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Born Local: Two Avenues to Internationalization

Author

Listed:
  • Zoltan J. Acs

    (School of Public Policy, George Mason University, Fairfax, Virginia, USA; Max Planck Institute of Economics, Jena, Germany)

  • Siri Terjesen

    (Brisbane Graduate School of Business, Queensland University of Technology; Max Planck Institute of Economics, Jena, Germany)

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.

Suggested Citation

  • Zoltan J. Acs & Siri Terjesen, 2007. "Born Local: Two Avenues to Internationalization," Jena Economics Research Papers 2007-022, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2007-022
    as

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    File URL: https://oweb.b67.uni-jena.de/Papers/jerp2007/wp_2007_022.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Zoltán J. Ács & Colm O'Gorman & László Szerb & Siri Terjesen, 2015. "Could the Irish Miracle be Repeated in Hungary?," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 30, pages 584-603, Edward Elgar Publishing.
    2. Zoltan Acs & Laszlo Szerb, 2007. "Entrepreneurship, Economic Growth and Public Policy," Small Business Economics, Springer, vol. 28(2), pages 109-122, March.
    3. Spyros Arvanitis & Areti Gkypali & Kostas Tsekouras, 2014. "Knowledge Base, Exporting Activities, Innovation Openness and Innovation Performance," KOF Working papers 14-361, KOF Swiss Economic Institute, ETH Zurich.
    4. Siri Terjesen & Jolanda Hessels, 2009. "Varieties of export-oriented entrepreneurship in Asia," Asia Pacific Journal of Management, Springer, vol. 26(3), pages 537-561, September.
    5. Jolanda Hessels & Siri Terjesen, 2010. "Resource dependency and institutional theory perspectives on direct and indirect export choices," Small Business Economics, Springer, vol. 34(2), pages 203-220, February.

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    More about this item

    Keywords

    International Entrepreneurship; Multinational Enterprises; Knowledge Spillovers; Intermediated Internationalization; International New Ventures; Foreign Direct Investment;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M16 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - International Business Administration

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