Transnational Entrepreneurs' Venture Internationalization Strategies: A Practice Theory Approach

By Terjesen, Siri; Elam, Amanda | Entrepreneurship: Theory and Practice, September 2009 | Go to article overview
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Transnational Entrepreneurs' Venture Internationalization Strategies: A Practice Theory Approach


Terjesen, Siri, Elam, Amanda, Entrepreneurship: Theory and Practice


How do entrepreneurs working across multiple countries leverage individual experiences and institutional environments to pursue international markets? This research utilizes Bourdieu's theory of practice as a sensitizing framework to explore transnational entrepreneurs' internationalization strategies. Four case studies reveal the ways in which transnational entrepreneurs rely on diverse sets of resources--economic, social, cultural, and symbolic capital--to navigate multiple institutional environments--cultural repertoires, social networks, legal and regulatory regimes, and power relations--when making strategic decisions about internationalization. Transnational entrepreneurs are uniquely positioned to internationalize directly and, in many cases, as an intermediary for local firms. As such, transnational entrepreneurs pursue a modern middleman role that transcends the multiple institutional environments in which they are embedded.

Introduction

Research in management explores several important questions regarding the variety and effectiveness of internationalization strategies among finns. The ability to internationalize is critical to firm growth (Lu & Beamish, 2001) and can significantly contribute to the economic development of the local environment (Girma, Greenaway, & Kneller, 2004). Establishing transactions, partnerships, and operations in foreign countries can open access to new markets, less costly sources of labor, and other resources. Further gains are realized from exposure to new product and service ideas, as well as new technologies and workplace innovations (Zahra, Hayton, Marcel, & O'Neill, 2001).

Compared to managers of large, established multinational enterprises (MNEs), entrepreneurs are typically regarded as resource-constrained, lacking the market power, knowledge, and resources to operate viably overseas (Acs, Morck, Shaver, & Yeung, 1997). Despite liabilities of newness, small size, and foreignness, an increasing number of entrepreneurs pursue international markets for selling their goods and services (Rugman & Wright, 1999), and may do so through intermediaries (Hessels & Terjesen, 2009). Evidence suggests that many of these new ventures are started by "transnational entrepreneurs" who undertake cross-border activities (Ozden & Schiff, 2005).

Despite the increasing phenomenon of transnational entrepreneurship and a growing appreciation of migration as a positive force for both home and host countries (Economist, 2008), academic research is limited, fragmented, and lacks rigorous development and testing of theory (Drori, Honig, & Ginsberg, 2006). Transnational entrepreneurs are a heterogeneous lot--hailing from many countries; crossing ethnic, immigrant, and minority boundaries; and possessing different motivations and experiences (Portes, Hailer, & Guarnizo, 2002; Wadhwa, Saxenian, Rissing, & Gereffi, 2007). There is substantial anecdotal evidence that immigrant entrepreneurs are involved in the intermediation of trade across countries (Saxenian, 2002); however, not all transnational entrepreneurs are immigrants. In effect, we have very little understanding about how entrepreneurs arrive at and pursue internationalization strategies.

Even more troubling is the inability of existing international business theories to explain entrepreneurship (McDougall, Shane, & Oviatt, 1994; Yeung, 2002). Furthermore, ethnic middleman theory (Blalock, 1967; Bonacich, 1973) has proved useful for understanding immigrant entrepreneurship and, in some cases, ethnic entrepreneurship, but does not explain transnational entrepreneurship generally, nor does it provide any basis for understanding internationalization strategies. Scholars have called for new theories of the internationalization of new ventures (Autio, 2005; Keupp & Gassmann, 2009), especially multi-level models given the complex process of business creation (Davidsson & Wiklund, 2001).

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