1

COGNITIVE AND DEMOGRAPHIC FACTORS INFLUENCING THE EXPORT INTENTION OF NASCENT ENTREPRENEURS

Charles H. Matthews, University of Cincinnati, USA Imane Khayat, University of Versailles Saint-Quentin, FRANCE Principal Topic Over the last decade, the phenomenon of “International New Ventures” (McDougall and Oviatt, 2003; Oviatt and McDougall, 1994) or “Born Globals” (Rennie, 1993) has been drawing the attention of many researchers and practitioners. In contrast to the traditional models of internationalization (Johanson and Wiedersheim-Paul 1975; Johanson and Vahlne 1977, 1990), firms no longer have to follow the incremental stages pattern before engaging in international operations. The psycho-cognitive characteristics of entrepreneurs have been emphasized to be the driving force for this early internationalization (Maignan and Lukas, 1997; Gupta and Govindarajan, 2002; Zahra and George, 2002; Nummela et al., 2004; Zahra et al. 2005). Yet, the number of empirical studies connecting the cognitive characteristics and global orientation of entrepreneurs is still rather limited and did not examine how cognitive and demographic characteristics can predict the global orientation of entrepreneurs. Furthermore, studies did not consider the intentionality of export in the early process of business creation. Drawn from international entrepreneurship (IE), cognition, and internationalization theories, this study investigates the impact of cognitive, demographic and new venture characteristics on the export intentionality of nascent entrepreneurs. Method Data are obtained from the National Panel Study of Entrepreneurial Dynamics (PSED) database. A multiple regression analysis is conducted to explain to what extend the cognitive and demographic characteristics influence the global orientation of nascent entrepreneurs. New ventures characteristics are used as control variables.

Results and Implications

Preliminary findings indicate a positive relationship between innovative decision style, challenging personality, risk taking, and export intentionality. Contrary to other studies, internal locus of control is found to be negatively related to nascent entrepreneurs’ export intentionality. Demographic characteristics, age and education attainment of nascent entrepreneurs are also found to have a significant effect on export intentionality. Overall, findings reveal that the main determinants of global entrepreneurship are innovative decision style, challenging and risk taking personality, and orientation toward hi-technology.

CONTACT: Charles H. Matthews; Charles.matthews@uc.edu; (T) 513-556-7123; (F) 513-556-5499; College of Business, University of Cincinnati, OH 45221-0165.

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Introduction

A quarter of a century ago, very small firms or micro-businesses were thought to be a marginal

phenomenon in developed economies. Nowadays, there is no doubt they have a significant

contribution particularly in the global market. In the U.S, micro-enterprises (those with fewer

than 20 employees) represent 69% of all U.S. exporting firms (U.S. Department of Commerce,

2003). Whereas firms in the late 80s and early 90s proved themselves in the domestic market

before looking abroad, more and more, firms today have a global vision and reach the global

market much sooner after their establishment. Consequently, there is an increasing interest in the

phenomenon of international new ventures (Knight and Cavusgil, 2004, 1996; Oviatt and

McDougall, 1994; Rennie, 1993). International new ventures have been described as the creative

process of discovering and exploiting opportunities outside the domestic market from the firm’s

inception (Zahra and George, 2002; McDougall and Oviatt 2000; Madsen and Servais, 1997).

However, despite this occurrence and the recent progress of research in the field of international

entrepreneurship, factors that drive entrepreneurs to go global in the first place, are still not fully

understood (Zahra, 2005; Grégoire et al. 2008).

Export intension, as an indicator of firms' future international behavior, has being broadly

studied among established firms to understand the difference between exporting and non

exporting firms (Katsikeas and Piercy, 1993; Aaby and Slater, 1989; Cavusgil 1984; Cavusgil,

Bilkey and Tesar, 1979). Moreover, the psycho-cognitive characteristics of entrepreneurs have

been emphasized to play an important role on the early internationalization of new ventures

(Maignan and Lukas, 1997; Gupta and Govindarajan, 2002; Zahra and George, 2002; Nummela

et al., 2004; Zahra et al., 2005). Yet, to our knowledge, no study has focused on the link between

the cognitive, demographic and new ventures’ characteristics and export intension of nascent

entrepreneurs. Therefore, the purpose of this paper is to offer better understanding in term of

antecedents of new ventures internationalization by investigating how selected aspects of

cognition, demographic and new ventures’ characteristics influence the export intension of

nascent entrepreneurs.

To explore this question, the model suggests three levels of analysis with regard to their impact

on the export intension: (1) nascent entrepreneurs’ cognitive characteristics, indicated by the

locus of control, innovative decision style, challenging personality, risk taking and problem

solving skills; (2) demographic characteristics indicated by nascent entrepreneurs’ age and

3

education attainment; (3) and new ventures’ characteristics, represented by sales sources and

high-technology.

After reviewing the literature on the internationalization behavior, hypotheses are advanced and

tested on a sample (N=150) of nascent entrepreneurs with the intension to go global. Method and

results are discussed, and finally, suggestions for future research are provided.

Internationalization of new ventures

Traditional approaches, the Uppsala (Johanson   and   Vahlne,   1977,   1990;   Johanson   and  

Wiedersheim-­‐Paul,   1975)   and innovation models   (I-­‐model)   (Cavusgil,   1980)   have   been  

widely  recognized as the most influential research stream in the international literature, mainly

in the study of small and medium sized enterprises (SME). These models have two conceptual

foundations. The first is based on the incremental progression of firms in the international

markets. Johanson and Vahlne (1977) describe this process as a gradual acquisition, integration

and use of knowledge about foreign markets. Thus, firms need to increase their knowledge over

time to increase their international commitment. The second is the “psychic distance” which

means that firms will primarily target markets with a similar culture, language, political system,

etc. Empirical studies of stage models have identified a number of different stages firms go

through during this internationalization process. These stages ranged from three to nine

(Cavusgil, 1984; Czincota, 1982; Reid, 1981; Bilkey and Tesar, 1977). Leonidou and Katsikeas

(1996) summarize these studies and conclude to the differences in the nature, number and

content of these stages. The Uppsala and I-models have been criticized, however, for their

inability to delineate boundaries and explain the process between stages (Andersen, 1993).

Moreover, they have been challenged for their inappropriateness for service-intensive industries

(Liesch and Knight, 1999) and for their limited relevance to apply to the rapid

internationalization of ‘knowledge-intensive’ SME (Bell, 1995). A comprehensive view of this

phenomenon has been brought by the international new ventures literature.

Different labels have been attributed to the early and rapid internationalization of some new

ventures: ‘born globals’ (Madsen and Servais, 1997); ‘international new ventures’ (INV) (Oviatt

and McDougall, 1994), and ‘knowledge-intensive’ firms (Jones, 1999; Bell, 1995). INV are

defined as companies, that from or near founding, have a global focus and commit resources to

obtain substantial revenue from international sales (Knight and Cavusgil, 2004; Oviatt and

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McDougall, 1994). These new ventures are formed by innovative, proactive and risk seeker

entrepreneurs (Oviatt and McDougall, 2000) who are stimulated by the advances in information

and communication technologies, niche markets and global networks (Knight and Cavusgil,

1996). Indeed, the entrepreneurs’ characteristics such as international experience and global

vision have been emphasized to enable the early and rapid internationalization process.

Entrepreneurs’ success in the global arena is explained by the quality of opportunities,

localization, and their creativity in using modes of exploitation (Zahra et al. 2005). The capacity

of entrepreneurs to identify these opportunities and take advantage of localization, technologies,

and niche markets cannot be completely understood without taking into account the antecedental

cognitive dimension. The role of entrepreneurs’ cognitive process has been mostly neglected in

international literature (Liesch et al., 2003).

Researchers in the field of international entrepreneurship, however, have been calling for more

use of cognitive perspective to enrich our understanding of the mental models that guide and

shape internationalization decisions (Zahra et al., 2005; Reuber and Fischer, 1997). In new

ventures, entrepreneurs’ global mindset, or cognitive capabilities is a key factor at the core of

international success (Levy, 2005; Gupta and Govindarajan, 2002). Thus, their beliefs and

perceptions of the environment and international opportunities are likely to influence their

choices and actions. The cognitive characteristics of entrepreneurs can explain the initial

identification and interpretation of opportunities as well as the processes of representing those

opportunities to others and the processes by which representations of opportunity become an

outline for managing international operations. Forbes (1999) points out the critical role played by

cognitive processes in the formation of new ventures. He notes that the effects of managerial

cognition are likely to be more direct and immediate in new venture settings than in the context

of larger, more established organizations.

Nummela et al. (2004) examining the impact of global mindset on the international success,

define it as entrepreneurs’ positive attitude and ability to coordinate international activities and to

take into consideration both attitudinal and behavioral aspects. Gupta and Govindarajan (2002)

explore how the global mindset helps integrate diversity across cultures and markets. Calori,

Johnson and Sarnin (1994) analyze top managers’ cognitive processes in terms of their degree of

complexity, in relation to the breadth of business portfolio as well as geographic scope and links

firms has with foreign partners. They conclude that CEOs need a high cognitive complexity to

5

cope with the dynamic of the international environment. By extension, we offer the following

hypotheses which further explore how selected aspects of cognition, demographic and new

venture characteristics influence the export intentionality of nascent entrepreneurs.

Research hypotheses The export marketing literature reveals three major research streams on export intention. The

first stream focuses on the non-exporting firms that intend to export (Leonidou, 1995; Jaffe and

Pasternak, 1994). The second concentrates on the exporting firms that intend to expand their

export involvement (Cadogan et al., 2006; Axinn et al. 1995). The third stream of literature

distinguishes between the external (Leonidou, 1995; Diamantopoulos et al., 1990) and internal

(Albaum et al., 1994; Katsikeas and Piercy, 1993) factor stimulating the export intention.

Concerned with the non-exporting firm’s intention to initiate export, this study is mainly driven

by internal factors stimulating the export intention. In this context, a few research investigated

the non-exporting firms’ intention to enter export markets. Lim et al. (1991) identify four phases

in the internationalization process: the awareness, interest, intention and adoption. Entrepreneurs

first recognize the export as an opportunity. Then, as well as their interest increase, they develop

a positive intention toward the internationalization and finally adopt it. Dosoglu-Guner (2001)

studies the export intention of firms with regard to their organizational behavior namely

organizational culture and ownership type. Ellis and Pecotich (2001) exploring the export

initiation process, reveal the importance of social ties on the perception of the entrepreneurial

opportunities. Focusing on the pre-export behavior, Yang, Leone and Dana, (1992) present a

model to identify potential exporters among small and medium sized enterprises. Acedo and

Jones (2007) are one of the few authors to examine the impact of managerial cognition on the

speed of internationalization using ambiguity tolerance, risk perception and international

orientation. They conclude that managers with a greater international orientation achieve rapid

internationalization. In the same line of these studies and to further the analysis on the export

intention, we aim to explain the export intention of nascent entrepreneurs focusing on new

ventures that are still in the process of formation and creation.

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Demographic characteristics Oviatt and McDougall, (2000) emphasized the entrepreneurs’ characteristics as a key factors to

the early internationalization. The educational attainment and entrepreneurs’ age have being

widely studied as determinants of export performance and export propensity. Evidence on the

relationship between the entrepreneurs’ age and internationalization is mixed. While Kaynak and

Kuan (1993) report a positive relationship between the entrepreneurs’ age and their international

success, Moini (1995) does not establish any significant relationship between the entrepreneurs’

characteristics (age and education) and the degree of export involvement. However, most studies

find a negative association between the manager’s age and export intention, propensity, and/or

intensity (Suarez-Ortega and Alamo-Vera, 2005;   Jaffe et al., 1988; Reid, 1981). Younger

entrepreneurs tend to be more cosmopolitan and global minded than the older ones. Based on

these last studies, we suggest that more mature entrepreneurs will be more reluctant to go global

when starting a business.

H1: Nascent entrepreneurs’ age is likely to have a negative impact on their export intention.

Most studies have reported a positive relationship between the educational level of the manager

and degree of international involvement of the firm (Nakos et al., 1998; Axinn, 1988; Reid,

1981). Reid (1981), for example, argued that college and university degree are important in the

positive attitude toward export. Leonidou et al., (1998), in a literature review of 46 empirical

studies (published between 1960 and 1995) found that the educational level has a positive impact

on the international success. Furthermore, research in entrepreneurship, outlined the importance

of education in the new venture creation (Davidsson and Honig, 2003; Robinson and Sexton,

1994). Thus, we expect that nascent entrepreneurs when they accomplish a high education level,

they have more awareness of the global economy and they can open their minds to many

possibilities specifically to start a business in a global market.

H2: Nascent entrepreneurs’ greater educational attainment is likely to have a positive impact on

their export intention.

Cognitive characteristics The impact of the cognitive characteristics of entrepreneurs on the export intension has not

received much interest in the literature (Halikias and Panayotopoulou, 2003). However, research

7

on the early-stage entrepreneurship has operationalized several cognitive characteristics of

nascent entrepreneurs (Shaver, 2004), which can be related to export behavior. Of those

characteristics, five were relevant to our purpose: risk attitude, locus of control, personal

realization, problem solving and decision-making style. Considering, the internationalization or

export, as an entrepreneurial process that requires entrepreneurial skills (McDougall and Oviatt,

1994), we could justify the following hypotheses, concerning the relationships between the

nascent entrepreneurs' cognitive characteristics and their export intension.

Risk attitude

Risk attitude of international entrepreneurs has been argued to be an important determinant of

internationalization (Johanson and Vahlne, 1977). The influence of the positive attitude of

entrepreneurs on the initiation of international operations has been strongly supported in the

literature (Axinn, 1988; Gupta and Govindarajan, 1984). Halikias and Panayotopoulou (2003)

found risk attitude to be a distinguishing feature between born global (INV) and traditional firms.

However, other authors do not agree that risk propensity is driving factor to successful

international ventures (Moini, 1995; Jaffe et al. 1988). Based on the fact that export activity

involves a special risk, we support that the positive attitude of nascent entrepreneurs toward risk

will influence their export intention.

H3: Nascent entrepreneurs who have greater risk taking attitude will have stronger export

intention.

Personal realization

Attributes such as personal realization (self-challenge), intern locus of control, and tolerance for

ambiguity have been argued to determine the entrepreneurial orientation of individuals and thus

their international orientation (Zahra et al. 2005). Personal realization is core to the

entrepreneurial activity and it can be posited that it regulates the entrepreneurs’ actions and the

need to be successful as well as achieve excellence over time (Birley and Westhead, 1994). Dana

et al. (2009) use personal achievement as a characteristic and a measure of the proactive

entrepreneurial, opportunity focused exporter. While the need for achievement; or realization,

was not a significant predictor of export involvement in Halikias’s and Panayotopoulou (2003)

study, others have found a positive relationship between the personal realization of entrepreneurs

8

and the new ventures growth (Lee and Tsang, 2001; Davidsson, 1989). In the same line of these

last studies, we suggest that the need for personal realization will be stronger within nascent

entrepreneurs who intend to start a global business since it is even more challenging process than

a domestic business. High achievers are ambitious, competitive, and enjoy the challenge of

difficult tasks.

H4: Nascent entrepreneurs who have greater personal realization (self-challenge) will have

stronger export intention.

Locus of control

The locus of control refers to individuals' perceptions of success, or failure, as contingent on the

control they have over personal events (Rotter, 1966). An entrepreneur with an internal locus of

control, basically, believes that the outcomes are the result of his personal initiatives, while an

entrepreneur with an external locus of control perceives his life or destiny as beyond his control.

Some studies have established a link between the entrepreneurs’ internal locus of control and

their propensity to engage in new ventures creation (Gartner, 1985). Miller and Toulouse (1986)

report that managers with an internal locus of control may be more innovative and thus better

performer than those with an external locus of control. Other research has found a positive

relationship between the CEO's internal locus of control and growth (Lee and Tsang, 2001),

namely with the export involvement of small firms (Halikias and Panayotopoulou, 2003). By

extension, nascent entrepreneurs who believe that they control events are believed to have

greater export intention.

H5: Nascent entrepreneurs with greater internal locus of control will have stronger export

intention.

 Problem-solving skills

Internationalization is a complex operation that requires from entrepreneurs to engage in a

heuristic thinking and a careful analysis of situations and events. It parallels the complexity of

international entrepreneurs since they cope with heterogeneous cultural, institutional and

competitive environments and are tasked with greater information-processing (Sanders and

Carpenter, 1998). Problem-solving is the process through which individuals manage and evaluate

the information (Govindarajan, 1989). Some studies found that managers who have intuitive

problem-solving style, in that, they focus on meanings and relationship between items and allow

9

their unconscious to add on creativity and imagination, have better impact on firms performance

(Roth, 1995; Govindarajan, 1989). Calori et al. (1994) found that CEOs of international

geographic scope firms have a more complex cognitive structure, and thus better abilities to

identify and solve problems than CEOs in firms with only a national scope. In the preoperational

environment of nascent entrepreneurs, it is important to identify problem (Ford and Matthews,

2004). Thus, we believe that nascent entrepreneurs with problem-solving skills will have greater

incentives to export, or go global.

H6: Nascent entrepreneurs who have greater problem solving skills will have stronger export

intention.

Decision making style

Kirton (1976) suggests that there are two different styles of decision making, innovators versus

adaptors. Adaptors tend to rely on exciting solution or technologies in their decision-making.

They are characterized by their precision, reliability, prudence and by conforming to the method

and discipline. Adaptors are concerned with resolving problems rather than finding them. By

contrast, innovators break patterns of accepted modes of thought and action and use creative

arrangement and procedures to make a decision. They are problem and solution finders; forward-

looking; and tend to challenge traditional situations. Johnson, Danis and Dollinger (2008) found

that innovators nascent entrepreneurs, in general, have greater growth expectations for their firms

than adaptors. Moreover, several studies have supported the positive relationship between CEOs’

openness to innovation and adoption of innovative practices (Daellenbach et al., 1999; Souitaris,

2001). Cavusgil   (1980)  argues that export behavior is an innovation adoption process since it

involves a new process of decision making and information gathering. Thus, we expect global

nascent entrepreneurs to have innovative decision-making style.

H7: Nascent entrepreneurs who have innovative decision-making style will have stronger export

intention.

New ventures’ characteristics

High-technology

International entrepreneurship research attributes the internationalization of global entrepreneurs

mainly to the high-tech characteristic of the new ventures (Madsen and Servais, 1997; Knight

10

and Cavusgil, 1996; Bell, 1995). Moreover, several studies pointed out the role of knowledge

and innovation in determining export behavior (Roper and Love, 2002; Wakelin, 1998). Roper

and Love (2002) establish a positive relationship between having an innovative product and the

probability and propensity to export. Bell et al. (2003) argue that knowledge-intensive firms have

more proactive approach and often target difficult markets. Even more, technology has been

found to be a determinant of export performance (Zou and Stan, 1998; Aaby and Slater, 1989).

In consistence with these studies, we expect that new ventures in high-technology business will

influence nascent entrepreneurs’ choice to go global.

H8: Nascent entrepreneurs who expect to have a hi-tech business will have stronger export

intention.

Customer diversity

In this study, customer diversity indicates new ventures that expect to build a relationship with a

large population of customers. In doing so, they are able to leverage the risk of depending on a

few customers. Literature is silent regarding the effect of customer diversity on the export

intentionality. In an attempt to broach this issue, we suggest that nascent entrepreneurs who

expect to have a diversified scope of customer portfolio will have a greater export intension.

Looking for more diversification of their customer base, they may intend to look further than the

domestic market.

H9: Nascent entrepreneurs who expect to have greater customer diversity will have stronger

export intention.

Method Sample Selection and Data Collection Procedure This study uses data from the Entrepreneurship Research Consortium Panel Study of

Entrepreneurial Dynamics I (ERC/PSED I), a national panel study of nascent business

entrepreneurs. Data in the ERC/PSED were collected from 830 randomly selected nascent

business entrepreneurs. Both telephone interview and mail surveys methods were used. The

survey took place from 1998 to 2003. Reynolds (2000) provides a detailed description of this

database’s development and content. To identity nascent entrepreneurs, they were asked the

following question during the initial telephone screening interview: “Are you, alone or with

11

others, now trying to start a new business?” Respondents who answered “yes” were then asked if

they were willing to participate in more extensive investigation. Over 780 NEs went on to

complete the phone and mail portions of the survey. Of 559 NEs who completed the question on

export intension, 151 answered as well questions related to cognitive, demographic and new

ventures’ variables.

Variables and Measures

Export intention

Some authors have measured the export intention as a dichotomous (yes/no) single item indicant

asking whether or not firms intend to export (Axinn et al. 1995; 1988). Other authors have used

multiple items to determine whether or not firms intend to export, plan to initiate export in the

next two year and whether they intend to utilize excess resources (Yang et al. 1992). Jaffe and

Pasternak (1994) have used a five-point Likert scale ranging from “no intention” to “very high

intention”. For the purpose of this study, we used percentage of expected international

customers, nascent entrepreneurs were asked: “Within the first three to four years, what

percentage of your customers do you expect to be international, that is, outside the United

States?” We believe that using a quantitative variable to measure the export intention will

provide more information about the intensity of export intention.

Explanatory variables

Explanatory variables and items related to each variable are presented in appendix I. The Sales

source is measured quantitatively through the percentage of sales expected form the three largest

customers. Hi-technology business is coded as dichotomous (1) when the respondent was

considering its new ventures to belong to hi-tech business and (0) when answered “no.” The

Locus of control is operationalized by a three-item five point Likert-scale statements that

investigate respondents’ assessment of the control they have over their friendship, plans and

work. A high score means that respondents have an internal locus of control. Personal

realization is measured through two-item five-point Likert scale ranging from great extent (5) to

no extent (1). Three-item five-point Likert scale is used to measure the Problem solving. For

decision style variable, one question is asked to determine whether nascent entrepreneurs have an

innovative, adaptive decision style or both. Respondents who answered that they prefer to “do

12

things better” where classified as adaptors, those who answered that they prefer to “do things

differently” where classified as innovators. Regarding risk attitude, one question from the mail

survey was used to capture the nascent entrepreneurs’ degree of risk attitude, “I enjoy the

challenge of situations that many consider ‘risky’.” The response scale was anchored by

completely true (5) to completely untrue (1). Items in the scale were coded again into

dichotomous variables. Because of the high level of correlation between these variables, we

chose the “Mostly untrue” item to estimate the impact of risk on the model. A negative

coefficient is then expected, in that, high negative score will imply a greater degree of risk

preference.

The demographic variables, age and education attainment, are operationalized as shown in

Appendix I.

Results and discussion Multiple regression is used to explain to what extent the cognitive, demographic and new

ventures characteristics explain the global orientation of nascent entrepreneurs. Table I provides

the summary statistics for the explanatory variables. The matrix for the independent variables

shows five correlations statistically significant at (p<0.001): a- correlation between the nascent

entrepreneurs’ age and education (r= -0.145); b- correlation between the self-challenge and locus

of control (r=0.216); c- correlation between the decision style and education (r=0.190); d-

correlation between self-realization and high-tech business (r=0.29); correlation between

problem solving and education (r=-0.124). Because of the high degree of correlation, six models

were specified using each of these correlated variables at a time.

Table II reproduces results of the regression analysis in terms of the effect of age, education

attainment, national sale and technological characteristic of the new business, locus of control,

self-challenge, problem solving skills, adaptation/innovation decision styles. The interaction term

is integrated to study the impact of the interaction between the innovative decision-making style

and personal realization of NE on the export intention. All six models are statistically significant

(the probability of F ratio is less than 0.001 in most models) with an R2 ranging from 0.08-0.18.

Table III shows the results of tests of a “no-constant model” with dummy variables, examining

the impact of different levels of education and decision styles on export intention of NE. The R2

for model 7 and 8 are respectively 0.23 and 0.16.

13

Tab

le I

Cor

rela

tion

of in

depe

nden

t var

iabl

es (N

=151

)

Mea

n

SD

1 2

3 4

5 6

7 8

1-A

ge o

f NE

39

.78

10.9

3

2-Ed

ucat

ion

Atta

inm

ent

0.13

0.

33

0.1

454*

0.00

01

3-Lo

cus

of C

ontro

l 4

0.58

-0

.078

-0

.028

7

0.05

0.

3808

4-Se

lf-ch

alle

nge

2.7

1.21

-0

.117

2*

-0.0

342

0.21

64*

0.00

32

0.30

67

0.00

01

5-Pr

oble

m S

olvi

ng

2.

59

0.7

0.00

72

-0.0

803*

0.

0554

-0

.046

4

0.85

71

0.01

57

0.09

65

0.16

42

6- D

ecis

ion

styl

e

0.

34

0.47

-0

.113

9*

0.06

43*

0.01

05

0.04

72

-0.0

032

0.

0011

0.

0226

0.

755

0.15

87

0.92

45

7-R

isk1

0.

14

0.35

0.

0405

0.

0643

-0

.123

5*

-0.1

357*

0.

0423

-0

.069

0.

3129

0.

0552

0.

0002

0.

0001

0.

2069

0.

0404

8-H

i-Tec

h bu

sine

ss

0.33

0.

47

-0.0

309

0.00

56

0.05

86

0.2

906*

-0

.005

4 0.

0261

0.

0143

0.

5461

0.

8824

0.

1751

0.

0001

0.

9004

0.

4634

0.

7407

9-C

usto

mer

div

ersi

ty

36.8

5 33

.42

-0.0

819

-0.0

078

0.04

14

0.08

49

-0.0

027

0.01

11

0.01

64

0.05

83

0.

1397

0.

8271

0.

3716

0.

0663

0.

9535

0.

7722

0.

7245

0.

1301

14

The first hypothesis states that nascent entrepreneurs’ age has a negative impact on their export

intention. Hypothesis1 is strongly supported across the six models. NEs’ age is negatively linked

to their export intention. Mature NEs are less likely to export or go global. This finding is

consistent with Luostarinen and Gabrielsson (2002), who reported that born-global founders are

young and active.

Results in Model 4 (Table II) show a significant relationship between NEs’ education attainment

and export intentionality. High-school diploma predicts the export intentionally. Model 7 (Table

III) also confirms the importance of high school diploma in determining the export intentionality

of NE. Yet, Indeed, in both regressions high school diploma appears to affect in great way the

intentionality to go global. Davis and Harveston (2000) argue that the more entrepreneur-founder

are educated, the greater the extensiveness of internationalization. It’s surprising that in our study

NEs with high school diploma are the most likely to have a global orientation. Therefore,

hypothesis 2 is rejected.

Considering the cognitive characteristics, hypothesis 3, stating that nascent entrepreneurs who

have greater risk taking attitude will have stronger export intention, is confirmed in both models

5 and 6 (Table II). Risk taking attitude is a predictor of the export intention of NEs. Hypothesis 4

considering the effect of the personal realization of NEs on the export intention is also

confirmed. Nascent entrepreneurs who have greater personal realization will be more challenging

and will have stronger export intention. However, hypothesis 5, predicting that NEs with internal

locus of control will have greater export intention is not confirmed. Through the six models

(Table II), the coefficient estimate was negative and significant. This result came as a surprise

given the common-sense expectation that NEs who believe they have control over their

outcomes would be more interested in going global. The possible explanation would be that NEs

who expect to go global may be conscious of the institutional, political and economic factors

related to foreign markets that go beyond their control. Furthermore, NEs awareness of the

ambiguity related to their international orientation may reduce their certitude about the control

they can have over the internationalization. According to Acedo and Jones (2007), tolerance to

ambiguity determines the proactivity of international entrepreneurs.

TABLE II

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Results of Multiple Regression Analysis for Nascent entrepreneurs demographic and cognitive characteristics

Variables Model 1 Model 2 Model 3 Model 4 Model 5 Model 6

 Intercept term 9.595* 20.412** 15.764* 9.27* 20.560*** 19.11***

     1-Age of NE -0.132* -0.142* -0.129*

-1.431* -0.135*

     2-Education Attainment      

5.157*    (high school)

           3-Locus of Control

-2.902* -2.996* -2.411* -3.250** -3.246**

   4-Self-challenge  

1.712**  and realization

       5-Problem Solving -1.129 -1.133

   6-Adaptation/innovation

3.21*  Decision style

         7-Risk1

   -3.663† -3.342†

                     8-National sale

-0.001 -0.001 -0.002 -0.001 -0.001

   9-Hi-Tech business 4.925*** 4.871***

5.108*** 5.239*** 4.750**

   Interaction term 4*6

1.20**  

1.144**

         R² 0.10 0.17 0.08 0.16 0.14 0.18 F 5.44*** 4.96*** 3.57** 5.46*** 4.91*** 5.33*** Mean VIF 1.00 1.03 1.03 1.01 1.04 1.04 *** Significant at 0.001 **Significant at 0.01 *Significant at 0.05 †Significant at 0.1

 

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TABLE III Results of Multiple Regression with Standardized Coefficients (Education Attainment and

Decision Style)

Variables Model 7 Model 8 Sale 0.005 0.006

  Locus of control -1.804 -1.98

    Education Attainment 4 12.75* (graduate)

 Education Attainment 3 8.589  (college)

Education Attainment2 9.439†  (some college)

 Education Attainment 1 15.114**  (High school)

 Decision style (innovation) 13.402*

  Decision style (adaptation) 9.625†

  Decision style (both)

8.493

  R² 0.23 0.16 F 6.39*** 5.60***

*** Significant at 0.001 **Significant at 0.01 *Significant at 0.05 †Significant at 0.1

Hypothesis 6 examined the impact of NEs’ problem solving skills on the export intention.

Results did not support our argument. This variable is not significant in models 1 and 2. Problem

solving skills are not a determinant of NEs interest in internationalization.

Considering the relationship between the innovative decision style of NEs and their export

intention (hypothesis 7), model 5 confirms our hypothesis. Moreover, model 8 shows a strong

significant (p<0.05) positive coefficient (13.402). It also shows a weak relationship between the

adaptive decision style and export intention. NEs need an innovative decision style to be

interested in the internationalization since it implies a break with the traditional way of doing

business first in the domestic market and then gradually exploring foreign markets. However,

NEs may also need the precision, reliability and prudence of adaptive decision style to manage

17

the international operations. According to Johnson, Danis and Dollinger (2008) innovators and

adaptors may benefit from collaboration or partnership to overcome the disadvantages related to

each of their decision-making style.

With regard to new ventures’ characteristics, the high-technology industry is a determinant factor

in the NEs internalization (hypothesis 8). This variable was positively significant (p<0.001)

through all tested models. This confirms the IE literature claiming the importance of technology

and knowledge as a main explanation of the early internationalization of entrepreneurs (Madsen

and Servais, 1997; Knight and Cavusgil, 1996; Bell, 1995). However, our final hypothesis

(hypothesis 9) predicting that the source sale will influence the export intention of NEs, did not

find any support through all the models. The scope of the customer portfolio does not determine

the internationalization choice of NEs.

As shown in Table II, the impact of the interaction term on the export intention was also tested.

The joint effect for the innovative decision-making style and personal realization of NEs is

strongly significant (p<0.01). Thus NEs with innovative decision style and stronger personal

realization are more likely to go global than those who are adaptors with weak personal

realization.

Conclusion In this study, we sought to examine the antecedents of NEs’ export intention. Using a broad

sample (N=150) of global nascent entrepreneurs, we focused on understanding what are the

cognitive, demographic and new ventures’ characteristics that determine their intention to go

global. The role of the cognitive characteristics in the explication of the early internationalization

has received little attention in the international entrepreneurship literature. Thus, this paper

contributes to the advancement of our knowledge of the early internationalization phenomenon

in two ways. First, by integrating international marketing and IE theories and by applying

cognitive measure from NEs literature; second, by focusing on two level analysis, the individual

age, education and cognitive characteristics as well as the new ventures’ hi-technology and sales

source. This paper provides a rich explanation of the entrepreneurs’ interest in

internationalization at the early processes of their business formation.

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Results show that young, risk-taking entrepreneurs with a strong personal realization and

innovative decision-making style who operate in hi-technology business are more likely to go

global. Acedo and Jones (2007), and Acedo and Florin (2006) in their study of the cognitive

characteristics pointed out the role played by positive risk perception in increasing the new

ventures’ international commitment. Interestingly, our findings suggest that NEs with an internal

locus of control are less likely to be interested in internationalization. The ambiguity and

incertitude related to the internationalization may inhibit NEs with strong internal locus of

control. The impact of education attainment in NEs’ export intention was as well unexpected.

The high-school diploma appears to predict the internationalization of NEs. The possible

explanation is that NEs with high-school diploma may look for many possibilities to find a

competitive business idea, in that they may include the alternative of the internationalization.

Overall, these results disagree with previous studies where firms are less likely to be interested in

the internationalization unless they experience and accumulate knowledge in the domestic

markets (Welch and Wiedersheim-Paul, 1980; Johanson and Vahlne, 1977). Indeed,

entrepreneurs can intend to go global from the inception (McDougall, Shane and Oviatt, 1994)

while developing their business plan. Thus, internationalization does not happen by chance, it is

a rather a result of a set of factors that include the new ventures’ domain of activity and

entrepreneurs’ cognitive structure and demography.

This study provides some potential insight for government organizations and agencies focused

on the export promotion in recognizing and training international entrepreneurs. It is apparent

that entrepreneurs with export intentions have certain cognitive and demographic characteristics

and that they may benefit from an appropriate training program. For example, having an

innovative decision-making style may be important to go global but may present some

disadvantage when managing international operations. Having external assistance with an

adaptive style may help balance the decision-making process. Furthermore, helping

entrepreneurs having a positive representation of international opportunities may reduce their

negative risk attitude and enhance their internal locus of control.

The first limitation of this study is that, even though, results of regression analysis were

statistically significant, models explained no more than 19 percent of the variance of the export

intention. The purpose of this study was to determine whether the cognitive, demographic and

new ventures’ characteristic have an influence on the export intention of NEs, rather than

19

identifying the best predictors of export intention. This suggests that other variables (e. g.

international experience of NEs, professional network of NEs) may be important to consider as

well as the cognitive, demographic and new ventures characteristics. We believe, however, that

our model predicts the effect of the most variables involved in the early internationalization of

NEs. Research may extend our finding by considering additional contributing variables to the

model. The second limitation is the cross-sectional design used in this study. Although the PSED

database provides a longitudinal survey, we based our analysis on the first wave of survey. In

order to verify the stability of NEs export intention through the three other waves, we run a test

and the test was positive. Future research may further the analysis by including the other waves

to compare how the cognitive characteristics may change and how this change may influence the

export intention of NEs. In this study, we focused on determining the cognitive, demographic

and new ventures’ characteristics underpinning the export intention of NEs. Although the

intention is an important phase in the achievement of the internationalization process (Lim et al.,

1991), the adoption phase of this process may be considered as a necessary future research line.

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APPENDIX I

Definition of explanatory variables

Variables Item Description New ventures’ Characteristics

Sale source Q296 What percentage of your sales, income, or fees would you expect to get from your three largest customers?

High-Tech Q301 (recoded)

Would you consider this new business to be hi-tech?

NE Demographic Characteristics

Age

SCREENYR-Q202

How old are you?

Education

Q343 (recoded) (00 01 02=1) (03 04 05=2) (06 07=3) (08 09=4)

What is the highest level of education you have completed so far? 00. Up to eighth grade 01. Some high school 02. High school degree 03. Tech. or voc. degree 04. Some college 05. Comm. college degree 06. College degree 07. Some graduate training 08. MBA, MA, MS degree 09. LLB, MD, PhD, EDD degree

NE Cognitive Characteristics

Locus of Control mean(QL1h QL1i QL1j)

How accurately (untrue/true) these statements would describe you? -I have no trouble making and keeping friends - When I make plans I am almost certain to make them work - When I get what I want, it is usually because I worked hard for it

Personal realization (self-challenge)

mean(QG1C QG1M)

To what extent (no /great) is the following reason important to you in establishing this new business? -To be innovative and in the forefront of new technology

25

- To develop an idea for a product Problem Solving mean(QJ2a QJ

2b REQL1r) How often (very often/never) does the following happen? -I face new, complex, or unpredictable situations - I feel overloaded, pushed to my physical or mental limits - When confronted with a difficult problem I tend to delay a decision so I can collect more information

Decision Style Q327 (recoded)

If someone asked you which kind of person you are, would you say that you preferred “doing things better” or “doing things differently?” 1. Doing things better 2. Doing things differently 3. Both

Risk 1 QL1Q The following statements can be used to describe most people. How accurately would they describe you? I enjoy the challenge of situations that many consider “risky” 1- Completely untrue 2. Mostly untrue 3. It depends 4. Mostly true 5. Completely true