Born-Globals and Culturally Proximate Markets

Susan Freeman (), Kate Hutchings and Sylvie Chetty
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Susan Freeman: University of Adelaide
Kate Hutchings: Griffith University
Sylvie Chetty: Massey University

Management International Review, 2012, vol. 52, issue 3, No 5, 425-460

Abstract: Abstract In this paper we focus on the differences between born-globals and older firms. We compare whether cultural proximity is important for born-globals and older firms and whether international or technological knowledge drives their internationalisation. In addition, we compare whether born-globals and older firms are proactive or reactive in their choice of culturally proximate markets. Our research suggests that born-globals tend to internationalise rapidly into markets ready to adopt their technology. This is driven by the need to establish a revenue stream (cash flow) as quickly as possible. These born-globals usually seek larger advanced economies, which are often culturally similar (proximate) and offer economies of scale; reducing risk for inexperienced firms. Indeed, born-global firms are more willing than older firms to move from culturally proximate to culturally non-proximate markets very quickly. Utilising an abductive approach based on case studies, our findings show that born-globals use their technological knowledge and networks and are proactive when they enter culturally non-proximate markets. Born-globals must assess a new market for its ability to provide a revenue stream very soon after entry. If the culturally proximate market does not offer this, then they will leverage technological knowledge and networks to move rapidly into nearby non-proximate markets where they perceive better opportunities for building a customer base or new funding alternatives to sustain the firm in their early foreign market forays. Our research significantly extends theory in highlighting that born-globals rely more on technological experience and display proactive behaviour more than older firms which can draw on previous international experience.

Keywords: Born-globals; Culturally proximate; International; Knowledge; Technical (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/s11575-011-0109-9

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