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Born-Globals and Culturally Proximate Markets

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Abstract

  • In this paper we focus on the differences between born-globals and older firms. We compare whether cultural proximity is important for born-globals and older firms and whether international or technological knowledge drives their internationalisation. In addition, we compare whether born-globals and older firms are proactive or reactive in their choice of culturally proximate markets.

  • Our research suggests that born-globals tend to internationalise rapidly into markets ready to adopt their technology. This is driven by the need to establish a revenue stream (cash flow) as quickly as possible. These born-globals usually seek larger advanced economies, which are often culturally similar (proximate) and offer economies of scale; reducing risk for inexperienced firms. Indeed, born-global firms are more willing than older firms to move from culturally proximate to culturally non-proximate markets very quickly.

  • Utilising an abductive approach based on case studies, our findings show that born-globals use their technological knowledge and networks and are proactive when they enter culturally non-proximate markets. Born-globals must assess a new market for its ability to provide a revenue stream very soon after entry. If the culturally proximate market does not offer this, then they will leverage technological knowledge and networks to move rapidly into nearby non-proximate markets where they perceive better opportunities for building a customer base or new funding alternatives to sustain the firm in their early foreign market forays.

  • Our research significantly extends theory in highlighting that born-globals rely more on technological experience and display proactive behaviour more than older firms which can draw on previous international experience.

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Authors and Affiliations

  1. International Business Discipline, Business School, University of Adelaide, Adelaide, Australia

    Susan Freeman

  2. Department of Employment Relations and Human Resources, Griffith University, Gold Coast, Australia

    Kate Hutchings

  3. School of Communication, Journalism and Marketing (Albany), Massey University, Auckland, New Zealand

    Sylvie Chetty

Authors
  1. Susan Freeman
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  2. Kate Hutchings
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  3. Sylvie Chetty
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Corresponding author

Correspondence to Susan Freeman.

Appendix

Appendix

Table 4 Summary of data from born-global firms
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Table 5 Summary of data from older firms
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Table 6 Summary of history of case study organisations
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Freeman, S., Hutchings, K. & Chetty, S. Born-Globals and Culturally Proximate Markets. Manag Int Rev 52, 425–460 (2012). https://doi.org/10.1007/s11575-011-0109-9

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