The Effect of Global Orientation on the Performance of International New Ventures: Evidence from Italy

Abstract

The aim of this paper is to investigate the relationship between global versus regional orientation and the performance of international new ventures (INVs). Building on internalization theory and organizational learning literature, we develop two competing hypotheses on the performance effect of geographic scope on INV performance. We test these hypotheses on a sample of Italian manufacturing INVs. The study extends the regionalization/globalization debate to the context of INVs. Our findings show that INVs mainly operate on a regional, rather than global basis. However, when they succeed in achieving a global reach, the effect on profitability is positive and significant, supporting the hypothesis that global orientation improves firm performance.

Antecedents of Accelerated Internationalisation of Polish and Czech Small and Medium-Sized Enterprises

“…Moreover, the majority of companies in the current sample had a rather regional scope of activity. This finding is similar to other studies concerning the internationalising SMEs, especially those from emerging markets (Cerrato & Piva, 2015;Lopez, Kundu, & Ciravegna, 2009). Such a regional focus may be one of the typical characteristics of the accelerated expansion path followed by companies originating in the CEE countries.…”

Empirical Relationships among Technological Characteristics, Global Orientation, and Internationalisation of South Korean New Ventures

“…This strategy implies that high-technology SMEs, including INVs, tend to survive by finding new global markets [12]. In addition to these findings, several studies [1,13] have reported a significant correlation between certain characteristics (e.g., global orientation) of the top management team, CEO, or founders and the rapid internationalisation process. Therefore, the CEOs' characteristics such as global orientation must be considered when investigating the internationalisation process.…”

“…This study aims to explore the role of the chief executive officers (CEOs)' global orientation ("the intention of penetrating international market" [1]) in determining internationalisation. It is particularly important for small-and medium-sized enterprises (SMEs) that aspire to sell their products at the global scale.…”

“…According to this theory, the internationalisation of companies is triggered by an increase in the accumulated knowledge about international markets and institutions. In recent years, numerous studies [1,3,4] have attempted to explain the internationalisation process of "born global firms", or international new ventures (INVs) ("a business organization that, from inception, seeks to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries" ( [5], p. 49)). INVs tend to pursue globalisation as soon as they are founded [6].…”

“…The above studies demonstrate that the CEO's global orientation is one of the most important variables determining the pace of internationalisation [15]. Nonetheless, relatively few studies have conducted a detailed analytical explanation on this new phenomenon, namely the internationalisation process of INVs [1]. Therefore, more empirical studies able to explain the rapid internationalisation process of INVs need to be carried out.…”