Intermediated mode of internationalization: new software ventures in Ireland and India

Siri Terjesen, Colm O'Gorman and Zoltan Acs

Entrepreneurship & Regional Development, 2008, vol. 20, issue 1, 89-109

Abstract: Building on an emerging literature of international new ventures, we suggest that new ventures face two modes of internationalization: a direct mode and an intermediated means, using multinational enterprises as intermediaries. When considering direct internationalization, new ventures face high entry barriers including a lack of firm resources and access to key infrastructure. However, new ventures pursuing the intermediated mode of internationalization encounter transaction costs and the threat of rent extraction from multinational enterprises. Sector level case evidence suggests that the intermediated form of internationalization can be found in the software industry in Ireland and India. Our firm-level case studies identify the strategic issues and drawbacks associated with the intermediated mode of internationalization. Implications for policy-makers include encouraging firms to consider intermediated internationalization and targeting enterprise supports at entrepreneurs with experience of working in multinational enterprises.

Date: 2008
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DOI: 10.1080/08985620701630946

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