Born Global Companies. Is This a Future for Economy of Latvia? A Preliminary Study

Abstract

A small number of export-capable sectors is a factor that renders the Latvian economy sensitive to any changes in the external environment, at the same time it is an incentive to look for growth patterns. Internationalisation is a factor that brings growth. International operations can have various advantages for enterprises, particularly for high-growing companies. The born global companies will experience stronger performance in markets that are more attractive and more internationalised. For this research purposes term ‘born global’ author understands as a ‘truly global’ company as well as domestically based company with overseas operations. The novelty of the research manifests as seeking of novel information and novel solutions based on the experience of different countries. Born global companies are the research object of an investigation. The aim of the article is an analysis of external environment perspective that is necessary to predict long-term survival for every company in conjunction with economic dimensions of globalization. The research methodology is based on the overview of literature sources that attempts to describe the key drivers for early internationalization, statistics of high-growth enterprises and survival rates of newly born enterprises, success factors of high-growth enterprises. As the result framework for the future research is created.

A literature review on CEE firms’ internationalization: success measurement, achievement and outcomes

“…For example, Nowiński and Rialp (2013) described a firm that had entered more than 20 countries during the first six years since its establishment, Musteen et al (2014) defined “early internationalization” as something that happened in two years or less since the firm’s establishment, while Ciszewska-Mlinarič et al (2020), Lukason et al (2021) and Nowiński and Bakinowska (2012) used the threshold of three years and expected firms to earn at least 25% of revenues from abroad during the period. Moreover, some authors – for instance, Filippov (2011) and Vaivode (2018) mentioned early or rapid foreign expansion but did not set a clear limit regarding the number of required years.…”

“…From other outcomes , revenue growth (Éltető and Udvari, 2019; Panibratov et al , 2022; Srbinoski et al , 2022; Vaivode, 2018), reduced financial risk and higher survival due to earnings from multiple markets (Roolaht, 2017; Steinerowska-Streb et al , 2022; Vissak and Masso, 2020), increased financial stability (Coşkun et al , 2022), high profitability (Barłożewski and Trąpczyński, 2021a; Bulis et al , 2021; Çela et al , 2022; Ciszewska-Mlinarič et al , 2012; Kalotay and Sulstarova, 2010; Lukason and Vissak, 2016; Srbinoski et al , 2022) and constant profitability (growth) during several years were used to characterize successful internationalizers (Vissak, 2013; Vissak and Zhang, 2016). In addition, in some studies, employment growth (Srbinoski et al , 2022; Svetličič et al , 2007; Vissak and Masso, 2020), high productivity (Benkovskis et al , 2020; Brodzicki, 2017; Damijan et al , 2017; Jaklič et al , 2017), improved reputation (Ciszewska-Mlinarič et al , 2020), increased value added (Ciszewska-Mlinarič et al , 2012; Trapczynski, 2016b), gaining access to new technologies via successful investments (Götz and Jankowska, 2019) and increased innovativeness (Ermolaeva et al , 2018) and competitiveness (Trąpczyński et al , 2016) were mentioned.…”

The Effect of Ifrs Adoption and Law Enforcement on Book Tax Aggressiveness: Evidence From Asean Countries

“…From the economic-financial point of view, the tax represents the fiscal relationship between the taxpayer and the government (Paulík et al 2015, Dobrovič et al 2018. Desai et al (2007) develop an analytical model and demonstrate that law enforcement strengthens corporate governance mechanisms, build global competitiveness (Vaivode 2018) and eventually leads to lower tax reporting aggressiveness. Zeng and Zhang (2009), Ye and Liu (2011), also Jiang (2013) also find similar results.…”