Initial entry speed and international performance of INVs

Abstract

Purpose In the literature concerning international new ventures (INVs), there has been a tension between the learning advantages of newness and absorptive capacity perspectives for explaining the performance influence of initial entry speed. To address this tension, this paper, through integrating both the motivation and ability to acquire foreign knowledge, proposes a theoretical model about the nonlinear relationship between INVs’ initial entry speed and international performance. Drawing upon upper echelons theory and the institution-based view, this study aims to extend the literature by developing two boundary conditions for this relationship: the moderating role of executives’ individual learning orientation and sub-national institutions. Design/methodology/approach The authors used the latent moderated structural equations approach specific to Mplus to test the hypotheses with data on 322 Chinese INVs. Findings The findings indicate that INVs’ international performance will increase initially and then decrease, as they accelerate initial entry speed (an inverted U-shaped relationship), and that INVs managed by executives with a higher learning orientation and located in better sub-national institutional environments achieve greater international growth gains from moderate initial entry speed. Originality/value This study mainly makes contributions to the INV literature by integrating the motivation and ability to acquire foreign knowledge to offer full understanding of the effect of initial entry speed on international performance, and by elaborating on the moderating effects of executives’ individual learning orientation and sub-national institutions on this relationship.

Internationalization Speed and International Performance among International New Ventures: The Moderating Role of Resource Synchronization

“…However, firm size and firm age at internationalization and market liberalization were not significantly related to international performance in all models. This is because: international perfor-mance relies more on resource orchestration rather than resource possession (Sirmon et al, 2011) indicated by firm size; firm age at internationalization has a positive effect on the motivation but a negative impact on the ability to acquire foreign knowledge (Huang, Ye and Shen, 2020); market liberalization also has both positive and negative effects on firm performance (Chang and Wu, 2014).…”