Networks' Impact on the Entrepreneurial Internationalization: A Literature Review and Research Agenda.

Author:Sedziniauskiene, Rimante

1 Introduction

The purpose of this paper is to systematically examine and organize the current body of literature that has explored the impact of the network on the entrepreneurial internationalization during the past decades. This research aims to answer whether and how networks matter in the context of entrepreneurial internationalization of new ventures. In addressing this question, we have chosen a systematic literature review approach (SLR). Through exploring the empirical and theoretical research that has investigated networks and entrepreneurial internationalization, we provide evidence that it is still a tenable area of investigation. Although this study is exploratory in nature, it aims to contribute to the literature on networks and entrepreneurial internationalization by several new aspects. First of all, in this study, we are not going to develop a contextualized or commonly accepted definition of the phenomenon of international new ventures since there are many attempts at this area (e.g., Cesinger et al. 2012). We state that despite the growing interest in the topic there is a lack of systematized knowledge about the internationalization of INVs and networks' relation. And a new constructive research could be only executed based on the existing knowledge gained over the past decades. We also contribute by revealing the weaknesses to be addressed in this area. We specifically systematize the overview of the key characteristics of the field, map out main objectives of the articles, the dominant methodological approaches, and operationalization of networks and entrepreneurial internationalization, and synthesize the main findings of the literature. We are not aware of a comprehensive discussion, adopting a systematic analysis of literature, of empirical and theoretical studies about the impact of networks on the entrepreneurial internationalization. To date, there are a few reviews concerning networks, for instance, leadership in inter-organizational networks (Muller-Seitz 2012); networking and innovation (Pittaway et al. 2004); inter-organizational relationships in marketing (Agostini and Nosella 2017), networks and entrepreneurship (Hoang and Antoncic 2003) but a systematic literature review on networks and entrepreneurial internationalization, to the best of our knowledge, was not detected so far, notwithstanding the relevance of the topic. An analysis of the literature about a network approach to the internationalization of born globals has been done by Sullivan Mort and Weerawardena (2006); however, this analysis encompasses a small sample of papers without any detailed explanation about inclusion or exclusion criteria for paper selection or other literature search strategies typical for systematic literature reviews.

Through exploring the theoretical and empirical studies that have investigated the links between networks and entrepreneurial internationalization, we provide evidence that there are research gaps to address, arising from lack of robust conceptualizations about what networks are and how they do impact the international growth of the firm, which may explain partially contradictory or inconclusive empirical research.

The paper is organized in the following way. We begin this paper by reporting the method used to select and review the literature; then, we describe the main features of the final dataset of articles and provide the findings of the systematic literature review; finally, we conclude by highlighting the contributions of the paper to further research directions on network and entrepreneurial internationalization.

2 Conceptual Boundaries

To begin with, it is essential to define conceptual boundaries of the research (Denyer and Tranfield 2009). In this study, two main subjects come to the fore: (1) entrepreneurial internationalization of new ventures and (2) networks.

To start with, the obvious changes in internationalization patterns have questioned the validity of existing theories and inspired countless studies in International Entrepreneurship (IE) research domain. Those firms labelled as 'international new venture' were able to internationalize "from inception' and seek 'to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries" (Oviatt and McDougall 1994, p. 49). Moreover, the firms which grow abroad at their start or soon after, and expand quickly, also have been labeled terms like Born globals, Born International firms, Global Start-ups, just to mention some main other concepts. Therefore, entrepreneurial internationalization, the term which has been recently adopted by the leading scholars (Autio 2017; Reuber et al. 2017), hosts different types of organizations and concepts. We are aware that different denominations may hinder partially different concepts: (1) the thresholds of first internationalization vary extensively from one year (e.g., Freeman et al. 2006) to six years (e.g., Zahra et al. 2000) but mostly it is within three years of founding (Knight and Cavusgil 2004; Kuivalainen et al. 2007); (2) scale of internationalization (usually measured by the percentage of foreign sales to total sales) varies significantly from 25% (Kuivalainen et al. 2007) to 90% (Lopez et al. 2009) of sales from abroad; (3) less frequently applied measurement is the scope of internationalization which captures the extent of regional concentration opposed to diversification (Tuppura et al. 2008), i.e. regional versus global. Nevertheless, these different terms have all in common--the internationalization of this kind of companies does not unfold in a slow and incremental manner, but rather in a proactive way. In other words, they are small or medium-sized entrepreneurial firms with the potential for an accelerated entrepreneurial internationalization (i.e. their international activities featured both precocity and speed) (Gabrielsson et al. 2008).

Therefore, all possible names such as international new ventures, born globals, born internationals, etc. will be accepted and used interchangeably while selecting relevant papers, since entrepreneurial internationalization covers different facets in IE studies. This represents the object of our analysis and the output of a process, in which we aim at detecting the role of networks.

A second key construct for this contribution is represented by networks. A review of network definitions reveals that there is a lack of consensus. As stated by Axelsson and Easton (1992, p. 365) networks can be explained as "sets of two or more connected exchange relationships". According to Powell (1990), networks also can be defined by a set of critical components, such as heavy reliance on reciprocity, collaboration, and a reputation and relationship basis for communication. Primarily, the majority of research emphasized the networks as the relationships "that binds a group of independent organizations together" (Christopher and Cameron 2007). In the same vein, Ahmetoglu (2017) stated that alliance relationships between firms are also referred to as an important type of network. The alliance is defined as a close inter-firm collaboration requiring substantial sharing of information, skills and/or resources for the attainment of mutually defined goals (Buckley 1992; Preece et al. 1998). Moreover, many scholars focus on business networks that are strategic relationships (D'Cruz and Rugman 1992) between collective actors (Chetty and Blankenburg Holm 2000) such as customers, suppliers, distributors, etc. Some of the reviewed definitions distinguish ties into vertical and horizontal (Gulati et al. 2000) or into domestic and international (Blomstermo et al. 2004) relationships. Another stream of research includes informal tics as an essential part of firms' network (Zain and Ng 2006; Zhou et al. 2007). Sasi and Arenius (2008) claim that for a long time network theory of internationalization had ignored the entrepreneur and his social ties. In this context, the social network consists of all informal ties with families, friends or other personal relations that enable the firm to internationalize its business activities (Zain and Ng 2006; Zhou et al. 2007). Some authors discuss the concept of intermediary networks (Ojala 2009; Oparaocha 2015). Intermediary ties also called as 'institutional ties' are the relations with chambers of commerce, research institutions, trade promotion councils, internationalization assistance organizations (Oparaocha 2015). The main difference with other typologies is that in intermediary ties there are no existing business transactions between the seller and the buyer (Ojala 2009) (see Table 1). Therefore, we argue that extant classifications of networks, like for example the distinction between formal and informal networks, can be oversimplified.

According to Ahmetoglu (2017), it is important to understand the relationship between different actors to understand a network as a whole. In this study, we adopt a comprehensive construct of the network as a collection of relationships between international new venture (and/or its' entrepreneurs) and different external independent partners which can be all possible types such as formal, informal and intermediary.

3 Methodology

For this literature review, 73 studies published and available in the press from 1994 to 2015 in 16 journals were analyzed. The search has been conducted at the beginning of October 2015. The steps of the systematic literature review were based on the guidelines provided by Denyer and Tranfield (2009), Petticrew and Roberts (2006), Nolan and Garavan (2016) and Christoffersen (2013).

3.1 Research Question

The quality of the systematic literature review depends on the quality of the question, therefore, first of all, the focus of SLR was established by formulating a clear question. The research question "guides the review by defining which studies will be included, what the research strategy to...

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