High-Tech Entrepreneurship and Internationalization

本系列文章主要是对曼海姆商学院(Business school of university of Mannheim)Advanced Entrepreneurship 课程的一个总结,所以大部分内容都来自于 Professor Dr. Michael Woywode 的课件。其中也有部分内容是自己做的补充。由于翻译比较麻烦,直接用的英文。


This article mainly talks about empirical evidence on early internationalization of newly founded High-Tech Startups. (Institutional Aspects)

Questions:

  • What are challenges in Internationalization?
  • Is it a necessary step in the life-cycle or on a growth path?
  • What are potential advantages, what are threats?
  • Will the costs of internationalization prevent young high-tech firms from internationalizing?
  • What do internationalization activities of high-tech startups look like?
  • What is the effect of internationalization on firm performance?


institutional aspects that might influence the decision to internationalize

This part briefly discusses to what extent framework (institutional) conditions of entrepreneurship can vary between countries, e.g. What are institutional indicators, How to improve them?, What is the role of regulations?

Entrepreneurship Framework Conditions: Institutional Indicators

  • Finance
  • National Policy
    • General Policy
    • Regulation
  • Government Programs
  • Education
    • Primary Education & Secondary Education
    • Post-School Education
  • R&D Transfer
  • Commercial Infrastructure
  • Internal Market
    • Dynamics
    • Openness
  • Physical Infrastructure
  • Cultural and Social Norms


What is an Institution? Which roles does it play?

An institution is a set of formal & informal rules, including their enforcement arrangements - Furubotn & Richter

  • form the “rules of the game” in a society
  • are the humanly devised constraints that shape human interaction
  • structure incentives in human exchange - North 1990


Institutional Framework

Economic activity requires a good set of rules. This set includes rules that:

  • establish and clarify property rights
  • reduce the cost of resolving disputes
  • increase the predictability of economic interactions
  • provide contractual partners with core protections against abuse


Institutional Environment for Entrepreneurship

The institutional environment constitutes the economic, political & social rules. it influences individuals’ willingness to engage in entrepreneurship and assists entrepreneurship in reducing uncertainty & transaction costs.

The institutional environment is of substantial interest to entrepreneurship scholars because it constitutes one of the determinants of entrepreneurial activity. institutional environments are amenable to the policy levers that governmental officials can use to influence the extent & nature of entrepreneurship.


The institutional context matters

  • Improving the regulatory environment for business can be difficult and takes time
  • Institutional or legal changes are rather complex and country-specific
  • Do not underestimate culture!
  • Times of crisis can be regarded as times of opportunities
  • Understanding the institutions of a country is highly important to develop adequate internationalization strategies without wasting cash

Some regulations that enhance business activity and some constrain it. Regulations affect several areas in the life of a business, e.g. starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency, employing workers.

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.

The “ease of doing business” is highly dependent on the institutional environment. Institutions do not require physical existence, just rules and compliance, resulting legal sanctions/ ostracism. The institutional environment in a new market is of central importance when considering the internationalization of a venture

While technology marches on, how people do business in markets like Latin America and Japan does not change nearly as fast - if at all. International Expansion with a business model still in flux is a tough job and can burn a lot of cash. The competitive landscape can force you into moves you would otherwise refrain from doing


Does early internationalization of newly founded high-tech startups improve firm performance?

  • Globalization and internationalization are on the rise
  • Internationalization can be regarded a necessity for large corporations
  • High investment risks and managerial costs of internationalization


resource-based theory and internationalization activities of high-tech startups

Corporations as bundles of material and immaterial resources:

  • financial resources
  • machines
  • intellectual property rights
  • innovative products and services
  • human capital (professional experience/ intern. experience)
  • management capabilities

Immaterial resources of the corporation determine how successful the material resources can be deployed. Resources and capabilities of a corporation determine its internationalization activities and performance

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.


Transaction cost theory and internationalization

  • Make or buy in international transactions
    • export
    • franchise / ˈfræntʃaiz /特许经销权
    • strategic alliance
    • joint venture
    • foreign subsidiary
  • Transaction specific determinants
    • level of transaction specific investments
    • uncertainty (behavioral, environmental)
    • frequency

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.


Internationalization – Does it pay off ?

  • Employment growth rates of internationalized companies are on average 10%-15% higher than growth rates of non-internationalized companies
  • Sales growth rates of internationalized companies are on average 25%-35% higher than growth rates of non-internationalized companies
  • Productivity growth caused by internationalization is significant

The picture is from the sildes of Lecturer Andrew Isaak and Professor Dr. Michael Woywode, Business school of university of Mannheim.

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