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Title:Born local: two avenues to internationalization PDF Logo
Authors:Ács, Zoltán J.
Terjesen, Siri
Issue Date:2007
Series/Report no.:Jena economic research papers 2007,022
Abstract:Are firms born Global? Because knowledge spillovers that lead to new venture creation are geographically constrained we believe that firms are born local. It follows that the decision to create sustainable new ventures is independent from the decision to interna-tionalize, even if that is the ultimate goal of the firm. We explore two avenues to interna-tionalize new ventures, a direct path described in much of the extant literature and an intermediated one. New ventures face high entry barriers and intellectual property rights protection to internationalization, which are circumvented by intermediating activities using existing multinational enterprises as facilitators of internationalization. However, new ventures using the intermediated mode of internationalization face transaction costs and rent extraction from multinational enterprises. Therefore, sustainable new ventures face a strategic decision on how to internationalize.
Subjects:International Entrepreneurship
Multinational Enterprises
Knowledge Spillovers
Intermediated Internationalization, International New Ventures
Foreign Direct Investment
JEL:L26
F23
M13
M16
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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