How Does Managerial Experience Predict the Internationalization Type of a Young Firm?

Abstract

This study aims to find out how useful managers' past general and export experience is in predicting whether young manufacturing firms become fast internationalizers. Extant literature about the role of managerial experience in determining young firms' internationalization type is scant. This paper fills this gap by providing systematic evidence on which kinds of general and export experience can be used for accurate predictions of two firm types: born globals and general fast internationalizers. Our dataset encompasses information about managerial experience of the whole population of young Estonian manufacturing firms. Based on using four different prediction methods (logistic regression, rough sets, decision tree, neural networks) and a large variety of variables reflecting managers' past experience, the results indicate that in prediction models, export experience variables are more valuable than general experience variables. Born globals can be predicted with an accuracy of at least 90% in case of all applied machine learning methods, while the precision is lower in case of general fast internationalizers. The study leads to important implications for international business theory and practice.

Which variables predict the internationalization type of academic spin-offs?

“…Thus, based on the above, it can be concluded similarly to [22, p. 34] that “export propensity does not depend on single attributes but instead, on specific combinations of attributes”. However, there is no consensus regarding which predictors should be used or which methods should be chosen [ 21 ].…”

“…Despite the abundance of studies on different internationalization-related aspects, so far, only a limited number of authors have tried to predict firms’ internationalization types (for instance, if they will internationalize fast or slowly or become born globals; for an overview, see Ref. [ 21 ]), and “there are inconclusive findings in the literature on key predictors of export behaviour” [ [ 22 ], p. 33]. Moreover, although according to some authors, academic spin-offs’ internationalization can differ from other firms’ foreign expansion [ 8 , 23 , 24 ] and it is very important to find out why some academic spin-offs achieve better performance than others [ 25 ], export prediction has not received any attention yet in studies on academic spin-offs.…”

“…[ 27 ]) and hundreds of papers have been published by now. In some other contexts, including international business domains, such articles are scarce [ 21 ], which might be caused by difficulties in identifying necessary (high accuracy) predictors.…”

The impact of human, social, and psychological capital on academic spin-off internationalization

“…International experience, according to Johnson (2004), Lukason et al (2021), and Wach and Głodowska (2021), is responsible for the early internationalization of hightech start-ups. Some authors explain how the desire on the part of entrepreneurs to capitalize on their resources, such as international experience, can provide a reason for the internationalization of their companies (Bloodgood et al 1996;Lukason et al 2021).…”

“…International experience constitutes a necessity in the global business world and one of the most influential characteristics of managers or entrepreneurs in the internationalization of companies McDougall 1995, 1997;Bloodgood et al 1996;Sambharya 1996;Tihanyi et al 2000;Athanassiou and Nigh 2002;Carpenter et al 2003;McDougall et al 2003;Herrmann and Datta 2005;Rivas et al 2009;Nielsen 2010;Baum et al 2015;Andersson and Berggren 2016;Dauth and Tomczak 2016;Volonté and Gantenbein 2016;Lukason et al 2021). Herrmann and Datta (2005) establish that international experience endows the manager with a personality and perceptions that positively influence international orientation.…”