Hungarian international new ventures – Market selection and the role of networks in early internationalisation

Abstract

In this article we rely on the concept of "international new ventures" (INV), and concentrate on the analysis of two research propositions in the case of selected Hungarian INVs, based on company interviews in two selected industries, biotechnology and information technology. First, we analyse the criteria of the selection of foreign markets in the internationalisation of these fi rms and second, the role of networks in the internationalisation process of selected Hungarian INVs. Our results highlight the typical internationalisation pattern of targeting the largest developed foreign markets globally. In terms of the role of networks in internationalisation, we found evidence of the decisive role of networks in all cases examined. The personal network of the founder(s) was emphasised, especially in winning early clients. The scalability of the personal network-based business model was, however, questioned. The management implications of our fi ndings suggest Hungarian INVs need to intensify their involvement in international communities supporting the growth of such companies. Areas for potential future research include comparing our fi ndings with empirical results from other countries in Central-Eastern Europe.

A posztszovjet térségbe irányuló tőkekivitel – országkockázat az elméletben és a hazai gyakorlatban

“…Ezek több szinten (makrogazdasági, iparági, vállalati és regionális) és szempontból (például globális értékláncok és feljebb lépés, innovációs gazdaságtan, kapitalizmusváltozatok) és térbeli mintázatok szempontjából közelítenek az FDI témájához (Farkas, 2011;Éltető & Sass, 2021;Lengyel & Varga, 2018;Sass & Szalavetz, 2014;Szalavetz, 2013;Vasvári et al, 2019). 1 Az új elemzési szempontok felbukkanásán túlmutató fontos változás, hogy egyre több tanulmány jelenik meg a hazai (és közép-és kelet-európai) szereplők tőkekiviteléről is (Antalóczy et al, 2014;Antalóczy & Éltető, 2002;Antalóczy & Sass, 2018;Gál & Juhász, 2016;Gubik, 2014;Kozma & Sass, 2019;Sass, 2020). Egy évtizeddel ezelőtt Farkas (2011) a függő kapitalizmusmodell, pontosabban az új EU-tagállamok egyik sajátosságaként emelte ki, hogy elenyésző a helyi szereplők tőkekivitele.…”

Just Look behind the Data! Czech and Hungarian Outward Foreign Direct Investment and Multinationals

“…tronics service provider: Videoton, and another important supplier to mainly foreign-owned firms: Jászplasztik, operating in the plastics industry (Sass -Kovács 2015). There are also small to medium companies, usually in the high tech domain, which internationalise quickly and basically from their establishment, and thus can be characterised as "born globals", among them we can find numerous small-to medium-sized medical precision instruments producing, biotechnology or IT firms (Kozma -Sass 2019;Stocker 2019). For example, 3DHistech, which was established in 1997, operates in the medical devices sector, producing virtual microscopes.…”

“…Mediso is a good representative of highly innovative and quickly internationalising Hungarian companies, from which we can find quite many, especially in highly technology intensive sectors and activities (for example biotechnology or IT, Kozma -Sass 2019).…”

Dancing with Giants: A Unified Framework for Cooperation Networks, Speed of Internationalisation, and Performance

“…The firms that develop their activities abroad operate in an unfamiliar environment. In this way, network relationships have been recognised as mechanisms with a strong influence on successful internationalisation processes [4,5]. In the case of industrial clusters, such networks provide trust between their members, allowing them to overcome several uncertainties and complex conflicts [6].…”

“…The powerful instruments that explore the entire network of an industrial cluster remain relatively unexplored [9][10][11][12] and the research, to date, has failed to provide clear guidance on how specific network interactions influence foreign expansion [13,14]. In the literature, there is a general assumption that the establishment of network relationships has a positive effect on the speed of internationalisation [4,13,[15][16][17]. Nonetheless, a recent research stream has claimed that such interactions do not influence speed [18][19][20].…”