The changing role of network ties and critical capabilities in an international new venture’s early development

The importance of networks for firm internationalization has been pointed out for several decades. Especially for small and new firms, networks have been found to be an important tool to gain access to resources and to overcome liabilities of newness, smallness and foreignness. Yet, there is a lack of understanding regarding which types of capabilities are developed through networking and how and when networks are used. The aim of this article is to explore how and when different networking activities develop critical capabilities during different phases of an international new venture’s early development. The article is based on a longitudinal, in-depth case study of a Swedish international new venture from the medical-technology industry. We find that the development process is greatly affected by how the individual key actors leverage their network ties to develop critical capabilities – they use existing network ties and different indirect ties during the pre-founding, start-up and establishment of production phases. During the commercialization and sales growth phases, however, many new network ties are developed. The heterogeneity of the individual actors’ backgrounds plays an important role during the different developmental phases. We conclude by advancing a number of propositions in relation to how critical capabilities are developed through networking during different developmental phases.