Prevalence and longitudinal trends of early internationalisation patterns among Canadian SMEs

Abstract

Purpose: Recently, studies call for a more nuanced perspective on different internationalization patterns pursued by early internationalizers. These studies argue that most Born Global firms turn out to be Born Regional and that the proportion of true Born Global firms would be overestimated. Moreover, literature claims that the proportion of Born Global firms increases over time due to macroeconomic trends. We investigate these assumptions by providing a dynamic perspective on the prevalence of different types of internationalization patterns among Canadian small and medium-sized exporters (SMEs). Design/methodology/approach: To empirically examine the ideas above, we constructed a unique large-scale longitudinal (1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004) dataset. A multinomial logit model is employed to estimate a firm's predicted probability, ceteris paribus, of choosing different internationalization patterns: Born Global, Born Regional, and Gradual Internationalization. Findings: We find that Born Global firms indeed account for a smaller proportion than Born Regional firms (16% vs. 27%). However, we find evidence that Born Globals and Born Regionals are increasingly established over time and that macroeconomic factors seem to account for this development at least partially. Originality/valueCombining a rigorous empirical analysis with a unique large scale longitudinal dataset, we address two fundamental research questions in the international entrepreneurship (IE) literature a) which internationalization pattern prevails and b) if the Born Global pattern is increasingly established over time. We therewith theoretically contribute by comparing the predictive value of different internationalization frameworks international new venture (INV) framework, stage-models and regionalization hypothesis), toward which there is considerable current debate.

Time, Temporality, and Internationalization: The Relationship among Point in Time of, Time to, and Speed of International Expansion

“…Instead, most studies treat temporality in isolation. Two exceptions should be mentioned here: Autio, Sapienza, and Almeida (2000), who reveal the relationship between time to internationalization and speed of increase in the ratio between domestic and foreign sales, and Sui, Yu, and Baum (2012), who show how firm age influences the temporal internationalization pattern. Yet, a consequence is that it seems that the interrelatedness between temporal variables is an underresearched area.…”

“…Second, few studies acknowledge the difference between studies where temporal concepts are used as an identification or selection criteria for the sample (e.g., Baum, Schwens, and Kabst 2011; Khavul, Pérez-Nordtvedt, and Wood 2010) and studies where the temporal concepts are measured and used as variables in models tested (e.g., Mohr and Batsakis 2016; Sui, Yu, and Baum 2012). Our literature review reveals that many studies referring to temporal internationalization dimensions merely use temporality, for example, the elapsed time from inception to first international sales, to distinguish a specific type of firm, usually labeled BG or INV.…”

Internationalisation patterns of border firms: speed and embeddedness perspectives

“…The study identifies border firms and analyses their patterns of internationalisation. Earlier research has indicated that these firms are rather common (Lopez et al, 2009;Sui et al, 2012) and that they offer potential benefits to their home regions (Smallbone and Welter, 2012). However, this study is limited to only seven companies; therefore, other designs and larger samples are needed to determine more about the prevalence and potential regional benefits of these firms.…”

Is “Born Global” a Viable Market Entry Mode for the Internationalization of SMEs? Evidence from China before COVID-19

“…This perspective maintains that the BG model tends to result in positive financial performance (Kuivalainen, Sundqvist, and Servais 2007). However, Sui, Yu, and Baum (2012), by comparing the survivability of Canadian SMEs on the export market for BGs and traditionally internationalized firms, indicated that the BG model is not correlated with survival in the export market. Similarly, other studies addressing developed countries, including Greece (Kanellos 2013), and Ireland (Bell 1997), concluded that the BG model is merely a strategic choice.…”