A TYPOLOGY OF INTERNATIONAL NEW

VENTURES:EMPIRICAL EVIDENCE FROM

HIGH-TECHNOLOGY INDUSTRIES
Matthais Baum
Christian Schwens
Rudiger Kabst

PRESENTED BY:
ASHMITA LAMSAL
MBA-GLM 6TH BATCH,SOMTU
● This research article was published in Journal of Small Business
Management 2011
● Writer-Matthais Baum, Christian Schwens, Rudiger Kabst
● Article- Examine determinants of different types of International New
Ventures
● Hypothesis generated and are tested on 195 German high-tech
enterprises. ABSTRACT
● Determinants: Growth orientation, Prior international experience ,
Knowledge intensity , Product differentiation , Learning orientation
● Result- All the determinants distinguish significantly between different
INV Types.
• The amount of international entrepreneurship literature has
increased with growing importance of young entrepreneurial firms.

• IE research compares early and late internationalizing firms and

investigate determinants of INV.

INTRODUCTION
• Firms characteristics helps to identify different INVs strategies for
better interpretation of divergent results.

• The aim of this paper is to contribute to extant IE literatures

elaborating on determinants and their effects on INVs.
• INV is a business unit that, from inception, seeks to drive significant
competitive advantages from the use of resources and sale output in
different countries- Oviatt and McDougall 1994

• This definition challenged traditional stages models of

internationalization by stating foreign market are only entered by
large and internationally experienced MNEs. DEVELOPMENT
OF RESEARCH
• Identified 4 major INV typologies: Export-Import Start-Ups
MODEL
Multinational
Traders
Geographically
Focused Start-Ups
Global Start-Ups
• Focused more on Scale and Scope of internationalization rather then
elaborating into an index.
• The intensive debate agreed that internationalization is multidimensional
construction
(a) Real dimension covering the
activities of
firm abroad
(b) Financial dimension defines

proximity of firm to international Classification of INVs

Contd….
capital market
%of foreign sales on total sale

high Geographically Global Start-Ups

Focused Start-Ups

Export-Import Start-Ups Multinational Traders

low

high
low No. of countries involved
 Hypothesis
Growth orientation Likelihood of establishing a Global Start-up as an INV type

Prior International
Likelihood of establishing a Global Start-up as an INV type
Experience

Likelihood of establishing a Geographically focused Start-up as an

Knowledge Intensity
INV type

Product Likelihood of establishing a Geographically focused Start-up as an

Differentiation INV type

Learning Orientation Likelihood of establishing a Export Start-up as an INV type

 Sample :
 Focused on firms from 4 different technology areas RESEARCH
 Questionaire based survey (Feb-April)
DESIGN
 Distributed to CEOs, Expert Managers and Firm Owners
 The response rate was about 17%,N=340 questinnaires AND
i. Nano Technology(N=305) METHODOLOGY
ii. Bio Technology(N=526)
iii. Micro-system(N=292)
iv. Renewable Energy(N=821)

To meet the aim of study firm with explicit activities are eliminated and the final sample
size of N=195 were analyzed .
 Conducted T-test for the variables of interest in analysis
 Used secondary data and conducted two-sample test to capture differences between
responding firm and
 Compared between true respondents and true non respondents and yielded no
significant result for employees.
 Measurement
 To measure dependent variable( Types of INVs) two metric scale was used.
 These chain employed the coordination of value chain activities abroad and number of
countries involved to differentiate INVs
 Value chain activities found making process more complicated so dimension were changed.
Result

Prior international Experience in Top Management-more likely at individual level

Knowledge Intensity-adapted three item scale and covered it’s different aspect (scale with an
Contd…
alpha of 0.78)

Product differentiation: measured by three item adapted from degree of unique product
development(scale with an alpha of 0.75)

Learning orientation: measured by three item scale(scale with an alpha of 0.83)

Control Variable: Used international network contacts, firm age, team size
● Multinomial Logistic Regression is an appropriate mean to examine organizational
characteristics
● The measures applied in study are self-reported and collected form an identical
sources so there exist problem of common method variance.
● Higher the growth orientation of firm greater the likelihood of Global Start-Up INVs.
● More prior the international experience of management greater the likelihood of
Global Start-Up INVs.
● Greater knowledge intensity increases the likelihood of becoming Geo-graphically
ANALYSIS,RESULT
Focused Start-Ups. AND DISCUSSION
● The product differentiation strategy propels that internationalization strategy
increase the likelihood of geo-graphically focused start-up.
● Higher the learning orientation greater the likelihood of establishing Export Start-
Up.
● Control variable shows a significant positive relationship with Global start-Ups
● The aim of this paper is to elaborate on factors that determine the different types of
INVs.
● Those factors were tested with nominal regression analysis on sample of 195
German high-technology firms.
● INVs are more heterogeneous than homogenous group of firms.
● Four INVs types elaborates different international strategies and those strategies Contd…..
depends on the firm’s inherent characteristics.
● Global Start-Up predominantly depend on a growth-oriented and internationally
experienced management team to succeed.
1. Lack of longitudinal data creates problems in measuring the INV
phenomenon.
2. This study is more focused on German technology based companies so
there exist lack of comparative value on an international scale.
LIMITATIONS AND
3. Small size of some INV groups gives less significant results IMPLICATIONS FOR FURTHER
4. Cultural distance needed to be considered in future INV research. RESEARCH

5. Prior international experience can be misapplied so this thing is also

needed to considered.
Thank You!

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