International entrepreneurship
Benjamin M. Oviatt and Patricia P. McDougall
We define international entrepreneurship as the discovery, enactment, evaluation, and exploitation of opportunities – across national borders – to create future goods and services (McDougall and Oviatt, forthcoming). The scholarly study of international entrepreneurship attempts to answer questions about how, by whom, and with what effects those opportunities are acted upon. It includes two branches: (1) the study of entrepreneurial activity that itself crosses national borders and (2) the comparison of domestic entrepreneurial activities in multiple countries.
The definition is a deliberate effort to blend the foci of entrepreneurship and international business, and we believe a full understanding of the definition requires an appreciation of its evolution. Furthermore, we believe understanding is also aided by examples of well conducted research from both branches of study in inter national entrepreneurship.
In their comprehensive review of inter national entrepreneurship, Zahra and George (2002) noted that the first known reference to the term ‘‘international entrepreneurship’’ was international entrepreneurship 159 in a three page article by Morrow (1988), in which the author showed the impact of techno logical advances and increased cultural aware ness in making once remote markets accessible to established companies and new ventures. The following year, McDougall’s (1989) study comparing domestic and international new ventures marked the beginning of academic study specifically positioned as international entrepreneurship research. She narrowly de fined international entrepreneurship as ‘‘the development of international new ventures or start ups that, from their inception, engage in international business’’ (1989: 388).
At the 1992 Academy of Management meetings, a commissioned task force held a special session entitled ‘‘What does international entrepreneurship mean to division members?’’ The general consensus of the membership was that the definition of international entrepreneurship needed to be broad and its multidimensionality should be encouraged (Giamartino, McDougall, and Bird, 1993).
While most of the early work in international entrepreneurship emanated from entrepreneur ship scholars, Wright and Ricks (1994) high lighted it as a newly emerging research direction for international business scholars, which was noteworthy since international business re searchers at that time focused almost exclusively on established companies. Their definition also drew attention to the need to include a comparative focus.
More recently, McDougall and Oviatt pro posed a new definition of international entrepreneurship in a Special Research Forum in the Academy of Management Journal, noting that firm size or age were not defining characteristics: ‘‘International entrepreneurship is a combination of innovative, proactive, and risk seeking behavior that crosses national borders and is intended to create value in organizations’’ (2000: 903).
Highlighting the fact that the bulk of international entrepreneurship research has focused on the internationalization of new ventures, Zahra and George (2002) sought to emphasize the role of established firms in inter national entrepreneurship. They defined international entrepreneurship as ‘‘the process of creatively discovering and exploiting opportunities that lie outside a firm’s domestic markets in the pursuit of competitive advantage’’ (2002: 261). Thus, Zahra and George more explicitly included corporate entrepreneurship.
As noted by Young, Dimitratos, and Dana (2003) in the inaugural issue of the Journal of International Entrepreneurship, a journal dedicated exclusively to the study of this growing field, regular ‘‘soul searching’’ on the boundaries of international entrepreneurship is not unique. They noted that during the last decade significant discussions in international business have taken place, with definitions ranging from ‘‘transactions that cross national boundaries’’ (Rugman and Hodgetts, 1995: 4) to ‘‘a multi level economic exchange process’’ (Toyne, 1997: 37). Within entrepreneurship, a definitional debate has plagued the field since its infancy (see, for example, Gartner, 1988; Venkataraman, 1997; Shane and Venkataraman, 2000). Building on the definition of entrepreneurship recently proposed by Shane and Venkataraman (2000), we have reformulated our definition of inter national entrepreneurship to the definition set forth in the first sentence of this essay. As the fields of entrepreneurship and international business continue to evolve, we expect the definition of international entrepreneurship will also evolve.
Two examples of international entrepreneur ship, one from each branch of inquiry, may improve the reader’s understanding and may even stimulate additional research. An example of the study of cross border entrepreneurial behavior is Zahra, Ireland, and Hitt’s (2000) empirical study of the relationships between international expansion, technological learning, and new venture performance. The research was conducted on a sample of 321 independent and corporate ventures that were (1) six years old or younger, (2) headquartered in the United States, (3) competing in a dozen high technology industries, and (4) deriving an average of 17 percent of their sales from foreign sources. Thus, the sample focused on firms exploiting relatively new and likely innovative opportunities across national borders, thereby fitting our definition of international entrepreneurship.
The study took into account a variety of variables using many rich data sources, including mailed surveys, archival data, telephone 160 international entrepreneurship contacts, and emailed responses. The results were complex and cannot be fully explained here, but evidence was found that new ventures that diversify internationally might sacrifice speed in international expansion for breadth and depth in technological learning. Deeper techno logical learning was associated with the use of high control entry modes, such as acquisition and establishment of new ventures. Proactive knowledge integration efforts, such as analysis of new information by cross functional teams and consultants, were associated with greater depth and breadth of technological learning in international new ventures. Technological learning was also shown to be positively linked to new venture performance. Readers wanting to know more are encouraged to read the entire article. It was recognized as the best article published in the Academy of Management Journal in 2000.
The Global Entrepreneurship Monitor (Reynolds et al., 2002) is a rich example of the comparative branch of international entrepreneurship. The study is published each year in the fall, and in its fourth year entrepreneurial activity in 37 countries was compared on a variety of dimensions. Teams of researchers in the countries gathered data on economic and social conditions, conducted interviews of many experts, administered surveys to those experts, and surveyed representative samples of the national populations. Thus, the data and the teams gathering them were highly international, and the objective was to compare entrepreneurial activities in many countries. Therefore, it clearly represents the international study of entrepreneurship.
Each year, the Global Entrepreneurship Monitor finds wide differences in the level of entrepreneurial activity from country to country, shows that variation in national economic growth rates is associated with those differences, and explores explanatory factors. Even more valuable, because the Global Entrepreneurship Monitor evaluates these issues from year to year, it can show longitudinal dynamics in entrepreneurial behavior around the world.
The domain of international entrepreneur ship provides abundant opportunities for further scholarly inquiry. For scholars focusing on entrepreneurial activity that crosses national borders, we propose two very broad research questions: What effects do fluctuating inter national economic conditions have on the amount, speed, direction, and mode of cross border transactions by entrepreneurial firms? What factors cause entrepreneurial firms to withdraw from international activity, and once withdrawal occurs, what stimulates entrepreneurial firms to increase their level of internationalization? Within the comparative branch of international entrepreneurship, we are particularly intrigued with the evidence of the positive association between entrepreneurial activity and improved national living standards. Therefore, it becomes important to determine the most effective and efficient way of encouraging entrepreneurship in nations where entrepreneurial activity is weak.
With 15 years of research inquiry, inter national entrepreneurship has grown to adolescence. As an adolescent discipline, we expect researchers will continue to explore the boundaries of the field and further seek to elucidate why international entrepreneurship should be regarded as a distinct area of scholarly investigation. The field is rich with possibility and opportunity (Acs, Dana, and Jones, 2003) and offers significant collaborative challenges as it, by definition, benefits from the work of scholars in multiple countries and the expertise of scholars in multiple disciplines.
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