regional? Evidence
from an exploratory study in the costa rican software industry. Journal of International
Business Studies, 40, 1228–1238.
Macmillan, I.C., Kulow, D.M., & Khoylian, R. (1989). Venture capitalists' involvement
in their investments: Extent and performance. Journal of Business Venturing, 4(1), 27–
47.
Madsen, T.K., & Servais, P. (1997). The internationalization of born globals: An
evolutionary process. International Business Review, 6, 561–583.
Mäkelä, M.M., & Maula, M.V.J. (2005). Cross-border venture capital and new venture
internationalization: An isomorphism perspective. Venture Capital: An International
Journal of Entrepreneurial Finance, 7(3), 227–257.
Mainela, T., & Puhakka, V. (2009). Organising new business in a turbulent context:
Opportunity discovery and effectuation for IJV development in transition markets.
Journal of International Entrepreneurship, 7, 111–134.
Mathews, J.A., & Zander, I. (2007). The international entrepreneurial dynamics of
accelerated internationalisation. Journal of International Business Studies, 38, 387–403.
McDonald, F., Krause, J., Schmengler, H., & Tuselmann, H.-J. (2003). Cautious
international entrepreneurs: The case of the mittelstand. Journal of International
Entrepreneurship, 1, 363–381.
McDougall, P.P., & Oviatt, B. M. (1991). Global start-ups: New ventures without
geographic limits. The Entrepreneurship Forum, 1-5.
McDougall, P.P., Shane, S., & Oviatt, B.M. (1994). Explaining the formation of
international new ventures: The limits of theories from international business research.
Journal of Business Venturing, 9, 469–487.
McDougall, P.P. (1989). International versus domestic entrepreneurship: New venture
strategic behavior and industry structure. Journal of Business Venturing, 4, 387–400.
McDougall, P.P., & Oviatt, B.M. (2000). International entrepreneurship: the intersection
of two research paths. Academy of Management Journal, 43 (5), 902–906.
McDougall, P.P., Oviatt, B.M., & Shrader, R.C. (2003). A comparison of international
and domestic new ventures. Journal of International Entrepreneurship, 1, 59–82.
McNaughton, R.B. (2003). The number of export markets that a firm serves: Process
models versus the born-global phenomenon. Journal of International Entrepreneurship,
1, 297–311.
Melén, S., & Nordman, E. (2009). The internationalisation modes of born globals: A
longitudinal study. European Management Journal, 27, 243–254.
Mezias, J. (2002). Identifying liabilities of foreignness and strategies to minimize their
effects: the case of labor lawsuit judgement in the United States, Strategic Management
Journal, 23, 229-224.

32
Michailova, S., & Wilson, H.I.M. (2008). Small firm internationalization through
experiential learning: The moderating role of socialization tactics. Journal of World
Business, 43, 243–254.
Moen, O. (2002). The born globals: A new generation of small European exporters.
International Marketing Review, 19, 156–175.
Moen, O., & Servais, P. (2002). Born global or gradual global? Examining the export
behavior of small and medium-sized enterprises. Journal of International Marketing,
10(3), 49–72.
Moen, O., Sørheim, R., & Erikson, T. (2008). Born global firms and informal investors:
Examining investor characteristics. Journal of Small Business Management, 46, 536–549.
Morck, R., & Yeung, B. (1991). Why Investors Value Multinationality. Journal of
Business, 64, 165-187.
Morgan-Thomas, A., & Jones, M. (2009). Post-entry internationalization dynamics:
Differences between SMEs in the development speed of their international sales.
International Small Business Journal, 27, 71–97.
Mort, G.S., & Weerawardena, J. (2006). Networking capability and international
entrepreneurship. International Marketing Review, 23, 549–572.
Mudambi, R., & Zahra, S.A. (2007). The survival of international new ventures. Journal
of International Business Studies, 38, 333–352.
Newbert, S.L. (2007). Empirical research on the resource-based view of the firm: An
assessment and suggestion for future research. Strategic Management Journal, 28, 121–
146.
Nordman, E.R., & Melen, S. (2008). The impact of different kinds of knowledge for the
internationalization process of born globals in the biotech business. Journal of World
Business, 43, 171–185.
Oviatt, B.M., & McDougall, P.P. (1994). Toward a theory of international new ventures.
Journal of International Business Studies, 25, 45–64.
Oviatt, B.M., & McDougall, P.P. (2005). Defining international entrepreneurship and
modeling the speed of internationalization. Entrepreneurship Theory and Practice, 29,
537–553.
Oviatt, B.M., & McDougall, P.P. (2005). The internationalization of entrepreneurship.
Journal of International Business Studies, 36, 2–8.
Oviatt, B.M., & Phillips McDougall, P.P. (1997). Challenges for Internationalization
Process Theory: The Case of International New Ventures. Management International
Review, 37, 85-99.
Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior
Performance, New York: The Free Press.
Pugel, T., Kragas, E., & Kimura Y. (1996). Further Evidence on Japanese Direct
Investment In US Manufacturing. Review of Economic and Statistics 78, 208–213.

33
Quelch, J., & Klein, L. (1996). The internet and international marketing. Sloan
Management Review, 37(3), 60-75.
Rhee, J.H. (2002). An exploratory examination of propensity and performance in new
venture internationalization. New England Journal of Entrepreneurship, 5(1), 51–66.
Rialp, A., Rialp, J., & Knight, G.A. (2005). The phenomenon of early internationalizing
firms: what do we know after a decade (1993–2003) of scientific inquiry?. International
Business Review, 14, 147–166.
Rialp, A., & Rialp, J. (2006). Faster and more successful exporters: An exploratory study
of born global firms from the resource-based view. Journal of Euro - Marketing, 16(1/2),
71–86.
Rialp, A., Rialp, J., Urbano, D., & Vaillant, Y. (2005). The born-global phenomenon: A
comparative case study research. Journal of International Entrepreneurship, 3, 133–71.
Sapienza, H.J. (1992). When do venture capitalists add value?. Journal of Business
Venturing, 7(1), 9-27.
Sapienza, H., Autio, E., George, G., & Zahra, S. (2005). A Capabilities Perspective on
the Effects of Early Internationalization on Firm Survival. The Academy of Management
Review, 31(4), 914-933.
Sapienza, H.J., Manigart, S., & Vermeir, W. (1996). Venture capitalist governance and
value added in four countries. Journal of Business Venturing, 11(6), 439-469.
Sasi, V., & Arenius, P. (2008). International new ventures and social networks:
Advantage or liability?. European Management Journal, 26, 400–411.
Servais, P., Madsen, T. K., & Rasmussen, E. S. (2006). Small manufacturing firms'
involvement in international e-business activities. Advances in International Marketing,
17, 297–317.
Servais, P., Zucchella, A., & Palamara, G. (2006). International entrepreneurship and
sourcing: International value chain of small firms. Journal of Euro - Marketing, 16(1/2),
105–117.
Shama, A. (2001). E-coms and their marketing strategies. Business Horizons, 44(5), 14-
20.
Sharma, D.D., & Blomstermo, A. (2003). The internationalization process of Born
Globals: a network view. International Business Review, 12(6), 739–753.
Shrader, R.C. (2001). Collaboration and performance in foreign markets: The case of
young high-technology manufacturing firms. Academy of Management Journal, 44, 45–
60.
Shrader, R.C., Oviatt, B.M., & McDougall, P.P. (2000). How new ventures exploit
trade-offs among international risk factors: lessons for the accelerated
internationalization of the 21st century. Academy of Management Journal, 43(6),
1127-1248.
Spence, M., & Crick, D. (2006). A comparative investigation into the internationalisation
of canadian and UK high-tech SMEs. International Marketing Review, 23, 524–548.

34
Stinchcombe, A. (1965). Social structure and organizations. In J. March (Ed.), Handbook
of organizations (pp. 142–193). Chicago: Rand McNally.
Styles, C., & Seymour, R.G. (2006). Opportunities for marketing researchers in
international entrepreneurship. International Marketing Review, 23, 126–145.
Terjesen, S., O'Gorman, C., & Acs, Z.J. (2008). Intermediated mode of
internationalization: New software ventures in Ireland and India. Entrepreneurship and
Regional Development, 20, 89–109.
Thai, M.T.T., & Chong, L.C. (2008). Born-global: The case of four vietnamese SMEs.
Journal of International Entrepreneurship, 6, 72–100.
Vahlne, J.E., & Johanson, J. (2002). New technology, new companies, new business
environments and new internationalisation processes. In Havila, Forsgren and Håkansson
(Eds.), Critical perspectives on internationalisation (pp. 209-227), London: Pergamon.
Vapola, T.J., Tossavainen, P., & Gabrielsson, M. (2008). The battleship strategy: The
complementing role of born globals in MNC's new opportunity creation. Journal of
International Entrepreneurship, 6, 1–21.
Vermeulen, F., & Barkema, H. (2002). Pace, rhythm and scope: Process dependence in
building a profitable multinational corporation. Strategic Management Journal 23, 637-
653.
Vernon, R. (1966). International investment and international trade in the product cycle.
The Quarterly Journal of Economics, 80(2), 190–207.
Vernon, R. (1979). The product cycle hypothesis in a new international environment.
Oxford bulletin of economics and statistics, 41(4), 255–267.
Vissak, T. (2007). The emergence and success factors of fast internationalizers: Four
cases from Estonia. Journal of East-West Business, 13, 11–33.
Vissak, T. (2007). The impact of the change from partial to full foreign ownership on the
internationalization of foreign subsidiaries: four Estonian cases. Journal of East-West
Business, 13, 219–242.
Wakkee, I. (2006). Mapping network development of international new ventures with the
use of company e-mails. Journal of International Entrepreneurship, 4, 191–208.
Weerawardena, J., Mort, G.S., Liesch, P.W., & Knight, G.A. (2007). Conceptualizing
accelerated internationalization in the born global firm: A dynamic capabilities
perspective. Journal of World Business, 42, 294–306.
Welch, C.L., & Welch, L.S. (2004). Broadening the concept of international
entrepreneurship: Internationalisation, networks and politics. Journal of International
Entrepreneurship, 2, 217–237.
Westhead, P. (2008). International opportunity exploitation behaviour reported by "types"
of firms relating to exporting experience. Journal of Small Business and Enterprise
Development, 15, 431–456.
Williamson, O.E. (1985). The economic institutions of capitalism. New York: Free Press.

35
Yamakawa, Y., Peng, M., & Deeds, D. (2008). What drives new ventures to
internationalize from emerging to developed economies? Entrepreneurship Theory and
Practice, 32, 59–82.
Yeoh, P.L. (2000). Information acquisition activities: A study of global start-up exporting
companies. Journal of International Marketing, 8(3), 36–60.
Young, S., Dimitratos, P., & Dana, L.-P. (2003). International entrepreneurship research:
What scope for international business theories? Journal of International
Entrepreneurship, 1, 31–42.
Zaheer, S. (1995). Overcoming Liabilities of Foreignness. Academy of Management
Journal 38(2), 341–363.
Zaheer, S., & Mosakowski, E. (1997). The Dynamics of the Liabilities of Foreignness,
Strategic Management Journal, 18(6), 439–464.
Zahra, S.A. (2005). A theory of international new ventures: A decade of research:
Commentary. Journal of International Business Studies, 36, 20–28.
Zahra, S.A., & George G. (2002). Absorptive Capacity: A Review, Reconceptualization,
and Extension. The Academy of Management Review, 27(2), 185-203
Zahra, S.A., Ireland, R.D., & Hitt, M.A. (2000). International expansion by new venture
firms: international diversity, mode of market entry, technology learning, and
performance. Academy of Management Journal , 43 (5), 925–960.
Zahra, S.A., Matherne, B.P., & Carleton, J.M. (2003). Technological resource leveraging
and the internationalisation of new ventures. Journal of International Entrepreneurship,
1, 163–186.
Zettinig, P., & Benson-Rea, M. (2008). What becomes of international new ventures? A
coevolutionary approach. European Management Journal, 26, 354–365.
Zhang, M.Y., & Dodgson, M. (2007). 'A roasted duck can still fly away': A case study of
technology, nationality, culture and the rapid and early internationalization of the firm.
Journal of World Business, 42, 336–349.
Zhou, L. (2007). The effects of entrepreneurial proclivity and foreign market knowledge
on early internationalization. Journal of World Business, 42, 281–293.
Zhou, L., Wu, W.P., & Luo, X. (2007). Internationalization and the performance of born-
global SMEs. Journal of International Business Studies, 38, 673–690.

36
TABLES AND FIGURES
Table 1: Overview of Systematic Literature Review Steps

37
Table 2: Mapping Studies to Dimensions
Multinationality
Function
Ownership
Timing
Multinationality
Function
Ownership
Timing
Acedo, & Casillas, 2007 X X Fan, & Phan, 2007 X X X
Acedo, & Jones, 2007 X Fernhaber et al., 2007 X X X
Andersson, 2004 X X X Ferro et al., 2009 X X
Andersson, & Evangelista,
2006 X X X Fletcher, 2004 X X
Andersson, & Wictor, 2003 X X X X Freeman, & Cavusgil, 2007 X X
Arenius et al., 2005 X X X X Freeman et al., 2006 X X
Aspelund, & Moen, 2005 X X X Freeman, & Reid, 2006 X X
Bell et al., 2001 X X Gabrielsson, 2005 X X
Berg et al., 2008 X X X
Gabrielsson, & Gabrielsson,
2003 X X X
Blesa et al., 2008 X X Gabrielsson et al., 2002 X
Brännback et al., 2007 X X
Gabrielsson, & Pelkonen,
2008 X X X
Burgel, & Murray, 2000 X X X X Gabrielsson et al., 2004 X X X
Cabrol et al., 2009 X X Gassmann, & Keupp, 2007 X X X
Callaway, 2004 X X
Gleason, & Wiggenhorn,
2007 X
Casillas et al., 2009 X Hallbäck, & Larimo, 2006 X X X
Chandra et al., 2009 X X X Han, 2008 X X X
Chetty, & Campbell-Hund,
2004 X X X X Han, 2007 X X X
Clercq et al., 2005 X X Han, & Celly, 2008 X X X X
Contractor et al., 2005 X X X Hansen, & Witkowski, 1999 X X X
Coviello, 2006 X X X X Ibeh, 2005 X X
Coviello, & Cox, 2006 X X X X Ibeh et al., 2004 X
Dana, Chan, & Chia, 2008 X X X Ibrahim, & MacGuire, 2001 X
DiGregorio et al., 2008 X X Jantunen et al., 2008 X X X
Dimitratos et al., 2003 X X X Jones, & Coviello, 2005 X X
Dimitratos, & Plakoyiannaki,
2003 X Katz et al., 2003 X X
Drori et al., 2009 X X Knight, & Cavusgil 2005 X X
Etemad, & Salmasi, 2001 X Knight et al., 2004 X X
Evangelista, 2005 X X Knight, & Cavusgil, 2004 X X

38
Table 2: Mapping Studies to Dimensions (Con’t)
Multinationality
Function
Ownership
Timing
Multinationality
Function
Ownership
Timing
Knight, & Cavusgil, 1996 X X X Sasi, & Arenius, 2008 X X
Kropp et al., 2006 X Servais et al., 2006 X X X
Kropp et al., 2008 X Servais et al., 2006 X X X X
Kuivalainen et al., 2007 X X Shrader, 2001 X X X
Loane, 2005 X Spence, & Crick, 2006 X X X
Lopez et al., 2009 X X Styles, & Seymour, 2006 X X
Mainela, & Puhakka, 2009 X Terjesen et al., 2008 X X X X
Mathews, & Zander, 2007 X X X Thai, & Chong, 2008 X X
McDonald et al., 2003 X Vapola et al., 2008 X X X
McDougall et al., 1994 X X X X Vissak, 2007 X X
McDougall, 1989 X X Vissak, 2007 X X
McDougall et al., 2003 X X Wakkee, 2006 X
McNaughton, 2003 X Weerawardena et al., 2007 X X
Melén, & Nordman, 2009 X X X X Welch, & Welch, 2004 X
Michailova, & Wilson, 2008 X Westhead, 2008 X X
Moen, 2002 X X Yeoh, 2000 X
Moen, & Servais, 2002 X X Young et al., 2003 X X X
Moen et al., 2008 X X Zahra, 2005 X X X
Morgan-Thomas, & Jones,
2009 X Zahra et al., 2003 X X X
Mort, & Weerawardena, 2006 X X
Zettinig, & Benson-rea,
2008 X X
Mudambi, & Zahra, 2007 X X Zhang, & Dodgson, 2007 X X
Nordman, & Melén, 2008 X X X X Zhou, 2007 X X X
Oviatt, & McDougall, 1994 X X X X Zhou et al., 2007 X X
Oviatt, & McDougall, 2005 X X
Oviatt, & McDougall, 2005 X X X
Rhee, 2002 X X X
Rialp, & Rialp, 2006 X X X
Rialp et al., 2005 X X X

41
Table 3: Antecedents and Article Sources
Antecedents Specific Examples Articles that Highlight these Antecedents
Founders and Managers
Organizational
Dynamism/lack of
Organizational Intertia
Social Network
Venture Capitalists
Capabilities and Skills,
Entrepreneurial Mindset;
Global Mindset,
Overseas Education,
Overseas Family
Quicker Learning, More
Openness to Foreign
Expansion
International Networks,
Contacts in Foreign
Countries,
Knowledge Acquired
Through Foreign Contacts,
Credibility
Financial Resources,
Pressure from Funding
Bodies to be Global from the
Start;
Foreign Knowledge; Foreign
Autio et al., 2000; Bloodgood et al., 1996; Birley, &
Norburn, 1987; Busenitz, & Barney, 1997; Cabrol et
al., 2009; Clercq et al., 2005; Harveston et al., 2000;
Madsen, & Servais, 1997; Shrader et al., 2000;
Weerawardena et al., 2007; Zhou, 2007
Autio et al., 2000; Knight, & Cavusgil, 2004;
McDougall et al., 2003; Weerawardena et al., 2007,
Zahra, & George, 2002.
Berg et al., 2008; Contractor et al., 2005; Coviello, &
Cox, 2006; Freeman, & Cavusgil, 2007; Freeman et
al., 2006; Gabrielsson, & Pelkonen, 2008; Hallbäck,
& Larimo, 2006; McDougall, Shane, & Oviatt, 1994;
Nordman, & Melen, 2008; Oviatt, & McDougall,
1997; Zhou et al., 2007
Andersson, & Wictor, 2003; Fernhaber, &
McDougall, 2009; Fried et al., 1998; Gabrielsson, &
Pelkonen, 2008; McDougall et al., 1994; McDougall et
al., 1994; MacMillan et al., 1989; Nordman, & Melen,
2008; Mäkelä, & Maula, 2005; Sapienza, 1992;

42
Contacts Sapienza et al., 1996.
Home Country Deficiencies
Industry Globalization
Pressures
Small or Mature Home
Market
Inadequate Access to Raw
Materials and Inputs
Global Competitors,
Price Competition,
Knowledge Clusters
Andersson, & Evangelista; 2006; Fan, & Phan, 2007;
Freeman et al., 2006; Knight, & Cavusgil, 2004;
McDougall et al., 1994; Madsen, & Servais, 1997;
McDougall, & Oviatt, 1991; Vissak, 2007.
Fernhaber et al., 2007; Gabrielsson, & Pelkonen, 2008;
McDougall, & Oviatt, 1991; McDougall et al., 2003

43
Table 4: Factors that Influence Liabilities of Foreignness and Pace of Internationalization
FACTORS THAT INCREASE
LIABILITIES OF FOREIGNNESS AND
SLOW INTERNATIONALIZATION
FACTORS THAT REDUCE LIABILITIES
OF FOREIGNNESS AND SPEED UP
INTERNATIONALIZATION
Management Lack of Knowledge of Foreign
Countries
Founder Experiences in Foreign Countries
Manager Experiences in Foreign Countries
International Experiences of Venture Capitalists
Lack of Foreign Contacts International Social Networks
Family in Foreign Countries
Organizational Inertia and Bias Toward
Foreign Expansion
Advantages of Newness
Primarily Domestic Competition in Home
Country Industry
Global Competition in Industry
Large Home Market/Sufficient Demand Small Home Market for Products/Services
Sufficient Inputs in Home Market Scarce Inputs in Home Market

44
Fig.1: Types of International New Ventures in Oviatt and McDougall (1994)
Few
Activities
Coordination Coordinated
Of Value
Chain
Activities
Many
Activities
Coordinated
Few Many
Number of Countries Involved
I II
New International Market Makers
Export/Import Multinational
Start-Up Trader
III
IV
Geographically Global
Focused Start-Up Start-Up

45
Fig.2: Impact of Firm, Founder and Country Antecedent Characteristics
Founder
International
Knowledge and
Experiences
Founder Social
Networks
Industry
Globalization
Organizational
Newness
Home Country
Deficiencies
Reduced
Liabilities of
Foreignness or
Increased
Pressures to Go
Global Early
Venture
Capitalist
Experience
and Pressures
T-2 T-1 T
Characteristics
Accumulated
Prior to Firm
Formation