International new ventures market expansion through collaborative entry modes

Abstract

The purpose of this article is to examine the role that different collaborative entry modes play in how international new ventures expand into international markets. Methodology/Approach: The article's arguments are based on the international new ventures and social network literatures. In order to investigate the entry modes adopted by British and Indian SMEs information and communication technology (ICTs) firms into each other markets, the paper outlines the results of qualitative semi-structured interviews with the key decision-makers of ten British and ten Indian ICT firms. Findings: The findings contribute to the relatively under-researched area of how international new ventures (INVs) enter foreign markets through collaborative entry mode. The findings suggest that INVs utilize both equity and non-equity modes of collaboration to expand their international operations. The findings also indicate that financial and nonfinancial resources always limit the market expansion and internationalization of such companies. Against this background, the INVs rely on building collaboration as one of the safest methods for foreign market expansion and successful internationalization. The collaborative entry mode is enhanced by entrepreneurs' prior experience, social ties and knowledge of the foreign market. Research limitations/implications: Set against the backdrop of an ever-increasing trend of internationalization of SMEs, the article offers important implications for understanding the conditions and factors behind the choice of collaborative and non-collaborative entry modes by international new ventures in particular and SMEs more broadly.

Internationalization of Chinese SMEs: The role of networks and global value chains

“…In sum, the findings of this study demonstrate the extant literature’s postulation that networks have substantial and positive influences on firms’ internationalization (Ellis, 2011; Puthusserry et al, 2018; Tian et al, 2018; Zhou et al, 2007). Networks facilitate firms’ quick insertion into the global markets, support their value creation, and engender resource complementarity and supplementation, though such benefits are mediated by the quality of SC derived from network ties and relationships with their value chain partners.…”

“…Extant research on SMEs’ networks and internationalization has focused on how networks help SMEs in market decisions, international opportunity identification, and entry modes (e.g., Puthusserry et al, 2018; Tian et al, 2018; Zhang et al, 2016). However, network quality and a firm’s position in the value chain must be examined in order to develop a much fine-grained view about the internationalization of SMEs.…”

“…Therefore, it is disputable how networks could influence their market decisions and entry modes. More scholars observe that SMEs’ market entry mode is dependent on the insertion and adaptive to support firms’ extant business relationships (Agndal & Chetty, 2007; Forsgren et al, 2005; Hilmersson & Jansson, 2012; Puthusserry et al, 2018). Ojala (2009) also found that the linkage of entry mode and network relationships is insignificant.…”

“…In summary, the above literature review on the internationalization process of EE-SMEs (i.e., networks’ ties and position within the GVCs) indicates that network relationships have substantial influence on firms’ internationalization process, both positively and negatively. It seems that networks’ impacts are manifold, and firms’ network utilization is highly contextual and situational according to various market and firm-specific factors (e.g., Puthusserry et al, 2018; Yamin & Kurt, 2018). Similarly, although GVCs offer opportunities for learning for firms based in emerging and developing economies, but at the same time such ties also constrain these firms’ further development and global growth opportunities due to being stuck in market-based and low value chain relationships (e.g., Mudambi, 2008).…”

Collaboration and Internationalization of SMEs: Insights and Recommendations from a Systematic Review

“…A prominent stream in this literature proposes that interorganizational collaboration may help alleviate these challenges (Chetty and Holm 2000; Oviatt and McDougall 1994; Puthusserry et al . 2018). Such collaborative linkages help SMEs overcome their resource limitations (Coviello 2006; Lu et al .…”