Abstract
Firms’ early internationalization has received considerable research attention. According to studies on born globals (Madsen and Servais 1997) and international new ventures (Oviatt and McDougall 1994), firms enter far markets soon after establishment. However, according to studies on slower internationalizers – for instance, in the case of innovation-related internationalization models (Bilkey 1978) and the Uppsala model (Johanson and Vahlne 1977, 1990) – internationalization takes more time and starts from the closest and/or more familiar markets.
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Notes
- 1.
Several definitions of BGs have been developed. We follow the one by Kuivalainen et al. (2007) that such firms should achieve at least 25 % of turnover from abroad and enter culturally distant foreign countries during the first three years of establishment. We also agree with Madsen and Servais (1997, p. 579) that they should ‘seek to derive significant advantages from … the sale of outputs to multiple countries/continents right from their legal birth’. Thus, we expect BGs to enter at least one continent outside Asia in three years or less from establishment and achieve a minimum 25 % export share during this period.
- 2.
- 3.
Experiential knowledge is accumulated during foreign operations. Knowing more, in turn, increases the firm’s commitment to that market as then it becomes easier to identify further expansion opportunities and also, the market will be perceived as less risky (Johanson and Vahlne 1977).
- 4.
Effectuation logic means that, to choose a marketing strategy, entrepreneurs start from taking into account their own traits, tastes, abilities, knowledge, and social networks instead of analysing different markets and evaluating different foreign market entry methods systematically (Andersson 2011).
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Acknowledgments
This work was supported by the Institutional Research Funding IUT20-49 of the Estonian Ministry of Education and Research and by the Estonian Research Council’s grant PUT 1003.
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Appendices
Descriptive Statistics
Total | NBG | BG | ||||
|---|---|---|---|---|---|---|
Number | Mean | Number | Mean | Number | Number | |
Sample 1 | ||||||
The year of establishment | 380 | 1996.61 | 261 | 1996.54 | 119 | 1996.76 |
Turnover (2010) | 380 | 31.92 | 261 | 30.41 | 119 | 35.22 |
The number of employees (2010) | 380 | 231.83 | 261 | 221.66 | 119 | 254.12 |
The year of first export outside Asia | 369 | 1999.83 | 250 | 2000.93 | 119 | 1997.51 |
The export share (2010) | 380 | 39.42 | 261 | 24.70 | 119 | 71.69 |
The year when achieved 25 % export share | 243 | 2001.27 | 124 | 2002.94 | 119 | 1999.53 |
Number of countries (any foreign operations) | 380 | 3.22 | 261 | 1.93 | 119 | 6.06 |
The overall success of internationalization (subjective estimation) (max = 100 points) | 380 | 75.99 | 261 | 75.54 | 119 | 76.97 |
Sample 2 | ||||||
The year of establishment | 332 | 1998.32 | 122 | 1996.65 | 210 | 1999.30 |
Turnover (2007) | 332 | 78.88 | 122 | 79.64 | 210 | 78.43 |
Turnover (2010) | 332 | 76.86 | 122 | 64.60 | 210 | 76.65 |
Turnover (2011) | 332 | 83.65 | 122 | 84.69 | 210 | 83.05 |
The number of employees (2007) | 332 | 306.85 | 122 | 355.93 | 210 | 278.34 |
The number of employees (2011) | 332 | 326.13 | 122 | 387.49 | 210 | 290.48 |
The year of first export outside Asia | 332 | 2000.62 | 122 | 2000.62 | 210 | 2000.63 |
The export share (2007) | 332 | 42.85 | 122 | 39.20 | 210 | 44.98 |
The export share (2011) | 332 | 45.11 | 122 | 41.48 | 210 | 47.22 |
The year when achieved 25 % export share | 332 | 2001.43 | 122 | 2001.97 | 210 | 2001.11 |
Number of countries (any foreign operations) (2007) | 332 | 5.90 | 122 | 5.28 | 210 | 6.26 |
Number of countries (any foreign operations) (2011) | 332 | 6.24 | 122 | 5.72 | 210 | 6.54 |
The overall success of internationalization (subjective estimation) | 332 | 74.82 | 122 | 74.65 | 210 | 74.90 |
The Most Popular Markets
Sample 1, 1st market | Sample 1, 2nd market | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
NBG | %a | BG | % | Total | % | NBG | % | BG | % | Total | % | |
USA | 134 | 36.31 | 76 | 20.60 | 210 | 56.91 | 9 | 3.88 | 9 | 3.88 | 18 | 7.76 |
Germany | 30 | 8.13 | 13 | 3.52 | 43 | 11.65 | 16 | 6.90 | 24 | 10.34 | 40 | 17.24 |
UK | 17 | 4.61 | 5 | 1.36 | 22 | 5.96 | 12 | 5.17 | 22 | 9.48 | 34 | 14.66 |
Italy | 13 | 3.52 | 0 | 0.00 | 13 | 3.52 | 7 | 3.02 | 2 | 0.86 | 9 | 3.88 |
Australia | 10 | 2.71 | 5 | 1.36 | 15 | 4.07 | 7 | 3.02 | 9 | 3.88 | 16 | 6.90 |
Canada | 7 | 1.90 | 7 | 1.90 | 14 | 3.79 | 17 | 7.33 | 24 | 10.34 | 41 | 17.67 |
France | 2 | 0.54 | 1 | 0.27 | 3 | 0.81 | 3 | 1.29 | 5 | 2.16 | 8 | 3.45 |
The Netherlands | 4 | 1.08 | 1 | 0.27 | 5 | 1.36 | 5 | 2.16 | 5 | 2.16 | 10 | 4.31 |
Russia | 9 | 2.44 | 3 | 0.81 | 12 | 3.25 | 1 | 0.43 | 0 | 0.00 | 1 | 0.43 |
Other | 24 | 6.50 | 8 | 2.17 | 32 | 8.67 | 37 | 15.95 | 18 | 7.76 | 55 | 23.71 |
Total | 250 | 67.75 | 119 | 32.25 | 369 | 100 | 114 | 49.14 | 118 | 50.86 | 232 | 100 |
Sample 1, 3rd market | Sample 2, 1st market | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
NBG | % | BG | % | Total | % | NBG | % | BG | % | Total | % | |
USA | 2 | 1.16 | 8 | 4.62 | 10 | 5.78 | 46 | 13.86 | 95 | 28.61 | 141 | 42.47 |
Germany | 4 | 2.31 | 16 | 9.25 | 20 | 11.56 | 13 | 3.92 | 25 | 7.53 | 38 | 11.45 |
UK | 4 | 2.31 | 9 | 5.20 | 13 | 7.51 | 10 | 3.01 | 19 | 5.72 | 29 | 8.73 |
Italy | 2 | 1.16 | 3 | 1.73 | 5 | 2.89 | 2 | 0.60 | 0 | 0.00 | 2 | 0.60 |
Australia | 4 | 2.31 | 18 | 10.40 | 22 | 12.72 | 13 | 3.92 | 8 | 2.41 | 21 | 6.33 |
Canada | 4 | 2.31 | 11 | 6.36 | 15 | 8.67 | 17 | 5.12 | 27 | 8.13 | 44 | 13.25 |
France | 5 | 2.89 | 10 | 5.78 | 15 | 8.67 | 4 | 1.20 | 3 | 0.90 | 7 | 2.11 |
The Netherlands | 2 | 1.16 | 12 | 6.94 | 14 | 8.09 | 0 | 0.00 | 3 | 0.90 | 3 | 0.90 |
Russia | 4 | 2.31 | 4 | 2.31 | 8 | 4.62 | 7 | 2.11 | 10 | 3.01 | 17 | 5.12 |
Other | 27 | 15.61 | 24 | 13.87 | 51 | 29.48 | 10 | 3.01 | 20 | 6.02 | 30 | 9.04 |
Total | 58 | 33.53 | 115 | 66.47 | 173 | 100 | 122 | 36.75 | 210 | 63.25 | 332 | 100 |
Knowledge Characteristics (1: Not at All, 7: Very Much)
Sample 1 | Sample 2 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1st market | 2nd market | 3rd market | 1st market | ||||||||||
N | Mean | Std. dev. | N | Mean | Std. dev. | N | Mean | Std. dev. | N | Mean | Std. dev. | ||
Customers | NBG | 261 | 3.40 | 1.184 | 115 | 3.45 | 1.428 | 61 | 3.51 | .942 | 122 | 2.32 | 1.26 |
BG | 119 | 1.31**** | .767 | 117 | 1.19**** | .776 | 114 | 1.06**** | .466 | 210 | 2.39 | 1.02 | |
Total | 380 | 2.74 | 1.444 | 232 | 2.31 | 1.611 | 175 | 1.91 | 1.347 | 332 | 2.36 | 1.11 | |
Suppliers | NBG | 260 | 3.63 | 1.209 | 115 | 2.74 | .849 | 61 | 3.49 | .924 | 122 | 1.80 | .95 |
BG | 119 | 1.55**** | .661 | 117 | 1.13**** | .580 | 114 | 1.04**** | .264 | 210 | 2.10 | 1.03 | |
Total | 379 | 2.97 | 1.440 | 232 | 1.93 | 1.085 | 175 | 1.89 | 1.311 | 332 | 1.99 | 1.01 | |
Foreign market conditions | NBG | 261 | 3.48 | 1.090 | 115 | 3.10 | 1.059 | 61 | 3.03 | .774 | 122 | 1.95 | .84 |
BG | 119 | 1.20**** | .720 | 117 | 1.09**** | .491 | 114 | 1.04**** | .264 | 210 | 2.16** | .89 | |
Total | 380 | 2.76 | 1.446 | 232 | 2.09 | 1.296 | 175 | 1.73 | 1.078 | 332 | 2.08 | .88 | |
Competitors | NBG | 260 | 3.12 | 1.106 | 115 | 3.60 | 1.362 | 61 | 2.87 | .785 | 122 | 1.90 | .75 |
BG | 119 | 1.18**** | .481 | 117 | 1.16**** | .682 | 114 | 1.04**** | .264 | 210 | 2.13** | .93 | |
Total | 379 | 2.51 | 1.312 | 232 | 2.37 | 1.625 | 175 | 1.67 | 1.013 | 332 | 2.05 | .88 | |
Foreign norms, rules and values | NBG | 260 | 3.16 | 1.151 | 115 | 2.21 | .960 | 61 | 3.16 | 1.036 | 122 | 1.70 | .75 |
BG | 119 | 1.13**** | .536 | 117 | 1.10**** | .480 | 113 | 1.03**** | .210 | 210 | 2.04**** | .88 | |
Total | 379 | 2.53 | 1.373 | 232 | 1.65 | .937 | 174 | 1.78 | 1.203 | 332 | 1.92 | .85 | |
Foreign government, laws and institutions | NBG | 260 | 2.98 | 1.263 | 115 | 2.13 | .874 | 61 | 2.87 | .846 | 122 | 1.75 | .81 |
BG | 119 | 1.09**** | .390 | 117 | 1.09**** | .508 | 114 | 1.04**** | .264 | 210 | 2.01*** | .89 | |
Total | 379 | 2.39 | 1.382 | 232 | 1.61 | .881 | 175 | 1.67 | 1.030 | 332 | 1.92 | .87 | |
Other Market Selection Criteria (1: Not at All, 7: Very Much)
Sample 1 | Sample 2 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1st market | 2nd market | 3rd market | 1st market | ||||||||||
N | Mean | SD | N | Mean | SD | N | Mean | SD | N | Mean | SD | ||
Good learning opportunities | NBG | 261 | 3.15 | 1.089 | 114 | 2.09 | 1.209 | 56 | 3.04 | .687 | 122 | 4.09 | 1.40 |
BG | 119 | 2.95* | .964 | 118 | 1.49**** | .814 | 115 | 2.90 | .706 | 210 | 4.02 | 1.31 | |
∑ | 380 | 3.08 | 1.054 | 232 | 1.78 | 1.067 | 171 | 2.94 | .700 | 332 | 4.05 | 1.34 | |
Strong contacts before entry | NBG | 260 | 2.08 | 1.209 | 114 | 2.99 | 1.327 | 57 | 1.72 | .921 | 122 | 1.95 | 1.12 |
BG | 119 | 1.49**** | .735 | 118 | 1.08**** | .417 | 115 | 1.03**** | .263 | 210 | 2.45**** | 1.46 | |
∑ | 379 | 1.89 | 1.116 | 232 | 2.02 | 1.367 | 172 | 1.26 | .654 | 332 | 2.27 | 1.36 | |
A foreign customer’s contact | NBG | 261 | 5.03 | 1.011 | 114 | 4.96 | .866 | 58 | 6.14 | .511 | 122 | 4.80 | 1.31 |
BG | 119 | 6.40**** | .751 | 118 | 5.81**** | .653 | 115 | 6.37**** | .597 | 210 | 4.87 | 1.26 | |
∑ | 380 | 5.46 | 1.133 | 232 | 5.39 | .876 | 173 | 6.29 | .578 | 332 | 4.84 | 1.27 | |
Support from the Chinese government | NBG | 259 | 4.76 | 1.316 | 114 | 5.87 | .888 | 55 | 6.40 | .494 | 122 | 4.48 | 1.12 |
BG | 119 | 5.71**** | .741 | 118 | 5.92 | .764 | 115 | 6.30 | .499 | 210 | 4.29 | 1.24 | |
∑ | 378 | 5.06 | 1.245 | 232 | 5.90 | .826 | 170 | 6.34 | .498 | 332 | 4.36 | 1.20 | |
Support from the foreign government | NBG | 258 | 1.65 | .926 | 114 | 1.48 | .778 | 57 | 1.30 | .626 | 122 | 2.62 | 1.37 |
BG | 118 | 1.41** | 1.015 | 118 | 1.34 | .527 | 115 | 1.10** | .295 | 210 | 2.36* | 1.21 | |
∑ | 376 | 1.57 | .960 | 232 | 1.41 | .665 | 172 | 1.16 | .442 | 332 | 2.45 | 1.28 | |
Rich (a high income per capita) | NBG | 261 | 5.72 | 1.305 | 114 | 5.42 | 1.038 | 58 | 5.07 | 1.349 | 122 | 5.10 | 1.35 |
BG | 119 | 5.89 | .998 | 118 | 5.74** | .938 | 115 | 5.71**** | .886 | 210 | 5.16 | 1.26 | |
∑ | 380 | 5.77 | 1.219 | 232 | 5.58 | .999 | 173 | 5.50 | 1.103 | 332 | 5.14 | 1.29 | |
Big (population) | NBG | 261 | 5.47 | 1.275 | 114 | 4.59 | 1.196 | 56 | 4.84 | 1.262 | 121 | 5.10 | 1.11 |
BG | 118 | 5.80*** | 1.034 | 117 | 4.74 | .957 | 114 | 4.96 | 1.258 | 210 | 5.07 | 1.11 | |
∑ | 379 | 5.57 | 1.214 | 231 | 4.67 | 1.082 | 170 | 4.92 | 1.257 | 331 | 5.08 | 1.11 | |
The firm’s product/service was better | NBG | 259 | 4.41 | .860 | 114 | 4.43 | .912 | 58 | 4.14 | .847 | 122 | 3.92 | 1.39 |
BG | 119 | 4.28 | .882 | 118 | 4.20** | .780 | 115 | 3.75*** | .736 | 210 | 3.75 | 1.43 | |
∑ | 378 | 4.37 | .868 | 232 | 4.31 | .853 | 173 | 3.88 | .794 | 332 | 3.81 | 1.42 | |
Good for production | NBG | 260 | 4.60 | 1.196 | 114 | 3.10 | 1.182 | 57 | 2.53 | .684 | 122 | 4.93 | 1.14 |
BG | 119 | 5.53**** | .973 | 118 | 2.86* | .899 | 115 | 2.23*** | .465 | 210 | 4.82 | 1.11 | |
∑ | 379 | 4.89 | 1.210 | 232 | 2.97 | 1.052 | 172 | 2.33 | .563 | 332 | 4.86 | 1.12 | |
Less risky | NBG | 261 | 2.59 | 1.158 | 114 | 2.95 | .920 | 58 | 3.22 | .702 | 122 | 3.25 | 1.20 |
BG | 119 | 2.67 | 1.082 | 118 | 2.81 | .765 | 115 | 3.06 | .753 | 210 | 3.22 | 1.15 | |
∑ | 380 | 2.62 | 1.134 | 232 | 2.88 | .846 | 173 | 3.12 | .738 | 332 | 3.23 | 1.16 | |
Empty: no similar services/products | NBG | 259 | 2.54 | 1.035 | 114 | 2.57 | .872 | 58 | 2.55 | .882 | 122 | 3.52 | 1.30 |
BG | 118 | 2.47 | .903 | 118 | 1.98**** | .773 | 115 | 2.31* | .583 | 210 | 3.29* | 1.18 | |
∑ | 377 | 2.52 | .995 | 232 | 2.27 | .873 | 173 | 2.39 | .704 | 332 | 3.37 | 1.23 | |
Close to China | NBG | 261 | 1.83 | 1.464 | 114 | 1.98 | 1.439 | 58 | 2.02 | 1.584 | 122 | 2.34 | 1.37 |
BG | 119 | 1.53** | 1.134 | 118 | 1.48**** | .771 | 115 | 1.37*** | .820 | 210 | 2.30 | 1.44 | |
∑ | 380 | 1.73 | 1.375 | 232 | 1.73 | 1.173 | 173 | 1.58 | 1.171 | 332 | 2.32 | 1.41 | |
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Vissak, T., Tsukanova, T., Zhang, X. (2017). The Value of Knowledge, Network Relationships and Governmental Support for Chinese Firms’ Early Internationalization: Survey Evidence. In: Marinova, S., Larimo, J., Nummela, N. (eds) Value Creation in International Business. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-39369-8_9
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