Internationalisation patterns of border firms: speed and embeddedness perspectives

Abstract

Purpose -The purpose of this paper is to provide new insight concerning a relatively understudied phenomenon in the medium sized enterprise (SME) internationalisation and international entrepreneurship literature; the internationalisation of firms crossing the border to only one adjacent foreign country. These firms are called border firms. This study explores the variety of internationalisation patterns of border firms. Design/methodology/approach -The study is based on theoretical perspectives related to speed of internationalisation and country embeddedness, and uses empirical data from seven Norwegian case companies operating across the border between Norway and Russia. Findings -Three different internationalisation patterns of border firms are empirically identified and described; an early single-country path, a born-again border path and a born border path. Then, a model of the distinctive cross-border pathway is developed. Research limitations/implications -Several limitations of this study have implications for further research, such as sample size and setting, the new perspective on country embeddedness and questions related to generalisation of the findings. Practical implications -The study has implications for both entrepreneurs and policy-makers. It demonstrates that internationalisation is not always about "going global" and is sometimes simply a matter of "hopping" across the nearest border. The model demonstrates different possible patterns for how to achieve or support this in practice. Originality/value -This study contributes to theory-building in the field of SME internationalisation and international entrepreneurship in three ways. First, it identifies and defines an interesting but neglected type of international venture; border firms. Second, it explores the different start-up patterns of these firms, their speed and embeddedness. Third, it offers a theoretical framework of the distinct cross-border pathway of internationalisation.

Locational challenges and opportunities for SMEs in border regions

“…), opportunistic partners, and external factors (such as legal, administrative, bureaucratic barriers and political uncertainty) that SMEs have little or no control over. A lack of motivation to internationalize to the neighbouring country, was, however, not mentioned as a barrier for establishing cooperative links across the border despite the emphasis given to it in the literature on SME internationalization (Jørgensen, 2014).…”

“…The nature and extent of cross-border cooperation opportunities are likely to vary also according to the characteristics of the firms themselves (Smallbone et al, 2011). SMEs often lack the motivation and resources to internationalize across the border (Jørgensen, 2014). Operating in a context of overlapping nation states, firms located in border regions, notably SMEs, face particular challenges, as they might have less capabilities to recognize and adopt to this complexity in terms of, e.g., language, culture and institutions (Welter et al, 2018).…”

“…More generally, Smallbone and Welter (2012, p. 100) summarize the perspective of borders as a resource for entrepreneurship as follows: 'cross-border entrepreneurship represents an opportunity to access new markets and sources of supply, capital, technology, know-how and know who'. In relation to SME characteristics, it has been stated that crossing only one close-by adjacent border can be a feasible and motivating entry mode for the initial internationalization of SMEs (Jørgensen, 2014), which overcomes some of the initially perceived disadvantages in their capacity for developing cross-border cooperation. In fact, SMEs can act as pioneers in internationalization across the border (Guo, 2012) and benefit from certain advantages related to cross-border cooperation, in comparison to large firms, such as their flexibility and responsiveness to market changes (Knight & Liesc, 2016).…”

Rapid internationalization and long-term performance: The knowledge link

“…Given the growing importance of time-based competition in the international markets (Stalk and Hout, 1990), the interest in the speed at which firms internationalize has grown dramatically in the last two decades (e.g., Acedo and Jones, 2007;Chang, 2007;Coviello, 2015;Guillén and García-Canal, 2009;Jørgensen, 2014;Knight and Cavusgil, 2004;Knight and Liesch, 2016;Li, Qian, and Qian, 2015;Mohr and Batsakis, 2014;Oviatt and McDougall, 2005;Vermeulen and Barkema, 2002;Zucchella, Palamara, and Denicolai, 2007). A large number of these studies have been devoted to the analysis of the relationship between speed of internationalization and performance.…”

A social network analysis of cooperation in forest, mining and tourism industries in the Finnish–Russian cross-border region: connectivity, hubs and robustness

“…Therefore, various regional decisions, actions and networks (particularly involving central travel agencies) are more important for facilitating the regional tourism than in the case of forest and mining industries. However, since establishing direct international contacts are not easy for small firms (Jørgensen 2014), the regional tourism industry is also likely to be relatively weakly connected across the border. Thus, it is hypothesised that: H1 The examined CBC network is weakly developed.…”