Rapid multinationalization: Propositions for studying born micromultinationals

Abstract

This study examines how so-called born micromultinationals multinationalize. Existing theoretical frameworks do not capture the multinationalization of young and small firms because of the literature gap separating studies on born globals and international new ventures from the research on multinational enterprises. However, firms go beyond accelerated internationalization and engage in accelerated multinationalization. Born micromultinationals invest and operate in multiple countries from, or soon after, their foundation. We argue that it is necessary to examine their smallness, newness and entrepreneurial nature, as suggested in the BG/INV literature, as well as to investigate why and how they invest abroad through the lenses of MNE theories. We discuss existing theories and examine them in the light of four case studies of Finnish born micromultinationals. Our results show that the organizational, locational and internalization approach and transaction costs economics for example, have explanatory power for the FDIs conducted by born micromultinationals. We suggest that the multinationalization process of born mMNEs consists of commitment decisions; reconfigurations of the value chain; and learning from, and creating and building trust with internal sources.

International entrepreneurship: The pursuit of entrepreneurial opportunities across national borders

“…The pursuit of entrepreneurial opportunities Dimitratos, Johnson, Slow & Young, 2003;Vanninen, Kuivalainen, & Ciravegna, 2017).…”

Unpacking the provision of the industrial commons in Industry 4.0 cluster

“…The main limitation of this study lies in its qualitative approach and the narrow sampling (Vanninen, Kuivalainen, & Ciravegna, 2016), that makes its conclusions more suggestive than conclusive. The single-case study method used, has its inherent weaknesses, such as difficulty in generalising and possible bias in interpreting interview transcriptions (Richardson, Yamin, & Sinkovics, 2012).…”

The timing of internationalization – Drivers and outcomes

“…One possibility is to focus on survival (e.g., Mudambi & Zahra, 2007) and/or ownership changes; that is, if a firm has survived and stayed independent and had an independent offering, or another firm had taken it over (Kuivalainen et al, 2012). In the case of internationalization presence, a noteworthy issue is the possible increase in internationalization (e.g., multi-nationalization, see Vanninen et al, 2017 for born micro-multinationals; Monaghan & Tippmann, 2018) or decrease in international presence. The latter is about the reverse patterns that underlie deinternationalization and withdrawal from international markets (see, e.g., Benito & Welch, 1997).…”

“…There are several possible outcomes to consider with regard to the consequences or implications of the timing of internationalization (see, e.g., Kuivalainen et al, 2012). The response to an overarching question, 'what happens after early internationalization' (see, Casillas & Acedo, 2013;Kuivalainen et al, 2007;Zahra & George, 2002), could be, for example, about increasing commitment in international markets by opening up new markets or establishing subsidiaries that could make a focal company a so-called "micro-multinational"-a process we define as multinationalization (e.g., Vanninen, Kuivalainen, & Ciravegna, 2017). Some firms may also de-internationalize, or retreat toward their domestic market after an early spurt of foreign sales (Benito & Welch, 1997) and some might internationalize immediately after inception, then retrench inward, and perhaps at a later stage again become international (see, e.g., Bell et al, 2003;Casillas & Acedo, 2013).…”