52nd Congress of the European Regional Science Association: "Regions in Motion - Breaking the Path", 21-25 August 2012, Bratislava, Slovakia
The emergence of new ventures that from inception use resources and sell their goods and services in multiple foreign markets has challenged traditional theories explaining the internationalization of a firm as a stage process (Oviatt & McDougall, 1994). Different factors have been identified to explain this phenomenon, including individual-related factors (Andersson & Evangelista, 2006; Bloodgood, Sapienza, & Almeida, 1996; Harveston, Kedia, & Davis, 2000; Orser, Spence, Riding, & Carrington, 2010), and organization-related factors (Bloodgood, et al., 1996; Dhanaraj & Beamish, 2003; Hollenstein, 2005). However, no emphasis has been placed on the regional forces influencing the early international expansion activities carried out by some entrepreneurs and their young businesses. In this study, we analyze the extent to which differences in FDI and technological knowledge across regions affect the propensity of early-stage entrepreneurs to be export-oriented. Based on Spanish GEM data and other secondary sources for the period 2005-2009, we found that the exposure to higher flows of inward FDI at regional level significantly raises the probability of an early-stage entrepreneur to be export-oriented, while the exposure to higher flows of outward FDI or higher levels of accumulated knowledge at regional level has no impact. The results also show that the exporting behaviour of early-stage entrepreneurs is driven by individual and organization factors that have been analyzed by previous studies. Our findings on the antecedents of export-oriented entrepreneurs complement those of prior studies which have suggested that the exposure to international activities of other organisations located in the same environment influences the propensity of a new venture to export (De Clercq, et al., 2008; Fernhaber & Li, 2010; Lu, 2002). However, our paper adds to the extant literature on international entrepreneurship by analyzing the role of FDI at individual level, considering both foreign and domestic firms involved in international investment activities in the same region.