The Effect of Early Internationalization on Survival Consistency, and Growqth of Export Sales

  • Jerzy Cieslik Kozminski University
  • Eugene Kaciak Brock University
  • Dianne H.B. Welsh The University of North Carolina at Greensboro

Abstract

This paper presents the results of a ten year longitudinal analysis of almost 19,000 Polish manufacturing firms engaged in export operations. Export dynamics was measured by the rate of growth, consistency of export sales and survival in international operations. It was found that early involvement in international activities negatively affected the survival and regularity of sales of small exporters but that had a positive impact on larger exporters. A strong commitment to internationalization and a capacity for managing rapid growth are factors in achieving high growth in international sales over time. Managerial implications include recognizing the risk of possible failure when they enter international markets, and take into account that export volumes may stagnate after a first opportunity and not justify the initial effort to expand abroad. To remedy such unfavorable outcomes, managers should plan carefully before entering export markets or undertaking subsequent phases of export growth.

Downloads

Download data is not yet available.

References

Almus, M. & Nerlinger, E.A. (1999). Growth of new technology-based firms: Which factors matter? Small Business Economics, 13(2), 141-154.

Alvarez, R. E. (2004). Sources of export success in small and medium-sized enterprises: The impact of public programs. International Business Review, 13, 383-400.

Alvarez, R. E. (2007). Explaining export success: Firm characteristics and spillover effects. World Development, 35(3), 377-393.

Andersson, M. & Loof, H. (2008). Learning-by-exporting revisited-the role of intensity and persistence. CESIS Electronic Working Paper Series Paper No. 149(October), Stockholm, Sweden.

Anderson, D. R., Sweeney, D. J., & Williams, T. A. (1996). Statistics for business and economics. St Paul, MN: West Publishing Company.

Arenius, P., Sasi, V., & Gabrielsson, M. (2006). Rapid internationalization enabled by the Internet: The case of a knowledge intensive company. Journal of International Entrepreneurship, 3, 279-290.

Autio, E., Sapienza, H. J., & Almeida, J. G. (2000). Effects of age at entry, knowledge intensity, and limitability on international growth. Academy of Management Journal, 43(5), 909-924.

Barringer, B. R., Jones, F. F., & Neubaum, D. O. (2005). A quantitative content analysis of the characteristics of rapid-growth firms and their founders. Journal of Business Venturing, 20(5), 663-687.

Barringer, B. R. & Jones, F. F. (2004). Achieving rapid growth: Revisiting the managerial capacity problem. Journal of Developmental Entrepreneurship, 9(1), 73-86.

Bell, J., McNaughton, R., Young, S, & Crick, D. (2003). Towards an integrative model of small firm internationalization. Journal of International Entrepreneurship, 1(4), 339-362.

Bernard, A. B. & Jensen, J. B. (1999). Exceptional exporter performance: Cause, effect, or both? Journal of International Economics, 47, 1 - 25.

Bilkey, W. & Tesar, G. (1977). The export behavior of smaller-sized Wisconsin manufacturing firms. Journal of International Business Studies, 8(1), 93-98.

Bloodgood, J. M., Sapienza, H. J., & Almeida, J. G. (1996). The internationalization of new high-potential US ventures: Antecedents and outcomes. Entrepreneurship Theory & Practice, 20, 61-76.

Brüderl, J. & Schüssler, R. (1990). Organizational mortality: The liabilities of newness and adolescence. Administrative Science Quarterly, 35, 530-547.

Cabrol M. & Nlemvo F. (2009). The internationalization of French new ventures: The case of the Rhone-Alps region. European Management Journal, 27(4), 255-267.

Cadogan, J.W., Kuivalainen, O., & Sundqvist, S. (2009). Export market-oriented behavior and export performance: Quadratic and moderating effects under differing degrees of market dynamism and internationalization. Journal of International Marketing, 17(4), 71-89.

Davidsson, P. & Klofsten, M. (2003). The business platform: Developing an instrument to gauge and to assist the development of young firms. Journal of Small Business Management, 41(1), 1-26.

Davidsson, P. & Wiklund, J. (2000). Conceptual and empirical challenges in the study of firm growth. In D. Sexton & H. Landström, (Eds.), The Blackwell handbook of entrepreneurship (26-44). Oxford, UK: Blackwell Publishing.

Davidsson, P., Kirchhoff, B., Hatemi-J., A., & Gustavsson, H. (2002). Empirical analysis of business growth factors using Swedish data. Journal of Small Business Management, 40(4), 332-249.

Davidsson, P., Steffens, P., & Fitzsimmons, J. (2009). Growing profitable or growing from profits: Putting the horse in front of the cart? Journal of Business Venturing, 24, 388-406.

EconStats (2006). Poland WPI base year 2000, 2006. Retrieved February 1, 2010 from http://www.econstats.com/ifs/IFS_Pol1v112.htm

Flamholtz, E. G. & Randle, I. (2000). Growing pains. San Francisco, CA: Jossey-Bass.

Gabrielsson, M. V., Kirpalani, H. M., Dimitratos, P., Solberg, C. A., & Zucchella, A. (2008). Born-globals: Propositions to help advance the theory. International Business Review, 17, 385-401.

Garnsey, E. & Heffernan, P. (2005). Growth setbacks in new firms. Futures, 37, 675-697.

Gilbert, B. A., McDougall, P. P., & Audretsch, D. B. (2006). New venture growth: A review and extension. Journal of Management,32(6), 926-950.

Hair, J. F., Black, B., Babin, B., Anderson, R., & Tatham, R. I. (2006). Multivariate data analysis (6th ed.). Upper Saddle River, NJ: Prentice-Hall.

Halabisky, D. ( 2005). Exporting matters: Job creation performance of Canadian exporters. Small Business Policy Branch Industry Canada. Ottawa, Canada: Industry Canada.

Johansson, S. (2009). Market experiences and export decisions in heterogeneous firms. CESIS Electronic Working Paper Series Paper No. 196(September), Stockholm, Sweden.

Keupp, M.M. & Gassman, O. (2009). The past and the future of international entrepreneurship: A review and suggestions for developing the field. Journal of Management, 35(3), 600-633.

Klatt, L. A. (2006). Entrepreneurial firms in the international arena. International Journal of Entrepreneurship, 10, 21-42.

Knight, G.A. & Kim, D. (2009). International business competence and the contemporary firm. Journal of International Business Studies, 40, 255-273.

Kudina, A., Yip, G. S., & Barkema, H. G. (2008). Born global. Business Strategy Review, 19(4), 38-44.

Levene, H. (1960). Robust tests for equality of variances. In I. Olkin, H. Hotelling, S. G. Ghurye, W. Hoeffding; W. G. Madow; H. B. Mann et al., Contributions to probability and statistics: Essays in honor of Harold Hotelling (278-292). Stanford, CA: Stanford University Press.

Loane, S., McNaughton, R. B., & Bell, J. (2004). The internationalization of internet-enabled entrepreneurial firms: Evidence from Europe and North America. Canadian Journal of Administrative Sciences, 21(1), 79-96.

Loane, S., Bell, J., & Deans, K. R. (2007). Internet adoption by rapidly internationalizing SMEs: A further challenge to staged e-adoption models. International Journal of Entrepreneurship and Small Business, 4(3), 277-290.

McAuley, A. (1999). Entrepreneurial instant exporters in the Scottish arts and crafts sector, Journal of International Marketing, 7(4), 67-82.

McDougall, P. P. & Oviatt, B. M. (2000). International entrepreneurship: The intersection of two research paths. Academy of Management Journal, 43, 902-908.

McNaughton, R. B. (2003). The number of export markets that a firm serves: Process models versus the born-global phenomenon. Journal of International Entrepreneurship, 1(3), 297-311.

Mitra, S. (2005). Information technology as an enabler of growth in firms: An empirical assessment. Journal of Management Information Systems, 22(2), 279-300.

Moen, Ø. & Servais, P. (2002). Born global or gradual global? Examining the export behavior of small and medium-sized enterprises. Journal of International Marketing, 10(3), 49-72.

Morgan-Thomas, A. & Jones, M.V. (2009). Post-entry internationalization dynamics. Differences in the development speed on their international sales. International Small Business Journal, 27(1), 71-97.

Morse, E. A., Fowler, S. W., & Lawrence, T. B. (2007). The impact of virtual embeddedness on new venture survival: Overcoming the liabilities of newness. Entrepreneurship Theory & Practice, 31(2), 139-159.

Mustar, P., Renault, M., Colombo, M. G., Piva, E., Fontes, M., Lockett, A., Wright, M., Clarysse, B., & Moray, N. (2006). Conceptualizing the heterogeneity of research-based spin-offs: A multi-dimensional taxonomy. Research Policy, 35, 289-308.

Neter, J., Kutner, M. H., Nachtsheim, C. J. & Wasserman, W. (1996). Applied linear statistical models. Boston, MA: McGraw-Hill.

Nicholls-Nixon, C. L. (2005). Rapid growth and high performance: The entrepreneur's "impossible dream?" Academy of Management Executive, 19(1), 77-89.

Organization for Economic Co-operation and Development. (1987). Structural adjustment and economic performance. Paris, France: Author.

Organization for Economic Co-operation and Development. (2008). Measuring entrepreneurship. A digest of indicators. Paris, France: Author.

Oviatt, B. M. & McDougall, P. P. (1995). Global start-ups: Entrepreneurs on a worldwide State, Academy of Management Executive, 9(2), 30-43.

Pangarkar, N. (2008). Internationalization and performance of small- and medium-sized Enterprises, Journal of World Business, 43, 475-485.

Pinches, G. E. & Kinney, W. R., Jr. (1971). The measurement of the volatility of common stock prices, The Journal of Finance, 26(1), 119-125.

Prashantham, S. (2005). Toward a knowledge-based conceptualization of internationalization. Journal of International Entrepreneurship, 3, 37-52.

Roberts, M. J. & Tybout, J. R. (1997). The decision to export in Colombia: An empirical model of entry with sunk costs. American Economic Review, 87, 545-564.

Salomon, R. M. (2006). Learning from exporting. Chettelham, UK: Edward Elgar.

Salomon, R. M. & Shaver, J.M. (2005). Learning by exporting: New insights from examining firm innovation. Journal of Economics & Management Strategy, 14(2), 431-460.

Samiee, S. & Walters, P. G. (1991). Segmenting corporate exporting activities: Sporadic versus regular exporters. Journal of the Academy of Marketing Science, 19(2), 93-104.

Sapienza, H. J., Autio, E., Shaker, G. G., & Zahra, A. (2006). A capabilities perspective on the effects of early internationalization on firm survival and growth. Academy of Management Review, 31(4), 914-933.

Shane, S. A. (2008). The illusions of entrepreneurship. New Haven, CT: Yale University Press.

Storey, D. (1994). Understanding the small business sector. New York: Routledge.

Weinzimmer, L. G., Nystrom, P. C., & Freeman, S. J. (1998). Measuring organizational growth: Issues, consequences and guidelines. Journal of Management, 24(2), 235-262.

White, H. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 48(4), 817-838.

Wiklund, J. & McKelvie, A. (2010). Advancing firm growth research: A focus on growth mode instead of growth rate. Entrepreneurship Theory & Practice, 34(2), 261-288.

Wiklund J., Patzelt H., & Shepherd D. A. (2009). Building an integrative model of small business growth. Small Business Economics, 32, 351-374.

Yamin, M. & Sinkovics, R. R. (2006). Online internationalization, psychic distance reduction and the virtuality trap. International Business Review, 15, 339-360.
Published
2010-01-21
How to Cite
CIESLIK, Jerzy; KACIAK, Eugene; WELSH, Dianne H.B.. The Effect of Early Internationalization on Survival Consistency, and Growqth of Export Sales. Journal of Small Business Strategy, [S.l.], v. 21, n. 1, p. 39-64, jan. 2010. ISSN 2380-1751. Available at: <https://libjournals.mtsu.edu/index.php/jsbs/article/view/138>. Date accessed: 25 apr. 2019.
Section
Articles