INTERNATIONAL NEW VENTURES

Theory of International New Ventures

Theory of International New Ventures

Introduction

The publication of 'Toward a Theory of International New Ventures' 10 years ago attracted worldwide attention to the growing role of young firms in the global marketplace. While researchers have long recognized the valuable contributions of SMEs to international trade, Oviatt and McDougall, highlighted the significance of minor and newer industries and their unique characteristics that point them to internationalise rapidly and produce value for their originator and owners. Arguing that international new ventures (INVs) have existed for years, but that researchers have overlooked them as an important population, Oviatt and McDougall proceeded to discuss how these characteristics influence the way INVs compete on the global stage. (Shrader, 2003, pp. 59-82)

The framework and arguments attracted a worldwide audience, resulting in several annual doctoral consortia on international entrepreneurship (IE), special issues of leading scholarly journals, several university-sponsored workshops, the publication of handbooks and edited volumes, a number of doctoral theses, numerous sessions in regular academic meetings, several book chapters, and MBA and doctoral seminars. Research building on (McDougall, 1994, pp. 45-64) framework has been carried out in the world's six major continents, in advanced and developing economies alike, under four labels: INVs, born global, accelerated internationalisation, and IE. Some of this research has been faithful to Oviatt and McDougall's original arguments. Other researchers, however, have used other theories from entrepreneurship, strategy, and cognitive psychology to refine and extend the original framework. These contributions have been seminal. The review highlights the varied and important contributions of Oviatt and McDougall's (1994) paper (McDougall, 1994, Pp: 45-64).

Discussion

New Ventures Growth

In beginning of this review, the existing form of new enterprise expansion to recognise the predictors assumed to explain why some new ventures grow more than others. We started with the new venture performance model of venture capital from his support of the research derived growth companies (Shrader, 2003, pp. 59-82). It believes that the new business performance of entrepreneurs, industry structure, function and strategy. This learning makes it possible for companies to use higher order entry modes, which in turn give these firms new knowledge. The stage model of internationalisation also proffered that different modes of entry require certain skills and therefore influence the evolutionary trajectory of knowledge accumulation quite differently within INVs. Thus, those INVs that enter international markets and learn about technology appear to reap the benefits of their investments in the form of higher profits and in opening up avenues for growth. Given the importance of learning for INVs' successful performance, it is essential to understand what and how these firms learn. For instance, we do not know how INVs develop the absorptive capacity to cultivate new capabilities that enable them to survive and even make a profit. (George, 2002, pp. 185-203)

How Much To Grow

The literature is replete with examples of entrepreneurs who recognised modest to no expansion in their firms. Contrary to what some may think, limited growth is not always related with an inability to grow ...