Network exploration and exploitation in international entrepreneurship: an opportunity-based view
Degree GrantorUniversity of Canterbury
Degree NameDoctor of Philosophy
International entrepreneurship (IE) exists at the interface of two distinct research fields - entrepreneurship and international business (IB). However, IE studies typically fail to integrate research from both fields, leaning much more towards IB. This study uses core concepts from entrepreneurship to explain the export performance of early internationalising firms. It contributes to the network and international opportunity-based view in IE by incorporating the twin concepts of exploration and exploitation into a dynamic capability perspective, showing how these affect export performance. While early internationalising firms including born globals constitute an important component in IE, empirical interest in this field focuses on high-tech and knowledge-intensive industries from developed countries. In addition, research in the field is mainly of qualitative nature investigating small numbers of firms. Therefore, much is unknown about how early internationalising firms differ in their dynamic network capabilities and opportunity related capabilities. We investigate these aspects using structural equation modelling based on a sample of 647 SMEs and large, young and mature export start-ups operating in the traditional low-tech apparel industry from a South Asian developing country (Bangladesh). This study shows that both network exploitation and exploration capabilities positively influence international opportunity exploitation and exploration capabilities. In turn, international opportunity exploitation and exploration capabilities influence export performance. This study also demonstrates that the relationship between network capabilities and export performance is both direct and indirect through the mediation of the twin international opportunity capabilities. The moderation analysis of firm age and size sheds additional light on the liabilities of newness and smallness of early internationalising firms. Interestingly, we find that the liabilities of smallness and newness do not have the same influence in different stages of IE. The role of firm size is more pronounced at the earlier stage of IE. In contrast, firm age accentuates in the later stage of the twin opportunity capabilities-export performance relationship. One possible explanation of this may be that developing and managing networks for the purpose of exploiting and exploring international opportunities is the most effortful and resource demanding stage in the entrepreneurial process. During this stage, owner-managers assess their own organisational resources, explore the possibilities of attracting external network resources and match their own resources with those of network partners. This stage reflects what is called "resource orchestration" in the strategic entrepreneurship literature. In the later stage, when opportunities are already developed and exploited, only minimal resources are then needed to achieve performance advantage. Age becomes a dominant factor because older firms derive greater performance advantage than younger firms due to their accumulated experience and learning throughout the years. This study indicates that firms may overcome their liability of smallness by connecting with new foreign partners, especially customers, resulting in more export orders. Policy makers can also help them connect with new partners by organising trade fairs, trade missions and sponsoring other promotion programmes. With respect to the liability of newness prevailing in the later stage, owner-managers should work with prominent business partners to help them get good referrals and overcome the lack of legitimacy in establishing new relations. Finally, the managers of early internationalising firms should be empowered to develop relationships with external partners.