Toward a theory of international new ventures2015/05/25 · on several continents, particularly in advanced technology indus-tries where many established competitors are already global

journal of International Business Studies (2005) 36, 29-41C 2005 Palgrave Macmillan Ltd. All rights reserved 0047-2506 S30.00wwwjibs.net

2004 DECADE AWARD WINNING ARTICLE

Toward a theory of international new ventures

Benjamin M Oviattl andPatricia Phillips McDougall 2

'Department of Managerial Sciences, RobinsonCollege of Business, Georgia State University,Atlanta, GA, USA; 2School of Management,Ivan Allen College of Management, Policy,and Intemational Affairs, Georgia Instituteof Technology, Atlanta, GA, USA

Correspondence:Dr B Oviatt, Department of ManagerialSciences, Po Box 4014, Georgia StateUniversity, Atlanta, GA 30302-4014, USA.Tel: + 1 404 651 3400;E-mail: [email protected]

Online publication date: 18 November 2004

AbstractOrganizations that are international from inception - international newventures - form an increasingly important phenomenon that is incongruentwith traditionally expected characteristics of multinational enterprises. Aframework is presented that explains the phenomenon by integratinginternational business, entrepreneurship, and strategic management theory.That framework describes four necessary and sufficient elements for theexistence of international new ventures: (1) organizational formation throughinternalization of some transactions, (2) strong reliance on alternativegovernance structures to access resources, (3) establishment of foreign locationadvantages, and (4) control over unique resources.Journal of International Business Studies (2005) 36, 29 -41doi: 10.1 057/palgravejibs.8400 128

Keywords: international new ventures

IntroductionThe study of the multinational enterprise (MNE) has focused onlarge, mature corporations. Historically, many MNEs developedfrom large, mature, domestic firms (Chandler, 1986), and theycommanded attention because they wielded significant economicpower, especially after World War II (Buckley and Casson, 1976;Dunning, 1981; Hennart, 1982). However, recent technologicalinnovation and the presence of increasing numbers of people withinternational business experience have established new foundationsfor MNEs. An internationally experienced person who can attract amoderate amount of capital can conduct business anywhere in the.time it takes to press the buttons of a telephone, and, when required,he or she can travel virtually anywhere on the globe in no more thana day. Such facile use of low-cost communication technology andtransportation means that the ability to discover and take advantageof business opportunities in multiple countries is not the preserve oflarge, mature corporations. New ventures with limited resourcesmay also compete successfully in the international arena.

Since the late 1980s, the popular business press has beenreporting, as a new and growing phenomenon, the establishmentof new ventures that are international from inception (Brokaw,1990; The Economist, 1992, 1993b; Gupta, 1989; Mamis, 1989).These start-ups often raise capital, manufacture, and sell productson several continents, particularly in advanced technology indus-tries where many established competitors are already global.

LASA Industries, Inc., which sold an unusually efficient micro-processor prototyping technology, is representative of these

Intemational new ventures Benjamin M Oviatt and Patricia Phillips McDougall

international new ventures formed within the pastdecade. As detailed by Jolly et al. (1992), LASA'sstrategy was international in multiple respects. Itsfounders were American, Swiss, and French. Itsfunding was European. The operational headquar-ters and R&D were located in the United States,while marketing was managed from France andfinance from Switzerland. Manufacturing was cen-tered in Scotland to take advantage of attractiveregional grants, and initial sales were in France andthe United States.

IXI Limited, a British venture which became aleading supplier of desktop windowing computersoftware for UNIX operating systems, violated theusual expectation that firms begin with sales intheir home country and later sell to foreigncountries. Ray Anderson, the venture's founderand chairman, had previously worked for a Britishcomputer company that failed. Through Ander-son's work in that company's Boston and Canadianoperations, he became aware of the needs of theNorth American market. While discussing thefailure of his former company, Anderson said,

... it did not succeed because we tried to sell the product bystarting up in England and then selling in the US, and bythat time it was too late. We should have developed ourproducts first of all for the US market and then sold it backinto England (Anderson, 1992).

When Anderson started IXI, his stated strategywas to target the United States first, Japan second,and then move back into the United Kingdom.Funding for the venture was from the UnitedKingdom, Germany, Austria, and Japan. Foreignsubsidiaries were set up in the United States andJapan. Only after establishing itself in both thosecountries did IXI turn its attention to its homecountry, and then to mainland Europe. In aninterview 4 years after the product's introduction,Anderson estimated that 60 percent of IXI's reven-ues came from the United States, 20 percent fromthe United Kingdom, 10 percent from Japan, and10 percent from other countries.

Actually, international new ventures have existedfor centuries. The famous East India Company waschartered in London in 1600 (Wilkins, 1970). Inearly 19th century America, the unprecedentedvalue of cotton exports gave birth to specializedcotton traders (Chandler, 1977). The Ford MotorCompany also seems to have been an internationalnew venture at its founding in 1903 (Wilkins andHill, 1964). However, the focus of interest has beenon MNEs that developed over time from large,

New

Organization Age

Established

Geographic ScopeDomestic International

11Sii 11i. 1,,t, 'i1riLisi~~~ I I X;m.j.

, tX oSY2\d .S ~~~~Ilwi ai

Significant amounts of literature :

Figure 1 The Domain of Academic Literature on Organizationsadapted from the presentation of Candida Brush in McDougallet al. (1991).

mature, integrated enterprises (Chandler, 1986),and we believe that has obscured the existence ofinternational new ventures.

As a result, scholars of organization science haveignored international new ventures until veryrecently. Figure 1 depicts our sense of the domrainof scholarly literature on organizations. A substan-tial body of research has been published onestablished firms, both domestic and international,and on domestic new ventures. However, there ismuch less work in the quadrant of internationalnew ventures. Entrepreneurship research on inter-national issues has largely concerned itself with (1)the impact of public policies on small-firm export-ing (e.g., Rossman, 1984), (2) entrepreneurs andentrepreneurial activities in various countries (e.g.,Ohe et al., 1991; Westhead, 1990), and (3) compar-isons between small-firm exporters and non-expor-ters (e.g., Kedia and Chhokar, 1985).

The age of an organization when it internationa-lizes has been considered infrequently. Vozikis andMescon (1985) did show that exporters that werestart-ups reported more problems with exportoperations than did mature small exporters. Moreoften, reports of new ventures that were interna-tional at or near inception have been regarded asexceptional (e.g., Welch and Loustarinen, 1988). Inaddition, the age of small exporters has frequentlybeen viewed as an unimportant demographiccharacteristic (e.g., Malekzadeh and Nahavandi,1985), or a side issue (e.g., Cooper and Kleinsch-midt, 1985).

However, since 1989, reports based on casestudies of international new ventures have begunto appear from scholars of entrepreneurship. Somehave shown that such ventures form becauseinternationally experienced and alert entrepreneursare able to link resources from multiple countries tomeet the demand of markets that are inherently

journal of International Business Studies

7*30

International new ventures *Beniamin M Oviatt and Patricia Phillios McDouaall

international (Coviello and Munro, 1992; Hoy et al.,1992; McDougall and Oviatt, 1991; Oviatt et al.,1991; Ray, 1989). Other case studies have shownthat the success of international new venturesseems to depend on having an international visionof the firm from inception, an innovative productor service marketed through a strong network, anda tightly managed organization focused on inter-national sales growth (Ganitsky, 1989; Jolly et al.,1992; McDougall and Oviatt, 1992).

Collectively, these case studies indicate thatinternational new ventures are an important phe-nomenon. They have identified the formation ofinternational new ventures in more than 10countries in all parts of the world, suggesting thatglobal forces may be promoting their development.In addition, the studies show that interest in thetopic is recent and has emerged independently andnearly simultaneously from several groups ofscholars. Finally, while many of the venturesstudied were in high-tech businesses, services andeven aquaculture were represented, suggesting thatinternational new ventures may appear in a widerange of industries.

Additional indicators of the emergence of inter-national new ventures have also appeared. Brush's(1992) study of small, internationalized, US manu-facturers found 17 firms - 13 percent of her randomnation-wide sample - were internationalized duringtheir first year of operation. Ernst and Young'ssurvey of 303 firms in the North American electro-nics industry (Burrill and Almassy, 1993) showedthat 5 years ago 53 percent of the industry wasoperating domestically. In 1992, only 17 percentwere domestic, and by 1997 only 9 percent wereexpected to be. A third of the firms surveyed werestill in development, with less than $5 million inrevenue.

The fact that the business press believes theemerging phenomenon of international newventures is important and that some academicsworking independently around the world havedescribed similar organizations indicate a needfor systematic research on these infrequentlystudied new ventures. However, the overall purposeof this paper is not to add to the growingdescriptions of particular international newventures. Rather, it is to define and describe thephenomenon and to present a framework explain-ing how international new ventures fit within thetheory of the MNE. We hope that a well-delineated,theoretical framework will unify, stimulate, andguide research in the area.

31

The next section provides a formal definition ofinternational new ventures. Following that, certainproblems are considered regarding the applica-tion of standard MNE concepts to internationalnew ventures. Next, a theoretical frameworkexplaining international new ventures is presented.It integrates accepted MNE theory with recentdevelopments in entrepreneurship and strategicmanagement research. Finally, four types of inter-national new ventures are described in terms of ourinternational new venture framework, the numberof value chain activities they coordinate (Porter,1985), and the number of countries in which theyoperate.

A definition of international new venturesWe define an international new venture as a businessorganization that, from inception, seeks to derivesignificant competitive advantage from the use ofresources and the sale of outputs in multiple countries.The distinguishing feature of these start-ups is thattheir origins are international, as demonstrated byobservable and significant commitments ofresources (e.g., material, people, financing, time)in more than one nation. The focus here is on theage of firms when they become international, noton their size. In contrast to organizations thatevolve gradually from domestic firms to MNEs,these new ventures begin with a proactive interna-tional strategy. However, they do not necessarilyown foreign assets; in other words, foreign directinvestment is not a requirement. Strategic alliancesmay be arranged for the use of foreign resourcessuch as manufacturing capacity or marketing. Thus,consistent with Buckley and Casson's (1976) defini-tion of the multinational enterprise, the definitionof the international new venture is concerned withvalue added, not assets owned (Casson, 1982).

The fact that international new ventures areinternational from inception implies that somedecision must inevitably be made about wheninception occurs. Much has been written in theentrepreneurship literature concerning the point atwhich a new venture is considered to exist as anorganization (e.g., Katz and Gartner, 1988). How-ever, Vesper argues that there can be no ultimateresolution, because the emergence of a venture is'spread over time in which its existence becomesprogressively more established' (1990, p. 97). Thus,empirical studies of international new venturesmust resolve a definitional ambiguity. We believeresearchers should rely on observable resourcecommitments to establish a point of venture


International new ventures Benjamin M Oviatt and Patricia PhilliDs McDouoall

inception. FOr new ventures that have no salesbecause their product or service is under develop-ment, there must be a demonstrated commitmentto sell the output in multiple countries uponcompletion of development.

Problems in the application of MNE theory tointernational new venturesStage theories of the MNE and the commonemphasis on organizational scale as an importantcompetitive advantage in the international arenaare inappropriate explanations of multinationalbusiness activity for new ventures that are instantlyinternational.

The stage theory of MNE evolutionMNEs are believed by many people to evolve onlyafter a period of domestic maturation and homemarket saturation (Caves, 1982; Porter, 1990).Empirical researchers have in the past found thatlarge, mature MNEs and small exporters go throughdistinct stages in the development of their inter-national business. They begin perhaps with anunsolicited foreign order, proceed sometimesthrough exporting and the development of aninternational division, and occasionally advanceto the establishment of a fully integrated, globalenterprise (Aharoni, 1966; Bilkey and Tesar, 1977;Czinkota and Johnston, 1981; Stopford and Wells,1972).

This staged development of firm internationaliza-tion is described as an incremental, risk-averse, andreluctant adjustment to changes in a firm or itsenvironment Uohanson and Vahlne, 1977, 1990).The process preserves routines that bind organiza-tional coalitions, and recognizes the difficulty ofgaining knowledge about foreign markets. Differ-ences in language and culture and, in the past, theslow speed of communication and transportationchannels between countries have inhibited thegathering of information about foreign marketsand have increased the perceived risks of foreignoperation.

With a logical explanatory theory and repeatedempirical confirmation, stage models of MNEdevelopment have been transformed from descrip-tive models, and 'were soon applied prescriptivelyby consultants, academics, and managers alike'(Bartlett and Ghoshal, 1991, 31). In addition, Cavesindicated that international firms must experiencean extended evolutionary process when he directlycontrasted MNEs with 'newly organized firms'(1982, 96). However, recent studies have found

contradictions. For example, Welch and Loustar-inen (1988) discussed reports of small English firms,Australian start-ups, and established Swedish firmsthat skipped important stages and were involvedwith unexpected speed in direct foreign invest-ments. In addition, Sullivan and Bauerschmidt(1990) found that a firm's stage of internationalinvolvement was an unexpectedly poor predictor ofEuropean managers' knowledge and beliefs. Finally,Turnbull (1987) presents a strong conceptual andempirical criticism of the stages theory of inter-nationalization.

Johanson and Vahlne (1990) dismissed theseconcerns as merely indicative of the need foradjustment to their model of firm internationaliza-tion. We believe, however, that the emergence ofinternational new ventures presents a uniquechallenge to stage theory. It purportedly bestapplies to the early stages of internationalizationwith only three exceptions Johanson and Vahlne,1990). First, firms with large resources are expectedto take large steps toward internationalization.Second, when foreign market conditions are stableand homogeneous, learning about them is easier.Third, when firms have considerable experiencewith markets that are similar to a newly targetedforeign market, previous experience may be gen-eralizable to the new arena. Yet, none of theexceptions seems to apply to international newventures. Resources are constrained by their youngage and usually by small size. Their markets areamong the most volatile (indeed, several of theinternational new ventures we have studied appearto contribute to industry volatility). Finally, newventures, by definition, have little or no experiencein any market. Therefore, according to Johansonand Vahine's (1990) own standards, stage theoryneeds more than a minor adjustment.

Scale and the MNEIn addition to the belief that firms must go throughstages of evolution before venturing into foreignlands, large size is often thought to be a require-ment for multinationality. The first modern MNEsevolved in the 1880s and 1890s and were large,mature, integrated companies (Chandler, 1986).They and their descendants have reaped substantialeconomies of scale in R&D, production, marketing,and other areas. An additional advantage of large,vertically integrated or diversified MNEs has beentheir ability to efficiently manage internationalcommunication and transportation and theexchange of production and market information


*32

International new ventu.re Rnnamin KA flviatt and Patricia PhilliDs KAcfn-all

among many countries (Stopford and Wells, 1972).In addition, their market power in oligopolisticindustries has been highlighted as a source of MNEadvantage (Dunning, 1981; Glickman and Wood-ward, 1989; Porter, 1990).

Yet, if large size were a requirement for multi-nationality, international new ventures would sel-dom form because they are almost always smallorganizations. One key to understanding how theycan exist is to recognize that large size may be botha cause and an effect of multinational competitiveadvantage. In some industries, such as pharmaceu-ticals, the sales volume generated by multinationaloperation makes feasible a large-scale R&D effort. Inturn, R&D produces differentiated products, such aspatented drugs, that provide competitive advan-tages over purely domestic firms in many countries.Thus, despite the fact that size is the main firm-specific variable that has explained multinational-ity (Glickman and Woodward, 1989), large MNEsize may be a concomitant, not a cause, of othermore elemental sources of competitive advantage(Casson, 1987; Caves, 1982). Those more elementalsources of advantage make international newventures possible.

The changing international environmentAlthough large size continues to be an importantsource of advantage for some MNEs, changingeconomic, technological, and social conditionshave in recent years highlighted additional sources.Dramatic increases in the speed, quality, andefficiency of international communication andtransportation have reduced the transaction costsof multinational interchange (Porter, 1990).Furthermore, the increasing homogenization ofmany markets in distant countries has made theconduct of international business easier to under-stand for everyone (Hedlund and Kverneland,1985). The upshot is that increasing numbers ofbusiness executives and entrepreneurs have beenexposed to international business. Internationalfinancing opportunities are increasingly available(Patricof, 1989; Valeriano, 1991) and human capitalis more internationally mobile (Johnston, 1991;Reich, 1991).

With such conditions, markets now link coun-tries more efficiently than in the past, and thehierarchies of large, established firms no longerhave the competitive advantage they once enjoyedin international communication and trade (TheEconomist, 1993a). Internationally sustainableadvantage is increasingly recognized to depend on

the possession of unique assets (Barney, 1991;Caves, 1982; Hamel and Prahalad, 1990; Stalket al., 1992).

A priori, valuable unique assets should permitorganizations with more constrained resources,such as new ventures, to enter the internationalarena. In addition, improved international com-munication and transportation along with thehomogenization of markets in many countriesshould, a priori, simplify and shorten the processof firm internationalization. Thus, firms may skipstages of international development that have beenobserved in the past, or internationalization maynot occur in stages at all.

We believe that is precisely what has beenobserved recently by a number of business journal-ists and business academicians - firms not follow-ing the theories of incremental firm inter-nationalization. However, that does not mean thatestablished theories are wrong; they still apply tosome firms and industries. Yet, it does mean thatthe established theories are less applicable in anexpanding number of situations where technology,specific industry environments, and firm capabil-ities have changed as we have described.

Necessary and sufficient elements forsustainable international new venturesWith many markets internationalizing, fewer newventures can escape confrontations with foreigncompetition, and more entrepreneurs are adoptinga multinational viewpoint (Drucker, 1991; Ohmae,1990; Porter, 1986, 1990). Thus, the stage theory offirm internationalization is increasingly incongru-ent with recent developments, and large scale hasbecome one among many ways to compete inter-nationally. As a result, a new framework is neededto lead both theoretical development and empiricalinvestigation toward greater understanding ofinternational new ventures.

The foundation of the theoretical framework thatwe propose is traditional in its reliance on transac-tion cost analysis, market imperfections, and theinternational internalization of essential transac-tions to explain the existence of the MNE. However,the framework also incorporates recently developedideas from entrepreneurship scholars about howventures gain influence over vital resources withoutowning them, and from strategic managementscholars about how competitive advantage isdeveloped and sustained. Together, all these ele-ments describe the international new venture as aspecial kind of MNE.


*33

Intermational new ventures Benjamin M Oviatt and Patricia Phillios McDouaall

Eement 1: IInternalizationOf SomeT ansactions

Organizations

Economic TransactionsL - - - - - - - - - - - -

I, II~~~~~~~~~~~~~~~~~~~~

I , , '

Element 2:AlternativeGovernanceStructures

New Ventures

Organizations

Economic Transactions

\ I, - ---- ---

Element3:Foreign

* * * Location InternationalAdvantage New Ventures

New Ventures

Organizations


I I I ~~~~~~~~~~~~~,I ,…

I- ----------------- Iemen \, | |Sustainable

Element4: InternationalUnique , , | NewVenturesResourses / H l' | Intnl.New Ventures

... NewVentures ...

Organizations

Economic Transactions. .~~-- - - - - - -- - - - -

Figure 2 Necessary and Sufficient Elements for Sustainable International New Ventures.

Essentially, the theoretical framework is anelaboration of Figure 1 (shown earlier), whichclassifies four types of organizations by age andgeographic scope. Figure 2 depicts the framework.The boxes show sets of economic transactions thatare of particular interest in this paper. The arrowsrepresent elements that distinguish a subset from alarger set of transactions.

The framework begins with the box at the upperleft, which is the set of all types of EconomicTransactions. Four necessary and sufficient ele-ments, which are enumerated within the largearrows, progressively distinguish subsets of transac-tions. 'Element 1: Internalization of Some Transac-tions' distinguishes transactions that take place inOrganizations from those that are governed bymarkets. From the set of all Organizations, strongreliance on 'Element 2: Alternative GovernanceStructures' separates the subset of transactionsassociated with New Ventures from those in estab-lished firms. Next, 'Element 3: Foreign LocationAdvantage' distinguishes the subset of transactionsconstituting International New Ventures from thosethat constitute domestic new ventures. Finally,'Element 4: Unique Resources' differentiates the

subset of Sustainable International New Ventures fromthose likely to be short-lived. The dashed con-centric boxes highlight the fact that the interiorboxes depict the progressively more narrow subsets,and the shading shows the path of our narrowinginterests. The effects of the four elements are fullydescribed in the sections below.

Element 1: Internalization of some transactionsThe internalization element is most basic and isclearly part of traditional MNE theory. Organiza-tions form where economic transactions are ineffi-ciently governed by market prices (Coase, 1937;Williamson, 1985); in other words, where marketimperfections exist. It is the defining element of allorganizations, whether new or established, domes-tic or multinational. When the transaction costs ofconstructing and executing a contract and mon-itoring the performance of the contracting partiesare at their lowest in an organization, its hierarch-ical authority (not market prices or a hybridcontract) will be the governance mechanism cho-sen, and the transaction is said to have beeninternalized within an organization (Buckley andCasson, 1976; Dunning, 1981, 1988).

lournal of International Business Studies

*34


International new vent-res.

Reniamin M Oviatt and Patricia Philli-s McDroaall

It should be noted that the internalizationelement of MNE theory is often used to explainforeign direct investment; that is, ownership ofassets located in foreign countries. Indeed, Hymer's(1960) seminal work on the internalization ofinternational transactions was among the firsttheoretical presentations to distinguish betweenpassive portfolio investment and foreign directinvestment, and it focused on explaining the latter.Nevertheless, ownership of foreign assets is not adefining characteristic of either MNEs or interna-tional new ventures (Casson, 1982). Of course, anorganization must own some assets, else it will havenothing of value to exchange in an economictransaction.

Element 2: Alternative governance structuresPoverty of resources and power may not be adefining characteristic of the new venture, but itis a nearly universal association (Stinchcombe,1965; Vesper, 1990). Thus, new ventures commonlylack sufficient resources to control many assetsthrough ownership. The result is that new venturestend to internalize, or own, a smaller percentage ofthe resources essential to their survival than domature organizations. Entrepreneurs must rely onalternative modes of controlling many vital assets(Vesper, 1990), and that fact distinguishes newventures from other organizations.

Williamson (1991) noted that under conditionsof moderate asset specificity and low to moderatedisturbance frequency, hybrid structures, such aslicensing, and franchising, are often useful alter-natives to both internal control and market controlover the exchange of resources. Hybrid partnersshare complementary assets to their mutual bene-fit. However, due to the potential for opportunism,as evidenced by the elaborate contracts that usuallystructure the relationships between the parties andthe frequent reports of hybrid failure (Kanter, 1989;Porter and Fuller, 1986), new ventures risk appro-priation by their hybrid partners of the valuableassets that they do own (Teece, 1987). LargeJapanese firms, for example, have sometimesappeared to form predatory alliances with Amer-ican high-technology start-ups.

An even more powerful resource-conservingalternative to internalization for new ventures isthe network structure (Aldrich and Zimmer, 1986;Larson, 1992). Networks depend on the social (i.e.,informal) control of behavior through trust andmoral obligation, not formal contracts. Coopera-tion dominates opportunism because business and

35

personal reputations are at stake that may greatlyaffect economic rent in and beyond a spot transac-tion. Larson's (1992) rich description of the gains inresources and knowledge of four entrepreneurialorganizations in seven intimate network alliances isimpressive. Yet, risks were also clear. Two of theseven relationships failed after many years ofsuccessful operation, leaving both partners withweaknesses. Nevertheless, even after failure, pro-prietary knowledge was protected and trust wasmaintained.

In summary, a major feature that distinguishesnew ventures from established organizations is theminimal use of internalization and the greater useof alternative transaction governance structures.Due to their poverty of resources and power, newventures may even use such structures when therisk of asset appropriation by hybrid partners ishigh.

Element 3: Foreign location advantageThe location advantage element of the frameworkdistinguishes international from domestic organi-zations. Essentially, firms are international becausethey find advantage in transferring some moveableresources (e.g., raw material, knowledge, intermedi-ate products) across a national border to becombined with an immobile, or less mobile,resource or opportunity (e.g., raw material, amarket) (Dunning, 1988).

However, a firm conducting transactions in aforeign country has certain disadvantages vis-a-visindigenous firms, such as governmentally insti-tuted barriers to trade and an incomplete under-standing of laws, language, and business practicesin foreign countries. As noted earlier, MNEs haveoften relied on the advantages of scale to overcomesuch obstacles. But international new venturesmust usually rely on other resources.

Private knowledge is the most obvious alterna-tive, and it has some interesting properties (Buckleyand Casson, 1976; Caves, 1982; Rugman, 1982).The property that provides location advantage formodern MNEs, including international new ven-tures, is the great mobility of knowledge once it isproduced. With modern communication infra-structures, valuable knowledge can be reproducedand can travel literally with the speed of light atminimal marginal cost. For example, software oftenrequires years of development, but once written, itmay be copied and used ad infinitum with insignif-icant additional costs. Knowledge can then becombined with less mobile resources in multiple


International new ventures Benjamin M Oviatt and Patricia Phillips McDouaall

countries (e.g. factories where the software isneeded). Thus, private knowledge may createdifferentiation or cost advantages for MNEs andinternational new ventures that overcome theadvantages of indigenous firms in many countriessimultaneously.

This appears to be why knowledge-intensiveindustries have been globalizing at such a rapidpace (Reich, 1991), and why a new venture withvaluable knowledge is propelled to instant ratherthan evolutionary internationalization. When afirm introduces valuable innovative goods orservices, it signals at least the existence, if not theessence, of its special knowledge to outsiders.

Competitors, therefore, will try to uncover thesecret or to produce equifinal alternative knowl-edge, and the recent increased efficiency of inter-national markets speeds the whole competitiveprocess. New ventures confronted with such cir-cumstances must be international from inceptionor be at a disadvantage to other organizations thatare international already. Thus, the prevalence ofinternational new ventures is predicted to accom-pany the increasing efficiency of internationalmarkets.

Element 4: Unique resourcesThe first three elements define the necessaryconditions for the existence of an internationalnew venture: internalization of some transactions,extensive use of alternative transaction governancestructures, and some advantage over indigenousfirms in foreign locations. However, these are notsufficient conditions for sustainable competitiveadvantage.

Sustainable competitive advantage for any firmrequires that its resources be unique (Barney, 1991).Unfortunately, for the knowledge-based interna-tional new venture, knowledge is at least to somedegree a public good. Its easy disseminationthreatens a firm's rent-earning opportunity becauseknowledge may not remain unique for long. Thus,the ability to reproduce and move knowledge atnearly zero marginal cost is a simultaneouslybeneficial (as noted in Element 3) and troublesomeproperty. The international new venture must limitthe use of its knowledge by outsiders in manycountries for it to have commercial value. Ingeneral, the use of such knowledge may be limitedby four conditions.

First, if knowledge can be kept proprietary bydirect means, such as patents, copyrights, or tradesecrets, then the possessor of internalized valuable

and rare knowledge may be able to preventimitation and slow the development of substitutes.Yet, patents and copyrights are ignored in somecountries. Even where they are respected, release ofpatented knowledge into a market may advancecompetitors' production of alternative or evenimproved technology. Knowledge that has poten-tial commercial value is often best protected withsecrecy.

Imperfect imitability is the second condition thatmay keep appropriable knowledge proprietary(Barney, 1991; Schoemaker, 1990). A unique orga-nizational history, socially complex knowledge,and ambiguous causal relationships betweenknowledge and the competitive advantage it pro-vides may all prevent imitation by competitors.New ventures often claim their unique manage-ment style and organizational culture provideadvantages, perhaps because they embody all threecharacteristics of imperfect imitability. However, itshould be noted that these same characteristics thatblock competitors' imitations may constrain thespread of such intangible assets as managementstyle into multiple national cultures within thesame organization. Yet, where it can be accom-plished, the inimitability of an international newventure is further reinforced.

Licensing is the third way outside use of, aventure's knowledge may be limited. When knowl-edge is expected to retain its value for a lengthyperiod, a limit pricing strategy (i.e., low license fees)may be used to discourage competitors or *toinfluence the rate and direction of knowledgedissemination. When demand is strong for appro-priable knowledge, but its valuable life is believedto be short (e.g., some personal computer innova-tions), high fees may be used to extract maximumrents over a short period.

The fact that new ventures frequently use net-work governance structures (as discussed underElement 2) is the fourth condition that may limitthe appropriation of venture knowledge. Althoughalliances with complementary organizations, suchas manufacturers and downstream channels, riskappropriation (Teece, 1987), the network structureitself tends to control the risk. The relationshipsinherent in a network can have high personal andeconomic value because network members usuallyshare rents and the relationships contrast so starklywith the usual background of economic opportu-nism (Larson, 1992). Thus, venture network mem-bers are at least somewhat inhibited from usurpingthe venture's knowledge. For such relationships to


*36

Intemational new ventures seniamin M Oviatt and Patricia Phillips McDouaall

exist in new ventures that cross national borders,logic suggests that founding teams must usuallyinclude internationally experienced business per-sons of various national origins.

Types of international new venturesThe previous section described basic elements forall sustainable international new ventures, but thepublished papers that describe actual cases indicatethat these elements manifest themselves in avariety of ways. Some ventures actively coordinatethe transformation of resources from many parts ofthe world into outputs that are sold wherever theyare most highly valued (McDougall and Oviatt,1991). Other international new ventures are pri-marily exporters that add value by moving outputsfrom where they are to locations where they areneeded (Ray, 1989). In the sections that follow,different types of international new ventures will beidentified, some published examples will be brieflyconsidered, and the variety of ways that thenecessary and sufficient elements are manifestedwill be described.

Figure 3 shows that different types of interna-tional new ventures may be distinguished by thenumber of value chain activities that are coordi-nated and by the number of countries entered. Thefigure identifies particular types of firms at theextremes of the two continua, but mixed typescertainly appear in between, and over time newventures may change type by coordinating addi-tional or fewer activities and by operating inadditional or fewer countries. Although the figureuses Porter's (1985) value chain and is similar toPorter's (1986) depiction of international strategyfor established MNEs, Figure 3 focuses on interna-tional new ventures only. In addition, the horizon-tal dimension of Figure 3 simply concerns thenumber of countries in which any value chainactivities occur. Porter's diagram focuses on the

Few Activities CoordinatedAcross Countries Export/Imp(Primarily Logistics)

Coordination of Value ChainActivities

Many Activities GeogralCoordinated FocusedAcross Countries

degree of dispersion among activities when sales areassumed to be in many countries.

New international market makers (Figure 3,quadrants I and 11)New International Market Makers are an age-oldtype of firm. Importers and exporters profit bymoving goods from nations where they are tonations where they are demanded. The mostimportant value chain activities and, therefore,the ones most likely to be internalized are thesystems and knowledge of inbound and outboundlogistics. Transactions involving other activitiestend to be governed by alternative structures.Direct investment in any country is typically keptat a minimum. The location advantage of such newventures lies in their ability to discover imbalancesof resources between countries and in creatingmarkets where none existed. Sustained competitiveadvantage depends on (1) unusual abilities to spotand act on (sometimes by charging high fees)emerging opportunities before increased competi-tion reduces profits in markets they had previouslyestablished, (2) knowledge of markets and suppli-ers, and (3) the ability to attract and maintain aloyal network of business associates. New Interna-tional Market Makers may be either Export/ImportStart-ups or Multinational Traders. Export/ImportStart-ups focus on serving a few nations with whichthe entrepreneur is familiar. Multinational Tradersserve an array of countries and are constantlyscanning for trading opportunities where theirnetworks are established or where they can quicklybe set up.

Geographically focused start-ups (Figure 3,quadrant 111)Geographically focused start-ups derive advantagesby serving well the specialized needs of a particularregion of the world through the use of foreign

1I1iNew International Market Makers

ort Start-up Multinational Trader

III IV

phically GlobalStart-up Start-up

Number of Countries Involved

Figure 3 Types of International New Ventures.


*37

International new ventures Benjamin M Oviatt and Patricia Phillips McDouaall

resources. They differ from the MultinationalTrader in that they are'geographically restricted tothe location of the specialized need, and more thanjust the activities of inbound and outboundlogistics are coordinated. They differ from theexport/import start-up only in the latter respect.In other words, competitive advantage is found inthe coordination of'multiple value chain activities,such as technological development, humanresources, and production. Successful coordinationmay be inimitable because it is socially complex orinvolves tacit'knowledge. That advantage may befurther protected by a close and exclusive networkof alliances in the geographical area served.

For example, in recent years, numerous entrepre-neurs have established firms to profit from thetransfer of Western management and economicknow-how to formerly communist countries. Profitmagazine was formed by two former editors ofSoldier of Fortune magazine who were familiar withEastern Europe (McDougall and Oviatt, 1991). Itpublished practical advice for Eastern Europeanentrepreneurs, and it was written by or aboutsuccessful entrepreneurs in the United States whocame from Eastern Europe. The first issue of themagazine was printed in the Czech Republic withEnglish and Czech translations on facing pages andwas distributed by a Czech entrepreneur whoshared the profits. Additional versions wereplanned for other European countries emergingfrom centrally planned to market-driven econo-mies. However, there was no strategy to movebeyond that geographic region because their com-petitive advantage was in their unique knowledgeof the Eastern European culture and their ability toestablish a network there.

Global start-ups (Figure 3, quadrant IV)The phrase 'global start-up' is used because it is acommon term of trade (Mamis, 1989). It is the mostradical manifestation of the international newventure because it derives significant competitiveadvantage from extensive coordination amongmultiple organizational activities, the locations ofwhich are geographically unlimited. Such firms notonly respond to globalizing markets, but alsoproactively act on opportunities to acquireresources and sell outputs wherever in the worldthey have the greatest value.

Global start-ups may be the most difficult inter-national new ventures to develop because theyrequire skills at both geographic and activitycoordination. However, once successfully estab-

lished, they appear to have the most sustainablecompetitive advantages due to a combination ofhistorically unique, causally ambiguous, andsocially complex inimitability with close networkalliances in multiple countries. One global start-upwe studied identified its 'proprietary network' as itsessential competitive advantage.

Another example is Momenta Corporation 'ofMountain View, California (Bhide, 1991; McDou-gall and Oviatt, 1991), a start-up in the emergingpen-based computer market. Its founders were fromCuba, Iran, Tanzania, and the United States. Fromits beginning in 1989, the founders wanted' theventure to be global in its acquisition of inputs andin its target market. A global market would permitrapid growth and was believed to be necessarybecause potential competitors were global. Inputacquisition was global because all the highest value(i.e., high quality to cost ratio) factors of produc-tion were not to be found in any single country.Thus, software design was conducted in the UnitedStates, hardware design in Germany, manufactur-ing in the Pacific Rim, and funding was receivedfrom Taiwan, Singapore, Europe, and the UnitedStates.

ConclusionThis article has identified, defined, and describedthe emerging phenomenon of international newventures, and has shown that some current theoriesof the MNE do not explain it well. Most important,it has integrated the traditional MNE concepts ofinternalization and location advantage with recerntentrepreneurship research on alternative govern-ance structures and with developments in strategicmanagement on the requirements for sustainablecompetitive advantage. The result is a rich, yetparsimonious, theoretical framework that explainsthe existence of international new ventures, andappears useful in describing their distinct types.

Our framework describes sustainable interna-tional new ventures as controlling assets, especiallyunique knowledge, that create value in morethan one country. Their internationality occurs atinception largely because competitive forcespreclude a successful domestic focus. Their empha-sis on controlling rather than owning assets is dueto resource scarcity that is common among neworganizations.

The framework indicates that empirical inves;ti-gators interested in international new ventures willfind larger sample sizes in industries where inter-national competition for unique knowledge is a

Journal of International Business Studies

*38

R--n,in KA CiA.tt and Patri,ia Phillirn McD--o1a1

dominant characteristic. The framework also iden-tifies ways of protecting rents derived from suchknowledge (i.e., direct patent protection, uncertainimitability, license fees, and network alliances), butempirical research is needed to understand thedifferential success of these mechanisms morecompletely.

This article is partially a response to Casson's(1985) call to include the role of the entrepreneurin explaining the dynamics of the MNE. Thedefensive role of network formation and, thus, theimportance of social interaction by entrepreneurs ishighlighted. Although networks certainly providevital information, their function as a defenseagainst the appropriation of tenuously defendedvaluable and rare knowledge needs more attention.How unusual are the intimate alliances that Larson(1992) describes, and what social and economicprocesses and conditions promote network build-ing across national borders? Although entrepre-neurship scholars have examined some of theseissues within various countries (e.g., Aldrich et al.,1991), we are unaware of investigations thatexplicitly include a sample of international newventures.

Considering a wider arena, it may be recognizedthat our emphasis on the importance of alternativegovernance structures for new ventures is consis-

ReferencesAharoni, Y. (1966) The Foreign Investment Decision Process,

Division of Research, Graduate School of Business Administra-tion, Harvard University: Boston.

Aldrich, H. and Zimmer, C. (1986) 'Entrepreneurship throughSocial Networks', in D.L. Sexton and R.W. Smilor (eds.) The Artand Science of Entrepreneurship, Ballinger: Cambridge, MA.

Aldrich, H.E., Birley, S., Dubini, P., Greve, A., Johannisson, B.,Reese, P.R. and Sakano, T. (1991) The generic entrepreneur?Insights from a Multinational Research Project, Paper Presented atthe Babson Entrepreneurship Research Conference, Pittsburgh.

Anderson, R (1992) 'Personal interview', June 2.Barney, J. (1991) 'Firm resources and sustained competitive

advantage', joumal of Management 17: 99-120.Barreyre, P.Y. (1988) 'The concept of 'impartition' policies: a

different approach to vertical integration strategies', StrategicManagement Journal 9: 507-520.

Bartlett, C.A. and Ghoshal, S. (1991) Managing Across Borders,Harvard Business School Press: Boston.

Bhide, A. (1 991) Momenta Corporation (A) and (B). Case NumbersN9-392-013 and N9-392-014, Harvard Business School,Harvard College: Boston.

Bilkey, W.]. and Tesar, G. (1977) 'The export behavior of smallersized Wisconsin manufacturing firms', journal of InternationalBusiness Studies 3(Spring/Summer): 93-98.

Brokaw, L. (1990) 'Foreign affairs', Inc. 12: 92-104.Brush, C.G. (1992) 'Factors motivating small companies to

internationalize: the effect of firm age', Unpublished disserta-tion, Boston University.

Buckley, P.J. and Casson, M. (1976) The Future of the Multi-national Enterprise, Holmes & Meier: New York.

*

tent with the advice of some scholars that allorganizations may find advantages in outsourcing(Quinn et al., 1990) and impartitioning (Barreyre,1988). The primary advantages are (1) increasedconcentration of limited resources on the primaryinternal sources of competitive advantage and (2)the cost, quality, and flexibility benefits that maybe derived from using outside experts to supply allperipheral resources. However, the risks of dissipat-ing competitive advantages, losing opportunitiesfor learning, and becoming a 'hollow corporation'are significant (Teece, 1987). The existence ofinternational new ventures that must outsourcemany inputs provides a natural laboratoryfrom which to gain insight into the results of thistrade-off.

AcknowledgementsThis article was awarded first prize in the 1993Competition for the Best Paper on Entrepreneurshipand Innovation sponsored by New York University'sCenter for Entrepreneurial Studies. We gratefullyacknowledge financial support for this research fromthe Bernard B & Eugenia A Ramsey Chair of PrivateEnterprise at the Georgia State University and from theSociety of International Business Fellows, based inAtlanta, GA.

Burrill, G.S. and Almassy, S.E. (1993) Electronics'93. The NewGlobal Reality: Ernst & Young's Fourth Annual Report on theElectronics Industry, Ernst & Young: San Francisco.

Casson, M. (1982) 'Transaction Costs and the Theory ofthe Multinational Enterprise', in A.M. Rugman (ed.) NewTheories of the Multinational Enterprise, St Martin's Press:New York.

Casson, M. (1985) 'Entrepreneurship and the Dynamics ofForeign Direct Investment', in P.J. Buckley, M. Casson (eds.)The Economic Theory of the Multinational Enterprise, St Martin'sPress: New York.

Casson, M. (1987) The Firm and the Market, The MIT Press:Cambridge, MA.

Caves, R.E. (1982) Multinational Enterprise and Economic Analysis,Cambridge University Press: Cambridge, MA.

Chandler Jr, A.D. (1977) The Visible Hand, The Belknap Press:Cambridge, MA.

Chandler Jr, A.D. (1986) 'The Evolution of ModernGlobal Competition', in M.E. Porter (ed.) Competition inGlobal Industries, Harvard Business School Press: Boston,pp. 405-448.

Coase, R.H. (1937) 'The nature of the firm', Economica N.S. 4:386-405.

Cooper, R.G. and Kleinschmidt, E.J. (1985) 'The impact ofexport strategy on export sales performance', journal ofInternational Business Studies 15: 37-55.

Coviello, N. and Munro, H. (1992) 'Internationalizing theentrepreneurial technology-intensive firm: growth throughlinkage development', Paper Presented at the BabsonEntrepreneurship Research Conference, INSEAD, France.


I. . . . .. n.ew ventures115Y1

International new ventures Benjamin M Oviatt and Patricia Phillips McDougall

Czinkota, M.R. and Johnston, W.J. (1981) 'Segmenting USfirms for export development', /oumal of Business Research 9:353-365.

Drucker, P.F. (1991) 'The Changed World Economy', in H.Vernon-Wortzel, L.H. Wortzel (eds.) Global Strategic Manage-ment, 2nd edn. Wiley: New York.

Dunning, J.H. (1981) International Production and theMultinational Enterprise, George Allen & Unwin: London.

Dunning, J.H. (1988) 'The eclectic paradigm of internationalproduction: a restatement and some possible extensions',Journal of International Business Studies 19: 1-31.

The Economist (1992) Go west, young firm. May 9, pp. 88-89.The Economist (1993a) The fall of big business. April 17,

pp. 13-14.The Economist (1 993b) America's little fellows surge ahead. July

3, pp. 59-60.Ganitsky, J. (1989) 'Strategies for innate and adoptive exporters:

lessons from Israel's case', International Marketing Review 6(5):50-65.

Glickman, N.J. and Woodward, D.P. (1989) The New Competi-tors, Basic Books: New York.

Gupta, U. (1989) 'Small firms aren't waiting to grow up to goglobal', The Wall Street Journal CCXIV: B2.

Hamel, G. and Prahalad, C.K. (1990) 'The core competence ofthe corporation', Harvard Business Review 68(3): 79-91.

Hedlund, G. and Kverneland, A. (1985) 'Are strategies forforeign markets changing? The case of Swedish investment inJapan', International Studies of Management and Organization.15(2): 41-59.

Hennart, J.-F. (1 982) A Theory of Multinational Enterprise, TheUniversity of Michigan Press: Ann Arbor.

Hoy, F., Pivoda, M. and Mackrle, S. (1992) 'A virus theory oforganizational transformation', Paper Presented at BabsonEntrepreneurship Research Conference, INSEAD, Fountaine-bleau, France.

Hymer, S.H. (1960) The International Operations of NationalFirms: A Study of.Direct Foreign Investment, The MIT Press:Cambridge, MA, (published in 1976).

Johanson, J. and Vahlne, J.-E. (1977) 'The internationalizationprocess of the firm - a model of knowledge development andincreasing foreign market commitment', Journal of Interna-tional Business Studies 4: 20-29.

Johanson, J. and Vahine, J.-E. (1990) 'The mechanism ofinternationalization', International Marketing Review. 7(4):11-24.

Johnston, W.B. (1991) 'Global work force 2000: the new worldlabor market', Harvard Business Review 69(2): 115-127.

Jolly, V.K., Alahuhta, M. and Jeannet, J.-P. (1992) 'Challengingthe incumbents: how high technology start-ups competeglobally', Joumal of Strategic Change 1: 71-82.

Kanter, R.M. (1989) 'Becoming PALs: pooling, allying, andlinking across companies', Academy of Management Executive3: 183-193.

Katz, J. and Gartner, W.B. (1988) 'Properties of emergingorganizations', Academy of Management Review 13: 429-441.

Kedia, B.L. and Chhokar, J. (1985) 'The impact of managerialattitudes on export behavior', American Joumal of SmallBusiness 10: 7-17.

Larson, A. (1992) 'Network dyads in entrepreneurial settings: astudy of the governance of exchange relationships', Adminis-trative Science Quarterly 37: 76-104.

Malekzadeh, A.R. and Nahavandi, A. (1985) 'Small businessexporting: misconceptions are abundant', American Journal ofSmall Business 9(4): 7-14.

Mamis, R.A. (1989) 'Global start-up', Inc. 11: 38-47.McDougall, P.P. and Oviatt, B.M. (1991) 'Global start-ups: new

ventures without geographic limits', The EntrepreneurshipForum, 1-5.

McDougall, P.P. and Oviatt, B.M. (1992) 'United States andEuropean global start-ups', Unpublished Report to the Societyof International Business Fellows, Atlanta, GA.

McDougall, P.P., Oviatt, B.M. and Brush, C. (1991) 'Asymposium on global start-ups: entrepreneurial firms thatare born international', Presentation at the Annual Academy ofManagement meeting, August, Miami.

Ohe, T., Honjo, S., Oliva, M., Considine, M. and MacMillan, I.C.(1991) 'Entrepreneurs in Japan and Silicon Valley: a study ofperceived differences', Joumal of Business Venturing 6:135-144.

Ohmae, K. (1990) The BorderHess World, Harper Business: NewYork.

Oviatt, B.M., McDougall, P.P., Simon, M. and Shrader, R.C.(1991) 'A New Venture Without Geographic Limits: CaseHistory of a Global Start-up', in N.C. Churchill, W.D. Bygrave,J.A. Hornaday, D.F. Muzyka, K.H. Vesper and W.E. Wetzel, Jr(eds.) Frontiers of Entrepreneurship Research, Babson College:Wellesley, MA, pp: 64-78.

Patricof, A. (1989) 'The internationalization of venture capital',Joumal of Business Venturing 4: 227-230.

Porter, M.E. (1985) Competitive Advantage, The Free Press: NewYork.

Porter, M.E. (1986) 'Competition in global industries: aconceptual framework', in M.E. Porter (ed.) Competition inGlobal Industries, Harvard Business School Press: Boston.

Porter, M.E. (1990) The Competitive Advantage of Nations, TheFree Press: New York.

Porter, M.E. and Fuller, M.B. (1986) 'Coalitions and GlobalStrategy', in M.E. Porter (ed.) Competition in Global Industries,Harvard Business School Press: Boston.

Quinn, J.B., Doorley, T.L. and Paquette, P.C. (1990) 'Technologyin services: Rethinking strategic focus', Sloan ManagementReview 31: 67-69.

Ray, D.M. (1989) 'Entrepreneurial companies 'born' interna-tional: four case studies', Paper Presented at BabsonEntrepreneurship Research Conference on Entrepreneurship,St Louis.

Reich, R.B. (1991) The Work of Nations, Alfred A. Knopf:New York.

Rossman, M. (1984) 'Export trading company legislation: USresponse to Japanese foreign market penetration', Journal ofSmall Business Management 22: 62-66.

Rugman, A.M. (1982) 'Internalization and Non-equity Forms ofInternational Involvement', in A.M. Rugman (ed.) NewTheories of the Multinational Enterprise, St Martin's Press:New York.

Schoemaker, P.J.H. (1990) 'Strategy, complexity, and economicrent', Management Science 10: 11 78-1192.

Stalk, G., Evans, P. and Shulman, L.E. (1992) 'Competing oncapabilities: the new rules of corporate strategy', HarvardBusiness Review 70(2): 57-69.

Stinchcombe, A.L. (1965) 'Social Structure and Organizations',in J.G. March (ed.) Handbook of Organizations, Rand McNally:Chicago, pp. 142-193.

Stopford, J.M. and Wells, L.T. (1972) Managing the MultinationalEnterprise, Basic Books: New York.

Sullivan, D. and Bauerschmidt, A. (1990) 'Incremental inter-nationalization: a test of Johanson and Vahlne's thesis',Management International Review 30(1): 19-30.

Teece, D.J. (1987) 'Profiting from Technological Innovation:Implications for Integration, Collaboration, Licensing, andPublic Policy', in D.J. Teece (ed.) The Competitive Challenge,Ballinger: Cambridge, MA.

Turnbull, P.W. (1987) 'A challenge to the Stages Theory of theInternationalization Process', in P.J. Rosson, S.D. Reid (eds.)Managing Export Entry and Expansion, Praeger: New York. .

Valeriano, L.L. (1991) 'Other Asians follow Japanese as investorsin US firms', The Wall Street Journal CCXVII: B2.

Vesper, K.H. (1990) New Venture Strategies, revised edn.Prentice-Hall: Englewood Cliffs, NJ.

Vozikis, G.S. and Mescon, T.S. (1985) 'Small exporters andstages of development: an empirical study', American Journalof Small Business 9: 49-64.


*40

International new ventures *Beniamin M Oviatt and Patricia Phillips McDouqall

Welch, L.S. and Loustarinen, R. (1988) 'Internationalization:evolution of a concept', Journal of General Management 14(2):34-55.

Westhead, P. (1990) 'A typology of new manufacturing firmfounders in Wales: performance measures and public policyimplications', Journal of Business Venturing 5: 103-122.

Wilkins, M. (1970) The Emergence of Multinational Enterprise,Harvard University Press: Cambridge, MA.

Wilkins, M. and Hill, F.E. (1964) American Business Abroad: Fordon Six Continents, Wayne State University Press: Detroit.

Williamson, O.E. (1985) The Economic Institutions of Capitalism,The Free Press: New York.

Williamson, O.E. (1991) 'Comparative economic organization:the analysis of discrete structural alternatives', AdministrativeScience Quarterly 36: 269-296.

About the authorsBen Oviatt (PhD, University of South Carolina)is currently Professor of Managerial Sciencesand Director of the HJ Russell, Sr. InternationalCenter for Entrepreneurship in the Robinson

41

College of Business at Georgia State University.His research focuses on the internationalizationof new ventures. At the time 'Toward a Theoryof International New Ventures' was published,he was an Assistant Professor at Georgia StateUniversity.

Practicia P McDougall (PhD, University of SouthCarolina) is currently Interim Associate Dean ofAcademics and the William L Haeberle Professor ofEntrepreneurship at Indiana University's KelleySchool of Business. Her research focuses on theinternationalization of new ventures and newventure strategies. At the time 'Toward a Theoryof International New Ventures' was published,she was an Associate Professor at the GeorgiaInstitute of Technology.

This paper was previously published in Journal of International Business Studies (1994) 25, 45-64.


COPYRIGHT INFORMATION

TITLE: Toward a theory of international new venturesSOURCE: J Int Bus Stud 36 no1 Ja 2005

WN: 0500102305004

The magazine publisher is the copyright holder of this article and itis reproduced with permission. Further reproduction of this article inviolation of the copyright is prohibited. To contact the publisher:http://www.jibs.net/

Copyright 1982-2005 The H.W. Wilson Company. All rights reserved.

Documents

Toward a theory of international new ventures2015/05/25 · on several continents, particularly in advanced technology indus-tries where many established competitors are already global