Academic journal article South Asian Journal of Management

Conceptualizing the Process of Opportunity Identification in International Entrepreneurship Research

Academic journal article South Asian Journal of Management

Conceptualizing the Process of Opportunity Identification in International Entrepreneurship Research

Article excerpt

This paper introduces a conceptual framework that extends the current notions of opportunity identification and exploitation in international entrepreneurship research. Drawing on entrepreneurship and strategic management literature we highlight that opportunity identification is a path dependent and an individual centred process that is positioned on learning, knowledge and capabilities of the decision makers. The proposed model offers testable propositions to prepare the ground for future empirical research.

INTRODUCTION

"Without opportunity there is no entrepreneurship" (Short et al, 2010, p. 40). Opportunity identification in entrepreneurship research has taken the long held focus away from venture creation to enterprising individuals and valuable opportunities (Shane and Venkataraman, 2000; and Eckhardt and Shane, 2003). However, for International Entrepreneurship (IE) scholars, this is still an emerging concept (Chandra et al, 2009). IE theory is moving away from understanding 'how' firms internationalize to 'why' firms internationalize. In this tide of changing views, the concept of international opportunity development has grown in importance amongst IE scholars. There have been repeated calls to integrate entrepreneurship research with IE in order to develop a broader theoretical discussion about international opportunities (Madsen and Servais, 1997; Chandra et al, 2009; Jones and Coviello, 2005; and Mainela et al, 2013). Yeta robust theoretical framework for understanding international opportunity development has not been introduced to-date. Our paper addresses this fundamental issue relating to the concept of international opportunity development.

According to Zahra and George (2002), it was Morrow (1998) who came up with the term 'international entrepreneurship'. The first empirical efforts in the area of IE came from McDougall (1989), who found significant differences between new venture firms competing domestically and new ventures also choosing to enter international markets. The concept of opportunity discovery and exploitation entered the IE field through the work of Zahra and George (2002) who viewed IE as a process of creatively discovering and exploiting opportunities which lie outside the firm's domestic market. The rapid growth of IE literature over the past two decades has added an impressive volume of research on international entrepreneurial ventures using different but overlapping concepts (Peiris et al, 2012). We use the definition suggested by Styles and Seymour (2006), who view IE as "behavioral processes associated with the creation and exchange of value through the identification and exploitation of opportunities that cross national borders" (p. 134). This definition focuses on three critical components which this paper is based on and IE theory in general: the impact of individual behavior; the creation and exchange of value; and the identification and exploitation of international opportunities.

Over the last decade, substantial knowledge had been added by entrepreneurship scholars to IE by introducing conceptual models of opportunity identification processes (Gaglio and Katz, 2001; Ardichvili et al, 2003; Baron, 2004; and Lumpkin et al, 2004). By far, the model developed by Ardichvilli et al. (2003) provides a more promising approach and extends the opportunity development dialogue to a level that is relevant to IE domain. Our work expands on this model to arrive at an advanced integrative framework of international opportunity identification.

We intend to achieve three objectives: (1) define international opportunity identification; (2) identify the factors that influence opportunity identification; and (3) to provide propositions and future directions for the advancement of IE research.

This paper has three sections. The first section looks at the conceptual background and past literature pertaining to opportunity identification (OI). The next section looks at the main antecedents of OI and provides indicative propositions. …

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