Abstract
International entrepreneurship involves the identification and exploitation of opportunities for international exchange. Yet little is known about the entrepreneurial methods used for opportunity recognition. While previous work emphasizes effects operating at the level of the business network, I propose that the recognition of exchange opportunities is a highly subjective process, shaped by entrepreneurs’ existing ties with others. Based on interview data collected from 41 managers, I develop a comprehensive measure for classifying different methods of opportunity recognition. I then use this measure to classify 665 international exchange ventures set up by entrepreneurs in four Chinese cities. In contrast with past research I find virtually no role for blind luck. Although the majority of exchange opportunities were discovered rather than sought, these discoveries were intentional rather than accidental. I also find that entrepreneurs’ idiosyncratic connections with others both promote and inhibit international exchange. Tie-based opportunities lead to higher-quality and more valuable exchanges that are constrained in terms of geographic, psychic and linguistic distance. From this I conclude that entrepreneurial networks have distinct opportunity horizons that limit the reach of tie-based exchanges and potentially lead to sub-optimal internationalization trajectories.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
Prior to the emergence of business network research in the 1980s, market entry decisions were thought to be the result of unspecified stimuli emanating from unknown sources in the firm's operating environment (Olson & Wiedersheim-Paul, 1978). When Thorelli (1986: 38) observed that “the most salient part of the environment of any firm is other firms,” he was advocating the idea that the analysis of business networks offered theorists a greater level of precision than studies of vaguely defined environmental stimuli. Scholars could now choose between impersonal markets that exist as givens “out there,” and networks that are both the antecedent and consequence of exchanges among firms (Håkansson & Snehota, 1995).
Some scholars define social ties narrowly distinguishing them from other types of interpersonal tie such as business and family ties (Coviello, 2006). Others interpret social ties as describing the set of all interpersonal ties, as opposed to inter-organizational ties (Ellis, 2000; Shane, 2003). In this paper the more generic meaning is intended: social ties are ties between people. This is not to diminish the significance of different tie types, of which many varieties have been identified in studies of firm internationalization (e.g., familial and friendship ties, corporate ties such as links with previous employers and employees, channel ties with current and former customers and suppliers, and scientific and academic ties such as those linking researchers and practitioners; Ellis & Pecotich (2001), Sharma & Blomstermo (2003), Zain & Ng (2006)). Yet while the description of ties is interesting, the conceptual benefits gained from speculating about the effects of different tie types remain unclear. This is because ties change over time: friends become business partners and vice versa; customers may become competitors; employees sometimes become customers (Ellis & Pecotich, 2001; Harris & Wheeler, 2005).
This limitation is implicitly acknowledged in recent work that seeks to supplement the business network perspective with social networks held by individual managers (Loane & Bell, 2006; Rutashobya & Jaensson, 2004; Sharma & Blomstermo, 2003). As the analysis of social networks falls outside a strict definition of the business network perspective, scholars have positioned this work as an “extension to the network approach” (Loane & Bell, 2006).
Another example of the restricted focus of business network research is found in the limited role attributed to weak ties. Although networks are built on both strong and weak ties, industrial networks are characteristically defined by “strongly bonded relationships” (Easton, 1992: 15). Inter-firm relationships tend to be “thicker” inside the network as a consequence of mutual interdependence, commitment and trust-building over time (Håkansson & Snehota, 1995). The analysis of business networks thus has limited relevance for exchange settings where firms do not need to form lasting relationships with their exchange partners. Further, in the traditional business network perspective, weak ties are almost always indirect. Yet social network theorists have shown that entrepreneurs can glean valuable information from weak, interpersonal ties, which may be direct or indirect (Burt, 1992; Granovetter, 1973; Sharma & Blomstermo, 2003).
Many studies adopt a case-based research strategy, which is appropriate when the phenomenon (the recognition of international opportunities) and the context (networks of interpersonal ties) must be considered simultaneously (Yin, 2003). The difficulty with this strategy is that researcher biases and errors of judgment are hard to detect. The independent reader cannot easily tell, for example, whether the researcher has been selective about the presentation of data. Have all the opportunities been accounted for, or only those that illuminate a favored conclusion? This puts the onus on researchers to adopt a number of procedures that enhance the validity and reliability of their studies. Several such tactics are described by Miles & Huberman (1994: Chapter 10) and Yin (2003: Chapter 2).
This figure overstates Hong Kong's actual degree of openness, as it reflects a high volume of re-export trade passing through Hong Kong to and from other markets. As some unknown portion of this re-export trade originates in non-Hong-Kong-owned factories located in the Pearl River Delta, Hong Kong's true level of openness will be lower, and closer to that of other coastal cities.
It is not uncommon for researchers to draw conclusions about observed effects by conducting tests of statistical significance. However, the p values generated by significance tests are confounded indices, as they reflect both the size of the effect as it occurs in the population and the statistical power of the test used to detect it. In many studies the biggest determinant of statistical power is sample size. Consequently a p value usually says less about the size of the effect than it does about the size of the sample used to estimate it. Conclusions that are wholly based on p values run the risk of missing small effects obtained in low-power settings (leading to a Type II error) or making too much of trivial effects observed in high-power settings (essentially leading to a Type I error). The best way to avoid either outcome is to interpret effect sizes independently of tests of statistical significance (Ellis, 2010). Tests of statistical significance are regarded by some as useful for insuring against the possibility of incorrectly rejecting a null hypothesis, but ultimately the product of any research enquiry is an estimate of the size of the effect being investigated (Cohen, 1990). In this paper relevant effect sizes include odds, odds ratios, probabilities, differences in probabilities and part correlations.
Not included in the analysis were 20 market entries where the respondent could not recall with sufficient detail the means by which they first met their international exchange partner. Consequently the usable data (665 exchanges) constitute 97% of the total number of export ventures personally set up by the interviewees. While previous market entry studies have attributed a heavy hand to the null hypothesis of luck (e.g., Meyer & Skak, 2002), virtually all of the exchange ventures observed in this study could be explained as a consequence of one of the methods of opportunity identification described in this measure. This is not to say that chance was absent. Many of the exchanges had a measure of serendipity about them. But international entrepreneurs are generally intentional in their identification of exchange opportunities, and make their own luck by exploiting network connections or attending trade fairs. During the interviews the managers were also asked to identify who had been the initiating actor in each exchange. Unsolicited orders from buyers (N=134) or third parties (N=143) accounted for 42% of the exchanges recorded. Despite being the passive party in this subset of exchanges, interviewees were able to identify the means for opportunity recognition in nearly every case (99.1%). This represents a significant departure from the past practice of leaving unsolicited orders unclassified, and provides further evidence of the effectiveness of the measurement procedure.
During their training, interviewers were presented with a number of hypothetical examples to illustrate how to classify exchanges that appeared to be the result of overlapping methods of identification. Classification challenges might arise, for example, if an entrepreneur met an old friend at a trade fair, or conducted market research to identify importers in a country where they had some prior connection (e.g., previous work experience). Two coding rules were used to decide ambiguous cases. First, interviewers were advised to consider precedence. A deal struck at a fair with an old friend or former business associate was considered a tie-based exchange (the tie preceded the fair), while a deal struck with a stranger would be considered fair-based (i.e., non-tie-based). Second, interviewers were advised to focus on partner selection and ignore market selection. An existing connection to a particular market was considered immaterial if the actual exchange partner was identified via other means. Exchanges link people, not markets. While there may have been some overlap between different types of non-tie exchange (e.g., market research that involves scanning published directories straddles the line between a formal search and an advertising-based search), tie-based exchanges are, by definition, fully measurable. If the interviewer was not able to establish a prior and instrumental tie linking the exchange partners, the exchange could not be classified as tie-based.
Shanghai was deemed to be the closest port to Xian by rail. Exports from Guangzhou were assumed to depart from the nearby container port of Nansha in the Pearl River Delta.
Pampel (2000: 27) describes the procedure used for calculating the difference in probabilities for two groups. In this procedure the mean value of the dependent variable serves as the probability of the omitted group (Po). In this case Po, or the overall proportion of tie-based exchanges, is 0.385 (256/665), and Lo, or the predicted logit for the omitted group (exchanges originating in the three coastal cities)=ln(Po/(1−Po)=−0.468. The predicted logit (Ld) for the dummy variable group is −1.462 or Lo+bd or −0.468 +−0.994. The probability for the dummy variable group (Pd) is 1/(1 + e−Ld) or 0.188. The difference in probabilities (Pd−P0) is 0.188−0.385=−0.197.
To facilitate interpretation I calculated a range of logits for tie-use, using the coefficients generated by the analysis and inserting into different regression equations the mean scores for all the variables and different scores for personal experience. The scores for personal experience corresponded to the full range of observed values on this dimension. (I am grateful to JIBS editor Anand Swaminathan for directing me to Hoetker (2007) and Wiersema and Bowen (2009) in this regard.) Logits generated by these equations were then transformed into probabilities (eb/(1+eb)), and an average effect was calculated from the full range of probabilities.
Assuming the effect size and the proportion of highly experienced exporters observed in the sample are identical to their corresponding population parameters, a sample size greater than 4000 would have been required to detect the accumulated effects of experience with α2 set at 0.05 and β set at 0.80. The difficulty of detecting the isolated effect of experience stems from the small size of the effect. The difficulty of detecting the aggregate effect stems from the relatively small proportion of highly experienced entrepreneurs in the population.
The results for three of the statistically significant control variables – market size, product type and colonial trade – are unsurprising. That finished goods tend to be exported 1490 nm further than intermediate goods reflects the dispersion of markets for both product types: components tend to be traded between suppliers and manufacturers located within Asia, whereas finished goods tend to be sold in the more distant and larger consumer markets of Europe and the USA. The large, positive coefficient for the colonial dummy reflects the long-distance trade linking Hong Kong entrepreneurs with buyers in the UK.
The predicted logit for the omitted group (L0) (non-tie-based exchanges) is 1.225 when the mean proportion of exchanges involving non-Chinese partners (P=0.773=379/490) is adopted as the mean value of the dependent variable. The predicted logit (Ld) for the dummy variable group is 0.640 or L0+bd or 1.225+−0.585. The probability for the dummy variable group (Pd) is 1/(1 + e−Ld) or 0.655. The difference in probabilities (Pd−P0) is −0.118 (or 0.655−0.773).
Discovery, in this context, means that the awareness of the exchange opportunity was the result of either an approach made by parties outside the exporting firm (i.e., an unsolicited order; n=277) or a chance meeting that occurred at a trade fair (n=300). A sought-out opportunity, in contrast, is one where the exporter first identified and then took the initiative in approaching the potential foreign buyer (n=88).
Unlike the nonlinear relationships estimated in binary logistic regression, in ordinal regression the effect of the independent variable is assumed to be the same for each level of the dependent variable.
References
AAPA. 2007. World port rankings: 2007. http://www.aapa-ports.org/Industry/content.cfm?ItemNumber=900#Statistics. Accessed 16 July 2009.
Abelson, R. P. 1985. A variance explanation paradox: When a little is a lot. Psychological Bulletin, 97 (1): 129–133.
Aldrich, H., & Zimmer, C. 1986. Entrepreneurship through social networks. In D. L. Sexton & R. W. Smilor (Eds), The art and science of entrepreneurship: 3–23. Cambridge, MA: Ballinger.
Andersen, O. 1993. On the internationalization process of firms: A critical analysis. Journal of International Business Studies, 24 (2): 209–231.
Andersen, P. H. 2006. Listening to the global grapevine: SME export managers’ personal contacts as a vehicle for export information generation. Journal of World Business, 41 (1): 81–96.
Ardichvili, A., Cardozo, R., & Ray, S. 2003. A theory of entrepreneurial opportunity recognition and development. Journal of Business Venturing, 18 (1): 105–123.
Arenius, P., & De Clercq, D. 2005. A network-based approach on opportunity recognition. Small Business Economics, 24 (3): 249–265.
Armitage, P., Berry, G., & Matthews, J. N. 2002. Statistical methods in medical research, (4th ed.) Malden, MA: Blackwell.
Autio, E. 2005. Creative tension: The significance of Ben Oviatt's & Patricia McDougall's article “Toward a theory of international new ventures”. Journal of International Business Studies, 36 (1): 9–19.
Axelsson, B., & Johanson, J. 1992. Foreign market entry: The textbook vs the network view. In B. Axelsson & G. Easton (Eds), Industrial networks: A new view of reality: 218–234. London: Routledge.
Bagozzi, R. P. 1978. Marketing as exchange: A theory of transactions in the marketplace. American Behavioral Scientist, 21 (4): 535–556.
Baumol, W. J. 1993. Formal entrepreneurship theory in economics: Existence and bounds. Journal of Business Venturing, 8 (3): 197–210.
Beckerman, W. 1956. Distance and the pattern of intra-European trade. Review of Economics and Statistics, 38 (1): 31–40.
Bilkey, W. J. 1978. An attempted integration of the literature on the export behavior of firms. Journal of International Business Studies, 9 (1): 33–46.
Björkman, I., & Kock, S. 1995. Social relationships and business networks: The case of Western companies in China. International Business Review, 4 (4): 519–535.
Blankenburg, D. 1995. A network approach to foreign market entry. In K. Moller & D. Wilson (Eds), Business marketing: An interaction and network perspective: 375–405. Boston: Kluwer Academic Publishers.
Brass, D. J., Galaskiewicz, J., Greve, H. R., & Tsai, W. P. 2004. Taking stock of networks and organizations: A multilevel perspective. Academy of Management Journal, 47 (6): 795–817.
Burt, R. S. 1992. Structural holes: The social structure of competition. Cambridge, MA: Harvard University Press.
Burt, R. S. 2000. The network structure of social capital. In B. M. Staw & R. I. Sutton (Eds), Research in organizational behavior, Vol. 22. 345–423. Greenwich, CT: JAI Press.
Casson, M. 2003. The entrepreneur: An economic theory, (2nd ed.) Cheltenham: Edward Elgar.
Castilla, E. J. 2005. Social networks and employee performance in a call center. American Journal of Sociology, 110 (5): 1243–1283.
Chandra, Y., Styles, C., & Wilkinson, I. 2009. The recognition of first time international entrepreneurial opportunities: Evidence from firms in knowledge-based industries. International Marketing Review, 26 (1): 30–61.
Chen, H., & Chen, T. J. 1998. Network linkages and location choice in foreign direct investment. Journal of International Business Studies, 29 (3): 445–468.
Chetty, S., & Blankenburg Holm, D. 2000. Internationalisation of a small to medium-sized manufacturing firms: A network approach. International Business Review, 9 (1): 77–93.
China statistical yearbook. 2008. Beijing: China Statistics Press.
Cohen, J. 1988. Statistical power analysis for the behavioral sciences, (2nd ed.) New York: Academic Press.
Cohen, J. 1990. Things I have learned (so far). American Psychologist, 45 (12): 1304–1312.
Coviello, N. 2006. The network dynamics of international new ventures. Journal of International Business Studies, 37 (5): 713–731.
Coviello, N., & Munro, H. 1997. Network relationships and the internationalisation process of small software firms. International Business Review, 6 (4): 361–386.
Crick, D., & Spence, M. 2005. The internationalisation of “high performing” UK high-tech SMEs: A study of planned and unplanned strategies. International Business Review, 14 (2): 167–185.
Dimitratos, P., & Jones, M. V. 2005. Future directions for international entrepreneurship research. International Business Review, 14 (2): 119–128.
Douglas, S. P., & Craig, C. S. 1983. International marketing research. Englewood Cliffs, NJ: Prentice Hall.
Dow, D., & Karunaratna, A. 2006. Developing a multidimensional instrument to measure psychic distance stimuli. Journal of International Business Studies, 37 (5): 578–602.
Easton, G. 1992. Industrial networks: A review. In B. Axelsson & G. Easton (Eds), Industrial networks: A new view of reality: 1–27. London: Routledge.
Easton, G., & Håkansson, H. 1996. Markets as networks: Editorial introduction. International Journal of Research in Marketing, 13 (5): 407–413.
Eckhardt, J. T., & Shane, S. A. 2003. Opportunities and entrepreneurship. Journal of Management, 29 (3): 333–349.
Ellis, P. D. 2000. Social ties and foreign market entry. Journal of International Business Studies, 31 (3): 443–469.
Ellis, P. D. 2003. Social structure and intermediation: Market-making strategies in international exchange. Journal of Management Studies, 40 (7): 1677–1702.
Ellis, P. D. 2007. Paths to foreign markets: Does distance to market affect firm internationalization? International Business Review, 16 (5): 573–593.
Ellis, P. D. 2009. Does experience make the world smaller? Effects on psychic distance. Working Paper, Hong Kong Polytechnic University.
Ellis, P. D. 2010. The essential guide to effect sizes: An introduction to statistical power, meta-analysis and the interpretation of research results. Cambridge: Cambridge University Press.
Ellis, P. D., & Pecotich, A. 2001. Social factors influencing export initiation in small and medium-sized enterprises. Journal of Marketing Research, 38 (1): 119–130.
Fox, J. 2008. Applied regression analysis and generalized linear models, (2nd ed.) Los Angeles: Sage.
Ghemawat, P. 2001. Distance still matters: The hard reality of global expansion. Harvard Business Review, 79 (8): 137–147.
Gould, D. M. 1994. Immigrant links to the home country: Empirical implications for US bilateral trade flows. The Review of Economic and Statistics, 76 (2): 302–316.
Granovetter, M. S. 1973. The strength of weak ties. American Journal of Sociology, 78 (6): 1360–1380.
Gulati, R. 1995. Social structure and alliance formation patterns: A longitudinal analysis. Administrative Science Quarterly, 40 (4): 619–652.
Håkanson, L., & Ambos, B. 2008. The antecedents of psychic distance, Paper presented at the Academy of International Business Meeting, Milan, Italy, 1–3 July.
Håkansson, H., & Snehota, I. (Eds) 1995. Developing relationships in business networks. London: International Thomson.
Harris, S., & Wheeler, C. 2005. Entrepreneurs’ relationships for internationalization: functions, origins and strategies. International Business Review, 14 (2): 187–207.
Hills, G. E., & Schrader, R. C. 1998. Successful entrepreneurs’ insights into opportunity recognition. Frontiers of entrepreneurship research: 30–43. Babson Park, MA: Babson College.
Hoetker, G. 2007. The use of logit and probit models in strategic management research: Critical issues. Strategic Management Journal, 28 (4): 331–343.
Hofstede, G. 2001. Culture's consequences: Comparing values, behaviors, institutions, and organizations across nations, (2nd ed.) Thousand Oaks, CA: Sage.
Hsieh, C. M., Nickerson, J. A., & Zenger, T. R. 2007. Opportunity discovery, problem solving and a theory of the entrepreneurial firm. Journal of Management Studies, 44 (7): 1255–1277.
Hutchinson, W. K. 2005. “Linguistic distance” as a determinant of bilateral trade. Southern Economic Journal, 72 (1): 1–15.
Ingram, P., & Roberts, P. W. 2000. Friendships among competitors in the Sydney hotel industry. American Journal of Sociology, 106 (2): 387–423.
Johanson, J., & Mattsson, L. G. 1988. Internationalisation in industrial systems: A network approach. In N. Hood & J.-E. Vahlne (Eds), Strategies in global competition: 287–314. London: Croom Helm.
Johanson, J., & Vahlne, J.-E. 1977. The internationalization process of the firm: A model of knowledge development and increasing foreign market commitments. Journal of International Business Studies, 8 (1): 23–32.
Johanson, J., & Vahlne, J.-E. 2006. Commitment and opportunity development in the internationalization process: A note on the Uppsala internationalization process model. Management International Review, 46 (2): 165–178.
Johanson, J., & Wiedersheim-Paul, F. 1975. The internationalization of the firm: Four Swedish cases. Journal of Management Studies, 12 (3): 305–322.
Kirzner, I. M. 1973. Competition and entrepreneurship. Chicago: University of Chicago Press.
Kirzner, I. M. 1997. Entrepreneurial discovery and the competitive market process: An Austrian approach. Journal of Economic Literature, 35 (1): 60–85.
Kogut, B., & Singh, H. 1988. The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19 (3): 411–432.
Koller, R. H. 1988. On the source of entrepreneurial ideas. Frontiers of entrepreneurship research, 8: 194–207.
Komulainen, H., Mainela, T., & Tähtinen, J. 2006. Social networks in the initiation of a high-tech firm's internationalization. International Journal of Entrepreneurship and Innovation Management, 6 (6): 526–541.
Kostova, T., & Roth, K. 2003. Social capital in multinational corporations and a micro-macro model of its formation. Academy of Management Review, 28 (2): 297–317.
Leamer, E. 1974. The commodity composition of international trade in manufactures: An empirical analysis. Oxford Economic Papers, 26 (3): 350–374.
Liang, N. 1995. Soliciting unsolicited export orders: Are recipients chosen at random? European Journal of Marketing, 29 (8): 37–59.
Lin, N. 1999. Social networks and status attainment. Annual Review of Sociology, 25 (1): 467–488.
Lin, N. 2001. Building a network theory of social capital. In N. Lin, K. Cook & R. S. Burt (Eds), Social capital: Theory and research: 3–29. New York: Aldine de Gruyter.
Loane, S., & Bell, J. 2006. Rapid internationalisation among entrepreneurial firms in Australia, Canada, Ireland and New Zealand: An extension to the network approach. International Marketing Review, 23 (5): 467–485.
Lundan, S. M., & Jones, G. 2001. The “Commonwealth Effect” and the process of internationalization. The World Economy, 24 (1): 99–118.
MacBean, A. 1996. China's foreign trade corporations: Their role in economic reform and export success. In J. Child & Y. Lu (Eds), Management issues in China, Vol. II. 183–200. London: Routledge.
Maritimechain.com. 2007. Distance calculator. http://www.maritimechain.com/port/. Accessed 15 November 2007.
Mathews, J. A., & Zander, I. 2007. The international entrepreneurial dynamics of accelerated internationalisation. Journal of International Business Studies, 38 (3): 387–403.
McDermott, G. A., & Corredoira, R. A. 2010. Network composition, collaborative ties, and upgrading in emerging-market firms: Lessons from the Argentine autoparts sector. Journal of International Business Studies, 41 (2): 308–329.
McDougall, P. P., & Oviatt, B. M. 2000. International entrepreneurship: The intersection of two research paths. Academy of Management Journal, 43 (5): 902–906.
Menard, S. 1995. Applied logistic regression analysis. Thousand Oaks, CA: Sage.
Meyer, K., & Skak, A. 2002. Networks, serendipity and SME entry into Eastern Europe. European Management Journal, 20 (3): 179–188.
Miles, M. B., & Huberman, A. M. 1994. Qualitative data analysis: An expanded sourcebook, (2nd ed.) Thousand Oaks, CA: Sage.
Miller, S. 1999. How to get the most out of trade shows, (3rd ed.) Chicago: NTC Books.
Mitchell, J. C. 1969. The concept and use of social networks. In J. C. Mitchell (Ed.), Social networks in urban situations: Analyses of personal relationships in Central African towns: 1–50. Manchester: Manchester University Press.
Morrison, E. W. 2002. Newcomers’ relationships: The role of social network ties during socialization. Academy of Management Journal, 45 (6): 1149–1160.
Mort, G. S., & Weerawardena, J. 2006. Networking capability and international entrepreneurship: How networks function in Australian born global firms. International Marketing Review, 23 (5): 549–572.
Nordström, K. A. 1991. The internationalization process of the firm: Searching for new patterns and explanations. Unpublished Doctoral Dissertation, Stockholm School of Economics.
Nordström, K., & Vahlne, J.-E. 1994. Is the globe shrinking? Psychic distance and the establishment of Swedish sales subsidiaries during the last 100 years. In M. Landeck (Ed.), International trade: Regional and global issues: 41–56. New York: St Martin's Press.
O’Grady, S., & Lane, H. W. 1996. The psychic distance paradox. Journal of International Business Studies, 27 (2): 309–333.
Olson, H. C., & Wiedersheim-Paul, F. 1978. Factors affecting the pre-export behaviour of non-exporting firms. In M. Ghertman & J. Leontiades (Eds), European research in international business: 283–305. Amsterdam: North Holland.
Oviatt, B. M., & McDougall, P. P. 1994. Toward a theory of international new ventures. Journal of International Business Studies, 25 (1): 45–64.
Oviatt, B. M., & McDougall, P. P. 2005. The internationalization of entrepreneurship. Journal of International Business Studies, 36 (1): 2–8.
Ozgen, E., & Baron, R. A. 2007. Social sources of information in opportunity recognition: Effects of mentors, industry networks, and professional forums. Journal of Business Venturing, 22 (2): 174–192.
Pampel, F. C. 2000. Logistic regression: A primer. Thousand Oaks, CA: Sage.
Qiu, Y. 2005. Personal networks, institutional involvement, and foreign direct investment flows into China's interior. Economic Geography, 81 (3): 261–281.
Rangan, S. 2000. The problem of search and deliberation in economic action: When social networks really matter. Academy of Management Review, 25 (4): 813–828.
Rauch, J. E., & Trindade, V. 2002. Ethnic Chinese networks in international trade. The Review of Economics and Statistics, 84 (1): 116–130.
Root, F. R. 1994. Entry strategies for international markets. New York: Lexington Books.
Rutashobya, L., & Jaensson, J. E. 2004. Small firms’ internationalization for development in Tanzania: Exploring the network phenomenon. International Journal of Social Economics, 31 (1/2): 159–172.
Saimee, S., Walters, P. G. P., & DuBois, F. L. 1993. Exporting as an innovative behaviour: An empirical investigation. International Marketing Review, 10 (3): 5–25.
Saxenian, A. L. 2006. The new Argonauts: Regional advantage in a global economy. Cambridge, MA: Harvard University Press.
Schumpeter, J. A. 1934. The theory of economic development. Cambridge, MA: Harvard University Press.
Shane, S. 2000. Prior knowledge and the discovery of entrepreneurial opportunities. Organization Science, 11 (4): 448–469.
Shane, S. 2003. A general theory of entrepreneurship. Cheltenham: Edward Elgar.
Shane, S., & Venkataraman, S. 2000. The promise of entrepreneurship as a field of research. Academy of Management Review, 26 (1): 13–17.
Sharma, D., & Blomstermo, A. 2003. The internationalization process of Born Globals: A network view. International Business Review, 12 (6): 739–753.
Shaver, J. M. 1998. Accounting for endogeneity when assessing strategy performance: Does entry mode choice affect FDI survival? Management Science, 44 (4): 571–585.
Simmonds, K., & Smith, H. 1968. The first export order: A marketing innovation. European Journal of Marketing, 2 (2): 93–100.
Singh, R. P. 2000. Entrepreneurial opportunity recognition through social networks. New York: Garland.
Styles, C., & Seymour, R. G. 2006. Opportunities for marketing researchers in international entrepreneurship. International Marketing Review, 23 (2): 126–145.
Thorelli, H. B. 1986. Networks: Between markets and hierarchies. Strategic Management Journal, 7 (1): 37–51.
Toyne, B. 1989. International exchange: A foundation for theory building in international business. Journal of International Business Studies, 20 (1): 1–17.
UFI. 2009. UFI approved events. http://www.ufi.org/pages/ufimembers/ufiapprovedevents.aspx. Accessed 31 July 2009.
Uzzi, B. 1996. The sources and consequences of embeddedness for the economic performance of organizations: The network effect. American Sociological Review, 61 (4): 674–698.
Uzzi, B. 1997. Social structure and competition in interfirm networks: The paradox of embeddedness. Administrative Science Quarterly, 42 (1): 35–67.
Venkataraman, S. 1997. The distinctive domain of entrepreneurship research. In J. Katz & R. Brockhaus (Eds), Advances in entrepreneurship, firm emergence and growth, Vol. 3. 119–138. Greenwich, CT: JAI Press.
Wang, C. L. 2007. Showtime in China. China Business Review, 34 (1): 24–27.
Wiersema, M. F., & Bowen, H. P. 2009. The use of limited dependent variable techniques in strategy research: Issues and methods. Strategic Management Journal, 30 (6): 679–692.
Wong, P., & Ellis, P. D. 2002. Social ties and partner identification in Sino-Hong Kong international joint ventures. Journal of International Business Studies, 33 (2): 267–289.
World Bank. 2007. World development indicators. http://www.devdata.worldbank.org/dataonline/. Accessed 27 June 2007.
Yin, R. K. 2003. Case study research: Design and methods, (3rd ed.) Thousand Oaks, CA: Sage.
Young, S., Hamill, J., Wheeler, C., & Davies, J. R. 1989. International market entry and development: Strategies and management. Englewood Cliffs, NJ: Prentice Hall.
Young, S., Dimitratos, P., & Dana, L. P. 2003. International entrepreneurship research: What scope for international business theories? Journal of International Entrepreneurship, 1 (1): 31–42.
Zahra, S. A. 2005. A theory of international new ventures: A decade of research. Journal of International Business Studies, 36 (1): 20–28.
Zahra, S. A., Korri, J. S., & Yu, J. F. 2005. Cognition and international entrepreneurship: Implications for research on international opportunity recognition and exploitation. International Business Review, 14 (2): 129–146.
Zain, M., & Ng, S. I. 2006. The impacts of network relationships on SMEs’ internationalization process. Thunderbird International Business Review, 48 (2): 183–205.
Zhou, L. X., Wu, W. P., & Luo, X. M. 2007. Internationalization and the performance of born-global SMEs: The mediating role of social networks. Journal of International Business Studies, 38 (4): 673–690.
Acknowledgements
I am grateful for the valuable research assistance provided by Ha Lau Ching, Kwan Loh Yien, Wong Pei Wai and Wilson Chan in Hong Kong; Zhuang Guijun in Xi’an; Chao Gangling and Li Huihui in Shanghai; Zheng Xian Yan in Guangzhou; and to the editor Anand Swaminathan, three anonymous referees, and Keith Brouthers, Sylvie Chetty and Pavlos Dimitratos for their constructive feedback on earlier drafts of this paper. The research reported in this paper was supported by an Internal Research Competitive Grant provided by the Hong Kong Polytechnic University (Project G-YF44).
Author information
Authors and Affiliations
Corresponding author
Additional information
Accepted by Anand Swaminathan, Area Editor, 15 December 2009. This paper has been with the author for three revisions.
APPENDIX
APPENDIX
International Exchange Opportunities Observed
See Table A1.
Rights and permissions
About this article
Cite this article
Ellis, P. Social ties and international entrepreneurship: Opportunities and constraints affecting firm internationalization. J Int Bus Stud 42, 99–127 (2011). https://doi.org/10.1057/jibs.2010.20
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1057/jibs.2010.20