Explaining Export Performance: A Comparative Study of International New Ventures in Indian and Taiwanese Software Industry

Zusammenfassung

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This study examines the international growth and competitiveness of software companies in newly-industrializing countries of India and Taiwan over the past decade. Hypotheses are drawn from the entrepreneurship, international business, and strategic management literature. The empirical evidence shows that the phenomenal international growth of small software firms is due to a combination of both entrepreneurial and firm level characteristics, and that entrepreneurship matters as much as firm structure at least for this stage of firm evolution.

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Explaining Export Performance: A Comparative Study of International New Ventures in Indian and Taiwanese Software Industry

Introduction

In explaining international expansion and performance, the international business literature has mainly offered country and firm-level structural explanations for performance. Moreover, this literature has been biased towards larger, established, multinational manufacturing companies (Dunning 1958, Hymer 1960, Aharoni 1966, Vernon 1966). This is understandable as, for much of the twentieth century, manufacturing occupied the dominant share of the economy. However, by the early 1960s, the service sector already accounted for more than half of the domestic economic activity in developed nations. Today, even in international operations, the share of services is rapidly increasing. For example, the share of services in US exports in 1997 had grown to 27 percent, and to 16 percent in US imports (Contractor 1999). Moreover, in sectors such as information technology, telecommunications and bio-technology, recent years have seen a proliferation of entrepreneurial start-up companies, where the characteristics of their founders and leaders appear to have as much, if not greater, impact on performance as a traditional firm-level explanation. Since the late 1980's, the growth of venture capital markets and the rise in entrepreneurship have been observed in technology-driven industries (The Economist 1993, Gupta 1989, Mamis 1989). In such sectors, could entrepreneurial and leadership factors assume a greater importance in explaining the performance, especially the international performance, of younger companies? This is the broad hypothesis pursued in this paper.

Research on international entrepreneurship has focused on themes such as (a) comparisons between non-exporters and exporters (Kedia/Chhokar 1985); (b) entrepreneurial activities in different countries (Ohe et al. 1991); and (c) the impact of public policies on small firm exports (Rossman 1984). Interest in exporting, or international expansion, was supposed to typically occur at a stage considerably after the inception of a firm. Small firms that were already international at, or near, inception were not considered in the mainstream research (Welch/Loustarinen 1988).

The export marketing literature frequently uses "stage" theories of the multinational enterprise to explain the growth of firms. However, these models have also attracted significant criticism (Turnbull 1987). Some researchers have argued that existing theories of internationalization are inappropriate for service sectors (Sharma/ Johanson 1987, Engwall/Wallenstal 1988, Buckley/Pass/Prescott 1992). According t...

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