Advancing research in international entrepreneurship

Citation

Styles, C. and Gray, S. (2006), "Advancing research in international entrepreneurship", International Marketing Review, Vol. 23 No. 5. https://doi.org/10.1108/imr.2006.03623eaa.001

Advancing research in international entrepreneurship

Advancing research in international entrepreneurship

About the Guest EditorsChris Styles is Professor of Marketing at the University of Sydney. His research focuses on international marketing and strategy and, in particular, on issues relating to export performance, the internationalisation process, international alliances and international entrepreneurship. He is a member of the Editorial Review panel of the International Marketing Review and a past winner of the journal's Outstanding Paper Award. In addition to publishing papers in the International Marketing Review, Chris' work has appeared in journals such as International Journal of Research in Marketing, Journal of International Marketing, Journal of Business Research, Industrial Marketing Management and Journal of Services Marketing. He has co-authored a book (with Tim Ambler), The SILK Road to International Marketing (FT/Pittman) and written policy reports for the UK Department of Trade and Industry, the Australian Trade Commission and the Australian Marketing Institute. Chris is a past winner of the Academy of Marketing Science Doctoral Dissertation competition.

Sid Gray is Professor of International Business at the University of Sydney. His research focuses on international accounting, international business strategy and cross-cultural management. He is a member of the Editorial Review Boards of the Journal of International Business Studies, Management International Review and Journal of International Management. He is also Associate Editor of the Journal of International Financial Management and Accounting. He is the co-author (with Lee Radebaugh and Ervin Black) of International Accounting and Multinational Enterprises (John Wiley, New York). Sid is a past winner of the American Accounting Association's Outstanding International Accounting Educator Award. He is a founder and past President of the Australia and New Zealand International Business Academy and a past President of the International Association for Accounting Education and Research.

Introduction and editorial strategy

This special issue was born out of the recognition that, while interest in the domain of international entrepreneurship has increased substantially over the last decade, there is still little agreement about its conceptual boundaries, core unit of analysis or central constructs. Nonetheless, research that falls within this domain has contributed unique insights to both internationalisation and entrepreneurial activity that crosses national borders. Articles from Oviatt and McDougall (1994), Knight (2000) and, more recently, Jones and Coviello (2005) are good examples. Our aim is to add to this body of work.

There are also good pragmatic reasons for advancing theory in this area. As a recent report by the OECD (2006, p. 8) states:

Entrepreneurship is viewed as a critical activity to regenerate and sustain economic growth in strong economies and also a means of boosting employment and productivity in depressed regions or developing countries.

With the growing internationalisation of business, this activity is increasingly cross-border in nature. However, many of the relationships between entrepreneurial activity and its effects are still not well understood (Shane and Venkataraman, 2000).

The strategy for this special issue was to adopt a wide definition of international entrepreneurship in an attempt to be inclusive and incorporate the many different perspectives currently being taken. Styles and Seymour (2006) built upon the earlier work by Jones and Coviello (2005) to define international entrepreneurship as the behavioural processes associated with the creation and exchange of value through the identification and exploitation of opportunities that cross national borders. The additional element in this definition is the notion of “exchange”, a critical contribution of the marketing perspective. Nonetheless, we did not restrict ourselves to this perspective and this produced a diverse array of submissions (37 in all). It also resulted in considerable debate amongst authors and reviewers about just what is and is not international entrepreneurship.

By far, the dominant focus of submissions was small, rapidly internationalising firms. Importantly, we insisted that the phenomena and theory featured in papers be not restricted to small and medium-sized enterprise (SME) exporters. There are export performance and internationalisation literatures already in existence which address these broader domains. Thus, irrespective of which definition or perspective was adopted, “entrepreneurship” in some form, as did an international element, had to be a component of the work.

The special issue papers

The papers included in this special issue are representative of the diversity of those received. From the original 37 papers, we have selected five for publication. These present different geographies – Australia, Canada, Ireland, South Africa, USA and New Zealand, different methods – both qualitative and quantitative, and a variety of theoretical perspectives – network approaches, the resource-based view (RBV) of the firm, the knowledge-based view of the firm (KBV), economic geography, organisational learning and competing theories of internationalisation.

The first paper, by Loane and Bell, looks at the networks of entrepreneurial firms that internationalise. They suggest that these firms not only draw on existing networks, they also develop new networks in the process of internationalising. They used a mixed-methods approach that included an online data search, a survey and follow-up qualitative interviews. Their data suggest that, in addition to leveraging existing networks, building new networks is a critical task of internationalising entrepreneurial firms, a task aided by existing “weak” ties. From a theoretical perspective, they advocate a more holistic approach which draws on the RBV, KBV and network approaches.

The second paper, by Mittelstaedt, Ward and Nowlin, takes a very different approach, being anchored in economic geography. They investigate the effects of urbanisation and industrial concentration on the propensity of entrepreneurial firms to export. They analysed data from nearly 44,000 firms in the Southeastern states of the USA. Their results show that smaller firms were most likely to export from urban areas and in concentrated sectors. Their findings suggest that small entrepreneurial firms are more dependent on their geographic environments than larger firms for internationalisation. The smaller firms require external mechanisms for learning, such as high concentrations of talented labour and/or high concentrations of industry specific talent. That is, their ability to export depends on opportunities to externalise scale economies which larger firms can internalise. This has important implications for entrepreneurs and firms with international aspirations, as well as those who support them, such as financiers, incubators, government agencies and policy makers.

The third paper, by Kropp, Lindsay and Shoham, shifts the geographic focus to South Africa and explores the impact of three orientations – entrepreneurial (EO), market (MO) and learning (LO) – on international entrepreneurial business venture (IEBV) performance. They surveyed managers from early stage, growth-oriented firms which exported early in their lifecycle (i.e., either from inception or within three years of inception). They found positive associations between performance and the innovativeness dimension of EO, as well as MO and LO. The results are consistent with those of previous studies on larger firms in different geographies, thus extending the generalisability of these findings. New to this study, however, is the explicit inclusion of communication as a dimension of EO, as conceptualised by a number of previous scholars. Interestingly, the results were counter intuitive with respect to this dimension – firms scoring lower on communication performed better and vice versa. It is suggested that this may be because of an importance hierarchy – innovativeness is more important in the early stages.

The fourth paper, by Spence and Crick, focuses on the internationalisation strategies of Canadian and UK high-tech small and medium-sized enterprises (HTSMEs). They find a mix of approaches to strategy formulation amongst the 24 firms of this type that they studied. These approaches included highly systematic planning as well as more opportunistic behaviour. They highlight the fact that while serendipity seemed to play a part in many cases, the critical factor was whether managers were entrepreneurial enough to identify and exploit the opportunistic events. They also examine issues relating to perceptions of overseas markets, internationalisation routes, the pace of internationalisation and markets served, as well as managerial objectives, risk assessment and the effect of internationalisation on the firm. Like Loane and Bell, Spence and Crick conclude by calling for a more holistic approach to theory development, as firm behaviours and perceptions cannot be explained by a single theory.

The final paper, by Sullivan Mort and Weerawardena, takes us back to some of the themes of the first paper – the importance and nature of networking in international entrepreneurship. Specifically, they position networking as a dynamic capability that enables born globals to identify opportunities and respond quickly to them which, in turn, facilitates rapid market entry. The study examines six “exemplar” born-globals from both high-tech and low-tech sectors, and focuses on issues relating to how a networking capability develops over time. They find that networking is not the “panacea” for small firms to overcome issues of resource poverty, but rather it complements opportunity-seeking behaviour. Their findings also suggest that the development of a networking capability is path dependent, consistent with the resource-based, capability view of competitive strategy. Interestingly, Sullivan Mort and Weerawardena also highlight negative aspects of networks, such as network rigidity, which may prove to limit strategic options and restrict the pursuit of certain opportunities.

Future research opportunities

While the papers in this special issue add to our understanding of international entrepreneurship, there is still much to be done. Styles and Seymour's (2006) precursor to this special issue highlighted a number of research opportunities, covering methodologies, theories and gaps in the literature. We do not propose to canvass this again. Rather, as a result of editing this special issue, we became aware of three very specific areas which are potentially fruitful avenues of future enquiry.

First, we feel somewhat concerned about the lack of papers focusing on well- established and larger firms, and, like others (Coviello and Jones, 2004), stress the need for their inclusion within the international entrepreneurship domain. Firms such as General Electric, IBM, 3M, Dupont, Microsoft and Goldman Sachs would all be regarded (and would regard themselves) as being “entrepreneurial”. They also operate internationally. International teams in organisations like these are constantly looking to identify and exploit new cross-border opportunities and global niches. Thus, international entrepreneurship is not restricted to small start-ups or so-called born globals. When Schumpeter (1934) wrote about creating market disequilibrium through disruptive innovations – new products, new production methods, new markets and new materials or sources of supply or new organisational structures – he mentioned nothing about the size and age of firms. Entrepreneurial activity, as such, can occur in any firm. Corporate venturing or entrepreneurship recognises this (Pinchott and Pellman, 1999), but the vast majority of academic papers on international entrepreneurship seem not to.

A second avenue which may prove fruitful is to focus on the “opportunity” as the unit of analysis rather than on just the firm, a practice which dominates most studies. For example, researchers could make use of the opportunity life cycle (Shane, 2000; Eckhardt and Shane, 2003) as a guiding framework. This conceptualises three stages: identification – of a new means-end framework; evaluation – whether the value of resources deployed through the new means-end framework would be greater than through the current framework; and exploitation – resources secured and deployed to establish the new means-end framework. By focusing on one or more these phases, multiple firms (legal entities), actors and resources would be included, as well as critical aspects of context. This should give a more holistic, 3608 view of opportunity-related behaviours, events and processes, some of which may be missed when focusing on, say, the firm or the entrepreneur.

A third avenue that seems worthy of further exploration relates to the influences of different cultural, ethical and social norms on entrepreneurial behaviour across national, regional, ethnic, religious and language boundaries. While some prior research addresses comparative international issues from such behavioural perspectives (Morris et al., 1994; Thomas and Mueller, 2000), there is substantial potential to make an important contribution to our understanding of the impact of differences in entrepreneurial mind-sets.

Acknowledgements

As those who have edited a journal or special issue know well, a great deal of work goes into bringing a publication such as this to fruition. We are quite proud that a call for papers that went out in April 2005 has culminated in a publication in September 2006. However, this was not our doing alone, and it would be remiss of us to not thank those who have contributed.

First, from the International Marketing Review, we would like to thank Jeryl Whitelock and Robert Morgan, the full-time editors, for encouraging us to pursue this special issue topic, as well as the Publishing Editor of the journal, Richard Whitfield, for his assistance. Next, we would like to acknowledge the many reviewers who took the time to read and comment on the manuscripts that we sent to them. Many of these reviewers were outside the regular Review Board, and we acknowledge them below:

Torben Bager                                   Tony Pecotich

David Ballantyne                              Michael Polonsky

Gabriel Benito                                  Erik Stavnsager Rasmussen

Yanto Chandra                                 Becky Reuber

Nicole Coviello                                Saeed Samiee

Tevfik Dalgic                                    Steven Seggie

Tim Devinney                                   Per Servais

Adamantios Diamantopoulos        Richard Seymour

Alex Eapen                                       Siri Terjesen

Manucher Farhang                          Vern Terpstra

Dennis Foley                                    Sandra Vandermerwe

Krzysztof Fonfara                             Nick Wailes

Jorma Larimo                                   Catherine Welch

Leonidas C. Leonidou                     Lawrence Welch

Brent MacNab                                   Ian Wilkinson

Sara McGaughey                              Heather Wilson

Stan Paliwoda

Our thanks also go to Diana Harris who copyedited the issue, which was not an easy job given the tight time constraints. Finally, we both extend our gratitude to Nicole Hartley who did an outstanding job as Managing Editor. It is largely due to her that the authors, reviewers and, indeed, the editors kept the process moving and we were able to meet the deadline.

Chris Styles and Sid GrayThe University of Sydney Business School, Sydney, Australia