Factors leading to early internationalization in emerging Central and Eastern European economies

Abstract

Purpose The purpose of this paper is to explore factors leading to the early internationalization of international new ventures (INVs) in Lithuania – a transition economy in Central and Eastern Europe (CEE). The determinants of early internationalization were grouped into three categories: entrepreneurial, firm-related and contextual determinants, and their impact on high-tech INVs that operate in emerging economies was investigated. Design/methodology/approach The research design is a case study approach. Case studies are presented of six Lithuanian entrepreneurial firms that demonstrated successful internationalization and rapidly expanded into foreign markets during the preceding year. Findings Region-specific theoretical propositions are provided for new ventures in CEE emerging economies. The results reveal that essential factors leading to the early internationalization of INVs operating in Lithuania, a transition economy, are entrepreneurial factors. Internationalization of INVs from CEE emerging economies is driven by push factors related to domestic market specifics; however, institutional factors do not seem to have a significant impact on INVs’ internationalization. Research limitations/implications The results of the analysis of the case studies are not generalizable to the entire population of INVs in Lithuania. However, the results are substantial considering the success of high-tech Lithuanian firms that started their international activities shortly after their inception. Future research can contribute to the literature by seeking to apply international new venture theory in the context of emerging economies with larger samples and a focus on distinct patterns of internationalization. Originality/value The findings contribute to the literature on international entrepreneurship by exploring early internationalization of INVs in the context of transition economies in CEE. This study’s contribution is based on theory building, especially in understanding the driving factors related to the early internationalization of new ventures founded by Lithuanian entrepreneurs. International entrepreneurship studies in the CEE, as well as Baltic countries, are limited, and this research contributes to filling this gap.

The effects of entrepreneurs’ characteristics on internationalisation of gazelle firms: a case of Lithuania

“…countries' context appears to be significant (Manolova et al, 2010), our results demonstrate that international expansion diminishes the value of domestic ties. Consequently, higher internationalisation degree requires to expand international ties (Sekliuckiene, 2017).…”

“…positively influenced the institutional environment of C.E.E. countries (Dinçer, Y€ uksel, Korsakien_ e, Rai sien_ e, & Bilan, 2019;Sekliuckiene, 2017) and contributed to a higher share of H.G.F.s in C.E.E. countries in comparison to developed countries (Pereira & Temouri, 2018).…”

Entrepreneurial Level Factors of Early Internationalization: A Cross Country Comparison

“…Explaining drivers of early internationalization researchers (Andersson et al, 2015;Felicio et al, 2014;Amoros et al, 2014;Michailova, 2015;Sekliuckiene, 2017;Jarosinski & Mierzejewska, 2017) usually describe different level factors, such as: entrepreneurial/managerial level (e.g., global mindset, experience, entrepreneurial orientation, social capital, etc. ); firm-related level (e.g., resources, knowledges, capabilities, business model, strategy, etc.…”

“…The emergence of early internationalized small and medium sized firms called most often international new ventures (INVs) or born globals (BGs) inspired a wave of research that concentrated on developed countries (Mathews & Zander, 2007;Kuivalainen et al, 2010;Gabrielsson & Gabrielsson, 2013), including metaanalyses of the research field (Santos & Barandas, 2015;Choquette et al, 2017;Garcia-Lillo et al, 2017;Dzikowski, 2018), but much less research focused on transition economies like the Central and Eastern European (CEE) countries (Vissak, 2006;Jarosinski, 2012;Nowinski & Rialp, 2013;Ferencikova, 2014;Ciszewska-Mlinaric et al, 2016;Sekliuckiene, 2017;Jarosinski & Mierzejewska, 2017).…”

“…Although the attention to contextual aspects of internationalization of INVs is growing, little is known about different drivers and success factors of international new ventures from transition economies in CEE. The first studies touching on the determinants of the success of Polish born globals/international new ventures (Jarosinski, 2013;Jarosinski & Mierzejewska, 2017;Danik & Kowalik 2015), drivers of early internationalization of INVs in Lithuania (Sekliuckiene, 2017) and Hungary (Czako & Konczol, 2014) have already appeared but they do not cover the topic in a sufficient way yet. Moreover, most of these studies uncovered the critical drivers using samples exclusively focused on single countries.…”