How Digitalization Changes the Internationalization of Entrepreneurial Firms: Theoretical Considerations and Empirical Evidence

Abstract

Entrepreneurship is considered a significant determinant for the economic development of a country but is also important for new job creation and innovation. Understanding and examining the factors which affect the decision of individuals to become entrepreneurs play a significant role for the decision makers in order to identify the adequate measures that can support and develop the entrepreneurial activity. The main purpose of this paper is to identify the key factors that determine entrepreneurial motivations of individuals, but also to analyze empirically the impact of these factors for a sample of 18 countries members of the European Union, for a period between 2002 and 2015. We performed our empirical analysis using data offered by the Global Entrepreneurship Monitor and the World Bank. We used panel data regression models. As dependent variables for our econometric models, we used, alternatively, total entrepreneurial activity rate, necessity driven entrepreneurial activity, and opportunity-driven entrepreneurial activity. As regards the independent variables considered, we took into account six macroeconomic indicators and four indicators which measure the perceptions and attitudes regarding entrepreneurship. The results of the panel data regression models show that the entrepreneurial motivations are influenced by the level of economic development of a country and total tax rate (only necessity entrepreneurs), unemployment rates, inflation rates and access to financial resources. Also, all the considered perceptual indicators (fear of failure, entrepreneurial intentions, perceived capabilities, and opportunities) have a significant effect on entrepreneurship according to its motivation, but these effects differ according to the motivation of individuals. Overall, this paper emphasizes that the economic conditions from an EU country but also the perception of entrepreneurs are important determinants of entrepreneurial motivation.

Past, ongoing, and future debate on the interplay between internationalization and digitalization

“…A first inspection of the available literature shows a lack of wide-ranging and analytical scrutiny of this interconnection; although we found five reviews that focus on digitalization and internationalization as intertwined phenomena, none of them provides an inclusive representation of the content and evolution of the knowledge on these two macro themes, as studied together. Moreover, these reviews focus on some specific aspects of digitalization (Eduardsen and Ivang 2016;Reuber and Fischer 2011) and internationalization (Vadana et al 2019;Watson et al 2018) or focus on a specific type of firm (Wittkop et al 2018) or country (Mendes 2020). All of them fall short in presenting the full picture of the literature on IDI, although more than 20 years have passed since attention began to be paid to this research domain (Lovelock and Yip 1996).…”

A set of factors related to the opportunity motivation: Analysis of Early-stage entrepreneurs from SEE

“…Individual characteristics of entrepreneurs such as their perception (Bosma, Jones, Autio, & Levie, 2008;Cacciotti & Hayton, 2014;Block, Sandner, & Spiegel, 2015;Rusu & Roman, 2018) and socio-demographic characteristics, have been related to the factors of entrepreneurial motivation (DeTienne & Chandler, 2007;Kautonen, 2008;Block & Sander, 2009;Robichaud, 2010;Verheul et al, 2010;Wagner, 2005;Stephan, Hart, Mickiewicz, & Drews, 2015). The next section presents a literature review of these factors.…”

“…Following the results of the research, and apart from the fact that only a limited number of authors have examined the individual determinants related to the opportunity motivations in the case of early-stage entrepreneurs (Arenius & Minnity, 2005 2005; Suchart, 2017;Rusu & Roman, 2018), this paper has a few important contributions.…”

The Impact of Digitalization and Resources on Gaining Competitive Advantage in International Markets: Mediating Role of Marketing, Innovation and Learning Capabilities

“…However, little is known about the resources and capabilities that lead to Malaysian SMEs' competitive advantages in international markets (Falahat et al, 2013;Falahat et al, 2018). In addition to resources and capabilities, international entrepreneurship scholars are also showing increased interest to explore the role of digitalization in SME internationalization through studies of digital platform firms (Ojala et al 2018;Stallkamp & Schotter 2018), internet-based companies (Wittkop et al, 2018), ibusiness firms (Brouthers et al, 2018), and high-tech startups (Neubert 2017(Neubert & 2018. While resources and capabilities are fundamental prerequisites for international research exploration, the concepts existed prior to the emergence of digital era (Coviello, Kano, and Liesch 2017;Wittkop et al 2018).…”

“…In addition to resources and capabilities, international entrepreneurship scholars are also showing increased interest to explore the role of digitalization in SME internationalization through studies of digital platform firms (Ojala et al 2018;Stallkamp & Schotter 2018), internet-based companies (Wittkop et al, 2018), ibusiness firms (Brouthers et al, 2018), and high-tech startups (Neubert 2017(Neubert & 2018. While resources and capabilities are fundamental prerequisites for international research exploration, the concepts existed prior to the emergence of digital era (Coviello, Kano, and Liesch 2017;Wittkop et al 2018). To date, the interaction between digitalization and these fundamental prerequisites has not been sufficiently validated with quantitative evidence (Coviello et al, 2017;Strange & Zucchella, 2017;Watson et al, 2018).…”