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KOZMINSKI UNIVERSITY
Kozminski Working Papers Series
NO. 7-2009
MEASURING GROWTH AND INTERNATIONALIZATION OF SMES: TOWARD AN
INTEGRATED ANALYTICAL FRAMEWORK
JERZY CIESLIK EUGENE KACIAK
Warsaw 2009
The working papers are produced by the Kozminski University in Warsaw and are to be circulated for discussion purposes only. Their contents should be considered to be preliminary. The papers are expected to be published in due course, in a revised form and should not be quoted without the author’s permission.
Measuring growth and internationalization of SMEs: Toward an integrated analytical framework
Working Paper Jerzy Cieslik
Kozminski University, Warsaw, Poland
Eugene Kaciak Brock University in St. Catharines, Ontario, Canada
Professor Jerzy Cieślik [email protected] http://www.cieslik.edu.pl Phone: (48 22) 519-21-00 Fax: (48 22) 814 11 56 Kozminski University Chair of Management Jagiellonska 57/59 Street 03-301 Warsaw Poland
Eugene Kaciak, Associate Professor [email protected] http://spartan.ac.brocku.ca/~ekaciak Phone: (905) 688-5550 ext. 3902 Fax. (905) 984-4188 Brock University Faculty of Business Department of Finance, Operations, and Information Systems (F.O.I.S.) St. Catharines, Ontario, Canada, L2S 3A1 Canada
Copyright © by Jerzy Cieślik & Eugene Kaciak Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author.
3
AABBSSTTRRAACCTT The paper proposes a methodological framework for analyzing and measuring the
growth and internationalization of SMEs in an integrated way. The proposed framework
addresses certain shortcomings in the international entrepreneurship research: inadequate
conceptualization of key dimensions of growth-oriented internationalization process,
incomplete integration of internationalization and entrepreneurship, and inadequate data for
advancing quality research. The framework is tested with a large dataset based on census data
covering all firms in the Polish manufacturing sector that employed 10 or more people
(15,355 firms) during 2002-2007. Implementing the proposed analytical framework can
improve the quality of research on the internationalization of SMEs in two ways. First, it will
enable the compilation of comprehensive, reliable, and internationally comparable data that
can be used to discern general patterns and trends in the internationalization of SMEs.
Second, it will broaden the combined analysis of growth and internationalization, a promising
avenue of research. An indirect but important benefit will also be the increased relevance of
the international entrepreneurship research to policy-making.
JEL Classifications L26
Keywords: High-growth firms; Gazelles; Internationalization; Born global
We thank the Ministry of Science and Higher Education of Poland for a financial support of
this research (Scientific Grant N N115 2566 33 - "International Entrepreneurship in Poland")
4
11 IINNTTRROODDUUCCTTIIOONN
The growing body of research in the
emerging field of international
entrepreneurship has identified key
characteristics of firms that have been
quick to become international. However,
the two streams of research,
internationalization and entrepreneurship,
have not been fully integrated despite
some attempts to do so (e.g., Jones and
Coviello 2005). Specifically, the well
researched category of “born global” has
not been incorporated into the research on
entrepreneurial, growth-oriented firms. As
a result, the international entrepreneurship
research has not taken advantage of the
methodological constructs and
measurement tools developed within the
specialized field of entrepreneurship
research that focuses on high-growth
firms.
In addition, researchers in the field of
international entrepreneurship have been
confronted with an inadequate supply of
reliable data as a result of a number of
factors:
- reluctance of owners of smaller and
younger firms to release information
about their firms, compared to the
relative openness of large corporations,
whose executives are usually familiar
with the academic community and
recognize the long-term benefits of
participation in mail surveys,
interviews, etc.
- stressful environment, lack of
established routines, workload during a
start-up period, and so on that make it
difficult for owners-managers to
allocate time for researchers
- lack of awareness among some leaders
of newly established firms of the
incompatibility of their ambitious plans
with the harsh realities of the business
formation phase, resulting in often
unintentional optimistic depictions of
their businesses, including international
operations, during interviews
- inaccessibility of data on international
transactions for managers, even if they
would like to respond to a survey,
because of the effort required to, for
example, requesting relevant data from
the accounting unit in advance.
As a result, research designs in
international entrepreneurship, as well as
constructs and measures used by
researchers, are largely “obtainability-
driven” (Coviello and Jones 2004).
Kuivalainen et al. (2007) pointed out that
the ambiguity and contradiction of results
5
related to the impact of early
internationalization on various aspects of
company performance largely stems from
conceptual confusion and the lack of
methodological rigor. Moreover, the
companies that have been studied differ in
size and age, so findings from different
research projects are difficult to generalize
and integrate within a body of knowledge.
Thus far, other than recognizing broad
diversity, the research community has
failed to determine the overall magnitude
of the born-global phenomenon and its
role in various sectors of the economy,
making it difficult to formulate meaningful
recommendations for managers and
policymakers.
The integration of research
perspectives that relate to
internationalization and the growth of
SMEs, is gradually making its way into the
international entrepreneurship literature.
Kuivalainen et al. (2006) argued that
internationalization and growth are often
interwoven, particularly in knowledge-
intensive industries, although there are
specific challenges to growth in the
context of international expansion.
This paper proposes a methodological
framework to measure internationalization
and high-growth phenomenon in an
integrated way and, in so doing, makes
several important benefits achievable:
a) Integration The proposed framework
will facilitate integration of born-global
research with the increasingly important
field of entrepreneurship and
management research in high-growth
firms and gazelles.
b) Generalizability and comparability The
proposed unified measures and
constructs will facilitate the
generalizability and comparability of
the results from individual research
projects and will help reveal general
characteristics and patterns. Here, we
refer specifically to a recommendation
by Coviello and Jones (2004) for use of
multiple data sources in the
international entrepreneurship research.
The proposed framework will primarily
address the demand for coarse-grained
methods that result in generalizable and
statistically significant data.
c) Triangulation Results obtained through
fine-grained methods such as interviews
and case studies that have focused on
various nuances and contexts can be
related to general patterns and trends
derived from alternative data sources,
particularly from census data compiled
by national statistical offices or
international organizations like the
OECD or Eurostat. Here, there is an
opportunity for a triangulation, which is
6
particularly important in view of the
shortage of data discussed above.
d) Prospective access to the anonimised
company data Incorporation of the
proposed concepts and measurement
tools within a framework of national
and international statistical systems will
augment the body of reliable empirical
data suitable for policy-making and
quality research. The resulting benefits
could be substantial once access to
anonimised individual company data is
granted for research purposes.
Regulations to facilitate such access are
already in place in a number of
countries. Recent experiences with the
use of anonimised census data by the
“neighbouring” discipline of
international economics have proven to
be a promising avenue for quality
research (Bernard et al. 2007; ISGEP
2008). We can build on the experiences
of a group of researchers and
statisticians, forming the International
Consortium for Entrepreneurship (ICE),
who have collaborated with the OECD
and Eurostat. As a result of their efforts,
new concepts and measurement
principles for high-growth firms and
gazelles have recently been
incorporated within the OECD/Eurostat
statistical system and will gradually be
adopted by national statistical offices
(OECD 2008). In fact, our proposed
framework has been designed as an
extension of these measurement
principles and concepts to capture the
segment of internationalizing high-
growth firms.
The proposed integrated framework
focuses primarily on the
internationalization of SMEs. Since SMEs
rarely engage in advanced forms of
international involvement, like FDI or
licensing, the analysis has been limited to
exports as the primary internationalization
mode. This limitation is particularly
justified in the context of Poland since, of
over 50,000 Polish firms currently
engaged in exporting, only a handful have
established foreign subsidiaries, and most
of these perform predominantly marketing
and sales activities. In 2006, involvement
in FDI was reported by only 214 Polish
firms (GUS 2007).
The rest of this paper is organized as
follows. First, we address the conceptual
links between the fields of
internationalization and entrepreneurship,
focusing particularly on areas where the
integration of conceptual and measurement
approaches, has not yet been
accomplished. Next, we present the
methodological framework for measuring
internationalization and growth at the firm
level in an integrated way. The
7
applicability of this framework is verified
with a large data set of 15,355 firms that
were in the Polish manufacturing sector
during 2002–2007. Results of the
empirical test, together with some
recommendations, are discussed in the
concluding section.
22 IINNTTEERRNNAATTIIOONNAALLIIZZAATTIIOONN,, BBOORRNN--GGLLOOBBAALL,, AANNDD EENNTTRREEPPRREENNEEUURRSSHHIIPP
RREESSEEAARRCCHH:: AANN UUNNFFIINNIISSHHEEDD IINNTTEEGGRRAATTIIOONN
Despite some attempts to integrate the
conceptual frameworks of
internationalization and entrepreneurship
(Jones and Coviello 2005; Kuivalainen et
al. 2006), this task remains incomplete as
some fundamental issues have not been
properly addressed, yet. Below we focus
on four areas that have been subject of
substantial debate in the entrepreneurship
literature for many years:
a) the distinction between the
entrepreneurial and small business
firms
b) new ventures versus established firms
c) the unit of analysis used in the
investigation of growth trajectories
d) ways of reflecting the impact of
alternative governance structures in the
growth analysis.
Addressing these fundamental issues
will facilitate defining key dimensions of
international entrepreneurship and
developing relevant measurement
methods.
2.1 Entrepreneurship versus small business
The distinction between entrepreneurs
and small-business owners has been
widely debated in the entrepreneurship
literature (Carland et al. 1984). There is
little doubt that born-global firms should
be positioned on the entrepreneurial, rather
than the small-business side, of the debate
since growth ambitions are clearly
reflected in the early definitions of
entrepreneurial firms. As Oviatt and
McDougal (1995) stated, born-global firms
“seem to have aggressive growth
objectives in that they rapidly exploit
technological advantages, acquire foreign
technologies, and follow clients into
foreign lands. When those facts are
combined with the observation that small
business creates a significant portion of
new jobs in America, then the collective
potential of global start-ups as powerful
economic engine begins to emerge” (p.
31). Similarly, Bloodgood et al. (1996)
pointed out the high aspirations and
potential for growth of new entrepreneurial
8
ventures. On the other hand, there is a
longstanding tradition in the
entrepreneurship research of attributing
growth ambitions to the entrepreneurial
activities of small businesses (Wiklund et
al. 2009). Here, again, there is a direct
reference in the extant literature to
entrepreneurial orientation
(innovativeness, proactiveness, and risk-
taking behavior), thus differentiating
international entrepreneurship from
internationalization at the firm level in
general (McDougall and Oviatt 2000).
Therefore, we may conclude that
growth orientation needs to be considered
as the key characteristic of born-global
firms and that constructs and measurement
tools used in research on the born-global
phenomenon should capture the dynamic
orientation of such ventures in general, and
their international expansion in particular.
Thus far, key measurement tools have not
been developed to reflect the growth
orientation of born-global entrepreneurial
firms.
2.2 New ventures versus established firms
Another conceptual issue that has
been a source of confusion in the
international entrepreneurship research is
the distinction between new ventures and
established firms. Following Lumpkin and
Dess (1996), an essential act of
entrepreneurship is a new entry (a new
economic activity), which can be
accomplished either through a new
business or within an existing organization
(corporate entrepreneurship) (Davidson et
al. 2002). These two types of
entrepreneurship require different research
tools and measurements.
The born-global phenomenon seems
to fall predominantly within the “new
venture” category of entrepreneurship, but
the current literature is inconsistent on the
subject, as some studies have focused on
new ventures (Zahra et al. 2000; Cabrol
and Nlemvo 2009; Anderssen and Wictor
2003), whereas others have included in
their analysis both new and established
organizations, applying some additional
criteria in the sample selection process to
eliminate organizations that may not fit the
research design because they are “too old”
(Knight and Cavusgil 2004).
The key methodological and
measurement issue in the entrepreneurship
research relates to determining a time
frame during which a new venture reaches
an initial level of maturity and becomes an
established organization. The period of six
years is most often used in the
entrepreneurship literature (Zahra et al.
2000; Short et al. 2009) since six years
reflect increased chances for new ventures
to reach initial maturity or “business
9
platform” (Davidsson and Klofsten 2003).
Such a delimitation is also relevant for
designing various assistance measures
addressed specifically to young firms
(Cabrol and Nlemvo 2009).
Surprisingly, the new venture
delimitation adopted in the
entrepreneurship literature is seldom
followed in the born-global research
(Zahra et al. 2000; Cabrol and Nlemvo
2009 are among the few exceptions here).
At the same time, a key criterion for
defining the born-global firm – time to
internationalization – also refers to a
specific time frame (typically three years,
but sometimes less) that reflects the time
between the company foundation and the
first export sale. What becomes a source of
confusion is that the two time frames—
new venture vs. established company and
born-global vs. not born-global—are based
on entirely different concepts. The time to
internationalization does not intend to
capture the initial maturity level in
international operations but the impact of
the “early international imprinting” on the
competitive advantage, future growth, and
subsequent success of the new venture
(Autio 2005). The key argument here is
that the early international exposure
enhances development of new knowledge
(learning from exporting), which
stimulates future growth. Firms that
internationalize early accumulate
knowledge on international markets more
efficiently than do those that enter
international markets after a longer delay
(learning advantage of newness) because
the former were not hampered by existing
operational routines that may be geared
more toward the domestic market (Autio et
al. 2000).
However, the overall impact of the
early internationalization on the future
growth of new ventures can be seriously
challenged. Recent study by Cieslik and
Kaciak (2009) revealed a large segment of
small-scale “lifestyle” exporters who,
having survived an initial unstable period,
later stagnated with very low and often
sporadic export sales. While entering
international markets they could benefit
from the improved flow of information
through the Internet, and the ICT
revolution in general, as well as decreasing
costs of international travel and
communication. Later stagnation occurred
because of the inadequate managerial and
financial resources as well as the lack of
expansion drive.
Gabrielsson et al. (2008) pointed out
that the timeframe in which exporting is
initiated should be used with caution
because, in many circumstances,
acquisition of the necessary experience
and adequate preparation for launching
10
exports in an organized manner may take a
while. Thus, early initiation of exports
may not properly reflect the international
commitment and organizational maturity
required to succeed. Just the opposite may
be true. A longer time between company
foundation and the first export sale may, in
some circumstances, reflect a more
determined, well planned strategy of
internationalization in a young firm.
From the methodological perspective,
what is of particular concern in the born-
global research is that the two most
important measures of being born global
are being applied to different points in the
companies’ histories. The time from
founding to internationalization (typically
three years or less for born-global firms)
relates to the company’s foundation
period, whereas the data on the
internationalization intensity (share of
foreign sales to total sales, or the FSTS) is
typically collected for the period closest to
when the research is carried out. In some
cases, the FSTS ratio is assessed at a time
when the companies under investigation
are 20 years old (e.g., Knight and Cavusgil
2004).
This inconsistent approach is not
intentional, but it reflects the harsh
realities of data availability. While
management in established firms that are,
say, 10 years old may recall when
exporting was initiated, getting access to
data on the FSTS ratio in the third year of
operations is likely to be difficult, if not
impossible. An attempt to follow strictly
the definition of a born-global firm (i.e.,
exceeding the 25% FSTS ratio by the end
of the third year of operation), followed by
Anderssen and Wictor (2003) resulted in
identification of just one such firm among
Swedish high-tech industries.
To illustrate the serious
methodological risks involved in such dual
approaches, assume that company X
initiated exports in the second year of
operations. In the fourth year, it secured
sizeable financing from a strategic
investor, which financing facilitated rapid
expansion into both domestic and
international markets. In the tenth year,
export sales generated over 50% of sales
revenues. What was the impact of the
“early international imprinting” on the
future growth of company X, compared to
the impact of securing sizeable financing
to facilitate such growth? Were there other
crucial events in the intervening years that
prompted/facilitated the international
expansion?
We argue that the distinction between
new ventures and established
organizations that has been adopted in the
entrepreneurship field has merit and
should be followed in the international
11
entrepreneurship research in a consistent
manner, including the use of the early-
maturity criterion (5-6 years). As a
consequence, in research focused on new
ventures, any measure of the depth or
intensity of internationalization should be
preferably applied towards the end of the
early-maturity period. At the same, one
should not confuse the latter time frame
with the internationalization time frame
(time to internationalization), which
depicts the “early international
imprinting.” The latter should be seen as
an additional characteristic of the
international growth process.
2.3 Unit of analysis
Longitudinal studies on firm growth
within the field of entrepreneurship
research have demonstrated the
complexity of unit of analysis issue. For
example, one should distinguish between
organic growth and acquisition growth
(Delmar et al. 2003) but, in the real world,
such a dichotomous approach may not be
enough. Several kinds of events in this
dynamic segment of the population of
firms may distort the picture and make it
difficult to compare the unit of analysis at
the beginning and the end of a period,
particularly when the legal entity is used as
the defining category. Such entities may
not only acquire other firms, but may
themselves be acquired and fully
integrated within another legal entity, or
they may be spun-off or closed. This
complexity raises a number of
methodological issues, such as the need for
an adequate definition of the firm as the
unit of analysis and the need to separate
the organic component of growth from that
which reflects changes in the ownership
and governance structures in general.
What aggravates the problem is an absence
of the comprehensive data necessary for
investigating the impact on firm growth of
evolving governance structures.
A longitudinal study on growth
trajectories of 8,652 Swedish companies
with 20 or more employees during 1987-
1996 identified the incidences of changes
in the ownership (governance) structure in
the majority (56%) of the firms
(Davidsson and Wiklund 2000).
The characteristics of accelerated
growth at the firm level that have been
recognized in the entrepreneurship field
pose serious challenges to researchers of
international new ventures. Particularly
when the impact of “early international
imprinting” on the international growth of
the established ventures is being
investigated, important events in the
company’s history may be neglected,
resulting in false conclusions. In our view,
the issues of the evolving unit of analysis
12
and the risks involved in the course of the
research process have not been adequately
dealt with in the international
entrepreneurship literature. In the
integrated framework for measuring
internationalization and growth outlined in
the next section, we recommend separating
firms with no incidents of acquisitions,
spin-off, divestment, restructuring, etc.,
from those in which such incidents have
taken place during the period of growth
analysis. In so doing, researchers can
assume that the growth of companies with
no such changes in governance is organic,
while they will need a more sophisticated
analytical apparatus and more detailed
information to arrive at meaningful
conclusions about the other group of
companies.
2.4 Corporate (group) membership
Closely related to the unit of analysis
and the evolving firm issues is the level of
independence of firms under investigation.
A longstanding tradition in research on the
internationalization of SMEs and born-
global firms is to ensure that firms selected
for a study are independent in terms of
ownership and management. However,
focus on the independent status is not
always specifically mentioned in the
research; often, procedures undertaken to
assess such status are not addressed at all;
considering recent trends in the global
economy, this shortcoming leaves open the
possibility that a firm under analysis may
be considered independent when, in fact, it
is a part of a bigger corporate (group)
structure.
Although large multinational firms
play an important role in international
trade and foreign investment, they
represent a small percentage (in terms of
the number of entities) of the parent
organizations and foreign subsidiaries that
are operating on the global scene. At
present, there are over 78,000 parent
corporations, with approximately 800,000
foreign affiliates, originating from various
parts of the world (UNCTAD 2008). These
smaller organizations should not be
viewed as truncated replicas of large
global firms; in fact, one may expect a
great diversity in the governance structures
within this group.
Alternatively, firms under
investigation may belong to domestic
corporate structures and may rely on the
resources and capabilities of their parents
and other units in the group, including
those that can facilitate access to
international markets. A recent study by
Koster (2006) of the Dutch software
industry demonstrated the importance of
local corporate spin-offs and spin-outs
which, although they operate
13
independently, can rely on the resources of
their founding organizations during their
initial periods.
Also business groups and diversified
conglomerates with loose operational links
may affect the performance of the smaller
firms, including export performance.
While these groups’ presence in the
emerging economies is typically seen as a
substitution for poorly performing or non-
existent economic institutions (e.g.,
banks), recent research has indicated that
such groups can also play an important
role in developed countries by enabling,
realizing, and managing growth of smaller
entrepreneurial firms (Lechner and
Leyronas 2009). As to the impact of the
group membership on internationalization,
the results of cursory research on this
subject are ambiguous. Gaur and Kumar
(2009) found that, as the degree of
internationalization increases, affiliation to
a business group becomes detrimental to
firm performance. Singh (2009) identified
a positive impact of group membership on
export sales in the Indian manufacturing
sector, whereas Chittoor et al. (2008)
found that group membership has a
negative impact on engagement in
exporting but a positive impact on
advanced forms of international
involvement, such as direct foreign
investment.
We argue, then, that the research on
international entrepreneurship should
cover not only purely independent firms
but also entities that belong to corporate
structures and other loosely coordinated
business groups. In fact, the integration of
corporate entrepreneurship and
internationalization within the field of
international corporate entrepreneurship
appears to be a promising avenue of
expanding research (Dess et al. 2003). In
the vast array of foreign affiliates,
particularly among those launched by
smaller parents, will be many examples
that reflect an entrepreneurial orientation
(proactivity, innovation, risk-taking),
rather than pursuit of a global strategy.
Once established, such firms often
undertake internationalization initiatives
independently from their parents, and this
kind of occurrence opens the ways to
including foreign subsidiaries as a unit of
analysis of the internationalization process
in general, and the internationalization of
new ventures in particular. Holm et al.
(2008) pointed out that the independent
internationalization of foreign subsidiaries
has not yet been adequately researched.
The internationalization process of
truly independent firms and those
belonging to larger corporate structures or
business groups differ in several ways that
call for different research methods and
14
analytical tools. For example, there are
serious fundamental issues in defining for
affiliated firms such key characteristics as
the size of the company (measured by
employment and/or sales revenues) and its
age or time to internationalization. In the
case of corporate spin-offs, there is a
serious question concerning whether to
take into consideration only features of the
newly established unit or to reflect
somehow the past and
resources/experiences of the parent and the
network as a whole.
One shall point out to the risk, that the
links within larger domestic and
international structures will be overlooked
by researchers who conduct empirical
studies, particularly those based on mail
surveys. Even if relevant questions on
independence are raised, they may not be
answered properly, particularly in the case
of diversified groups, where the
engagement of the parent company in day-
to-day management of the affiliated
company is relatively weak and results in
the perception of autonomy by the local
management.
Surprisingly, researchers that focus on
truly independent ventures may, at least in
some countries, face difficulties in
identifying such firms because they are
underrepresented among exporters,
particularly in terms of their contribution
to the overall export volume. An example
of Swedish manufacturing exporters may
well illustrate this issue. According to a
study conducted by Andersson et al.
(2007), over 92% of Swedish
manufacturing exports were generated
either by subsidiaries of foreign
multinationals or by domestic parents and
subsidiaries of the Swedish multinationals.
An additional 5% of export volume
originated from Swedish domestic
corporations, and less than 3% was
generated by truly independent local firms,
even though they represented 33% of the
total population of firms with 10 or more
employees.
Although all of these issues have been
recognized in the extant literature, no
conclusive methodological
recommendations have been offered.
Having assessed the state of the art in
international entrepreneurship after a
decade of research, Zahra (2005) noted
that, among born-global firms, at least
some had been initiated by established
businesses. Zahra identified this as a
thorny problem but did not suggest what
level of relationship with a founding
organization would qualify or disqualify a
newly established company as born global.
In an earlier study aimed at identifying the
early internationalizing ventures, Zahra et
al. (2000) included in their initial sample
15
independent firms as well as corporate
ventures, arguing that corporate ventures
compete in the same markets as
independent ventures, but excluded
business units that had been acquired,
spun-off, or divested, as well as joint
ventures of established companies because
of the difficulty in discerning what
resources had been transferred from the
corporation to its ventures. In another
study, George et al. (2005) investigated the
impact of institutional ownership by
banks, investment firms and pension funds
and by venture capitalists on the scale and
scope of the internationalization of
Swedish SMEs. The authors demonstrated
that the ownership links with the parent
venture organization helped in the
internationalization process, which finding
again suggests that such equity links
justifies the treatment of the new venture
as the unit of analysis in
internationalization research.
The issue of internationalized new
ventures’ level of independence has rarely
been taken into consideration in the
empirical studies regarding SMEs. In a
recent major Pan-European survey
covering over 17,000 firms, 5% of the
sample were subsidiaries of other firms
(Gallup Organization 2007), but there was
no attempt to distinguish between
domestic and foreign parents nor to assess
the impact of the corporate affiliation on
export performance. In research based on a
major panel study of German
establishments that employed 5 or more
people, Wagner (2001) included in the
analysis whether the establishment was a
branch of a larger entity and pointed that
such branches can use certain resources of
their larger parents. One promising
approach would be to use the population of
foreign subsidiaries as a basis for
comparison with the internationalization
process of independent domestic firms, as
was done by Salomon and Shaver (2005)
in an analysis of the Spanish
manufacturing sector during 1990 – 1997.
These methodological concerns have
significant consequences with respect to
the analytical constructs and measurement
tools adopted in the field of international
entrepreneurship. These tools and
constructs must be flexible enough to
capture the differences in the dimensions
of the internationalization process of truly
independent ventures and of ventures that
fall within the domain of international
corporate entrepreneurship. At the same
time, the tools and constructs should
facilitate efficient segmentation of the
firms under study with respect to their
independent versus corporate (group)
membership status.
33 PPRROOPPOOSSEEDD FFRRAAMMEEWWOORRKK FFOORR IINNTTEEGGRRAATTIINNGG MMEEAASSUURREEMMEENNTTSS OOFF GGRROOWWTTHH
AANNDD IINNTTEERRNNAATTIIOONNAALLIIZZAATTIIOONN AATT TTHHEE FFIIRRMM LLEEVVEELL
In order to remedy the shortcomings
in the international entrepreneurship
research outlined in the previous section,
we propose an integrated framework for
measuring internationalization and growth.
The impulse for designing such an
integrated framework came from the
recent adoption of certain conventions and
definitions for measuring a high-growth
segment of SMEs (high-growth firms and
gazelles) by researchers under the auspices
of the OECD and Eurostat (OECD 2008).
Once the new conventions are
incorporated into national statistical
systems of the member countries,
comprehensive, internationally comparable
datasets that can be used for quality
research are likely to result. The integrated
framework put forward in this paper shall
be seen as an extension of the recently
adopted OECD/Eurostat conventions with
the specific aim to capture the
international dimension of the growth
process. An earlier pilot empirical study
(Cieslik 2007) confirmed strong linkages
between growth and internationalization,
thus providing an additional argument for
the integrated approach.
In the proposed integrated
measurement format, we follow the
standard categorization of firms by size
bands, as defined by the level of
employment (<49, 50–249, and >250
employees), but we divide the middle
category into two (50–99 and 100–249
employees) because, in less developed
countries, firms with 100 or more
employees qualify as fairly large and need
to be studied separately from traditional
medium-sized firms that employ fewer
than 100 people. The sub-categorization
also allows for comparisons with statistical
data from countries like the U.S., where
100 employees is the widely used
threshold. Measuring growth in line with
the OECD/Eurostat format effectively
eliminates microenterprises (<10
employees) from the analysis as, by
definition, both high-growth firms and
gazelles must have a minimum of 10
employees in the base year (t–3).
In order to assess the impact of
alternative ownership structures on the
growth and internationalization of firms,
we follow, in principle, the categorization
put forward by Andersson et al. (2007):
(i) independent domestic firms (ii) firms that belong to domestic
corporations (groups) (iii) firms that belong to home-based
multinational corporations (iv) subsidiaries of foreign-based
multinational corporations.
17
Firms are categorized here on the basis of
their equity-ownership structure.
3.1 Level of internationalization (export intensity)
The proposed framework for
measuring growth and internationalization
in an integrated way is presented
graphically in Figure 1. The first column
depicts the “internationalization grid,”
which measures the export intensity of the
entire population of firms under study,
may serve as a starting point of the
internationalization analysis. Using the
FSTS ratio, we recommend the following
categorization:
i) non-exporters ii) marginal exporters (FSTS ≤ 10%) iii) moderate exporters (10% < FSTS ≤
25%) iv) advanced exporters (25% < FSTS ≤
50%) v) intensive exporters (FSTS > 50%).
Figure 1 goes about here
The proposed thresholds reflect some
of the conventions followed in the
internationalization literature and the
stipulations identified in the
internationalization research. It seems
clear that the binary categorization into
exporters and non-exporters is not
sufficient for carrying out in-depth
analyses of the internationalization
process. On one hand, some researchers
have indicated that the performance of
firms is largely affected by the level of
export intensity (e.g., Fryges and Wagner
2008). Others (Samiee and Walters 1991;
Alvarez 2004; Cieslik and Kaciak 2009)
have identified a category of marginal (and
often sporadic) exporters who, in terms of
their international orientation, could be
grouped with the non-exporters. Although
25% is the threshold that has been used
most frequently in the extant literature to
categorize born-global firms, for smaller
countries, this threshold seems low as an
indicator of a significant involvement in
international operations. Some authors
have suggested higher thresholds, such as
50% (e.g., Luostarinen and Gabrielsson
2004), but those recommendations have
not been based on a sound empirical
background that identifies general patterns
in the export intensity based on categories
of firms in a given country, industry or
region.
Thus, the proposed
“internationalization grid” is intended to
provide a flexible framework that will
facilitate various research needs and allow
for generalization of research results. The
grid helps to capture the level of
internationalization for all firms under
study at a given point in time (year t). In
addition, we propose to study the export
18
intensity of two cohorts as subsets of the
total population of firms under study:
a) those established in year t–5; b) those established in year t–2.
We choose the five-year period in
order to be consistent with how new
ventures have been most often categorized
in the entrepreneurship literature. We
follow the OECD/Eurostat statistical
principle that the year of establishment is
Year 0; thus, firms covered by the analysis
are between five and six years old. The
two-year period relates to a convention
that categorizes born globals as companies
that initiate exports within three years of
founding (a year of establishment plus two
full years of operation).
The data on the internationalization
patterns of young ventures should permit a
comparative analysis of young ventures
and the whole population of firms under
study, facilitating the identification of
distinctive features of the
internationalization process in those two
groups of firms. At the same time, a better
understanding of general patterns within
the new-venture category may also
enhance the born-global research. For
example, we do not know whether
reaching the 25% FSTS ratio within the
initial three years represents an
extraordinary achievement or reflects a
more widespread tendency among young
firms that embark on the
internationalization route.
3.2 High-growth firms, gazelles, and antelopes
The core of the proposed format for
measuring the high-growth phenomenon
(the right column of Figure 1) is the
recently adopted definitions of a high-
growth firm and a gazelle. (For a detailed
presentation, see Eurostat OECD 2007.)
However, we propose that these
definitions be extended to include export
sales in the core data on each company in
the sample.
High-growth firms are those that
enjoy an average annual growth rate of
employment or sales greater than 20%
over three years. An additional
requirement is that, in the base year (t–3),
the company must employ 10 or more
people; firms that do not reach the
minimum employment threshold are
usually excluded from the growth analysis.
This condition eliminates very small firms
that have marginal economic impact since
including them in the analysis would
distort the overall picture. This limitation
also reflects the reality that the reliable
data necessary for measuring growth are
rarely available for micro-firms (those that
employ fewer than 10 people).
Gazelles are the subset of the high-
growth population that achieves high-
19
growth status within five years of
beginning operations. In practical terms,
the proposed definition is too restrictive
and may not capture the growth scenarios
of some truly dynamic firms during the
initial five-year period. To qualify as a
gazelle, the company must reach the
threshold of 10 employees not later than
the second year of operation; if the
threshold is reached in the third year or
later, the company does not qualify as a
high-growth firm because the growth ratio
cannot be calculated properly for the last
(fifth) year of the observations. However,
the growth trajectories of many new firms
are highly diverse in the initial years and
are dependent on a variety of conditions
and factors. For example, high-tech start-
ups that are founded by broad-based
entrepreneurial teams with a clear,
dynamic vision do not employ large
numbers of people during the initial phase,
partly because their founders are not just
managers but also perform other functions,
reducing the need for additional
employees.
The gazelle construct, as a sub-set of a
high-growth category, is highly practical
in terms of collecting and processing
statistical data. However, at the same time,
the construct’s formal rigidity is in
contrast with the subject it measures: a
young, dynamic firm during the turbulent
take-off stage. Therefore, we suggest using
as a research tool an alternative construct
proposed by Cieslik (2007): the antelope
firm, which is an enterprise that reaches
the threshold of 20 employees during its
first five years of operation, irrespective of
the growth trajectory leading to that effect.
Unlike gazelles, antelopes are not a subset
of high-growth firms.
To illustrate the arguments raised
here, consider the six hypothetical growth
trajectories of new ventures that launch
their operations in the Year t0 and employ
20 people in Year t5 (Table 1). All six
ventures would qualify as antelopes, but
only one would meet the conditions for a
gazelle. There is no merit in eliminating
the five remaining ventures simply
because of the rigidity of the gazelle
concept.
Table 1 goes about here
3.3 High-growth, export-driven firms, export-intensive gazelles and antelopes
As the first step in combining the
growth and internationalization
perspectives (see the middle column of
Figure 1), we propose the concept of
a “high-growth export-driven firm” as
a company that meets the high-growth
criteria (a subset of high-growth firms) but
also:
20
- was an exporter in the base year t–3 and in year t, and;
- had an export growth rate higher than the growth rate of total sales during the period under analysis.
The concept of an export-driven high-
growth firm is aimed at identifying those
high-growth firms for which international
sales are the key driving force of the
accelerated growth. This approach reflects
the tendency identified in the high-growth
research that the incidences of accelerated
growth are not restricted to smaller and
younger firms but can also be found
among larger, more established ones.
Cieslik’s pilot study (Cieslik 2007)
demonstrated that exports contribute
strongly to the accelerated growth of firms
of various sizes. The definition of export-
driven high-growth firm incorporates the
“international commitment” concept
introduced by Oviatt and McDougall
(2005), which reflects changes in the FSTS
ratio over time. The higher the growth rate
of international sales compared to total
sales, the higher the FSTS ratio during the
period of analysis.
As a second step, we put forward the
concept of export-intensive gazelles, a
subset of gazelles that had an FSTS
exceeding 25% in the last year of
observation. By introducing this concept,
we propose redefining the born-global firm
in terms of how it equates to the export-
intensive gazelle (born-global gazelle).
This new definition has several
advantages. First, it clearly positions born-
global firms among high-growth firms.
Second, it eliminates the confusion and
contradiction between general definitions
of the born-global firms by pointing to
their entrepreneurial orientation and the
measurement tools used for categorization
of such firms. Here, we have particularly
in mind the most widely used FSTS ratio.
A high FSTS ratio and/or its increase may
not always reflect adequately a truly
dynamic and international orientation. At a
very low level of international and
domestic sales, which is not unusual
during the initial period, a high FSTS ratio
may be the result of a just a few incidental
export transactions. Alternatively, a radical
increase in the ratio may also reflect a
decline in domestic sales, rather than
accelerated growth of export sales.
The FSTS measure can be particularly
confusing when it is applied to high-tech
born-global firms that initiate sales in
foreign markets early because of limited
opportunities in their domestic markets
(Kudina et al. 2008). For these firms, later
expansion into the domestic market
actually decreases the FSTS ratio, even
though exports may be increasing as well.
Even more important is that only a few of
these early internationalizing high-tech
21
firms demonstrate subsequent growth
capabilities (Mustar et al. 2006). The new
definition of export-intensive gazelles
excludes the small-scale “life-style”
exporters that represent a significant
proportion of exporting SMEs and meet
born-global criteria of internationalization
within three years and FSTS ratio
exceeding 25% (Cieslik and Kaciak 2009).
Under the proposed definition of the
born-global gazelle, we adopt, for now, the
25% FSTS threshold because it is the
criterion most often used in the born-
global literature. However, we will verify
its rationale on the basis of the Polish data
presented in the following section. We
measure the ratio toward the end of the
five-year period, delimiting the new
venture in line with the standards adopted
in the entrepreneurship literature.
Finally, to capture the international
dimension of antelopes, we define a subset
of antelopes, export-intensive antelopes, as
antelopes that have an FSTS ratio that
exceeds 50% at the end of the initial five-
year period.
44 VVEERRIIFFYYIINNGG TTHHEE FFEEAASSIIBBIILLIITTYY OOFF TTHHEE PPRROOPPOOSSEEDD FFRRAAMMEEWWOORRKK AANNDD TTHHEE
MMEEAASSUURREEMMEENNTT TTOOOOLLSS WWIITTHH DDAATTAA FFRROOMM TTHHEE PPOOLLIISSHH MMAANNUUFFAACCTTUURRIINNGG
SSEECCTTOORR 22000044--22000077
The verification is important because
fine measures and constructs used in the
management and entrepreneurship
research are often difficult to apply
because of the shortage of data, concerns
regarding their reliability, and the high
cost of compiling relevant information.
The source of statistical information
for this study is census data from the
Annual Enterprise Survey of the Central
Statistical Office (CSO) of Poland.
Submission of data to the Annual
Enterprise Survey is obligatory for Polish
enterprises that employ ten or more people
in a given calendar year. In 2007, there
were 66,432 such enterprises; of those,
48,165 kept full accounting records and
were subsequently requested to provide a
wide range of economic and financial data
(GUS 2008). These enterprises constitute
the core dataset for our broader research
project, which envisages tracing company
records back to 2002, the first year that
export sales were reported separately from
total sales revenues in the Annual
Enterprise Survey. The project is being
carried out in cooperation with the CSO.
Unlike a number of countries that have
specific provisions granting access to
anonimized company data for scientific
purposes, such access is not yet allowed
under Polish law, so we used the data
22
processed by the CSO to meet the
requirements of this particular project.
Following the recommendations of
experts from the CSO, for the purpose of
testing the proposed integrated
measurement framework, we limited the
empirical analysis to the 15,355 firms in
the manufacturing sector that had 10 or
more employees – 32% of all firms
covered by the Annual Enterprise Survey.
The key argument is related to the quality
of the census data provided by the
companies, which is much better in the
manufacturing sector than in the services
sector.
The methodology of the Polish
Annual Enterprise Survey identifies eight
incidents of economic restructuring that
companies are obliged to report. To ensure
the comparability of the unit of analysis
(see Section 2) in the growth analysis, we
removed from the sample those firms
whose economic restructuring was
reported after 2004.
The analysis presented in this section
is confined to methodological and
measurement issues only. For the purpose
of testing the measurement tools, we used
only core company data: age, total sales
revenues, export sales and employment. A
more comprehensive investigation of links
between internationalization and growth
will be conducted during subsequent
stages of this research project using a
comprehensive set of longitudinal data.
4.1 Export intensity
The “internationalization grid” of the
Polish manufacturing sector shown in
Table 2 demonstrates the diversity of
manufacturing firms in terms of their
export intensity and shows the importance
of categorizing the firms, according to
ownership control, into foreign
subsidiaries, domestic subsidiaries and
independent local firms. Although
Andersson et al. (2007) categorized
domestic multinational firms separately in
their study of the internationalization of
the Swedish manufacturing sector, we did
not do so because of the limited number of
foreign subsidiaries established by Polish
firms thus far. Our categorization was
accomplished in two steps. First, we
determined the equity structure of firms as
of 2007 and assigned them to one of the
three categories: foreign subsidiaries, local
subsidiaries and independent local firms
based on their majority control. The few
firms with balanced equity structures were
assigned to the local subsidiaries category.
For the approximately 20% of the firms
that did not provide data about their equity
structure in 2007, we used corresponding
data from the Polish statistical register of
economic entities.
23
Table 2 goes about here
The overall contribution and export
intensity of the foreign-controlled sector
deserve particular attention. Foreign
subsidiaries account for only about 18% of
all firms in the manufacturing sector that
employ 10 or more people, but they
contribute 34% of the employment, 47%
of the total sales, and 69% of the export
sales in the manufacturing sector. In terms
of export intensity, data in Table 3 depicts
foreign subsidiaries as a category distinct
from local subsidiaries and independent
domestic firms. The key differentiating
factor lies in the stratification of firms
within a given category in terms of their
export intensity. Foreign subsidiaries are
predominantly intensive exporters that
generate over 50% of their revenues from
abroad, whereas local subsidiaries and
independent domestic firms are
predominantly non-exporters or marginal
exporters.
Table 3 goes about here
4.2 High-growth firms, gazelles, and
their international orientation
Based on employment, 8.2% of
manufacturing firms with 10 or more
employees are high-growth firms, and
14.9% are high-growth firms based on
sales (Table 4 and 5). These figures are
among the highest among the OECD
countries where comparable data are
available (OECD 2008 p. 19). Similar to
those in other countries, the high-growth
manufacturing firms in Poland contributed
more than proportionally to employment,
sales and exports of the Polish
manufacturing sector in 2007. It is
interesting to note the significant
contribution to total sales and exports
within the group of high-growth firms in
the independent domestic firm segment.
Table 3 provides data on sales-based
growth.
Tables 4 and 5 go about here
We also identified a group of
approximately 4,000 manufacturing firms
(almost 25% of the manufacturing
population) that were not included in the
growth analysis because they did not
participate in the Annual Enterprise
Survey in the base year of 2004, possibly
either because they did not meet the
required number of employees or because
they were too young. It is also possible
that they simply failed to meet their
obligation to file. As a result, there may be
many “hidden” high-growth firms.
The export-driven subset of high-
growth firms accounts for 28% of the
24
high-growth population but contributes
37% of employment, 56% of total sales,
and 62% of export sales of the high-
growth firms. Since it signals the
important role of international orientation
in pursuing a high-growth strategy, the
export-driven high-growth firm category is
highly relevant to research on international
entrepreneurship.
The share of gazelles in the total
number of firms in the Polish
manufacturing sector is among the highest
of the OECD countries (OECD 2008 p.
21); 2.0% of all firms in the sector are
gazelles, based on employment, and 2.7%
are gazelles based on sales (Table 3).
However, a more detailed analysis reveals
that 42% of the gazelle firms employed
more than 99 people, which seems difficult
to achieve within the defined period of five
years. Therefore, it is likely that many of
these gazelles were actually new corporate
ventures that were not reported as
incidents of economic restructuring, but
whether this conjecture holds true should
be verified through more thorough
examination. Here we shall refer to the
earlier discussion regarding the difficulty
of dealing with the issue of comparable
units of analysis in longitudinal studies,
even when the period under study is
relatively short (e.g., four years). The
Polish statistical system identifies eight
incidences of economic restructuring, but
these do not seem to capture the full range
of events. For example, a company that
was set up by an existing parent but
acquires assets, employs people, etc., on
the basis of commercial transactions
formally reports its status as a new entity,
but in reality should be categorized as
economic restructuring . Tables 4 and 5
provide separate data for firms that
employed up to 99 people because this
band may do a better job of reflecting the
size of a gazelle population.
At 28%, the share of export-intensive
firms among the gazelles is the same as
that of export-driven firms among the
high-growth firms. Export-driven (born-
global) firms dominate the export
operations of gazelles, but the fact that
approximately 60% of the export-intensive
gazelles employ more than 99 people
suggests that these firms may be incidents
of corporate restructuring. From the
research perspective, export-driven
gazelles (born-globals) are a “rare species”
among the manufacturing firms; our study
revealed just 45 such entities that
employed up to 99 people. Their overall
contribution to the employment, domestic
and export sales, at the early stage, is
relatively small.
Under the definition adopted in this
study, export-intensive gazelles must have
25
an FSTS ratio over 25%, which ratio is in
line with the threshold most often used in
the born-global literature. However, the
average FSTS ratio among export-
intensive gazelles exceeds 60%, and an
additional sensitivity analysis reveals that
even a 50% threshold would have only a
marginal effect on the number of firms
within this category. This finding sets an
argument for moving the export-intensity
threshold for categorizing born-global
firms to 50%.
Unlike gazelles, the number of
antelopes is sizeable—even bigger than the
number of high-growth firms with
comparable contributions to sales, exports
and employment. The high-growth firms
and antelopes are clearly two separate
cohorts, with gazelles, in principle, as an
overlapping component. Since the growth
analysis is based on sales, some gazelles
that employ 10 employees in year t-3 but
stay below 20 employees in year t would
not qualify as antelopes. However, one
might expect such cases to be rare,
particularly in the manufacturing sector.
The empirical analysis demonstrates the
negative effect of the formal rigidity of the
gazelle construct, thus reinforcing the
argument for the use of antelope as a more
useful construct for researching the
dynamics of new ventures.
With regard to export orientation, the
empirical analysis points to the
heterogeneity of the antelope category.
The majority of export-intensive antelopes
are foreign subsidiaries, whereas the
domestic antelopes are only marginally
engaged in exporting.
4.3 Export intensity of young firms
We also examined the patterns of
export intensity in the cohort of young
firms by looking at their export intensity
status two full years after establishment
(with reference to the “early
internationalization imprinting”) and five
full years after establishment (consistent
with the principles adopted in the high-
growth analysis). We did not include the
growth analysis in this examination
because our core data set includes only
firms with 10 or more employees.
However, reaching this level within 2-3
years indicates growth orientation in itself.
We also compared the trends in export
intensity among young firms to that of the
entire population of manufacturing firms
in 2007. To eliminate incidences of
corporate restructuring, we confined our
comparison to firms that employed less
than 100 people (Table 6). The cohort of
young manufacturing firms established in
a given year represents approximately 5%
of the total number of manufacturing
26
firms, and a similar percentage of sales
(including exports). The key differentiator
between foreign subsidiaries and domestic
firms (both subsidiaries and independent
firms) lies in the composition of firms
within a given category of export intensity.
Young, foreign subsidiaries are, from the
beginning, largely intensive exporters,
whereas most domestic Polish firms are
predominantly non-exporters and marginal
exporters. Thus, the internationalization
patterns of young firms do not differ from
that identified earlier in the entire
population of manufacturing firms.
Table 6 goes about here
The export-intensity analysis of young
firms facilitates a comparison of the cohort
of five-year-old firms whose export
intensity exceeded 25% with export-
intensive gazelles (born global).
Comparing the data in Tables 3 and 4
indicates that, although export-intensive
gazelles represented only 25% of five-
year-old firms with export intensity
exceeding 25%, their contribution to total
sales revenues and exports was, at 55%
and 75%, respectively, disproportionately
high.
A comparison of export-intensive
antelopes with export-intensive young
firms, particularly those 5 years old, shows
that the number of export-intensive
antelopes is four times that of 5-year-old
export-intensive firms and that antelopes’
contribution to total and export sales is
more than 5 times higher. The source of
this striking difference is that antelopes are
firms established in 2002 and later and
many firms established this recently have a
strong export orientation and also meet the
minimum requirement of 10 employees in
2007, thus falling within the scope of the
export-intensive antelope category.
55 SSUUMMMMAARRYY AANNDD CCOONNCCLLUUSSIIOONN
The international entrepreneurship
research has not taken advantage of the
methodological constructs and
measurement tools developed within the
specialized field of entrepreneurship
research that focuses on high-growth
firms. To do so was the purpose of this
paper.
The empirical verification has proved
the applicability and usefulness of the
proposed framework for measuring growth
and internationalization in an integrated
way. It has also demonstrated the
feasibility of putting together a set of
generalizable, statistically significant data,
as advocated by Coviello and Jones
27
(2004), which also may serve as a
“research springboard” for more detailed
analyses with the use of fine-grained
methods.
Our analysis leads to some important
conclusions with respect to measurement
tools. It demonstrates the usefulness of the
high-growth export-driven definition in
categorizing, within the population of
existing firms, those that are both dynamic
and expand predominantly in international
markets in pursuit of their growth
strategies.
As to the use of the export-intensive
gazelle concept as an alternative definition
for a born-global firm, the empirical
analysis indicates that the 50% threshold
may be more appropriate for categorizing
such firms than the 25% threshold.
However, our study points to the serious
weaknesses of the gazelle construct in
general because it leads, inter alia, to the
elimination of truly dynamic,
internationally oriented new ventures.
Comparing gazelles to antelopes
seems more useful in researching growth-
oriented new ventures. Since it is more
flexible, the antelope construct can be
easily adapted to the specific conditions
prevailing in a given industry. High-tech
start-ups, particularly in the ICT sector,
often achieve impressive track records
with respect to sales, growth and
profitability, despite modest employment
levels. For this sector, as an example, the
proposed threshold of 20 employees by the
end of the initial five-year period could be
lowered to, say, 10 employees. Another
argument in favor of the antelope concept
is that it is compatible with the “high-
expectation entrepreneur” definition used
in the Global Entrepreneurship Monitor
Project (Autio 2007).
Our empirical analysis demonstrates
the usefulness of and need for tracking
firms’ equity composition and other links
within larger corporate structures and
business groups, categorizing firms by
different governance structures, and
applying different methods in the follow-
up research. In the contemporary world,
which is characterized by a great diversity
of governance structures, there is a
significant risk that such links can be
overlooked and/or not properly addressed
by researchers in the international
entrepreneurship field.
Our analysis clearly demonstrates that
by integrating the internationalization and
entrepreneurship research streams, the IB
community will be increasingly confronted
with the most serious challenge identified
in the high-growth analysis: the evolving
concept of a high-growth firm that can
grow either organically or by acquisitions
and that undergoes governance structure
28
changes over time. This issue becomes
particularly relevant for longitudinal
studies, which are strongly advocated but
rarely applied in IB research or in the
management field in general.
Finally, J. J. Heckman, the Nobel
Prize Winner in Economics in 2000,
observed that the most important discovery
of economic research based on micro-data
was the pervasiveness of heterogeneity and
diversity in economic life (Heckman
2001), thus making the concept of the
“average person” as a unit of analysis
largely obsolete. Coping with such
heterogeneity and diversity of international
operations, while at the same time
exploiting the full potential of micro-data
analysis, represents a major challenge for
international entrepreneurship research.
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Table 1 Gazelles and antelopes under alternative growth scenarios
*) To achieve the average growth rate of 20% over a three-year period, the ratio must be equal to or higher than 1.728.
Source: Cieslik 2007
Growth scenario
Employment Minimum employment in the base year
Gazelle Antelope Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Ratio 4/1*
Ratio 5/2*
A 1 2 5 9 12 20 6.000 4.000 NO NO YES
B 1 2 10 12 16 20 8.000 2.000 YES YES YES
C 8 10 12 14 17 20 1.700 1.667 YES NO YES
D 2 9 13 14 15 20 1.667 1.538 YES NO YES
E 3 7 9 15 18 20 2.571 2.222 NO NO YES
F 10 12 15 17 19 20 1.583 1.333 YES NO YES
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Table 4High-growth, gazelles, antelopes and their international orientation in the Polish manufacturing sector in 2007
(growth rate calculation based on sales)
Unit All firms Subs foreignSubs local
Indep. local All firms
Subs foreign
Subs local
Indep. local
Number of firms number 15 355 2 814 2 795 9 746 10 862 1 550 1 613 7 699Total sales million 809 635 383 659 168 694 257 282 121 777 29 702 17 280 74 796Export sales million 284 977 197 014 35 289 52 674 22 504 11 368 1 797 9 338Employment thousand 1 939 655 499 785 432 64 70 298
Number of firms number 2 289 508 339 1 442 1 385 213 175 997Total sales million 218 965 84 443 25 536 108 986 26 643 7 166 3 269 16 208Export sales million 82 038 50 679 5 499 25 860 5 005 2 309 299 2 398Employment thousand 358 138 60 160 64 10 8 46
Number of firms number 639 246 74 319 276 92 20 164Total sales million 130 544 41 412 11 329 77 803 7 629 3 153 724 3 753Export sales million 50 961 24 721 3 885 22 354 2 514 964 173 1 377Employment thousand 132 58 20 55 15 5 1 9
Number of firms number 411 90 73 248 238 42 39 157Total sales million 24 616 11 603 5 567 7 446 4 459 1 646 492 2 322Export sales million 10 136 7 054 1 770 1 312 940 685 16 238Employment thousand 62 19 13 29 11 2 2 7
Number of firms number 114 61 8 45 45 25 1 19Total sales million 14 840 10 131 2 962 1 746 1 181 875 11 295Export sales million 9 554 6 927 1 673 955 810 618 7 185Employment thousand 26 16 3 7 2 1 0 1
Number of firms number 2 423 570 376 1 477 1 643 352 205 1 086Total sales million 109 109 56 279 22 265 30 566 22 488 7 920 2 785 11 783Export sales million 40 114 30 293 4 480 5 340 5 456 3 696 336 1 424Employment thousand 310 106 68 136 79 18 11 51
Number of firms number 555 334 43 178 336 206 17 113Total sales million 36 710 28 626 4 407 3 676 5 097 3 861 186 1 050Export sales million 28 553 23 111 2 744 2 697 4 248 3 263 150 835Employment thousand 91 61 10 20 17 10 1 6Source: Own calculations based on the census data provided by the Central Statistical Office of Poland
Firms up to 99 employees
High-growth firms
Total
High-growth export-driven
Gazelles
Export intensive gazelles (born global)
Antelopes
Export intensive Antelopes (born global 2)
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Table 5 High-growth, gazelles, antelopes in the Polish manufacturing sector in 2007 (as % of all firms)
Total Firms up to 99 employees
All
firms Subs
foreign Subs local
Indep. local
All firms
Subs foreign
Subs local
Indep. local
High-growth firms Number of firms 14.9 18.1 12.1 14.8 12.8 13.7 10.8 12.9 Total sales 27.0 22.0 15.1 42.4 21.9 24.1 18.9 21.7 Export sales 28.8 25.7 15.6 49.1 22.2 20.3 16.6 25.7 Employment 18.4 21.0 12.1 20.3 14.9 15.8 11.4 15.6
High-growth export-driven Number of firms 4.2 8.7 2.6 3.3 2.5 5.9 1.2 2.1 Total sales 16.1 10.8 6.7 30.2 6.3 10.6 4.2 5.0 Export sales 17.9 12.5 11.0 42.4 11.2 8.5 9.6 14.7 Employment 6.8 8.9 4.0 7.0 3.5 7.3 1.5 3.1
Gazelles Number of firms 2.7 3.2 2.6 2.5 2.2 2.7 2.4 2.0 Total sales 3.0 3.0 3.3 2.9 3.7 5.5 2.8 3.1 Export sales 3.6 3.6 5.0 2.5 4.2 6.0 0.9 2.6 Employment 3.2 2.9 2.7 3.8 2.6 3.0 2.5 2.5
Export intensive gazelles (born global) Number of firms 0.7 2.2 0.3 0.5 0.4 1.6 0.1 0.2 Total sales 1.8 2.6 1.8 0.7 1.0 2.9 0.1 0.4 Export sales 3.4 3.5 4.7 1.8 3.6 5.4 0.4 2.0 Employment 1.4 2.5 0.7 0.9 0.6 2.0 0.0 0.4
Antelopes Number of firms 15.8 20.3 13.5 15.2 15.1 22.7 12.7 14.1 Total sales 13.5 14.7 13.2 11.9 18.5 26.7 16.1 15.8 Export sales 14.1 15.4 12.7 10.1 24.2 32.5 18.7 15.3 Employment 16.0 16.2 13.6 17.3 18.3 27.5 15.2 17.1
Export intensive antelopes (born global 2) Number of firms 3.6 11.9 1.5 1.8 3.1 13.3 1.1 1.5 Total sales 4.5 7.5 2.6 1.4 4.2 13.0 1.1 1.4 Export sales 10.0 11.7 7.8 5.1 18.9 28.7 8.3 8.9 Employment 4.7 9.3 2.0 2.6 4.0 16.4 1.1 2.0
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Table 6Export intensity of the Polish manufacturing firms employing up to 99 people in 2007: All firms compared with 5-years old and 2 years old
2007 Data Unit TotalSubs
foreignSubs local
Indep. local Total
Subs foreign
Subs local
Indep. Local Total
Subs foreign
Subs local
Indep. Local
Number of firms number 10 862 1 550 1 613 7 699 583 98 81 404 518 96 81 341
Total sales million 121 777 29 702 17 280 74 796 5 902 1 584 807 3 511 4 832 1 329 779 2 725
Export sales million 22 504 11 368 1 797 9 338 1 117 609 81 426 936 547 91 298Employment thousand 432 64 70 298 23 4 4 15 19 4 4 12
Number of firms number 1 598 791 106 701 95 47 5 42 91 54 5 32Total sales million 19 914 11 696 1 066 7 153 986 587 46 353 835 571 34 230Export sales million 15 389 9 244 828 5 317 763 469 33 262 670 465 27 178Employment thousand 72 34 5 33 4 2 0 2 4 2 0 1
Number of firms number 781 166 89 526 37 10 5 22 33 8 5 19Total sales million 11 186 3 391 1 377 6 418 575 248 93 233 451 131 119 201Export sales million 4 032 1 218 512 2 302 210 93 31 86 166 50 42 74Employment thousand 38 8 5 25 2 0 0 1 1 0 0 1
Number of firms number 875 135 109 631 43 9 6 28 36 7 6 23Total sales million 12 996 3 906 1 692 7 398 577 214 55 308 424 134 99 191Export sales million 2 161 666 286 1 208 99 37 9 53 67 21 17 29Employment thousand 40 6 6 28 2 0 0 1 2 0 0 1
Number of firms number 1 871 218 276 1 377 102 16 14 72 80 13 15 52Total sales million 29 630 7 771 5 284 16 575 1 354 352 220 782 1 052 325 188 539Export sales million 923 240 172 512 44 11 9 25 32 11 5 17Employment thousand 84 9 14 61 5 1 1 3 3 1 1 2
Number of firms number 5 737 240 1 033 4 464 306 16 52 239 279 14 51 214Total sales million 48 050 2 938 7 860 37 252 2 411 184 394 1 834 2 071 168 339 1 565Export sales million 0 0 0 0 0 0 0 0 0 0 0 0Employment thousand 198 7 40 151 10 0 2 8 9 0 2 7
Source: Own calculations based on the census data provided by the Central Statistical Office of Poland
Non-exporters
Marginal exporters
All firms 5 years old firms 2 years old firms
Intensive exporters
Export intensity classes - all firms up to 99 emp.
Advanced exporters
Moderate exporters
37
Figure 1. Integrating internationalization and high-growth measures
Source: Own presentation
Export-intensive
Antelopes (born global 2) Antelopes
Export intensity
(All firms)
High-growth firms
(subset of all firms)
High-growth, export-driven
(subset of high-growth firms)
Gazelles as subset of
high-growth firms
Export-intensive Gazelles
(born global) Export intensity of young
firms
Integrated measures
High growth measures
Internationalization measures