The Emergence of an International New Software Venture from an Emerging Economy

Abstract

This study is positioned at the intersection of legitimation and international entrepreneurship theories. It is a longitudinal ethnographic case study that explores the process of emergence of an international new software venture from an emerging economy and the effect this venture has on the process of industry creation in that economy. Data were collected over a two year period, 2010-2011, via in-depth interviews, observations, and unobtrusive data. Data analysis reveals three different contexts in which legitimation took place: legitimation of the new venture domestically and internationally, and legitimation of the new industry. To acquire cognitive legitimacy and sociopolitical legitimacy and successfully internationalize, an international new venture needs to design a robust business model targeting both internal and external stakeholders, engage in persuasive argumentation invoking familiar cues and scripts, promote and defend incentives and operating mechanisms in political negotiations, and overcome the country-of-origin effect by pursuing a technology legitimation strategy.

Instant Internationalization of Emerging Economy New Ventures: The Evidence of a Family-Owned Venture from Moldova

“…INVs from emerging economies internationalize gradually (see Turcan and Fraser (2012) for an exception), do not follow the internationalization patterns suggested by the studies of INVs (from developed economies), and are born regional rather than global (Lopez, Kundu and Ciravegna, 2009;Thai and Chong, 2008;Zou and Ghauri, 2010). As to the internationalization of family-owned ventures from the IE perspective, the current knowledge of the internationalization process of family-owned ventures is also rather limited (Casillas, Acedo and Moreno, 2007;Kontinen and Ojala, 2010), yielding more or less similar results.…”

“…Although scarce, the research on internationalization of new ventures from emerging economies is gradually taking form (see e.g., Dib, da Rocha and da Silva, 2010;Lopez, Kundu and Ciravegna, 2009;Naude and Rossouw, 2010;Thai and Chong, 2008;Turcan and Fraser, 2012;Zhang, Tansuhaj and McCullough, 2009;Zhou, Barnes and Lu, 2010;Zou and Ghauri, 2010). The findings thus far point, for example, to learning-capability and networking-capability as capability-upgrading constructs that differentiate international new ventures (INVs) in emerging economies from traditional internationalizing ventures.…”

“…These are: (i) technology, aimed to validate a technology or knowhow; (ii) market, aimed to better understand the market; (iii) operating, aimed to have an optimal organizational gestalt; (iv) locational, aimed to overcome the disadvantages of foreignness; (v) alliance, aimed to mitigate the risk of newness and smallness; and (vi) anchoring, aimed to intentionally misrepresent the facts. In a longitudinal ethnographic case study of internationalization of a software venture from an emerging economy, Turcan and Fraser (2012) found for example that in order to acquire cognitive legitimacy and sociopolitical legitimacy and successfully internationalize, an international new venture needs to design a robust business model targeting both internal and external stakeholders, engage in persuasive argumentation invoking familiar cues and scripts, promote and defend incentives and operating mechanisms in political negotiations, and overcome the country-of-origin effect by pursuing a technology legitimation strategy.…”

International New Venture Legitimation: An Exploratory Study

“…Recent attempts to explore this intersection highlighted a number of challenges that await entrepreneurs in the process of INV legitimation [7,[33][34][35]. How legitimacy and identity are constructed over time, and whether the legitimacy threshold is ever reached are considered major challenges in INVs research [7].…”

“…Moreover, entrepreneurs' concerns are not only about legitimizing their international ventures, but also about contributing to the creation and the establishment of new technical norms and new cognitive patterns of behavior [33].…”