Internationalize to live: a study of the post-internationalization survival of new ventures

Hadi Fariborzi () and Mohammad Keyhani
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Hadi Fariborzi: University of Calgary
Mohammad Keyhani: University of Calgary

Small Business Economics, 2018, vol. 50, issue 3, No 12, 607-624

Abstract: Abstract Despite a growing number of studies on the survival of new ventures who pursue an international entry strategy, research in this area is not yet conclusive. One line of argument tells a story of unprepared novices making a risky move, and thus predicts negative consequences. Another line of argument tells a story of prepared entrepreneurs making a strategic decision, and thus predicts positive consequences. The problem of estimating the true effect involves an important endogeneity problem that can only be overcome by accounting for the fact that new ventures self-select into internationalization. The goal of this research is to add to the post-internationalization survival literature by accounting for this self-selection using an endogenous switching model in a potential outcomes or counterfactual inference approach. Leveraging a panel of US new ventures from the Kauffman Firm Survey, our results paint a picture more in line with the preparedness logic of new venture internationalization. After controlling for this self-selection, we find a positive average treatment effect of internationalization on survival, and we find evidence that early internationalization is better for post-internationalization survival than late internationalization. We argue that these results suggest that the new theories of new venture internationalization needs to be further unchained from the process theories of internationalization.

Keywords: New venture internationalization; New venture survival; Survival analysis; Endogeneity (search for similar items in EconPapers)
JEL-codes: C23 C24 F23 L26 M13 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (13)

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DOI: 10.1007/s11187-017-9910-6

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