Born Local: Two Avenues to Internationalization

Zoltan Acs and Siri Terjesen

No 2007-022, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Are firms born Global? Because knowledge spillovers that lead to new venture creation are geographically constrained we believe that firms are born local. It follows that the decision to create sustainable new ventures is independent from the decision to internationalize, even if that is the ultimate goal of the firm. We explore two avenues to internationalize new ventures, a direct path described in much of the extant literature and an intermediated one. New ventures face high entry barriers and intellectual property rights protection to internationalization, which are circumvented by intermediating activities using existing multinational enterprises as facilitators of internationalization. However, new ventures using the intermediated mode of internationalization face transaction costs and rent extraction from multinational enterprises. Therefore, sustainable new ventures face a strategic decision on how to internationalize.

Keywords: International Entrepreneurship; Multinational Enterprises; Knowledge Spillovers; Intermediated Internationalization; International New Ventures; Foreign Direct Investment (search for similar items in EconPapers)
JEL-codes: F23 L26 M13 M16 (search for similar items in EconPapers)
Date: 2007-06-25
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent and nep-knm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://oweb.b67.uni-jena.de/Papers/jerp2007/wp_2007_022.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2007-022

Access Statistics for this paper

More papers in Jena Economics Research Papers from Friedrich-Schiller-University Jena
Bibliographic data for series maintained by Markus Pasche ().