Essays on resource scarcity, early rapid internationalization and born global firms

Abstract

This dissertation focuses on a relatively new organizational form: Born Globals, or small and medium sized firms that internationalize rapidly from the start. For Born Global firms, globalization at an early stage of business development and speed of internationalization are paramount, which is what distinguishes them from small and medium enterprises (SMEs) that internationalize in a traditional manner, i.e. in a gradual and step-by-step manner. Rapid internationalization and/ or globalization puts extremely high pressure on firms, with respect to obtaining and organizing resources that allow for faster and deeper global commitment. This issue is addressed in the dissertation’s overarching research problem of “how Born Global firms deal with resource scarcity to internationalize/ globalize rapidly from the start”. The dissertation consists of seven main chapters, in addition to an introduction and a conclusion. The absence of a suitable internationalization theory for the Born Global or international new venture (INV) firm is addressed in chapter two. In chapter three, a longitudinal process perspective on the financing strategies of Finnish Born Globals is adopted. The fourth chapter explores a relatively recent phenomenon – the Internet – and its role in decreasing resource scarcity and liability of foreignness for the INV. In the fifth chapter the focus is on the role of networks in the INV’s internationalization process, specifically formal and informal networks of the founders and the firms. Chapter six is a comparative study of INVs in two small and open economies. The aim in the article is to explore whether business and social networks vary between these countries. Chapter seven investigates critical events in the globalization process of a Born Global. The purpose in chapter eight is to identify appropriate strategic actions that can increase global growth despite the adversity created by scarce resources. The focus of this thesis is resource constraints and how they affect Born Global firms in various circumstances over time, in networks, in changing markets, and at the industry and country levels. The key themes in the chapters – financing, networks and the Internet – relate to access to resources, and the findings show that the constraints and strategies differ at different stages of internationalization and globalization. Each of the chapters containing this thesis offers specific suggestions for future research