International Entrepreneurship Flashcards

International entrepreneurship is a field that combines traditional entrepreneurship with international business, studying how entrepreneurial actors recognize and utilize opportunities that exist across national borders.

Traditional theories assume that firms expand slowly and gradually, establishing themselves domestically first before expanding.

International entrepreneurship examines firms that may internationalize from day one, seeking opportunities globally from their initiation, rather than expanding slowly and gradually.

Traditional models assume firms establish themselves domestically first, expand slowly while learning, and avoid risky or distant markets early on.

Their research showed that many entrepreneurial firms do not follow a careful, step-by-step plan. Instead, they often internationalize early, act opportunistically based on networks, and rely on learning as they go.

An International New Venture (INV) is a new firm that is international from the start, viewing international opportunities as essential to its business model.

International corporate venturing (ICV) refers to established firms expanding entrepreneurially into international markets.

Successful INVs have a global vision from the beginning, international experience (exposure to foreign cultures, education, or work), and strong social networks.

The Uppsala model proposes that firms internationalize gradually, starting with low-commitment modes like exporting and slowly moving toward establishing subsidiaries, often targeting culturally or geographically closer countries first.

INVs challenge the Uppsala model by combining resources across borders from the start, developing an international mindset early, using alliances and networks, and learning rapidly.

INVs face the liability of smallness (limited resources), liability of newness (lack of routines or reputation), and liability of foreignness (challenges in unfamiliar markets).

Successful INVs overcome liabilities through networks, learning, and adaptability.

ICV involves established firms entering or expanding in foreign markets with new products or for new customers, adopting an entrepreneurial approach.

Key traits of successful ICV include entrepreneurial management, growth orientation, and an entrepreneurial culture.

INVs are new firms that are international from the start, while ICV involves established firms expanding internationally with an entrepreneurial approach.

Strong social networks provide critical resources, knowledge, and access to foreign markets for INVs, compensating for limited financial or human capital.

Psychic distance refers to the perceived cultural and geographical differences between countries, which the Uppsala model suggests influences the order of international expansion.

It means the firm is engaged in international activities and seeking global opportunities from its very inception, rather than developing a domestic base first.

INVs rely on learning as they go, taking advantage of their flexibility and ability to adapt to international markets.

The liability of smallness refers to the limited financial and human resources that new, small ventures often possess.

The liability of newness refers to the challenges faced by new firms due to their lack of established routines, reputation, or track record.

The liability of foreignness refers to the inherent challenges and disadvantages that firms face when operating in unfamiliar foreign markets.

Entrepreneurial traits like entrepreneurial management, growth orientation, and an entrepreneurial culture help established firms remain flexible and innovative while expanding globally.

The core concept is the recognition and exploitation of cross-border business opportunities by entrepreneurial actors.