BornGlobal Firm Study-Thesis

BORN GLOBAL FIRMS:
AN INTEGRATED ANALYSIS OF THE DETERMINANTS AND

MEASUREMENT OF INTERNATIONAL PERFORMANCE
By
Stephan Gerschewski
A thesis submitted
to the Victoria University of Wellington
in fulfilment of the requirements for the degree of
Doctor of Philosophy
Victoria University of Wellington

2011
Abstract
Born global firms are an increasingly emerging phenomenon worldwide. However,
relatively little is known about what drives the international performance of these early
and rapidly internationalising firms, and how born globals measure their own
performance. The objectives of this research are to examine the determinants and
measurement of international performance for born global firms.
Grounded in the resource-based view of the firm (RBV) and the network perspective
on internationalisation, the study develops an integrated, conceptual model,
incorporating six constructs: firm and managerial characteristics, networks, business
strategy, external environment, control variables (e.g., firm size), and international
performance. Drawing on several literature strands, including exporting, international
entrepreneurship, networks, and strategic management, research hypotheses are
developed, and tested on a sample of 310 New Zealand and Australian firms. A mixed
methods approach, including exploratory interviews and a web-based survey
instrument, is employed. The study adopts a comparative perspective with non-born
global firms to improve the robustness of the findings for born globals.
The results show that international entrepreneurial orientation and a focus on

product/service quality as well as competitor orientation, firm size and entry mode are
generally key drivers of superior international performance for born globals. In
addition, customer engagement skills, positioning as a global company rather than
an exporter, and the leveraging of international trade shows tend to be critical
concepts to explain variations in born global performance. The study suggests that
born global firms consider financial-based measures more important than operational
indicators, and have better international performance than non-born globals.
The study offers six contributions to the literature: (1) the development and testing of
an integrated performance model for born globals, (2) the identification of important
international performance measures for born globals, (3) the incorporation of
additional entry modes of born globals besides exporting, (4) the consideration of
multiple industries of born globals, (5) the adoption of a mixed methods design, and
(6) the integration of a comparative perspective with non-born global firms.
i
Acknowledgements
Give, give, give what is the point of having experience, knowledge or talent if I
dont give it away? Of having stories if I dont tell them to others? Of having wealth
if I dont share it?... It is in giving that I connect with others, with the world and with
the divine.
Isabel Allende
When I started my PhD degree a few years ago, I did not predict the exciting journey
that would lie ahead. For example, I did not know that I would be able to present my
research in places, such as Tallinn, San Diego or Rio de Janeiro. I did not know that I
would feel this deep sense of accomplishment after conducting my first interview
with a born global firm. I did not know that I would eventually become a Dad.
This amazing journey would not have been possible without the support of many
people. First, I would like to express my sincere gratitude to my supervisors
Professor Elizabeth Rose and Associate Professor Val Lindsay. Beth, Val, I much
appreciate your outstanding guidance and mentorship throughout the PhD. Thank
you for your inspiration and belief in me. You made me grow as an academic person
and taught me the fine art of academia. It was a great honour and privilege to work
with you.
I would like to thank the PhD Examination Committee Professor David Crick,
Professor Brendan Gray and Professor Niina Nummela for examining my thesis and
providing valuable feedback. I am grateful to Tara Fisher from the Faculty of
Graduate Research for the efficient administrative support in the examination process.
My thanks go to the Research Committee at the School of Marketing and

International Business for the support in terms of conference attendance and
fieldwork, and for providing constructive feedback in the proposal stage of the thesis.
Specifically, I would like to acknowledge the helpful comments from Professor Lena
Zander, Professor Peter Dowling, Professor Ashish Sinha and Professor Peter
Thirkell. Thanks to Dr. Audra Mockaitis for giving me the opportunity to teach my
first university lecture, and for offering me to work in various research projects. I
would also like to thank Associate Professor Joanna Scott-Kennel who supported me
ii
throughout my postgraduate studies, in particular at Masters level. Thanks to
Professor David Crick and Professor Kim Fam as PhD Directors of the School. I am
grateful to Victoria University of Wellington for a generous scholarship that enabled
me to focus on my studies.
To Margaret Boon, Jessie Johnston and Jacqui Fitzgerald, thank you for your
administrative assistance in terms of enrolment matters and other duties. Special
thanks to Helen Hynes for co-ordinating tutor opportunities so I could gain teaching
experience. Thanks to Maria Goncalves-Rorke from Student Finance for the kind
support.
To all fellow PhD students that I shared the office with over the past few years: Mao,
Lachie, Janine, Lin, Farhana, Suzana, Matnoor, Vu, Nick, Banjo, Vik, Janti. It was a
pleasure to exchange ideas and walk this path with you.
I would like to acknowledge all companies which volunteered for this research by
participating in the interviews and the surveys. Without the fantastic response, this
study would not have been possible.
I would not have been able to do my postgraduate studies without the support of my
parents and brother. Mum, Dad, Johannes, thank you for your love and for your self-
sacrifice to support my education. Thank you for giving me the freedom to embark
on this journey. I am proud of you.
Dear God, thank you for your guidance, and for giving me perseverance, energy and
love. The Lord is my shepherd (Psalm 23).
And finally, my thanks go to my wife Pilok and my daughter Esther. Pilok, thank
you for your patience and unconditional love. I am truly lucky to have you as my
wife. Esther, thank you for letting me experience fatherhood. You kept me going
forward and always had a smile for me when I came home from university.
Esther this is for you.
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Table of Contents
ABSTRACT.......................................................................................................................................... I
ACKNOWLEDGEMENTS ..................................................................................................................... II
LIST OF TABLES ..............................................................................................................................VIII
LIST OF FIGURES ............................................................................................................................... X
CHAPTER 1: INTRODUCTION ................................................................................. 1

1.1 BACKGROUND AND RATIONALE OF STUDY ................................................................................. 2
1.2 RESEARCH OBJECTIVES AND RESEARCH QUESTIONS ................................................................... 4
1.3 RESEARCH CONTRIBUTION ......................................................................................................... 6
1.4 RESEARCH METHODOLOGY ........................................................................................................ 9
1.5 OUTLINE OF THE THESIS ............................................................................................................ 10
CHAPTER 2: LITERATURE REVIEW ....................................................................... 12

2.1 DEFINITION AND FEATURES OF BORN GLOBALS ....................................................................... 13
2.1.1 MANAGERIAL GLOBAL VISION AND MANAGEMENT COMMITMENT ........................................................ 23
2.1.2 NICHE STRATEGY.......................................................................................................................... 24
2.1.3 LOW COMMITMENT ENTRY MODES................................................................................................. 25
2.1.4 LIMITED APPLICABILITY OF STAGES INTERNATIONALISATION MODEL ....................................................... 25
2.1.5 USAGE OF NETWORKS AND FLEXIBLE ORGANISATIONAL ATTRIBUTES ...................................................... 27
2.2 DRIVERS FOR THE EMERGENCE OF BORN GLOBALS .................................................................. 28
2.3 BORN GLOBAL STUDIES ............................................................................................................ 30
2.3.1 RESEARCH SUMMARIES OF BORN GLOBAL STUDIES............................................................................. 30
2.3.2 CONCEPTUAL FRAMEWORKS OF BORN GLOBAL STUDIES ...................................................................... 32
2.4 INTERNATIONALISATION MODELS ............................................................................................ 35
2.4.1 ECONOMIC SCHOOL OF FDI THEORY ................................................................................................ 35
2.4.2 THE BEHAVIOURAL SCHOOL: STAGE MODELS OF INTERNATIONALISATION ............................................... 36
2.4.3 THE RELATIONSHIP SCHOOL: NETWORK PERSPECTIVE ON INTERNATIONALISATION .................................... 37
2.4.4 ENTREPRENEURIAL PERSPECTIVE ON INTERNATIONALISATION ................................................................ 38
2.5 INTERNATIONAL MARKET ENTRY MODES OF BORN GLOBALS .................................................. 39
2.6 THEORETICAL BACKGROUND ON DETERMINANTS OF FIRM PERFORMANCE ............................ 41
2.6.1 INDUSTRIAL ORGANISATION THEORY................................................................................................ 41
2.6.2 STRATEGY-STRUCTURE-PERFORMANCE PARADIGM............................................................................. 42
2.6.3 RESOURCE-BASED VIEW OF THE FIRM .............................................................................................. 43
2.6.4 EMPIRICAL STUDIES OF FIRM PERFORMANCE ..................................................................................... 44
2.7 DETERMINANTS OF EXPORT PERFORMANCE ............................................................................ 47
2.7.1 INTERNAL FACTORS OF EXPORT PERFORMANCE.................................................................................. 50
2.7.1.1 Export Marketing Strategy .............................................................................................. 50
2.7.1.2 Firm Characteristics ......................................................................................................... 52
2.7.1.3 Management Characteristics .......................................................................................... 53
2.7.2 EXTERNAL FACTORS OF EXPORT PERFORMANCE ................................................................................. 54
2.7.2.1 Foreign Market Characteristics ....................................................................................... 54
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2.7.2.2 Domestic Market Characteristics .................................................................................... 55
2.7.3 CONTROL AND MODERATOR VARIABLES ........................................................................................... 56
2.8 DETERMINANTS OF BORN GLOBAL PERFORMANCE .................................................................. 57
2.8.1 ANTECEDENTS/DRIVERS OF BORN GLOBAL STRATEGY ......................................................................... 59
2.8.2 BUSINESS STRATEGY OF BORN GLOBALS ........................................................................................... 60
2.8.3 OTHER DETERMINANTS OF BORN GLOBAL PERFORMANCE ................................................................... 62
2.8.4 ANTECEDENTS OF BORN GLOBAL PERFORMANCE ............................................................................... 62
2.9 MEASUREMENT OF FIRM PERFORMANCE................................................................................. 63
2.10 MEASUREMENT OF EXPORT PERFORMANCE .......................................................................... 67
2.10.1 LEVEL OF ANALYSIS OF EXPORT PERFORMANCE MEASUREMENT .......................................................... 69
2.10.2 FRAME OF REFERENCE OF EXPORT PERFORMANCE MEASUREMENT...................................................... 69
2.10.3 TIME FRAME OF EXPORT PERFORMANCE MEASUREMENT .................................................................. 71
2.10.4 DATA COLLECTION METHODS IN EXPORT PERFORMANCE MEASUREMENT ............................................ 71
2.10.5 EXPORT PERFORMANCE MEASURES IN EMPIRICAL STUDIES ................................................................ 72
2.11 MEASUREMENT OF BORN GLOBAL PERFORMANCE ................................................................ 73
2.11.1 LEVEL OF ANALYSIS OF BORN GLOBAL PERFORMANCE MEASUREMENT ................................................. 75
2.11.2 FRAME OF REFERENCE OF BORN GLOBAL PERFORMANCE MEASUREMENT............................................. 75
2.11.3 TIME FRAME OF BORN GLOBAL PERFORMANCE MEASUREMENT ......................................................... 75
2.11.4 DATA COLLECTION METHODS IN BORN GLOBAL PERFORMANCE MEASUREMENT ................................... 76
2.11.5 BORN GLOBAL PERFORMANCE MEASURES IN EMPIRICAL STUDIES ....................................................... 76
2.12 CHAPTER SUMMARY ............................................................................................................... 77
CHAPTER 3: CONCEPTUAL MODEL AND HYPOTHESIS DEVELOPMENT .................. 79

3.1 OVERVIEW OF CONCEPTUAL MODEL AND THEORETICAL BASIS ................................................ 80
3.2 INTERNATIONAL ENTREPRENEURIAL ORIENTATION ................................................................. 86
3.3 PRODUCT/SERVICE QUALITY AND CORPORATE GOVERNANCE STRUCTURE .............................. 89
3.4 MARKET ORIENTATION AND LEARNING ORIENTATION ............................................................ 92
3.5 NETWORKS ............................................................................................................................... 96
3.6 BUSINESS STRATEGY ............................................................................................................... 102
3.7 EXTERNAL ENVIRONMENT ...................................................................................................... 104
3.8 INTERNATIONAL PERFORMANCE ............................................................................................ 106
3.9 CONTROL VARIABLES .............................................................................................................. 108
3.10 CHAPTER SUMMARY ............................................................................................................. 108
CHAPTER 4: RESEARCH METHODOLOGY ........................................................... 110

4.1 RESEARCH PARADIGM ............................................................................................................ 111
4.2 QUALITATIVE COMPONENT .................................................................................................... 113
4.2.1 SAMPLE SELECTION .................................................................................................................... 114
4.2.2 DATA COLLECTION ..................................................................................................................... 115
4.2.3 DATA ANALYSIS ......................................................................................................................... 116
4.3 QUANTITATIVE COMPONENT ................................................................................................. 116
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4.3.1 RESEARCH INSTRUMENT .............................................................................................................. 117
4.3.2 RESEARCH SAMPLE ..................................................................................................................... 119
4.3.3 SURVEY DEVELOPMENT AND PRE-TESTING ...................................................................................... 121
4.3.4 ADMINISTRATION OF THE SURVEY ................................................................................................. 123
4.3.5 MEASUREMENTS OF CONSTRUCTS ................................................................................................. 124
4.3.5.1 Measuring Explanatory Variables ................................................................................. 126
4.3.5.1.1 Measuring International Entrepreneurial Orientation........................................................... 127
4.3.5.1.2 Measuring Product/Service Quality ....................................................................................... 127
4.3.5.1.3 Measuring Board of Directors/Advisory Boards Service Function ....................................... 127
4.3.5.1.4 Measuring Market Orientation ............................................................................................. 128
4.3.5.1.5 Measuring Learning Orientation ........................................................................................... 128
4.3.5.1.6 Measuring Networks ............................................................................................................. 128
4.3.5.1.7 Measuring Business Strategy ................................................................................................ 129
4.3.5.1.8 Measuring External Environment .......................................................................................... 129
4.3.5.2 Measuring International Performance .......................................................................... 129
4.3.5.3 Control Variables ........................................................................................................... 132
4.3.6 DATA ANALYTICAL TOOLS ............................................................................................................ 133
4.4 CHAPTER SUMMARY............................................................................................................... 134
CHAPTER 5: QUALITATIVE ANALYSIS................................................................. 136

5.1 INTRODUCTION ...................................................................................................................... 137
5.2 INTERVIEW PROCESS .............................................................................................................. 137
5.3 FINDINGS FROM THE INTERVIEWS .......................................................................................... 139
5.3.1 FIRM AND MANAGERIAL CHARACTERISTICS ..................................................................................... 141
5.3.2 NETWORKS ............................................................................................................................... 151
5.3.3 BUSINESS STRATEGY AND EXTERNAL ENVIRONMENT ......................................................................... 155
5.3.4 INTERNATIONAL PERFORMANCE MEASUREMENT .............................................................................. 160
5.3.5 ADVICE FOR NEW INTERNATIONALISING FIRMS ................................................................................. 162
5.4 LINKAGE BETWEEN QUALITATIVE INTERVIEWS AND QUANTITATIVE SURVEY ......................... 165
5.5 CHAPTER SUMMARY............................................................................................................... 166
CHAPTER 6: QUANTITATIVE ANALYSIS .............................................................. 170

6.1 INTRODUCTION ...................................................................................................................... 171
6.2 SURVEY RESPONSE ................................................................................................................. 171
6.3 DATA PREPARATION ............................................................................................................... 172
6.3.1 NON-RESPONSE BIAS.................................................................................................................. 172
6.3.2 COMMON METHOD VARIANCE ..................................................................................................... 174
6.4 DESCRIPTIVE STATISTICS ......................................................................................................... 175
6.5 RELIABILITY ............................................................................................................................. 181
6.5.1 EXPLORATORY FACTOR ANALYSIS .................................................................................................. 182
6.5.2 RELIABILITY ANALYSIS ................................................................................................................. 184
6.6 INITIAL DATA ANALYSIS .......................................................................................................... 195
6.7 HYPOTHESIS TESTING ............................................................................................................. 196
6.7.1 TESTING HYPOTHESES 1-10 (EXCEPT 3 AND 7) ................................................................................ 197
6.7.2 TESTING HYPOTHESIS 3 ............................................................................................................... 202
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6.7.3 TESTING HYPOTHESIS 7 ............................................................................................................... 205
6.8 TESTING OF INTERNATIONAL PERFORMANCE MEASURES ...................................................... 207
6.8.1 LEVEL OF IMPORTANCE OF INTERNATIONAL PERFORMANCE MEASURES ................................................ 207
6.8.2 LEVEL OF SATISFACTION WITH INTERNATIONAL PERFORMANCE ........................................................... 214
6.8.3 WEIGHTED INTERNATIONAL PERFORMANCE .................................................................................... 220
6.9 ADDITIONAL RESEARCH FINDINGS .......................................................................................... 225
6.9.1 INTERNATIONALISATION PLANNING AND DOMESTIC EXPANSION PRIOR TO INTERNATIONALISATION ............ 225
6.9.2 PSYCHIC DISTANCE, ENTRY MODE, AND INTERNATIONAL MARKET SELECTION........................................ 227
6.10 SUMMARY OF QUANTITATIVE FINDINGS .............................................................................. 242
CHAPTER 7: DISCUSSION .................................................................................. 247

7.1 INTRODUCTION ...................................................................................................................... 248
7.2 THE ROLE OF FIRM AND MANAGERIAL CHARACTERISTICS ...................................................... 248
7.3 THE ROLE OF NETWORKS ........................................................................................................ 255
7.4 THE ROLE OF BUSINESS STRATEGY .......................................................................................... 258
7.5 THE ROLE OF THE EXTERNAL ENVIRONMENT .......................................................................... 259
7.6 THE ROLE OF OTHER DETERMINANTS (FIRM SIZE, FIRMS INTERNATIONAL EXPERIENCE,
INDUSTRY AND ENTRY MODE) ..................................................................................................... 262
7.7 INTERNATIONAL PERFORMANCE MEASUREMENT .................................................................. 268
7.8 THE ROLE OF PSYCHIC DISTANCE AND INTERNATIONAL MARKET SELECTION ......................... 272
7.9 SUMMARY OF KEY FINDINGS AND IMPLICATIONS .................................................................. 274
CHAPTER 8: CONCLUSION ................................................................................ 283

8.1 CONTRIBUTION TO THEORY/LITERATURE ............................................................................... 285
8.2 MANAGERIAL CONTRIBUTIONS .............................................................................................. 295
8.3 POLICY CONTRIBUTIONS ......................................................................................................... 298
8.4 LIMITATIONS OF THE STUDY ................................................................................................... 300
8.5 DIRECTIONS FOR FUTURE RESEARCH ...................................................................................... 302
8.6 CONCLUDING REMARKS ......................................................................................................... 304
REFERENCES ................................................................................................................................. 306

APPENDIX A: COVER LETTER FOR INTERVIEW ............................................................................... 328
APPENDIX B: CONSENT FORM FOR INTERVIEW ............................................................................ 329
APPENDIX C: INTERVIEW QUESTIONS ........................................................................................... 330
APPENDIX D: POSTAL COVER LETTER FOR SURVEY ....................................................................... 332
APPENDIX E: WEB-BASED SURVEY INSTRUMENT .......................................................................... 333
APPENDIX F: FIRST EMAIL REMINDER FOR SURVEY ...................................................................... 350
APPENDIX G: SECOND EMAIL REMINDER FOR SURVEY ................................................................. 351
APPENDIX H: FACTOR ANALYSIS ................................................................................................... 352
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List of Tables
Table 2.1: Definitions and Features of Born Globals ....................................................................... 14
Table 2.2: Key Themes of Born Global Literature ............................................................................ 32
Table 2.3: Key Theoretical Frameworks of Born Global Studies ...................................................... 34
Table 2.4: Percentage of Variance Explained of Return on Assets (ROA) by Firm, Industry, and
Other Effects ......................................................................................................................... 47
Table 3.1: Dimensions of Performance ......................................................................................... 107
Table 3.2: Summary of Hypotheses .............................................................................................. 109
Table 4.1: Advantages and Drawbacks of Web-based Surveys Compared to Mail Questionnaires 117
Table 4.2: Summary of Measurement for Explanatory Variables .................................................. 124
Table 4.3: Summary of Measurement for Dependent Variables ................................................... 126
Table 5.1: Key Interview Details ................................................................................................... 138
Table 5.2: Profile of Interviewed Companies ................................................................................ 138
Table 5.3: Summary of the Key Themes of the Interviews ............................................................ 167
Table 6.1: Overview of Statistical Analyses ................................................................................... 171
Table 6.2: Summary of Response Rate.......................................................................................... 172
Table 6.3: Testing for Non-Response Bias: T-tests ........................................................................ 173
Table 6.4: Testing for Non-Response Bias: Crosstabulations and Pearsons Chi Square Test ......... 174
Table 6.5: Distribution of Born Global and Non-Born Global Firms ............................................... 176
Table 6.6: Distribution of BG and Non-BG Firms by Industry Type ................................................ 176
Table 6.7: Distribution of BG and Non-BG Firms by Industry Type and Companys Annual Gross
Sales in 2009 ....................................................................................................................... 177
Table 6.8: Distribution of BG and Non-BG Firms by Number of Full-Time Employees and Industry
Type .................................................................................................................................... 178
Table 6.9: Distribution of BG and Non-BG Firms by Company Age and Industry Type ................... 179
Table 6.10: Distribution of BG and Non-BG Firms by Years of Doing International Business and
Industry Type ...................................................................................................................... 179
Table 6.11: Distribution of BG and Non-BG Firms by Domestic and International Sales Ratios ..... 180
Table 6.12: Distribution of BG and Non-BG Firms by Number of Years from Company
Establishment to First Internationalisation.......................................................................... 181
Table 6.13: Distribution of BG and Non-BG Firms by Survey Respondents .................................... 181
Table 6.14: Summary of Created Factors and Cronbachs alpha.................................................... 185
Table 6.15: Descriptive Statistics for Variables in Regression Model ............................................ 186
Table 6.16: Correlation Matrix and Descriptives (Born Global Sample)......................................... 193
Table 6.17: Correlation Matrix and Descriptives (Non-Born Global Sample) ................................. 194
Table 6.18: T-test Results for Constructs in Regression Model ..................................................... 195
Table 6.19: Regression Estimates for International Performance (Testing Hypotheses 1-10,
except 3 and 7) (BG Sample) ................................................................................................ 198
Table 6.20: Regression Estimates for International Performance (Testing Hypotheses 1-10,
except 3 and 7) (Non-BG Sample) ........................................................................................ 200
Table 6.21: Regression Estimates for International Performance (Testing Hypothesis 3)
(BG Sample) ........................................................................................................................ 203
(Non-BG Sample) ................................................................................................................. 204
(BG Sample) ........................................................................................................................ 205
(Non-BG Sample) ................................................................................................................. 206
Table 6.25: T-test Results for Level of Importance of International Performance Measures ......... 208
Table 6.26: T-test Results for Level of Importance of International Performance Measures (by
Types of Performance) ........................................................................................................ 209
Table 6.27: ANOVA Results for Level of Importance of International Performance Measures,
based on Industry (BG sample) ............................................................................................ 210
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Table 6.28: ANOVA Results for Level of Importance of International Performance Measures,
based on Industry (Non-BG sample) ................................................................................... 212
Table 6.29: ANOVA Results for Level of Importance of International Performance Measures (by
Types of Performance), based on Industry (BG sample) ...................................................... 213
Table 6.30: ANOVA Results for Level of Importance of International Performance Measures (by
Types of Performance), based on Industry (Non-BG sample) ............................................... 214
Table 6.31: T-test Results for Level of Satisfaction with International Performance ..................... 215
Table 6.32: T-test Results for Level of Satisfaction with International Performance (by Types of
Performance) ...................................................................................................................... 216
Table 6.33: ANOVA Results for Level of Satisfaction with International Performance, based on
Industry (BG sample) ........................................................................................................... 217
Table 6.34: ANOVA Results for Level of Satisfaction with International Performance, based on
Industry (Non-BG sample) ................................................................................................... 218
Table 6.35: ANOVA Results for Level of Satisfaction with International Performance (by Types of
Performance), based on Industry (BG sample) .................................................................... 219
Table 6.36: ANOVA Results for Level of Satisfaction with International Performance (by Types of
Performance), based on Industry (Non-BG sample) ............................................................. 219
Table 6.37: T-test Results for Weighted International Performance ............................................. 220
Table 6.38: T-test Results for Weighted International Performance (by Types of Performance) ... 221
Table 6.39: ANOVA Results for Weighted International Performance, based on Industry
(BG sample) ......................................................................................................................... 222
Table 6.40: ANOVA Results for Weighted International Performance, based on Industry
(Non-BG sample) ................................................................................................................. 223
Table 6.41: ANOVA Results for Weighted International Performance (by Types of Performance),
based on Industry (BG sample) ............................................................................................ 224
Table 6.42: ANOVA Results for Weighted International Performance (by Types of Performance),
based on Industry (Non-BG sample) .................................................................................... 225
Table 6.43: T-test Results for Internationalisation Planning ......................................................... 226
Table 6.44: Crosstabulation and Pearsons Chi-Square Test for Domestic Expansion prior to First
Internationalisation............................................................................................................. 226
Table 6.45: Crosstabulation and Pearsons Chi-Square Test for Presence of Board of
Directors/Advisory Board .................................................................................................... 226
Table 6.46: Crosstabulation and Pearsons Chi-Square Test for Attendance of International
Trade Shows ........................................................................................................................ 226
Table 6.47: T-test Results for Psychic Distance (First Foreign Market) (New Zealand Sample) ...... 228
Table 6.48: T-test Results for Psychic Distance (First Foreign Market) (Australia Sample) ............ 228
Table 6.49: Distribution of BG and Non-BG Firms by Location of Companys First Main
International Markets ......................................................................................................... 229
Table 6.50: Confidence Intervals for Proportions in terms of Companys First Main International
Markets ............................................................................................................................... 230
Table 6.51: Decisions based on 95% Confidence Intervals for Proportions in terms of Companys
First Main International Markets......................................................................................... 231
Table 6.52: Distribution of BG and Non-BG Firms by Location and Order of Entry to Companys
Table 6.53: Distribution of BG and Non-BG Firms by Industry Type and Entry Mode to Companys
Table 6.54: Confidence Intervals for Proportions in terms of Industry Type and Entry Modes to
Companys First Main International Markets ..................................................................... 236
Table 6.55: Decisions based on 95% Confidence Intervals for Proportions in terms of Industry
Type and Entry Modes to Companys First Main International Markets .............................. 236
Table 6.56: Distribution of BG and Non-BG Firms by Entry Mode and Order to First Main
International Markets ......................................................................................................... 238
Table 6.57: Distribution of BG and Non-BG Firms by Location and Entry Mode to Companys
Table 6.58: Summary of the Results of the Hypotheses ................................................................ 243
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Table 6.59: Summary of International Performance Measures ..................................................... 245
Table 6.60: Summary of Other Research Findings ......................................................................... 246
Table 6.61: Summary of Psychic Distance ..................................................................................... 246
Table 6.62: Summary of International Market Selection............................................................... 246
Table 6.63: Summary of Foreign Market Entry Mode ................................................................... 246
Table 7.1: Summary of Key Findings and Implications: Determinants of International
Performance........................................................................................................................ 275
Table 7.2: Summary of Key Findings and Implications: International Performance
Measurement ...................................................................................................................... 280
Table 7.3: Common Determinants of International Performance ................................................. 281
Table 7.4: Unique Determinants of International Performance .................................................... 281
Table 8.1: Contribution to Theory/Literature ............................................................................... 286
List of Figures
Figure 1.1: Outline of the Study ...................................................................................................... 11
Figure 2.1: Determinants of Financial Performance of Firms .......................................................... 45
Figure 2.2: Determinants of Export Performance............................................................................ 49
Figure 2.3: Determinants of Born Global Performance ................................................................... 58
Figure 2.4: Domains of Business Performance ................................................................................ 64
Figure 2.5: Framework for Classifying Approaches to Business Performance Measurement .......... 65
Figure 2.6: Measurement of Export Performance ........................................................................... 68
Figure 2.7: Measurement of Born Global Performance................................................................... 74
Figure 3.1: Conceptual Model of the Study ..................................................................................... 82
Figure 5.1: Coding Structure for Interviews .................................................................................. 140
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CHAPTER 1
INTRODUCTION
This chapter provides the background to the topic of the study. In addition, the
research objectives and questions are discussed, and the contribution of this study is
outlined. The chapter concludes with an overview of the organisation of the thesis.
1
Chapter 1 Introduction
1.1 Background and Rationale of Study

Small and medium-sized enterprises (SMEs) have become increasingly important
players in international trade (Knight, 2001), now accounting for 25-35% of world
exports of manufactures and a small, but increasing, share of foreign direct
investment (FDI) (OECD, 2005). Globalisation processes, such as advances in
technology, communication, and transport, the decline of trade barriers, and a shift in
global value chains, have led to new classifications of the world, such as global
village and borderless world (Ohmae, 1990; Knight & Cavusgil, 2004), resulting
in an increasing number of firms expanding their activities internationally. In recent
years, the emergence of the early and rapidly internationalising firm has become
increasingly common. This type of firm, generally entrepreneurial in nature, starts to
internationalise, in often psychically distant countries, very soon after its formation,
thus challenging one of the traditional views of a slow, incremental
internationalisation process, as proposed by Johanson and Vahlne (1977). Oviatt and
McDougall (1994) defined such an early and rapidly internationalising firm as a
business organization that, from inception, seeks to derive significant competitive
advantage from the use of resources and the sale of outputs in multiple countries (p.
49). There have been several different terms for these firms, such as international
new ventures (Oviatt & McDougall, 1994), instant exporters (McAuley, 1999),
born globals (McKinsey & Co., 1993), and high technology start-ups (Jolly,
Alahuhta, & Jeannet, 1992). This study adopts the term born global, in line with
the seminal studies by Rennie (1993) and Knight and Cavusgil (1996). This is on the
basis that the terms international new venture and born global have generally
been used interchangeably in the literature (Moen & Servais, 2002; Cavusgil &
Knight, 2009), although there have been calls to distinguish between these two terms
(Crick, 2009). The born global firm has been operationalised in many different ways,
according to the time period until internationalisation (ranging from inception to 10
years) and international sales ratio (from 5% to 50%). These different
operationalisations will be discussed in Section 2.1; to date, the literature has not
settled on a consistent operationalisation (Crick, 2009).
2
The international performance of firms has been widely researched in the literature.
Peng (2004) argued that the big question in international business research has
centred on the question of What determines the international success and failure of
firms? (p. 102). This has also been identified as one of four fundamental research
questions in strategy research (Rumelt, Schendel, & Teece, 1994). Peng (2004)
acknowledged that the question of the determinants of international success and
failure of firms is vast and there are not yet definite answers. In the context of export
performance, it has been argued that the literature on export performance is
probably one of the most widely researched and least understood areas of
international marketing (Sousa, Martinez-Lopez, & Coelho, 2008, p. 2).
The rationale for this PhD research is to contribute to knowledge regarding the
determinants and measurement of international performance, specifically in the
context of born globals, by investigating the multidimensionality of performance.
The study examines internal and external factors that may affect the performance of
these early and rapidly internationalising firms. In light of the phenomenon of high-
performing, well-known born global firms, such as Skype, Logitech, F-Secure,
Icebreaker, and easyJet, and the increasing emergence of these types of firms (Knight
& Cavusgil, 2004), it will be beneficial to better understand the aspects associated
with their strong international performance. In order to improve the robustness of our
knowledge regarding performance determinants and measures of born globals, a
comparative approach with more traditional non-born global firms is adopted. The
thesis draws on several strands of literature, including exporting, international
entrepreneurship, strategic management, and networks. This integrated approach is
intended to incorporate different viewpoints and schools of thought, leading to a
thorough analysis of the determinants and measurement of international performance
for born global firms.
A comprehensive understanding of the international performance mechanisms of

these firms is expected to be of interest to academics, managers, and policy-makers.
Academics should find relevance in advancing our theoretical understanding of the
international performance measurement and determinants of born globals. Managers
3
may also benefit by being able to adapt their internationalisation efforts, based on
findings from similar firms. Finally, policy-makers may have the opportunity to
adjust their policies and public support systems, in view of a better comprehension of
internal and external factors that are related to born global performance.
1.2 Research Objectives and Research Questions

The internationalisation of firms has received considerable attention in the literature
over the last decades. Some key research strands include, for example, the
internationalisation process (Johanson & Vahlne, 1977; Leonidou & Katsikeas,
1996), internationalisation stimuli (Bell, Crick, & Young, 2004; Katsikeas, 1996),
determinants of export performance (Thirkell & Dau, 1998), and internationalisation
barriers (Crick, 2007; Shaw & Darroch, 2004).
Traditionally, research focus has been placed on studying the internationalisation of

large multinational enterprises (MNEs) (Oviatt & McDougall, 1994; Coviello &
McAuley, 1999). Over the last two decades, there has been an extension toward
examining the internationalisation behaviour of small and medium-sized firms
(Knight, 2001; Jones, 1999). As a result, a new stream of international
entrepreneurship research (IE) has emerged, combining the international business
and the entrepreneurship literatures (McDougall & Oviatt, 2000). Among small and
medium-sized firms, the study of early and rapidly internationalising born globals
has become increasingly popular among academics and policy-makers. This research
area has its origins in the 1990s and can be partly attributed to the emergence and
rapid increase of born globals based in countries including Australia, New Zealand,
Spain, Germany, UK, USA and Norway (Aspelund, Madsen, & Moen, 2007; Knight,
Madsen, & Servais, 2004; Crick & Jones, 2000; Chetty & Campbell-Hunt, 2004;
Liesch, Steen, Middleton, & Weerawardena, 2007). The existing literature about
born globals is generally aimed at describing, understanding and interpreting the
reasons underlying the firms formation (Rialp, Rialp, & Knight, 2005a). Some
studies are also focussing on the performance of these firms and the relationship
between performance and other variables, such as entrepreneurial orientation
(Freeman, Edwards, & Schroder, 2006; Knight & Cavusgil, 2004). In addition, some
4
scholars have examined the role of networks for born global firms (Sharma &
Blomstermo, 2003; Loane & Bell, 2006).
However, research attention has not yet produced a comprehensive framework about
the determinants of born global performance. The existing literature tends to examine
relatively specific aspects of the international performance of born globals, such as
marketing strategy (Knight et al. 2004), rather than developing a broader analysis of
both internal and external influences in the context of these firms. As Knight and
Cavusgil (2004) point out, there has been almost no empirical research that
examines the factors that drive the superior international performance of these young,
highly entrepreneurial firms (p. 125). While some recent work (e.g., Kuivalainen,
Sundqvist, & Servais, 2007; Jantunen, Nummela, Puumalainen, & Saarenketo, 2008;
Crick, 2009) has begun to address this topic, considerably more work remains to be
done, in order to develop a full understanding of born global performance. In this
respect, Schwens and Kabst (2008) emphasise the lack of comparative studies and
concur that studies addressing the performance of early internationalizers,
esp.[ecially] contrasting companies that enter international markets later in their life
cycle are largely missing (p. 12). The need for a comparative approach between
born global and non-born global firms has also been raised by several other scholars
(e.g., Fan & Phan, 2007; Zhang, Tansuhaj, & McCullough, 2009).
Similarly, the literature on the measurement of international performance for born

global firms is rather scattered and tends to remain inconsistent (Crick, 2009). There
appears to be a void in the literature as to which international performance measures
born global firms are using for their own assessment, and how much importance they
attach to the respective performance indicators.
Therefore, the main research objectives of the thesis are to examine the measurement
and determinants of international performance among born global firms. To this end,
the study develops a model that covers internal, as well as external, factors, by
adopting an integrated approach and incorporating various literature strands and
theoretical concepts. In addition, the model involves a consideration of various
5
industry sectors and born global entry modes (e.g., licensing). The study adopts a
comparative perspective with non-born global firms to increase the rigour and
interpretability of the findings. The primary theoretical bases underpinning the study
are the resource-based view of the firm (RBV) (e.g., Wernerfelt, 1984; Barney, 1991)
and the network perspective on internationalisation (e.g., Johanson & Mattson, 1988).
This thesis is guided by the following research questions:
1. What are the determinants of international performance for born global firms?
2. What are important measures of international performance in the context of
born global firms?
The study also examines various foreign market entry modes that are adopted by
born global firms, such as strategic alliances and joint ventures, to provide
complementary insights into the born global performance literature that has, to date,
focussed on exporting firms (Knight et al., 2004; Kuivalainen et al., 2007). The goal
is to develop a more integrated understanding of international performance in the
context of born global firms.
1.3 Research Contribution

The international performance of firms is generally assumed to be associated with a
large number of factors, which include firm and managerial characteristics, firm
strategy, and macroeconomic, institutional, and market structure aspects of the
environment (Capon, Farley, & Hoenig, 1990; Porter, 1980; Hult et al., 2008). In the
context of born global performance, there is a lack of empirical research on the
drivers of superior international performance for born global firms (Knight &
Cavusgil, 2004; Cavusgil & Knight, 2009). The existing born global literature has
examined specific aspects, such as strategic orientation of the firm, and business
strategy (in particular, marketing) (Jantunen et al., 2008). Few born global studies
have developed conceptual performance frameworks, in which multiple factors, such
as entrepreneurial orientation, firm strategy and international performance, are linked
(e.g., Knight & Cavusgil, 2004; Knight & Kim, 2009). As a result, there is a lack of
studies that adopt a holistic approach by examining internal and external factors, e.g.,
firm and foreign market characteristics that may be related to the international
6
performance of born globals. In particular, the external environment has not been
investigated extensively in the context of performance (Aspelund et al., 2007). The
key contribution of this thesis lies in the development and testing of an integrated
model that considers the variables associated with international performance of born
globals. To this end, the study incorporates new constructs that have received scant
attention in the literature, such as corporate governance structures, international trade
shows, and environmental factors, e.g., foreign market characteristics, in order to
analyse the determinants of born global performance.
Another important contribution is the comparison between born global and more
traditional non-born global firms in terms of their international performance
determinants and measurements. While there has been some research on the different
characteristics of born globals and non-born global firms (e.g., Moen, 2002; Madsen,
Rasmussen, & Servais, 2000), there is a lack of research that examines and compares
the drivers and measurements of international performance of these two types of
firms (Schwens & Kabst, 2008; Fan & Phan, 2007; Crick, 2009). A comparative
approach enables researchers to assess whether certain performance determinants are
unique to born globals or whether they may also apply to non-born global firms.
In addition, the study contributes to the literature in terms of the measurement of

born global performance. The existing literature has often based its measures on
export performance indicators (e.g., Kundu & Katz, 2003; Knight & Cavusgil, 2005;
Kuivalainen et al., 2007). While exporting presents a key foreign market entry mode
for born globals (Knight & Cavusgil, 2004), a sole focus on export performance
measures overlooks the role of other important entry modes (e.g., licensing) that born
globals may adopt in their internationalisation endeavours. There seems to be no
agreement on how to measure the international performance of born global firms
(Crick, 2009). The study considers the multidimensionality of performance and
investigates the determinants of born global performance based on a collection of
measures, in order to provide a more differentiated and thorough analysis.
Multidimensional measures have been used in the export performance literature (e.g.,
Morgan, Kaleka, & Katsikeas, 2004), but relatively seldom in the context of born
7
globals. The thesis examines new measures of born global performance that take into
account different types of international performance, including financial, operational,
organisational effectiveness, and perceived success (Venkatraman & Ramanujam,
1986; Hult et al., 2008; Styles, 1998), based on the three dimensions of efficiency,
effectiveness and adaptability (Walker & Ruekert, 1987). Many born global studies
have utilised a single, composite performance measure, without analysing the
subtleties and potential differences associated with various aspects of performance
(e.g., Jantunen et al., 2008; Knight & Cavusgil, 2004; Knight & Cavusgil, 2005).
This thesis examines these different aspects of performance. Thus, the study intends
to shed light on the multidimensionality of performance and how different aspects
are related to both internal and external factors affecting born global firms.
The study also intends to contribute to advancing the entrepreneurship (E)

component of international entrepreneurship (IE) given that the majority of born
global studies tended to have focused on the I part of IE (Keupp & Gassmann,
2009). As mentioned earlier, international entrepreneurship is the combination of
international business and entrepreneurship (McDougall & Oviatt, 2000) which
warrants thorough examination of both literature streams.
Finally, the study aims to contribute to the academic literature through a mixed
methods approach. The majority of born global studies have adopted either a purely
quantitative (e.g., Kuivalainen et al., 2007) or qualitative research design (e.g.,
Chetty & Campbell-Hunt, 2004; Liesch et al., 2007). In an extensive review of the
born global literature, Rialp et al. (2005a) noted that the use of a single method
approach of data collection and analysis may not fully capture the key issues under
investigation. As a result, they called for a mixed methods approach and concluded
that future researchers would largely benefit from the potential synergies resulting
from a more insightful combination of both quantitative and qualitative research
methods and techniques (p. 163). In light of the benefits of providing a more
rigorous examination of international performance of born globals and following
Rialp et al. (2005a), the study uses a sequential mixed methods design with
8
exploratory interviews and a web-based survey instrument (Tashakkori & Teddlie,

1998).
To conclude, the key contributions of the thesis are as follows:

Development and testing of integrated performance model for born global
firms
Identification of important international performance measures in the context
of born global firms
Advancement of entrepreneurship part of international entrepreneurship (IE)
Incorporation of additional entry modes of born globals besides exporting
(e.g., joint venture, strategic alliance)
Integration of multiple industries of born globals (e.g., manufacturing, ICT)
Adoption of mixed methods research design
Comparative perspective of born global and non-born global firms in terms of
determinants and measurement of international performance
1.4 Research Methodology

The study adopts a mixed methods approach with exploratory interviews and a
subsequent web-based survey instrument. As the first step, semi-structured, in-depth
face-to-face and phone/Skype interviews are conducted with CEOs/senior managers
of born global companies in New Zealand and Australia. The purpose of the
interviews is to: (1) inform the development of the survey instrument (for example,
by refining measurement items), (2) seek initial confirmation and validation of the
conceptual model, and (3) provide rich insights into the antecedents and measures of
international performance for born global firms. The web-based survey is developed
to collect primary data that are used to test the model. The survey is distributed to
New Zealand and Australian firms across a range of various industry sectors (e.g.,
manufacturing, service). Statistical analyses, including regression modelling, T-tests,
and ANOVA are conducted to test the research hypotheses and answer the research
questions.
9
The results from the qualitative interviews and quantitative surveys are integrated
and jointly discussed to provide a comprehensive and rigorous analysis of the
international performance determinants and measures for born global firms.
1.5 Outline of the Thesis

The thesis is organised into eight chapters. A brief description of each chapter is
provided below.
Chapter 1: Introduction
The first chapter provides the background to the study and outlines the research
questions and objectives. In addition, the contribution of the thesis is highlighted.
Chapter 2: Literature Review

The chapter reviews the literature that provides the foundation for this thesis. The
focus is on a discussion of the performance literature in terms of determinants and
measurement of performance. In doing so, performance is addressed in the context of
general firms, exporting and born global firms.
Chapter 3: Conceptual Model and Hypothesis Development

This chapter discusses the theoretical underpinnings of the study. Based on the
resource-based view of the firm (RBV) and the network perspective on
internationalisation, a conceptual model is developed and relationships between the
explanatory constructs and international performance are hypothesised.
Chapter 4: Research Methodology

The chapter discusses the research paradigm and the research design of the study.
The rationale for adopting a mixed methods approach is outlined and the qualitative
and quantitative elements of the study are described. In addition, the chapter presents
the statistical techniques to test the hypotheses and answer the research questions of
the thesis.
10
Chapter 5: Qualitative Analysis

As the first step in the mixed methods design, the chapter outlines the findings from
the exploratory interviews which provide rich insights into the international
performance drivers and mechanisms for born global firms.
Chapter 6: Quantitative Analysis

This chapter describes the findings from the web-based survey instrument. It presents
the results of the hypotheses and findings to answer the research questions.
Chapter 7: Discussion
In this chapter, the findings from the qualitative interviews and quantitative surveys
are integrated and jointly discussed. Implications from the findings are raised.
Chapter 8: Conclusion
The final chapter details the key contributions of the study in terms of literature,
managerial and policy implications. In addition, the limitations of the study are
acknowledged and avenues for future research are proposed.
Figure 1.1 provides a graphical presentation of the thesis outline.
Figure 1.1: Outline of the Study
Chapter 1: Chapter 2: Chapter 3: Chapter 4:

Introduction Literature Conceptual Model Research
Review and Hypothesis Methodology
Development
Chapter 8: Chapter 7: Chapter 6: Chapter 5:

Conclusion Discussion Quantitative Qualitative
Analysis Analysis
11
CHAPTER 2
LITERATURE REVIEW
This chapter reviews the literature that is pertinent to the study. It includes an
analysis of the definitions and features of born global firms, and describes the drivers
for the emergence of these firms. In addition, the internationalisation models of the
firm are presented, and international market entry modes of born globals are outlined.
The focus of the review relates to the performance literature, which includes the
determinants and measurements of firm performance. The analysis differentiates
between firm, export, and born global performance.
12
Chapter 2 Literature Review
2.1 Definition and Features of Born Globals

There are many different terms used to describe born global firms, ranging from
international new ventures (Oviatt & McDougall, 1994) to instant exporters
(McAuley, 1999) and born globals (McKinsey & Co., 1993). Table 2.1 provides an
overview about the various definitions and features of these firms.
Born globals are a relatively new phenomenon and have received recent attention in
the literature, although they might have been in existence for a longer time, and there
are a few earlier references to quickly internationalising firms (Ganitsky, 1989). One
of the first studies that looked at these firms was undertaken by the management
consulting company McKinsey & Co. (1993). In cooperation with the Australian
Manufacturing Council, they examined the internationalisation behaviour of
emerging, high value-added Australian exporters in the manufacturing sector, in
order to understand the characteristics of and reasons for the growth of these
companies, and find implications for government policy. Based on a survey sample
of 310 exporters, they identified two distinct groups. The first group resembles the
traditional notion of an exporting firm with an established domestic business, and a
start into exporting only after establishment in the home market. The authors called
these firms domestic based firms (p. 9), which amounted to around 75% of the
sample. The average age of these firms at their first exporting venture was 27 years,
and they had an average of 20% of export sales of their total sales at the time of the
study in 1992. On the other hand, the remaining 25% of the total sample started
exporting within two years after their inception and achieved an average of 76% of
their total sales through exports at the time of the study. McKinsey & Co. (1993)
termed these firms born globals and stated that
these firms view the world as their marketplace from the outset; they do not
see foreign markets as useful adjuncts to the domestic market - quite the
opposite, they see the domestic market as supporting their exporting business.
(p. 9)
13
Table 2.1: Definitions and Features of Born Globals
Author Time period International Managerial Management Niche Low Limited Usage of Flexible Other features/
until sales ratio and global vision commitment strategy commitment applicability networks organisational definitions
internatio- age of the firm entry mode of stages attributes
nalisation model and
psychic
distance
McKinsey & Within two 76% export Not specified Not specified Born globals not
Co. (1993) years after ratio restricted to specific
inception industry sectors
Oviatt & At inception Not specified Not specified Not specified

McDougall
(1994)
Knight & Within three At least 25%

Cavusgil years after export ratio
(1996) inception Not older than
20 years
Madsen & Not specified Not specified Not specified Partly Not specified
Servais supported
(1997)
McAuley Within one Not specified Not supported Not specified

(1999) year after
inception
Zahra et al. Within six At least 5% of Not specified Not specified Not specified Not specified Not specified Not specified
(2000) years after sales from
inception international
markets
Moen (2002) Within three At least 25% Not specified
years after export ratio.
inception Establishment
date post 1990
14
Table 2.1: Definitions and Features of Born Globals Contd
until sales ratio and global vision commitment strategy commitment applicability networks organisational definitions
internatio- age of the firm entry mode of stages attributes
psychic
distance
Knight & Within three At least 25% Not specified
Cavusgil years after export ratio.
(2004) inception Establishment
date after 1980
Luostarinen Not specified Over 50% of Partly

& sales outside supported
Gabrielsson home continent.
(2006) Establishment
date after 1985
Mort & Within three At least 25% Not specified Not specified
Weerawar- years after export ratio
dena (2006) inception
Freeman et al. Within two Not specified Not specified Multiple entry
(2006) years after modes in different
inception combinations for
different markets
Fan & Phan At inception At least 20% of Not specified Not specified Not specified Not specified Not supported
(2007) production
capacity to
international
markets
Servais et al. Within three Over 25% of Not specified Not specified Not specified Not specified Not specified
(2007) years after sales or
inception sourcing outside
home continent
15
Table 2.1: Definitions and Features of Born Globals Contd

until sales ratio and global vision commitment strategy commitment applicability networks organisatio- definitions
internatio- age of the firm entry mode of stages nal attributes
psychic
distance
Gassmann Within 10 At least one Not specified Not specified Not specified Not specified -Specialised position
& Keupp years after foreign country in international value
(2007) inception chain
-Homogeneous
product/service
-Innovative product
-Intellectual property
protection
-Embeddedness in
global communities
and networks
-Access to usage of
tangible assets
Gabrielsson Flexible time Flexible export - Products with global
et al. (2008) period ratio market potential
- Only start-ups, no
spin-offs of larger
firms
- Capability (i.e.
precocity and speed)
for accelerated
internationalisation
Crick Within three At least 10% of Not specified (plus also - Distinction between
(2009) years after turnover in each preference for born global and
inception of the three triad FDI) international new
markets of North venture
America,Western
Europe and
South-East Asia
(including Japan)
Source: Compiled by author
16
One of the leading investigators of the McKinsey study argued that born globals may
be increasingly relevant contributors to a countrys export growth (Rennie, 1993).
Analysing the findings from the McKinsey study, Rennie (1993) concluded that
niche markets present an important opportunity for small firms to compete
internationally against larger firms. Furthermore, the author stressed the fact that
born globals are not restricted to certain industries, but were found in many different
sectors, such as food, electronic equipment, and wood.
Oviatt and McDougall (1994) built on the McKinsey study and were the first to
establish a conceptual model for these rapidly internationalising firms. They defined
an international new venture (INV) as a
business organization that, from inception, seeks to derive significant
competitive advantage from the use of resources and the sale of outputs in
multiple countries. The distinguishing feature of these start-ups is that their
origins are international, as demonstrated by observable and significant
commitments of resources (e.g., material, people, financing, time) in more
than one nation. (p. 49)
Oviatt and McDougall (1994) argued that traditional international business theories,
such as internalisation theory (e.g., Hennart, 1982; Buckley & Casson, 1976),
product life-cycle theory (Vernon, 1966), and the stages model of internationalisation
(Johanson & Vahlne, 1977) fail to explain the emergence of INVs. Instead, Oviatt
and McDougall (1994) integrated international business, entrepreneurship, as well as
strategic management theory, in order to build a new model of international new
ventures. In doing so, they described four elements that are necessary for their
framework of INVs: a) organisational formation of INVs through internalisation of
some transactions; b) reliance on hybrid governance structures, such as strategic
alliances and networks, in order to access resources; c) establishment of foreign
location advantages; and d) control over unique resources. The first three elements
(a-c) are necessary conditions for the existence of INVs, while the last one defines
the sustainability of the INV. As for internalisation of some transactions, Oviatt and
McDougall (1994) referred to market imperfections and stated that internalisation is
the defining element of all organisations. Regarding the second element, hybrid
governance structures, the authors mentioned that new ventures are apt to lack the
17
resources necessary to control assets through ownership and, thus, are reliant on
alternative means of controlling company assets. As a result, the use of
internalisation is limited for new ventures, and alternative governance structures,
such as networks, are employed. In terms of foreign location advantages, the authors
pointed to Dunnings (1988) OLI-paradigm, where one of the conditions is that firms
are likely to engage in foreign production whenever it is in their best interests to
combine spatially transferable intermediate products produced in the home country,
with at least some immobile factor endowments or other intermediate products in
another country (Dunning, 1988, p. 4). The mobility of private knowledge is
mentioned as an example of a foreign location advantage that is relevant for INVs.
Once knowledge is produced, it is easily transferable and can be combined with less
mobile resources in different countries (e.g., factories, where knowledge (e.g.,
software) is needed). The last element of Oviatt and McDougalls (1994) framework
of international new ventures relates to unique resources. Based on the strategic
management literature, the authors referred to Barneys (1991) argument pertaining
to unique resources as a source of sustainable competitive advantage. In particular,
new ventures as all firms are generally required to limit and prevent the use of their
own proprietary knowledge by other competitors. According to Oviatt and
McDougall (1994), new ventures can achieve this through appropriate means, which
include patents/copyrights, a unique organisational culture and management style,
licensing, and network governance structures. The authors also designated four
categories of international new ventures, according to the numbers of value chain
activities coordinated across countries and countries involved. The first category is
the export/import start-up, which has few value chain activities internationally, and
operates in a few countries. Secondly, there is the multinational trader, which has
few value chain activities internationally, but is active in many countries. Thirdly, the
geographically focussed start-up conducts many value chain activities
internationally, in only few countries. The last category refers to the global start-up,
which has many value chain activities globally, in many different countries.
To conclude, Oviatt and McDougall (1994) argued that INVs differ importantly from
traditional MNEs, in terms of greater lack of resources and speed of
18
internationalisation. In their definition of INVs, Oviatt and McDougall (1994)

stressed that the age of the firm at time of internationalisation, rather than its size, is
relevant for the conceptualisation of INVs. This is important to note, as INVs may
include both small and larger firms.
With regard to the definition of born globals, there are differences among studies
with regard to both the time until the firm starts to internationalise after
establishment and the international sales ratio. There seems to be no real consensus
in the literature. Knight (1997) offered a definition of a born global as a firm that is
less than 20 years old, internationalises within three years after founding, and exports
at least 25% of total sales. This operationalisation has been used in several studies,
including Moen (2002), Moen and Servais (2002), Knight and Cavusgil (2004), and
Mort and Weerawardena (2006).
However, there are also other operationalisations of born globals, based on different
cut-offs for both the export ratio and the time until the born global goes international.
For example, Gabrielsson, Kirpalani, Dimitratos, Solberg, and Zucchella (2008)
argued that the export ratio of a born global firm is influenced by the size of its home
country and its neighbouring markets, as well as factors such as the type of industry,
which makes a definition based on a deterministic export ratio less suitable.
Therefore, they adopted a more open approach and defined a born global as a firm
that has products with global market potential, displays a capability for accelerated
internationalisation in terms of both precocity and speed, and has a global vision at
inception. In addition, the time period until the born global starts its activities in
international markets was handled flexibly by Gabrielsson et al. (2008); the authors
argued that the time period prior to internationalisation depends on the situation of
the start-up firm, and could be longer than three years, due to the complexity of
exporting. As a result, the time until the born global starts to internationalise is not a
major definitional criterion for Gabrielsson et al. (2008). Fan and Phan (2007)
defined born globals as firms that allocate at least 20% of their production capacity
to international markets immediately at their inception. Gassmann and Keupp (2007)
used 10 years after firm establishment as a time span until first internationalisation
19
with no specified export ratio and international activities in at least one foreign
country.
Some scholars incorporated the location of the overseas markets in their

operationalisation of born global firms. For example, Luostarinen and Gabrielsson
(2006) argued that European firms fulfil the 25% export ratio easily, due to
proximity and the ease of business of doing business in Europe, making many of
them born globals, according to the definition of Knight (1997). On this basis,
Luostarinen and Gabrielsson (2006) operationalised born globals as firms with more
than 50% of their sales outside of their home continent and that had entered global
markets at their inception. Servais, Madsen, and Rasmussen (2007) used within three
years of establishment as the cut-off for international sales, with more than 25% of
foreign sales outside the home continent, in order to identify born globals. Crick
(2009) defined born global firms as companies that obtain, within three years after
inception, at least 10% of turnover in each of the triad markets of North America,
Western Europe, and South East Asia (including Japan). Lopez, Kundu, and
Ciravegna (2009) differentiated between born regional and born global
companies. These definitions considered the location of the born globals
international market (i.e., in triad markets, or outside the firms home continent),
which is a feature that is not included in Knights (1997) widely accepted definition.
The operationalisations of Luostarinen and Gabrielsson (2006) and Servais et al.
(2007) may be a European perspective, whereas Knights (1997) definition may be
grounded more in the context of the U.S. and Australia.
Another operationalisation comes from Shrader, Oviatt, and McDougall (2000), who
argued that born globals should be defined as companies that start to internationalise
within six years of their establishment, due to the first six years being crucial for the
survival of an international new venture (Shrader et al., 2000). This measure of six
years has also been used by Zahra, Ireland, and Hitt (2000), as well as McDougall,
Oviatt, and Shrader (2003).
20
In a review of theoretical issues associated with international new ventures, Zahra

(2005) discussed the problems of defining a born global by its age, pointing to the
issue of spin-offs of larger companies. These spin-offs may benefit from the
resources and networks of their parent companies and may also inherit the parent
companys risk propensity towards internationalisation, i.e., they may be more likely
to internationalise based on the experiences of their parent companies. Hewerdine
and Welch (2008) further investigated this issue and argued that the time period
between a born globals inception and first international venture should be treated
with caution. Considering Cochlear, an Australian producer of hearing implants for
the deaf, which has been cited as a prime example of a born global (Rennie, 1993;
Madsen & Servais, 1997), they found that Cochlears pre-foundation history had an
important influence on the internationalisation of the firm. Using archival analysis
and examination of internal firm documents, Hewerdine and Welch (2008) learned
that Cochlear was founded as a spin-off of a larger parent company, Nucleus, in 1984.
As a result, Cochlear benefited greatly from its parent firms resources and networks
with government, industry, and tertiary institutions, which had important impacts on
Cochlears early development. Also, Cochlears incorporation date (i.e., its spin-off
from Nucleus in 1984) was long after its actual start date in the 1960s, when the main
innovations and developments on which the companys business is based took place
for Cochlear. Hewerdine and Welch (2008) concluded that previous studies related to
Cochlear have overlooked the crucial influence of the pre-establishment history of
the firm. Therefore, they suggested that the operational definition of a born global
may need re-adjustment, and that further consideration may be undertaken with
regard to the unit of analysis, i.e., whether to look at the company entity or the key
technological innovation as a determining factor for defining a born global.
Gabrielsson et al. (2008) stated that born globals do not include spin-offs of larger
firms, arguing that only independent, start-up firms constitute born globals. This
definition would not consider Cochlear as a born global. It seems that some studies in
the born global literature may have not clearly defined their research sample in terms
of the firms pre-establishment history and, thus, may have included both start-ups
and spin-offs of larger firms.
21
With regard to the industry sector, early studies of born globals focussed on high-
technology and knowledge-intensive industries (e.g., Bell, 1995; Zahra et al., 2000;
Autio, Sapienza, & Almeida, 2000; McDougall & Oviatt, 1996; Crick & Jones,
2000). However, other studies have found evidence that born globals are also active
in non-knowledge-intensive, low-tech industries, such as the arts and crafts sector
(McAuley, 1999), clothing (Gabrielsson et al., 2008), and wine (Wickramasekera &
Bamberry, 2003). There have been some suggestions that the reason for these
findings could lie in the characteristics of the born globals home market. For
example, Madsen and Servais (1997) proposed that firms from smaller countries
have a higher propensity to become born globals than firms from larger countries.
It is important to note that there has been debate regarding the terms born global
and international new venture. As indicated in the Introduction chapter, these terms
tend to have been used interchangeably in the literature (Cavusgil & Knight, 2009;
Moen, 2002; Crick, 2009). Crick (2009) raised the issue that born globals and
international new ventures may be distinct types of firms, and found that they
displayed different behaviour in their internationalisation decisions. It seems that
articles that used the term born globals (e.g., Knight & Cavusgil, 1996, 2004;
Moen, 2002; Mort & Weerawardena, 2006) may be closest to Oviatt and
McDougalls (1994) global start-ups, which are a subgroup of INVs. However, it
should be emphasised that these articles did not explicitly operationalise born globals
according to Oviatt and McDougalls (1994) global start-ups, thus making it
difficult to come to a definite conclusion. Rather, the two key criteria to
operationalise born globals in these studies (Knight & Cavusgil, 2004; Moen, 2002;
Mort & Weerawardena, 2006) are the time/speed (i.e., start to internationalise within
three years after firm establishment) and extent/scale of internationalisation (i.e.,
achieving at least 25% export sales ratio within three years after firm establishment)
without considering geographical location/scope of foreign markets. If a distinction
is made between born globals and INVs, it seems that regardless of geographical
location of overseas markets INVs and born globals may have similarities in that
they share the two key features of internationalising early and rapidly. This study
uses the approach based on Knight & Cavusgil (2004) considering the two main
22
features of time/speed and extent/scale of internationalisation. For a detailed

operationalisation of the born global firm in this thesis, please refer to the
methodology chapter 4.3.2 on page 119.
Whereas there are divergent views on the age of the firm prior to internationalisation,
the degree of internationalisation and the industry sector, there is more consensus in
the literature with regard to other features of born globals as described below. Before
we start with the discussion, it should be noted that some of the features of born
globals may also be found in other internationalising small firms. Reference is made
to this as appropriate in the following sections.
2.1.1 Managerial Global Vision and Management Commitment

The first feature of born globals relates to managerial perceptions, in terms of the
worlds being viewed as the marketplace for such firms. As a result, managers of
born globals typically place high importance on exploring and developing
international markets for their products or services. This has been highlighted by
McKinsey & Co. (1993) and is widely noted in other studies, e.g., Knight and
Cavusgil (1996), and Luostarinen and Gabrielsson (2006). The notion of a global
vision is related to the concept of a global mindset, which plays an important role in
the international entrepreneurship literature (e.g., Nummela, Saarenketo, &
Puumalainen, 2004).
The second feature refers to managements commitment to internationalisation. The

top management in born globals tends to display an international entrepreneurial
orientation, i.e., a combination of autonomy, innovativeness, risk taking,
proactiveness, and competitive aggressiveness (Lumpkin & Dess, 1996). Oviatt and
McDougall (1994) stressed that born globals are defined by their actions, and not
their resources, which suggests that the entrepreneurial characteristics in the born
global firm are highly relevant (Zahra, 2005).
Managerial global vision and international orientation provide a contrast between

born globals and other small firms. Moen (2002) found significantly higher levels of
23
international vision and proactiveness in born globals, compared to small firms that
assume more slow-paced approaches to internationalisation. Similarly, based on a
study of 224 US companies, Harveston, Kedia, and Davis (2000) reported that
managers of born globals had more global mindsets than those of gradually
globalising firms.
2.1.2 Niche Strategy

The literature offers some consensus on the point that born globals tend to undertake
niche strategies based on specialised products/services that are offered to narrowly
defined customer groups (Aspelund et al., 2007; Knight & Cavusgil, 1996; Rennie,
1993). Chetty and Campbell-Hunt (2004) found that born globals tend to market a
specialised product to niche markets, whereas traditionally internationalising firms
generally offer a diversified product range to a broad market segment. Also, it has
been suggested that born globals typically follow a differentiation and/or focus
strategy, rather than a low-cost strategy (McDougall et al., 2003; Knight & Cavusgil,
2005). This may be attributed to the difficulties that born globals experience, with
respect to achieving economies of scale in production and/or marketing, which may
result in the inability to compete on the basis of cost or volume against larger firms
(Oviatt & McDougall, 1994; Knight & Cavusgil, 1996). It has been noted that quality
and value created through innovative technology and product design are the key
competitive advantages for firms (Sisodia, 1992), including born globals (Rennie,
1993). Therefore, born global firms tend to compete more on the basis of a unique,
quality product/service, rather than cost leadership (Knight & Cavusgil, 2004).
Small firms that are not born globals may also target niche markets (Dalgic & Leeuw,
1994). Etemad, Wright, and Dana (2001) noted that small firms are able to compete
internationally by following a niche strategy and integrating themselves into the
value chains of large firms, citing the system of chaebols (i.e., large conglomerate
firms) in South Korea as an example. More than 1 million small firms supply the
large chaebols, resulting in benefits for both parties; similar situations exist in other
countries, including the keiretsu in Japan. Etemad et al. (2001) argued that, due to the
niche nature of the small firms products, the Korean system has shifted from the
24
strong dependence of SMEs on large firms towards more interdependence between

small and large firms (Etemad et al., 2001). In a study of Norwegian industrial firms,
Moen (2000) found evidence of SMEs tendency to use niche strategies for exporting,
and also reported a link between the adoption of niche strategies and high attention to
personal selling.
2.1.3 Low Commitment Entry Modes

The literature suggests that the entry strategies of born globals typically involve low
commitment (e.g., strategic alliances, rather than stand-alone subsidiaries), with the
goal of identifying and establishing agreements with partners (Aspelund et al., 2007,
Rialp et al., 2005a). Zahra et al. (2000) found that, while some born global firms use
foreign direct investment (FDI) and acquisitions as entry modes, most new venture
firms used low-commitment exporting or licensing. Limited financial resources may
mean that born globals are not able to afford to establish subsidiaries in foreign
markets from the beginning of their internationalisation efforts. Knight and Cavusgil
(2004) concluded that exporting is the most common internationalisation strategy for
born globals.
SMEs, more generally, tend to start internationalising through low commitment entry
modes (Coviello & McAuley, 1999). Among the internationalisation approaches,
exporting is associated with relatively lower risk, less commitment of resources and
greater flexibility (Leonidou & Katsikeas, 1996).
2.1.4 Limited Applicability of Stages Internationalisation Model

Several studies have confirmed that the incremental internationalisation model, as
proposed by the Uppsala school (Johanson & Vahlne, 1977), does not necessarily
apply to any firms, including born globals (Oviatt & McDougall, 1994; Bell, 1995).
Born globals tend not to expand domestically prior to internationalisation, and they
generally do not follow the traditional, incremental stages pattern (Knight &
Cavusgil, 1996; Madsen & Servais, 1997). For example, Madsen and Servais (1997)
argued that the domestic market does not necessarily seem to be a learning place (p.
564) for born globals. In addition, the concept of psychic distance (Johanson &
Vahlne, 1977) does not tend to be as relevant to born globals, which often select
25
psychically distant countries as their international markets (Aspelund et al., 2007;

Knight & Cavusgil, 1996). Bell (1995) argued that, due to the increasing
homogeneity of markets and improvements in global communication and transport
infrastructure, psychic distance has become less pertinent. The rationale for born
globals appears to be to find a market with growth potential, where they can sell their
products/services, and where they can find business partners that complement their
own resources; the culture and location of the host country seem to be of secondary
importance (Moen & Servais, 2002; Bell, 1995). Also, due to the nature of the niche
products, born globals may often target markets on a worldwide basis, which
diminishes the issue of geographical distance from their home markets (Rialp et al.,
2005a; Crick & Spence, 2005). On the other hand, some scholars argued that the
stages model may still be relevant and applicable for born global firms (e.g.,
Wickramasekera & Bamberry, 2003; Fan & Phan, 2007). For example, Fan and Phan
(2007) argued that born globals are not necessarily a distinct breed of firm and found
that cultural distance played an important role in the inaugural international market
entry for born global firms.
While there are proponents of both views in terms of the stages model, it seems that
the majority of the born global literature tends to advocate the limited applicability of
the stages model to born global firms. The stages model was established in the 1970s,
during a time where the technological and international business environment was
markedly different from that in the 21st century. Technological innovations, such as
email and video-conferencing, and improvements in infrastructure that allow faster
and more economical travel, have enabled firms to internationalise at a much quicker
pace. Also, todays international business environment is increasingly characterised
by free trade agreements and the decline of trade barriers, which makes it a more
feasible alternative for firms to internationalise (Ohmae, 1990). The stages model of
Johanson and Vahlne (1977) was based on case studies of four Swedish firms about
four decades ago, so it may be hard to apply to firms that face a different competitive
and business environment in todays context and time.
26
2.1.5 Usage of Networks and Flexible Organisational Attributes

Another salient feature of born globals pertains to the firms usage of networks,
which may result in hybrid governance structures, (e.g., strategic alliances); this is
presumed to be related to firms own lack of resources to support more standard
internationalisation approaches (Oviatt & McDougall, 1994; McDougall et al., 1994).
Rialp et al. (2005a) concluded that born globals generally make strong use of
personal and business networks, in order to compete internationally. Other studies
(e.g., Freeman et al., 2006) have found that networks can be critical for the
performance of these firms.
In comparison, traditional internationalising SMEs tend to rely more on

conventional distribution channels, such as agents/distributors (Bell, McNaughton,
Young, & Crick, 2003). Similarly, Chetty and Campbell-Hunt (2004) found that born
globals differ from traditional internationalising firms in the extent and pace of
network development with business partners; i.e., born globals used and developed a
more extensive network that facilitated rapid expansion in international markets,
compared to traditional firms.
Successful born globals tend to be very flexible and able to quickly adapt to changes
in their external environment and circumstances (Rennie, 1993; Oviatt & McDougall,
1994). This may be attributed to the small size of the born global, which allows its
organisational structure to be more flexible and dynamic. Born globals typically are
not characterised by the administrative heritage of long-established businesses that
internationalise late in their existence (Knight et al., 2004; Collis, 1991). It may be
difficult to overcome this administrative heritage for these firms when expanding
abroad, as domestic routines may need to be unlearned and new international ways
learned that conflict with existing operations and the managements mindset. Thus,
Knight et al. (2004) stated that it can be advantageous to start internationalising at a
young age. As such, born globals may not face the burden of organisational inertia
that may characterise more established firms; Autio et al. (2000) termed this as
learning advantages of newness (p. 919).
27
To summarise, there are some unique features of born globals that differentiate them
from other firms, such as the managements global outlook and international
entrepreneurial orientation and the strong usage of networks. However, it can also be
concluded that the research on born globals is scattered and there is a great
heterogeneity in terms of the conceptualisation of born globals, such as the extent
and the rapidity of internationalisation. Aspelund et al. (2007) suggested finding a
common definition of born globals based on two characteristics: organisational
newness and rapidity/extent of internationalisation. Other authors, such as Madsen
and Servais (1997), have proposed using the conceptualisation of born globals as
originally developed by Oviatt and McDougall (1994). In general, it can be
concluded that there seems to be a need to unify the heterogeneous operational
definitions and indicators of born global firms (Rialp et al., 2005a).
2.2 Drivers for the Emergence of Born Globals

Born globals are a relatively recent phenomenon (Oviatt & McDougall, 1994). In the
following, some of the most important drivers for the appearance of this type of firm
are discussed.
The first factor relates to new market conditions, in particular, the increasing role of
niche markets in the world. Knight and Cavusgil (1996) argued that there is a
growing demand among consumers for specialised or customised products, which led
to an increase in firms producing specific parts and components. In addition, due to
the globalisation of markets and the increasing world competition from large MNEs,
smaller firms may have no other choice than to specialise in niche products. Etemad
et al. (2001) argued that smaller firms that pursue a niche strategy may yield benefits
by supplying their customised products and components to larger MNEs. Moreover,
certain industries have become characterised by global sourcing activities and
networks across the world with the consequence that innovative products can spread
very quickly to multiple international markets (Madsen & Servais, 1997).
Another factor that may have given rise to the emergence of born globals refers to
advances in production process technology. Due to improvements in microprocessor-
28
based technology and developments of new manufacturing technologies, it can be

now a viable alternative for small firms to manufacture complex and non-standard
components (Knight & Cavusgil, 1996).
In addition, there have been vast improvements in communications technology over

the recent decades. New technologies, such as the fax machine, electronic data
interchange (EDI) and, above all, email, have enabled firms to do business
internationally much more quickly and efficiently (Knight & Cavusgil, 1996). Also,
transportation of goods and people across borders has become more reliable and
economical (Madsen & Servais, 1997). These developments have led some scholars
to view the world as a global village (Ohmae, 1990).
Knight and Cavusgil (1996) indicated that the means of internationalisation, such as
knowledge, technology, and facilitating institutions, have become more accessible to
a wider variety of firms. For example, international financial markets enable smaller
firms to access funding more readily worldwide. The increasing availability of
international financing opportunities is also mentioned by Oviatt and McDougall
(1994). In addition, the globalisation of technology, through the transfer of know-
how, and joint research across national borders have become salient features in
international business.
Moreover, a trend toward global networks may have contributed to the emergence of
born globals. International business is increasingly becoming characterised by
networks and partnerships among various types of firms, such as distributors,
subcontractors, and trading companies (Knight & Cavusgil, 1996). As such, the
complexity of international business tends to be related to the role of global networks.
Finally, the increasingly elaborate capabilities of people, including the

owner/founder of born globals, may have played a critical role in understanding the
growth of born globals. Madsen and Servais (1997) mentioned the growing number
of people who gain international experience by working and studying abroad. As a
consequence, the availability of potential employees that are competent in
29
communicating and understanding foreign languages and cultures is rising. Related

to the international experience, human capital tends to be more internationally
mobile now (Oviatt & McDougall, 1994). Some characteristics of entrepreneurs in
international companies, such as a global mindset and international experience, seem
to be very relevant to a consideration of born global firms (Jantunen et al., 2008).
2.3 Born Global Studies

The topic of born globals has received considerable attention in the literature since
Oviatt and McDougalls (1994) conceptualisation of international new ventures.
Research summaries and conceptual frameworks of born global studies are reviewed
in the next sections.
2.3.1 Research Summaries of Born Global Studies

The literature on born globals has focussed on various research objectives. Early
studies in the 1990s have taken a relatively broad research approach and generally
attempted to explain the phenomenon of born globals. These studies aimed to
describe, understand, and interpret the reasons underlying the emergence of born
globals (Rialp et al., 2005a). Some of the studies that fall in this category are Oviatt
and McDougall (1994), Knight and Cavusgil (1996), Madsen and Servais (1997),
and Rennie (1993). Recent studies that examined the factors associated with the
formation process of born global firms include Dunford, Palmer, and Benveniste
(2010), Karra, Phillips, and Tracey (2008), Dib, da Rocha, and da Silva (2010), and
Weerawardena, Mort, Liesch, and Knight (2007).
Another important research stream considers the internationalisation patterns of born

global firms (Moen & Servais, 2002; Jones, 2001; Crick & Jones, 2000; McAuley,
1999; Chetty & Campbell-Hunt, 2004; Larimo, 2003; Zou & Ghauri, 2010). These
studies tended to look at the internationalisation process of born globals and
compared them to existing internationalisation theory, such as the stages model from
the Uppsala school (Johanson & Vahlne, 1977), FDI (Buckley & Casson, 1976), and
network approach (Johanson & Mattson, 1988).
30
The choice of entry mode of born globals has been the research objective of some
studies (Gabrielsson & Kirpalani, 2004; Burgel & Murray, 2000; Zahra et al., 2000).
In this regard, potential distribution channels and the factors that may determine the
entry mode of born globals have been investigated.
Oviatt and McDougall (1994) stressed the importance of hybrid governance

structures for born globals. Following on this, some studies examined the relevance
of networks for the development of born global firms in terms of performance
implications (Freeman et al., 2006), networking capabilities (Mort & Weerawardena,
2006), the building of new networks (Loane & Bell, 2006), and networks as vehicles
for the internationalisation process and the implementation of global strategies
(Chetty & Campbell-Hunt, 2003; Andersson & Wictor, 2003).
In addition, the international performance of born globals has been examined. These
studies looked at performance and its linkages with organisational culture (i.e.
international entrepreneurial and marketing orientation) and business strategies,
(Knight & Cavusgil, 2004), and the effect of a firms technological learning on
performance (Zahra et al., 2000). Other studies focussed on the entrepreneurial level
of the born global and examined the relationship between managements individual
characteristics and export performance (Kundu & Katz, 2003) and the role of
customer focus and marketing competence for superior performance (Knight et al.,
2004). Moreover, some authors looked at the link between the degree of
internationalisation of born globals (defined as born globalness) and international
performance (McDougall & Oviatt, 1996; Kuivalainen et al., 2007). Crick (2009)
examined the differences in measures and sources of international performance
between international new ventures and born global firms. The performance of born
global firms is discussed in more detail in Section 2.8.
Table 2.2 summarises some of the key themes in the born global literature.
31
Table 2.2: Key Themes of Born Global Literature
Key theme Born global studies
Emergence and formation process of Rennie (1993); Oviatt & McDougall (1994); Knight
born global firms & Cavusgil (1996); Madsen & Servais (1997);
Dunford et al. (2010); Weerawardena et al. (2007);
Karra et al. (2008)
Internationalisation patterns of born Chetty & Campbell-Hunt (2004); Jones (2001);

global firms Moen & Servais (2002); Larimo (2003); McAuley
(1999); Zou & Ghauri (2010); Crick & Jones (2001)
Entry mode choice of born global Gabrielsson & Kirpalani (2004); Burgel & Murray
firms (2000); Zahra et al. (2000)
Role of networks for born global Freeman et al. (2006); Mort & Weerawardena
firms (2006); Loane & Bell (2006); Andersson & Wictor
(2003); Chetty & Campbell-Hunt (2003); Coviello
(2006); Sharma & Blomstermo (2003)
International performance of born Knight & Cavusgil (2004); Kundu & Katz (2003);
global firms Kuivalainen et al. (2007); Jantunen et al. (2008);
Knight & Kim (2009); Crick (2009)
Source : Compiled by author
2.3.2 Conceptual Frameworks of Born Global Studies

Born global researchers have adopted a variety of theoretical bases for their studies.
One of the frameworks is the resource-based view of the firm (e.g., Wernerfelt,
1984). Some researchers, such as Knight et al. (2004), Zhang et al. (2009), and
Knight and Cavusgil (2004), adopted this view, arguing that intangible assets, in
particular, play a vital role for born globals, due to their limited tangible assets.
Furthermore, these researchers stressed the importance of the rareness, inimitability,
uniqueness, and non-substitutability of resources, referring to Barney (1991).
Aaby and Slater (1989) developed a framework for analysing the export performance
of firms, which has been used in born global studies. For example, Moen (2002)
based a study on this classic model, by incorporating firm characteristics, strategy,
environment and competencies, as potential determinants of export behaviour and
performance, in order to examine the differences between born globals and less
internationalised firms.
32
The stages model of internationalisation developed by the Uppsala school (Johanson

& Vahlne, 1977) has been used as a theoretical framework to examine the
phenomenon of born globals (Knight & Cavusgil, 1996; Fan & Phan, 2007; Madsen
& Servais, 1997). Whereas some studies rejected the stages model, finding no
support in the context of born globals (Knight & Cavusgil, 1996), other studies found
that the stages model may apply to born globals (Fan & Phan, 2007; Madsen &
Servais, 1997). For example, Madsen and Servais (1997) argued that entrepreneurs
often have gained extensive international business experience (i.e., experiential
market knowledge) prior to joining the born global firm. This experience may be
viewed as a preparation for internationalisation, and may explain the early
international market commitment decisions of born globals (Madsen & Servais,
1997).
The knowledge-based view of the firm has also been used to investigate born global
firms (Gassmann & Keupp, 2007). According to this perspective, knowledge-based
resources represent the firms competitive advantage and are the main determinant of
performance differences among organisations.
Moreover, the network perspective on internationalisation has served as a theoretical

framework in born global studies. According to this view, successful
internationalisation may depend on the firms position in a foreign network and its
relationships with stakeholders, such as customers, suppliers, and distributors
(Johanson & Mattson, 1988; Coviello & Munro, 1997). As such, these network
relationships can play an important role in the market entry of the firm (Johanson &
Mattson, 1988). Born global studies that have adopted a network perspective include
Chetty and Campbell-Hunt (2004), Loane and Bell (2006), Sharma and Blomstermo
(2003), and Mort and Weerawardena (2006).
Related to the RBV, some scholars have adopted a dynamic capabilities view (Teece,
Pisano, & Shuen, 1997). Dynamic capabilities represent the organisational and
strategic routines to integrate, reconfigure, gain and release resources (Eisenhardt &
Martin, 2000). Emphasising the role of learning and knowledge in the accelerated
33
internationalisation process of born global firms, Weerawardena et al. (2007) based

their study on the dynamic capabilities perspective.
In addition, organisational learning theory has been used in the literature. This
perspective views the firm as a learning organisation and relates to the firms
capacity to process and assimilate knowledge and use it to obtain competitive
advantage (Liesch & Knight, 1999; Fiol & Lyles, 1985). Studies that adopted
organisational learning theory include Knight and Cavusgil (2004) and
Weerawardena et al. (2007).
Some authors have combined several theoretical perspectives. For example, Madsen
and Servais (1997) used evolutionary economic theory, the stages model and the
international network approach in their study of born globals. Andersson and Wictor
(2003) integrated the network perspective with concepts from the entrepreneurship
literature.
Table 2.3 provides a summary of the key theoretical frameworks adopted in born
global research.
Table 2.3: Key Theoretical Frameworks of Born Global Studies
Theoretical framework Born global studies
Resource-based view of the firm Knight & Cavusgil (2004); Freeman & Cavusgil
(2007); Knight et al. (2004); Zhang et al. (2009)
Network perspective on Loane & Bell (2006); Chetty & Campbell-Hunt

internationalisation (2004); Freeman et al. (2006); Mort &
Weerawardena (2006); Sharma & Blomstermo
(2003)
Stages model of internationalisation Fan & Phan (2007); Madsen & Servais (1997)
Dynamic capabilities view of the firm Weerawardena et al. (2007); Knight & Cavusgil
(2004)
Knowledge-based view of the firm Gassmann & Keupp (2007); Sharma &
Blomstermo (2003)
Organisational learning theory Zahra et al. (2000); Autio et al. (2000); Knight &
Cavusgil (2004); Weerawardena et al. (2007)
34
2.4 Internationalisation Models

Coviello and McAuley (1999) identified three individual schools of
internationalisation research: the economic school of FDI theory, the behavioural
school of the stages models, and the relationship school of the network perspective.
In addition, the entrepreneurial perspective has emerged, to provide a distinct
perspective on the internationalisation process of firms (Andersson, 2000). These
four approaches will be discussed in the following.
2.4.1 Economic School of FDI Theory

The economic school of FDI theory has its origins in transaction cost economics
(Williamson, 1975) and theories of market imperfection (Hymer, 1976). It is based
on the assumption that firms choose a suitable organisational structure and location
for internationalisation, in order to minimise the transaction costs of their activities.
Transaction costs have been defined as the costs of running the economic system
(Arrow, 1969, p. 48), and relate to those that are connected to information searching,
negotiating, monitoring, and enforcing a contract or agreement between economic
agents. Under this perspective, firms are likely to internalise their business activities
(i.e., FDI is likely to occur) under two conditions. First, FDI is likely to occur when it
is more efficient for a firm to organise the business activities and interdependencies
between agents located in different countries internally than through the market.
Second, a firm is likely to internalise, if the benefits of coordinating these
interdependencies within the firm outweigh the costs (Hennart, 2001). Effectively,
the firm substitutes some external market mechanisms by creating an internal market
within the organisation (Hymer, 1976; Rugman, 1980). Thus, the benefits of
internalisation originate from the avoidance of imperfections in the external market
(Buckley & Casson, 1976). Dunning (1988) incorporated internalisation advantages
with ownership (e.g., possession of intangible assets), and locational advantages (e.g.,
spatial distribution of factor endowments in market), arguing that these three
conditions are necessary prerequisites for the emergence of FDI (OLI-paradigm).
The economic school assumes that the firms decision-maker is homo economicus,
a utility-maximising agent that has perfect information and always chooses the
rational solution (Williamson, 1985).
35
2.4.2 The Behavioural School: Stage Models of Internationalisation

In contrast to the economic school of FDI theory, the stage models of
internationalisation focus on behavioural aspects to explain firms cross-border
expansion. Thus, its influences can be found in behavioural theory (e.g., Cyert &
March, 1963). It assumes that decisions are based on bounded rationality, rather than
the rational choice of the economic school. The earliest and most prominent stages
model was developed by academics at Uppsala University in the 1970s (Johanson &
Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977). One of the main tenets of this
model is the gradual and incremental nature of internationalisation. The interplay
between state aspects (i.e., market knowledge and market commitment) and change
aspects (i.e., commitment decisions and performance of current business activities)
are the key pillars of the framework. According to the stages model, firms tend to
increase foreign involvement gradually, as they gain more experiential knowledge
about the foreign market. Therefore, the internationalisation process is shaped by
increased market knowledge, which leads to increased market commitment. The
selection of international markets is affected by the concept of psychic distance,
which is defined as
the sum of factors preventing the flow of information from and to the market.
Examples are differences in language, education, business practises, culture,
and industrial development. (Johanson & Vahlne, 1977, p. 24)
The stages theory holds that firms generally start to internationalise to psychically
close countries, in order to avoid risks and gain experiential knowledge. As the
firms gain more experiential knowledge, they tend to progress to psychically
distant countries. The internationalisation process is classified into four distinct
stages (Johanson & Vahlne, 1977):
1. no regular exporting
2. exporting via representatives/agents
3. establishment of a sales subsidiary, and
4. establishment of a production subsidiary.
The analogy of rings in the water has been used to describe this incremental
internationalisation process (Madsen & Servais, 1997, p. 561).
36
In addition, there are other related stage models. For example, Cavusgil (1982)
developed the so-called I-model (innovation model) with five export stages that
range from pre-involvement with selling only in the home market, to committed
involvement with allocating resources between domestic and foreign markets.
Cavusgil (1982) argued that the initial stage of exporting is characterised by reactive
and external export stimuli, whereas these change into more proactive and internal
stimuli in more advanced stages of exporting. Other related stages models were
developed by Bilkey and Tesar (1977) and Czinkota (1982). These models have in
common that they view internationalisation as an innovation-adoption process
(Thomas & Araujo, 1985). In accordance with the stages model of the Uppsala
school, the models focus on the incremental nature of the internationalisation
process.
2.4.3 The Relationship School: Network Perspective on Internationalisation

Unlike the economic FDI view and the stages model, the network perspective
focuses on the inter-organisational and inter-personal relationships among firms,
drawing on social exchange theory (Axelsson & Easton, 1992). Markets are seen as
systems of social and industrial relationships among, for example, customers,
suppliers, and competitors. Johanson and Mattson (1988) considered business
networks as the relationship a firm has with its customers, distributors, suppliers, and
competitors. The network view suggests that successful internationalisation is more
dependent on a firms networks in a foreign market, than on firm-specific advantages
as proposed by internalisation theory (Rugman, 1980). An important characteristic of
networks is the interdependence of the involved actors (Johanson & Mattson, 1988).
Through the use of networks, deficiencies in resources and knowledge can be
overcome. In particular, it has been argued that the use of networks can help
international new ventures to achieve complementary assets that are necessary for
internationalisation (Oviatt & McDougall, 1994). In comparison to FDI perspective,
where internationalisation is seen as rational strategic-decision making, network
theory contends that internationalisation decisions and activities are behavioural
patterns influenced by members of the firms network (Coviello & McAuley, 1999).
37
Reviewing the schools of internationalisation, Coviello and McAuley (1999) argued

that the application of a single theoretical framework may be reductionist rather
than expansionary in its development (p. 241) and, thus, may not fully capture the
complexity and dynamics of the internationalisation process of firms. As a result,
they called for a holistic approach to internationalisation, integrating the three
different perspectives.
2.4.4 Entrepreneurial Perspective on Internationalisation

In addition to the three major schools of thought regarding internationalisation,
another perspective has emerged, which focuses on the entrepreneur within the firm
and has its origins in Schumpeterian economics. According to Schumpeter (1934),
the entrepreneurship function includes the introduction of new products, and new
production methods, the opening of new markets, the conquest of new sources of
supply and raw materials, and the reorganisation of an industry. Schumpeter (1934)
focuses on the entrepreneurial function rather than the entrepreneur as a person. This
implies that entrepreneurship is the individual carrying out the entrepreneurial
function, regardless of the formal position within the company (e.g., Managing
Director). Personal goals of the entrepreneur rank above economic profit according
to Schumpeters entrepreneur (Endres & Woods, 2010). In the entrepreneurial
perspective on internationalisation, the entrepreneur has an important influence on
the internationalisation behaviour of the firm (Andersson, 2000). As such, the roles
of individuals are the main factors for determining the choice of internationalisation
mode. Therefore, internationalisation is seen as the consequence of different
entrepreneurial actions (Andersson, 2000, p. 82). Oviatt and McDougall (1994) and
Ibeh and Young (2001) also indicated that internationalisation can be viewed as an
entrepreneurial act. In the context of SMEs and born globals, the importance of
individual decision-makers characteristics for understanding the internationalisation
process of the firms has been highlighted (Andersson, Gabrielsson, & Wictor, 2004;
Andersson & Wictor, 2003).
38
2.5 International Market Entry Modes of Born Globals

The entry mode of born global firms is of interest due to their alternative governance
structures (Oviatt & McDougall, 1994). Studies in the literature have highlighted the
relevance of entry mode choice on small firm performance, reporting a positive
relationship between appropriate entry mode(s) and performance (Brouthers &
Nakos, 2004; Lu & Beamish, 2001).
The born global literature has typically looked at firms whose primary international
operations have been through exporting (Fan & Phan, 2007), to the extent that export
intensity is often used as one of the criteria to determine born globals (e.g., Knight &
Cavusgil, 1996; Knight & Cavusgil, 2004; Moen, 2002; Luostarinen & Gabrielsson,
2006). In a study on high-technology born globals, Burgel and Murray (2000) found
that most firms used exporting as an entry mode, whereas licensing and joint
ventures were only adopted by a few. Knight and Cavusgil (2004) argued that
exporting is the most common entry mode for born globals.
However, the initial definition of born globals by Oviatt and McDougall (1994)
stressed the importance of hybrid governance structures, such as networks, and
alliances. Freeman et al. (2006) found that born globals utilise networks and strategic
alliances, in order to help them overcome barriers to internationalisation. Bell et al.
(2003) developed a model of small firm internationalisation that differentiates small
firms into traditional, born global and born-again global. They argued that, in
comparison to traditional SMEs, born globals integrate more into customer and
supplier channels, through licensing, joint ventures and other strategic alliances.
More generally, there has been a call to adopt a more holistic view of entry modes, in
the context of small firms. For example, Jones (1999) stated that the current literature
on small firms tended to look at specific entry modes, such as exporting, and
focussed on downstream activities. This approach does not appropriately consider the
diversity of small firms, and does not examine other business activities that may
occur in the internationalisation process, e.g., licensing and contract manufacturing.
At present, there seems to be a par in the literature, with respect to taking a broader
39
perspective that incorporates additional cross-border activities, such as production

and R&D, as well as inward activities (e.g., importing). Jones (1999) argued that
these cross-border links should be included when analysing the internationalisation
behaviour of small firms and born globals. In this respect, Gassmann and Keupp
(2007) noted that the internationalisation of small firms does not necessarily equate
with export intensity. Research by the European Commission (2003) also suggests
that the internationalisation of SMEs is more than just exporting (p. 8), and may
involve other cross-border activities, such as importing and licensing.
Moreover, the focus on exporting firms leads researchers to overlook the fact that
born global firms may employ multiple entry modes simultaneously. In a study of
213 small, high-technology companies, Jones (2001) found that more than half of the
firms used a combination of inward and/or outward links in their internationalisation
ventures, such as inward marketing/distribution (e.g., importing) and outward R&D
(e.g., licensing). In addition, the study revealed that a large proportion of the firms
used value chain activities other than trade (i.e., import, export) as the first steps of
internationalisation. This finding emphasises the complexity of how small firms enter
international markets and implies that entry mode would benefit by being looked at
in a more integrative manner, rather than focussing on discrete modes of entry. In a
similar vein, Oviatt and McDougall (1994) discussed the coordination of multiple
value chain activities in their analysis of international new ventures. Freeman et al.
(2006) found evidence of the adoption of multiple entry modes that enabled born
globals to undertake rapid foreign expansion and penetration, leading them to
hypothesise a positive relationship between the use of multiple entry modes in
different combinations for different markets and the rapid internationalisation of
SMEs.
In terms of the link between born global entry mode and international performance,
there have been only few studies that directly addressed this relationship. For
example, Zahra et al. (2000) found that exporting and licensing were positively
associated with sales growth and return on equity. This is in contrast to a study by
Gleason, Madura, and Wiggenhorn (2006) where born globals with joint ventures or
40
acquisitions tended to perform better than those firms that only exported within their
first six years of inception. Jones and Young (2009) raised the issue that
internationalisation is a temporal process (p. 14) where entry mode decisions and
outcomes, such as knowledge development and establishment of organisational
routines are interdependent. In a similar vein, Gallego, Hidalgo, Acedo, Cassillas,
and Moreno (2009) proposed that the timing of entry is related to the entry mode
decision and international market selection.
In conclusion, more research on the entry modes of born global firms is needed
(Andersson & Wictor, 2003; Burgel & Murray, 2000). This is particularly important
in light of the potential entry mode implications on firm performance (Brouthers &
Nakos, 2004).
2.6 Theoretical Background on Determinants of Firm Performance

As noted in Chapter 1, the main research objectives of this thesis are to examine the
determinants and measurement of international performance for born global firms.
There are many different approaches to examining firm performance, with roots in
fields such as economics, sociology, industrial organisation, and management.1 The
determinants of firm performance tend to include a combination of elements,
including environmental variables (e.g., industry/market structure, macro-
environment, and institutions), firm strategy, and organisational characteristics
(Capon et al., 1990). Some of the key theories and explanations pertaining to firm
performance are summarised in this section.
2.6.1 Industrial Organisation Theory

Industrial organisation theory (IO-theory) posits that the structure of a market or
industry determines the strategy of firms within it, and that their conduct, in turn,
affects firm performance. This is expressed in the Structure-Conduct-Performance
(SCP) paradigm (Bain, 1956). The basis of this view is that the external environment,
in the form of market/industry structure, imposes pressure on firms, to which they
must adapt to survive. Industry structure includes concentration levels (rivalry),
1
See Lenz (1981) for a review
41
technology intensity, the level of product differentiation, capital intensity, and

barriers to entry (Scherer, 1980). Porter (1980) argued that the attractiveness of an
industry can be analysed, by considering five competitive forces that determine
industry profitability: the entry of new competitors, the threat of substitutes, the
bargaining power of buyers, the bargaining power of suppliers, and the rivalry
among the existing competitors. Based on Porter (1980), external industry structure
is the main determinant of firm performance according to IO-theory; the conduct of a
firm is then merely a reflection of the environment (e.g., industry structure). As such,
firm conduct is effectively subsumed by the environment, and need not be considered
explicitly when attempting to explain firm performance. In IO-theory, performance is
viewed as the efficient allocation of resources (profitability), and technical efficiency
(minimisation of costs) (Porter, 1981). The key unit of analysis in the industrial
organisation perspective is, thus, the industry.
2.6.2 Strategy-Structure-Performance Paradigm

In contrast to the SCP (Structure-Conduct-Performance) paradigm inherent in IO-
theory, another research strand argues that strategy influences the organisational
structure of a firm, which affects performance; this is the Strategy-Structure-
Performance paradigm (SSP-paradigm). This perspective is based on the work of
Chandler (1962), who argued that changes in strategy give rise to administrative
strains in the firm. In order to deal with the strains, firms modify their organisational
structures. Such modifications are what led to the evolution of the multi-divisional
organisational form. Rumelt (1974) built on this argument, examining performance
implications, finding that the fit between diversification strategy and divisional
structure affects firm performance, such that firms that pursued strategies of related
diversification and adopted divisional structures tended to achieve higher
performance than firms that followed unrelated diversification strategies. Miles and
Snow (1978) developed a typology of four different strategic types of organisations:
defender, prospector, analyser, and reactor. Each of these types has a different
structure. Organisations with defender strategies generally adopt functional,
centralised structures, while prospectors normally choose divisional, decentralised
structures, and analysers tend to use matrix structures. Reactors generally do not
42
have a systematic structure. The SSP-paradigm has been described as arguably the
most important substream of research on structural contingency theory (Galunic &
Eisenhardt, 1994, p. 216). Broadly speaking, the SSP-paradigm can be viewed as
contingency-based, where the match between a firms strategy and organisational
structure affects firm performance.
2.6.3 Resource-based View of the Firm

The resource-based view of the firm (RBV) places its primary emphasis on firms
internal characteristics, as opposed to the external environment emphasised in IO-
theory. The origins of the RBV are in Penroses (1959) theoretical work on the
growth of the firm. Penrose (1959) viewed the firm as a collection of productive
resources the disposal of which between different uses and over time is determined
by administrative decision (p. 24), specifying two different types of resources:
physical (e.g., land, equipment and raw material) and human (e.g., skilled and
unskilled labour, managerial and administrative staff). Wernerfelt (1984) introduced
a resource-based view of the firm, by examining firms from the resource side, rather
than the product side emphasised in IO-based theory, noting that resources and
products are two sides of the same coin for firms (p. 171). Wernerfelt (1984) built
on Penroses (1959) study by incorporating intangible resources of the firm and
defining a firms resources as:
those (tangible and intangible) assets which are tied semi-permanently to the
firm. Examples of resources are: brand names, in-house knowledge of
technology, employment of skilled personnel, trade contacts, machinery,
efficient procedures, capital, etc. (p. 172)
Thus, Wernerfelt (1984) viewed the firm as a bundle of tangible and intangible
resources. Building on this basis, Barney (1991) linked firm resources to the
competitive advantage of the firm, defining firm resources as:
all assets, capabilities, organizational processes, firm attributes, information,
knowledge, etc. controlled by a firm that enable the firm to conceive of and
implement strategies that improve its efficiency and effectiveness. (p. 101)
Firm resources can be classified in terms of physical capital (e.g., a firms land and
equipment), human capital (e.g., training, and experience of individual managers in a
firm), and organisational capital (e.g., a firms planning and reporting system)
43
(Barney, 1991). Another classification is from Grant (1991) who differentiated

between six categories of resources: financial, physical, human, technological,
reputation and organisational.
Barney (1991) identified two assumptions underlying the analysis for sources of
competitive advantage. First, firms within an industry may be heterogeneous with
regard to the strategic resources they control; this is in direct contrast to IO-theory,
which assumes homogeneity among firms. The second assumption states that these
resources may be immobile across firms, rather than mobile, as assumed by IO-
theory. Central to Barneys (1991) argument are four resource attributes that can
enable a firm to create sustainable competitive advantage: value, rarity, imperfect
imitability, and non-substitutability. Resources are valuable if they allow the firm to
exploit opportunities and/or neutralise threats in its environment. Rareness of
resources refers to the fact that a resource can create a competitive advantage if
competitors do not possess it. Valuable and rare resources can be a source of
sustained competitive advantage, only if firms that do not possess these resources are
not able to obtain them; that is, the resources are imperfectly imitable. Finally, a
resource may be a source of sustained competitive advantage if there are no
strategically equivalent resources that can replace the valuable, rare and imperfectly
imitable resource (Barney, 1991). In order to create competitive advantage, the firm
should act as a seeker of unique, or costly-to-copy, inputs for production and
distribution (Conner, 1991). In sum, in the context of the resource-based view of the
firm, an organisations resources represent its source of competitive advantage and
are, thus, the main drivers of its performance (as opposed to the industry in IO-
theory) (Conner, 1991).
2.6.4 Empirical Studies of Firm Performance

Capon et al. (1990) undertook a meta-analysis of 320 empirical studies from the
economic, and industrial organisation (165 studies) and management (155 studies)
literatures that examined the determinants of firms financial performance. Based on
this assessment, the following variables were studied most frequently, with respect to
their relationships with financial performance: industry concentration, growth
44
(industry and firm), market share, firm size, capital investment intensity, advertising
intensity, and R&D spending. Using counting methodology and ANCOVA, the
authors identified strategy, environmental and organisational determinants of
financial performance as summarised in Figure 2.1.
Figure 2.1: Determinants of Financial Performance of Firms
Strategy: Environment:
Growth (+) Industry concentration (+)
Capital investment (-) Industry growth (+)
Firm advertising (+) Industry capital investment (+)
Market share (+) Industry size (+)
Research and Development (+) Industry advertising (+)
Debt (-) Industry imports (-)
Diversification (-) Industry minimum efficient scale (+)
Quality of product and service (+) Industry geographic dispersion (+)
Vertical integration (+) Industry barriers to entry (+)
Corporate social responsibility (+) Industry exports (-)
Industry economies of scale (+)
Organisation:
Capacity utilisation (+) Financial performance:
Profitability
Growth
Reduced variability
Not significant:
Firm size
Industry diversification
Firm/ business relative price
Firm/ business marketing expense
Consumer vs. industrial sales
Firm/ business inventory
Owner vs. management control
Source: Adapted from Capon et al. (1990)
In terms of environmental factors, Capon et al. (1990) found in their meta-analysis

that the following variables had positive relationships with financial performance:
industry concentration, growth, capital investment, size, advertising, minimum
efficient scale, geographic dispersion, barriers to entry and economies of scale.
Industry imports and exports, on the other hand, showed negative associations with
financial performance. The authors concluded that these findings were consistent
with industrial organisation theory (Bain, 1956).
45
In terms of strategy variables, the following factors were identified as having positive
relationships with financial performance: growth, low capital investment, firm
advertising, market share, R & D, product and service quality, vertical integration,
corporate social responsibility, and lower levels of debt and less diversification.
With regard to organisation issues, Capon et al. (1990) only found capacity
utilisation to be positively associated with financial performance. The authors noted
the lack of research on organisational factors that may be related to financial
performance, and called for further research to be undertaken in this area.
Firm size, industry diversification, relative price, marketing expense, consumer vs.
industrial sales, inventory, and type of control (owner vs. management) showed no
significant relationship in the meta-analysis.
In sum, Capon et al. (1990) concluded that there were a large number of potential
determinants of financial performance, comprising environment, strategy, and
organisational variables. They suggested that future studies should consider
organisational variables, such as the nature of top management, the effectiveness of
planning, or the impact of skill in managing human resources.
The area of organisational behaviour addresses organisational issues and their

relationship with firm performance. In organisational behavioural theory, the
organisations planning, reward, control systems and group dynamic, are assumed to
affect employees, which, in turn, affect firm performance. One of the research areas
of organisational behaviour is the study of organisational climate, which incorporates
issues such as structure, motivation, leadership, goal setting, and planning (Litwin &
Stringer, 1968; Denison, 1996).
In a study of 60 Fortune 1000 firms, Hansen and Wernerfelt (1989) examined an

organisational model of firm performance based on organisational climate. They
compared the model of organisational climate with the economic model of
performance, which has its roots in Industrial Organisation (IO) theory and includes
46
variables such as industry concentration and firm size. Hansen and Wernerfelt (1989)
found that the organisational model of firm performance explained about twice as
much of the variance in performance (R2=0.38), compared to the economic model
(R2=0.19). Integrating the models explained more of the variance in performance
(R2=0.50) than the individual models, leading the authors to conclude that both
organisational and economic factors are significant determinants of firm performance.
The issue as to what extent firm- or industry-specific effects explain variations in

firm performance has been a widely debated topic in the literature. While proponents
of the industrial organisation theory argue that industry factors primarily drive firm
performance, scholars of the resource-based view of the firm posit that firm-specific
factors generally engender superior performance (see Sections 2.6.1-2.6.3).
Hawawini, Subramanian, and Verdin (2003) reviewed several influential studies in
this area which are summarised in Table 2.4.
Table 2.4: Percentage of Variance Explained of Return on Assets (ROA) by Firm,

Industry, and Other Effects
Variance Schmalensee Rumelt (1991) McGahan & Hawawini et al.

component (1985) Porter (1997) (2003)
Firm effect 0.6% 45.8% 36.0% 35.8%
Industry effect 19.6% 4.0% 18.7% 8.1%
Year effect N/A N/A 2.4% 1.0%
Industry-year N/A 5.4% N/A 3.1%
Error 80.4% 44.8% 48.4% 52.0%
Source: Adapted from Hawawini et al. (2003)
As the table indicates, there are divergent results with regard to the variables
explaining variations in return on assets. While Schmalensees (1985) study found
industry effects to be more useful in explaining variations in return on assets than
firm effects, more recent studies found evidence of firm effects being a more
important driver of performance as compared to industry effects. This lends support
to the validity of the RBV.
2.7 Determinants of Export Performance

In this thesis, the focus is on the determinants of performance for born globals. As
noted earlier, exporting is viewed to be the most common entry mode among these
firms (Knight & Cavusgil, 2004), and the majority of academic studies of born
47
globals have tended to look at exporting firms (e.g., Knight et al., 2004; Kuivalainen
et al., 2007; Moen, 2002). Thus, a consideration of the literature on the determinants
of export performance is pertinent to the present study.
Export performance has received much attention in the literature; yet, the findings
tend to be inconsistent. For example, Zou and Stan (1998) stated that the area of
exporting is known for autonomous and unco-ordinated efforts (p. 333). Katsikeas,
Leonidou, and Morgan (2000) argued that export performance is one of the most
widely researched but least understood and most contentious areas of international
marketing (p. 493). The lack of understanding has been attributed to the difficulties
in conceptualising, operationalising, and measuring export performance, which has
led to often-contradicting results (Katsikeas et al., 2000; Sousa et al., 2008;
Matthyssens & Pauwels, 1996; Leonidou & Katsikeas, 2010).
The determinants of export performance can be broadly categorised into internal and
external factors (Sousa et al., 2008; Aaby & Slater, 1989; Zou & Stan, 1998).
Internal factors include export marketing strategy, and both firm and management
characteristics. The internal factors thus focus on the firm- and business level, and
involve an assessment of capabilities and business policies within the firm (Aaby &
Slater, 1989). External factors include market characteristics, both domestic and
foreign. These factors are focussed on the macro-environment, and involve social,
cultural, and political aspects (Sousa et al., 2008; Aaby & Slater, 1989). In the
following, the study reviews these different factors, using the classification by Sousa
et al. (2008), as shown in Figure 2.2.
48
Figure 2.2: Determinants of Export Performance
Internal factors
Export marketing strategy
- Product, Price, Place, Promotion (Styles & Ambler, 1994)
- Strategic orientation (Robertson & Chetty, 2000)
- General export strategy (Baldauf et al., 2000) Moderating variables
- Market research (Hart & Tzokas, 1999)
- Export planning (Brouthers & Nakos, 2005)
Firm characteristics
- Firms capabilities and competencies (Piercy et al.,1998)
- Firm size (Wolff & Pett, 2000)
- Firms international experience (Cavusgil & Zou, 1994)
- Market orientation (Cadogan et al., 2002)
Management characteristics
- Management commitment/support (Beamish et al., 1993) Export performance
- Management education/experience (Nakos et al., 1998)
External factors
Foreign market characteristics
- Political and legal factors (OCass & Julian, 2003)
- Export market competitiveness (Morgan et al., 2004)
- Export market attractiveness (Madsen, 1989)
Domestic market characteristics Control variables

- Domestic market attractiveness (Madsen, 1989)
- Export assistance (Katsikeas et al., 1996)
- Environmental hostility (Zahra et al., 1997)
Source: Adapted from Sousa et al. (2008)

49
2.7.1 Internal Factors of Export Performance

Internal factors of export performance have received a great deal of attention in the
literature (Zou & Stan, 1998). They can be classified into export marketing strategy,
firm and management characteristics (Sousa et al., 2008).
2.7.1.1 Export Marketing Strategy

Export marketing strategy includes the marketing mix with the 4 Ps, (i.e., product,
price, place, and promotion), the firms strategic orientation, its general export
strategy, market research, and export planning (Zou & Stan, 1998). In terms of the
marketing mix, many studies (e.g., Styles & Ambler, 1994; Cavusgil & Zou, 1994)
examined the relationship between export performance and product, price,
distribution and promotion strategies. There is little agreement on whether product,
price, and promotion adaptation/standardisation are positively related to export
performance. Some studies reported a positive relationship (e.g., Cavusgil & Zou,
1994), whereas others found a negative or insignificant relationship (e.g., Kaynak &
Kuan, 1993). Sousa et al. (2008) explained that this may lie in the fact that the
adaptation/standardisation of marketing strategy per se may not be related to superior
export performance. Instead, the fit between strategy and its context, i.e.,
organisational characteristics or external environment, may be more important for
predicting export performance. Other explanations may relate to the potential role of
the firms general strategy and other firm- and managerial specific variables, such as
product/service quality and management commitment, which may be associated with
export performance in conjunction with marketing strategy.
The strategic orientation of the firm has been operationalised using a combination of
three constructs: risk-taking, innovativeness, and proactiveness (Covin & Slevin,
1989). An entrepreneurial firm tends to possess a high propensity to take risks, is
innovative, and tends to actively look for new markets and opportunities. In contrast,
a conservative firm is generally risk-averse, non-innovative, and passive/reactive
(e.g., Robertson & Chetty, 2000). The findings in the export performance literature
generally indicate a positive relationship between entrepreneurial orientation and
export performance (Dean, Menguec, & Myers 2000; Francis & Collins-Dodd, 2000).
50
There are inconsistent findings with respect to performance and the use of particular
general export strategies (e.g., market concentration, diversification, Porters (1980)
generic strategies (low-cost, focus, differentiation), first-mover versus follower).
Reviewing the export performance literature, Zou and Stan (1998) noted that the
majority of studies reported a non-significant relationship between general export
strategy and export performance. On the other hand, there is some evidence of
significant relationships between general export strategy and export performance.
For instance, Baldauf, Cravens, and Wagner (2000) found, in a study of Austrian
firms, that the use of a differentiation strategy was positively associated with export
performance. Beamish, Craig, and McLellan (1993) observed that firms that
employed a market diversification strategy with broad geographic scope had superior
export performance than firms with narrow geographic scopes in their international
activities.
Regarding market research, several studies have indicated that its use may be a
predictor of export performance (Hart & Tzokas, 1999). In this regard, the role of
information acquisition is important. Souchon and Diamantopoulos (1999)
categorised information acquisition modes into three dimensions: (1) formal
marketing research, (2) export assistance (e.g., banks, government departments), and
(3) export market intelligence, which includes visits to overseas customers and
agents. Calof (1997) found that personal contacts were the most important source of
information, followed by associates, and foreign clients. Leonidou (1997) also
stressed the importance of informal measures, noting that firms gather information
via such approaches as foreign market visits, overseas agents and personal contacts.
Leonidou and Theodosiou (2004) argued that information needs, information sources,
and information use should be considered together as a determinant of export
performance, noting the importance of the synergistic effect of their interplay (p.
29), over specific elements of information behaviour (e.g., only information sources).
With regard to export planning, the literature exhibits a broad consensus that formal
export planning is positively related to export performance (e.g., Bijmolt & Zwart,
1994; Zahra, Neubaum, & Huse, 1997). Brouthers and Nakos (2005) concluded,
51
based on a study of 112 Greek SMEs, that a systematic international market selection
process was positively associated with export performance.
2.7.1.2 Firm Characteristics

The second major construct that is assumed to be related to export performance
refers to firm characteristics, including a firms capabilities and competencies, firm
size, international experience, and market orientation (Zou & Stan, 1998). The
relationship between a firms capabilities/competencies and export performance has
been studied by Piercy, Kaleka, and Katsikeas (1998). They identified four key
competencies with regard to export - informational, customer relationship, product
development and supply chain management skills - and found that high-performing
exporters tend to display better skill levels in these areas than low-performing
exporting firms. Similarly, Prasad, Ramamurthy, and Naidu (2001) defined
marketing competencies as product development skills, product quality, technical
support/after-sales service, product line breadth, cost/price competitiveness, and
customer relationship skills, finding a positive relationship between marketing
competencies and export performance. Sousa et al. (2008) pointed to the importance
of knowledge as a firm competency that can enable a firm to achieve superior export
performance.
Firm size provides mixed results in the literature. Size has primarily been
operationalised as the number of firm employees, and less often, total sales. Some
studies have found a positive relationship between firm size and export performance.
These included positive associations between number of employees and export sales
volume (Lado, Martinez-Ros, & Valenzuela, 2004), and managements satisfaction
with export performance (White, Griffith, & Ryans, 1998). However, there are also
studies that have indicated a non-significant relationship between firm size and
export performance (e.g., Wolff & Pett, 2000), and Kaynak and Kuan (1993)
reported a negative relationship between firm size (as measured in number of
employees) and export profit.
The relationship between a firms international experience and export performance

has also been studied. Exporting involves uncertainty and risk, and it is argued that
52
firms with extensive practical experience in overseas markets are more competent
than less experienced firms and, thus, tend to report superior export performance.
However, empirical studies that have examined the relationship between a firms
international experience and export performance have found conflicting results.
While several studies have suggested a positive relationship between international
experience and export performance (e.g., Dean et al., 2000; Cavusgil & Zou, 1994),
others have found a negative relationship (e.g., Kundu & Katz, 2003). A potential
explanation for this negative relationship is offered by Brouthers and Nakos (2005),
who suggested that firms with less export experience may view international sales as
more central to their long-term profitability, compared to experienced export firms.
Market orientation is a concept that has become important in more recent export
studies. Kohli and Jaworski (1990) defined a market orientation as a combination of
three activities: a) organisation-wide generation of market intelligence pertaining to
current and future customer needs, b) dissemination of the intelligence across
departments, and c) organisation-wide responsiveness to it. Cadogan,
Diamantopoulos, and De Mortanges (1999) built on this concept and developed a
measure for export market orientation, by combining export market intelligence (e.g.,
export market research, export assistance), export intelligence dissemination, and
export intelligence responsiveness. In a follow-up study, Cadogan, Diamantopoulos,
and Siguaw (2002) found that firms that display a high export market orientation
tend to have better export performance.
2.7.1.3 Management Characteristics

Managerial characteristics, broadly classified into management commitment/support
and management education/experience (Sousa et al., 2008), are also viewed as key to
export performance. There is general agreement that management
commitment/support for exporting activities is positively related to export
performance (e.g., Beamish et al., 1993; Nummela et al., 2004). Shaw and Hassan
(2002) looked at the internationalisation process of 255 service firms in New
Zealand, and found managements commitment to internationalisation to be an
important success factor, which shows the relevance of entrepreneurial spirit in a
company. These findings are consistent with those of Cavusgil and Zou (1994), who
53
argued that high management commitment enabled a firm to undertake effective

export marketing strategies, resulting in superior export performance.
With regard to managements educational background, the assumption is that better-

educated managers with international experience will positively affect the firms
export performance. Nakos, Brouthers, and Brouthers (1998) found that managerial
fluency in foreign languages is positively related to export performance. Similarly,
Swift (1991) underlined the importance of the ability to speak foreign languages in
international business, concluding that foreign language capability facilitates the
establishment of market closeness, and enables the marketer to examine his market in
far greater detail than would otherwise be possible (Swift, 1991, p. 45).
2.7.2 External Factors of Export Performance

Unlike the internal determinants of export performance, external factors have
received much less attention in the literature. For example, Sousa et al. (2008)
reported that, out of 40 reviewed export studies, only nine examined external factors.
In an earlier review of the export literature, Zou and Stan (1998) concluded that only
18 out of 50 export studies had addressed the external environment.
2.7.2.1 Foreign Market Characteristics

Among foreign market characteristics, political and legal factors are one of the
determinants that were examined in export studies. These include the existence of
trade barriers, which have shown both negative (Madsen, 1989; OCass & Julian,
2003) and non-significant (Gripsrud, 1990) relationships with export performance. In
a similar vein, Baldauf et al. (2000) found that higher perceived socio-cultural and
political environmental influences are not significantly associated with lower export
performance.
The competitiveness of the export market has also been investigated in several
studies. The rationale for examining this factor lies in industrial organisation theory
where the structure of the market and/or industry is assumed to affect the strategy of
firms, which, in turn, affects firm performance (Scherer, 1980). Cavusgil and Zou
(1994) found that export market competitiveness is positively associated with
54
product and promotion adaptation and support to foreign distributor/subsidiary,

which, in turn, have positive relationships with export performance. Morgan et al.
(2004) noted that export market competitive intensity moderates the relationship
between export marketing strategy and export performance. On the other hand,
OCass and Julian (2003) indicated that competitive intensity and export
performance are negatively associated. However, Kaynak and Kuan (1993) did not
find a significant relationship between export market competitiveness and export
performance.
Export market attractiveness is another hypothesised determinant of export

performance. It involves, for example, the markets demand potential, the
sophistication of its marketing infrastructure, and its economic development. Madsen
(1989) found a positive relationship between export market attractiveness and export
sales and profitability.
2.7.2.2 Domestic Market Characteristics

In terms of domestic market attractiveness, a negative association with export
performance has been suggested. For example, Madsen (1989) measured the
attractiveness of the domestic market as the degree of absence of competition, sales
potential and profit potential relative to a firms goals, and found that domestic
market attractiveness showed a negative association with export sales. Madsen
(1989) argued that domestic market attractiveness was much lower in a small
country, such as Denmark, than in a large country, e.g., the United States, which
would help to explain the higher export intensity of Danish exporters compared to
American firms.
Export assistance is another factor that falls under this category. The literature tends
to report a positive association between government assistance programmes and
export performance (Katsikeas, Piercy, & Ioannidis, 1996; Gencturk & Kotabe,
2001).
In addition, efforts have been made to examine the environment-performance

relationship, by classifying the environment into two categories: hostile and benign
55
(Robertson & Chetty, 2000). Hostile environments are characterised by intense

competition, harsh business climates, and a lack of exploitable opportunities. Benign
environments are presumed to provide better opportunities for market investment
(Covin & Slevin, 1989). Applying a contingency-based approach, Robertson and
Chetty (2000) found that environmental characteristics had different relationships
with export performances of entrepreneurial and conservative firms. Entrepreneurial
firms could achieve high export performance in both hostile and benign
environments, whereas, for conservative firms, the fit between strategic orientation
and the host context (hostile versus benign) was related to export performance;
conservative firms in benign environments tended to achieve higher export
performance than in hostile environments.
Conceptualising the domestic environment into hostility, dynamism, and

heterogeneity, Zahra et al. (1997) looked at the relationship between export
performance and these environmental variables. Environmental dynamism is related
to the continuity in change in the firms environment and can involve, for example,
changes in technology and customer tastes, whereas heterogeneity refers to the level
of perceived diversity and complexity in the firms environment. Zahra et al. (1997)
found that all three dimensions of the external environment (i.e., hostility, dynamism
and heterogeneity) are associated with better export performance.
2.7.3 Control and Moderator Variables

According to Sousa et al. (2008), there is a lack of research on control and moderator
variables. This may be attributed to the fact that the control variables of some
researchers are the explanatory variables of others. Despite their potential importance
for modelling export performance, they have not been used extensively in the
literature. Commonly-employed control variables are firm size (Francis & Collins-
Dodd, 2000; Brouthers & Nakos, 2005) and a firms international experience
(Brouthers & Nakos, 2005). As for moderator variables, environmental turbulence
has been used in some studies (Cadogan, Sundqvist, Salminen, & Puumalainen,
2005).
56
To conclude, there are a large number of potential determinants of export

performance ranging from internal factors, such as firm characteristics, to external
factors, comprised of the domestic and foreign environment. In the next section, the
study reviews the literature specific to determinants of performance in the born
global context.
2.8 Determinants of Born Global Performance

In contrast to the export performance literature, the born global performance
literature is quite limited, partly attributable to the relatively recent emergence of
such firms (Knight & Cavusgil, 2004). Many models of born globals have
incorporated two constructs in examining performance: antecedents/drivers of born
global strategy and business strategy. Figure 2.3 summarises the key determinants of
born global performance.
57
Figure 2.3: Determinants of Born Global Performance
Business strategy of born globals:

Antecedents/drivers of born global strategy: - Global technological competence (Knight & Cavusgil,
- International entrepreneurial orientation 2004)
(Knight & Cavusgil, 2004; Kuivalainen et - Development of unique products (Knight & Cavusgil, 2004)
al., 2007) - Quality focus (Knight & Cavusgil, 2004)
- International marketing orientation (Knight - Leveraging competencies of foreign distributors (Knight &
& Cavusgil, 2004) Cavusgil, 2004)
- Learning orientation (Jantunen et al., 2008) - Degree of born globalness (scale and scope of
- Entrepreneurial orientation (Jantunen et al., internationalisation) (Kuivalainen et al., 2007)
2008) - International growth strategy (Jantunen et al., 2008)
- Customer focus (Knight et al., 2004) - Marketing competence (Knight et al., 2004)
- Product quality (Knight et al., 2004)
- Product differentiation (Knight et al., 2004)
Other determinants: Other factors:

- International expansion (Zahra et al., 2000) - Technological learning (Zahra et al., 2000) Born global
performance
Antecedents of born global performance:

- Managements education (Kundu & Katz, 2003)
- Share of foreign-trained employees in firm (Kundu & Katz, 2003)
- International entrepreneurial orientation (Knight & Cavusgil,
2005)
- Technological leadership (Knight & Cavusgil, 2005)
- Focus strategy (Knight & Cavusgil, 2005)
- Differentiation strategy (Knight & Cavusgil, 2005)
- International expansion (Zahra et al., 2000)
- International entrepreneurial capability (Zhang et al., 2009)
- Market orientation (Frishammar & Andersson, 2009)
58
2.8.1 Antecedents/Drivers of Born Global Strategy

Knight and Cavusgil (2004) examined the linkages among organisational culture,
business strategies, and international performance of born globals. Based on a
framework of evolutionary economics, they argued that the organisational culture in
born globals is characterised by innovative, entrepreneurial behaviour and embedded
in tacit information and routines in the firm. Knight and Cavusgil (2004) defined
international entrepreneurial orientation as the firms overall innovativeness and
proactiveness in the pursuit of foreign markets. Thus, managerial vision,
innovativeness, and a proactive competitive posture are components of a firms
international entrepreneurial orientation. The second factor that shapes the
organisational culture of born global firms is international marketing orientation
(Knight & Cavusgil, 2004); this concept relates to a managerial mindset that
emphasizes the creation of value, via key marketing elements, for foreign customers
(Knight & Cavusgil, 2004, p. 130). The authors argued that the business strategies of
born globals are a function of their organisational culture (i.e., international
entrepreneurial and marketing orientation).
The concept of international entrepreneurial orientation has been used in several

other performance studies. For example, Kuivalainen et al. (2007) indicated that
international entrepreneurial orientation is an antecedent of the born global strategy
path and, thus, a determinant of the scale and scope of born global activities. They
operationalised international entrepreneurial orientation as a combination of risk-
taking, proactiveness, and competitive aggressiveness. While not empirically testing
the relationship, Knight and Cavusgil (2005) suggested that a born globals business
strategy (i.e., focus and differentiation) is a function of its organisational orientation
(i.e., international entrepreneurial orientation and technological leadership). Jantunen
et al. (2008) introduced the concept of strategic orientation in the context of born
globals, consisting of entrepreneurial orientation, learning orientation, and
international growth orientation. For entrepreneurial orientation, the authors used
similar measures to those of Kuivalainen et al. (2007), and Knight and Cavusgil
(2005). In terms of learning orientation, Jantunen et al. (2008) followed Sinkula,
59
Baker, and Noordewier (1997), who defined it as a combination of commitment to

learning, open-mindedness, and shared vision. International growth orientation
relates to the managers global mindset and motivation to expand abroad.
Differentiating their sample into born globals, born-again globals, and traditionals,
Jantunen et al. (2008) found mixed results. Whereas learning orientation was
positively associated with international performance for born globals only,
entrepreneurial orientation was positively related with international performance of
born-again globals. Strategic orientations did not explain variations in performance
of traditional companies.
Customer focus is another factor that has been used in explaining born global
performance. Knight et al. (2004) argued that customer focus is a driver of born
global strategy, operationalised as product quality, marketing competence, and
product differentiation.
2.8.2 Business Strategy of Born Globals

Born global strategy is the second construct of performance models, and several born
global studies have argued that strategy is driven by certain antecedents that include
international entrepreneurial orientation, as discussed in Section 2.8.1. Born global
strategies tend to have a positive, direct relationship with international performance,
according to several studies; key strategies are outlined in the following.
Knight and Cavusgil (2004) developed a conceptual performance model including

business strategies, such as global technological competence, the development of
unique products, quality focus, and leveraging the competencies of foreign
distributors. They argued that these business strategies are drivers of the international
performances of born globals. Using a sample of 203 US firms, Knight and Cavusgil
(2004) found support for a positive relationship between international performance
and each of the four business strategies.
Other studies have looked at born global strategies from a different angle, by
investigating the location of the foreign markets. For example, Kuivalainen et al.
60
(2007) examined the relationship between the degree of internationalisation and

international performance, introducing the concept of born globalness, defined in
terms of the scale and scope of internationalisation. Scale was measured by export
turnover, and scope was measured by the distance between markets and the home
country, using Hofstedes cultural distance measures. Kuivalainen et al. (2007)
classified firms with high export turnover and internationalisation to culturally
distant markets as true born globals. Firms that were low on export turnover and
exported to culturally close markets were categorised as apparently born globals or
born internationals. The results indicated that true born globals displayed
significantly better export performance than born internationals.
Born global strategy has also been used as a moderating variable. For example,
Jantunen et al. (2008) examined the international growth strategy of born globals as a
potential moderator between strategic orientation of the firm and international
performance. Three different strategic alternatives were identified: born global, born-
again global, and traditional strategy. Born global strategy relates to a rapid pace of
internationalisation. Born-again global strategy pertains to firms that have been
established in their home market, but suddenly start to internationalise in a rapid
manner. Finally, traditional strategy is based on the stages model of the Uppsala
school (Johanson & Vahlne, 1977), and is characterised by a slow and incremental
internationalisation process. Jantunen et al. (2008) found support for a moderating
effect of the international growth strategy on the relationship between strategic
orientation of the firm and international performance.
The notion of born-again globals was originally coined by Bell, McNaughton, and
Young (2001) who found evidence of these types of firms in case studies of UK,
New Zealand and Australian companies. Some of the critical incidents that triggered
the rapid internationalisation of born-again globals include change of ownership,
acquisition, and client followership. The phenomenon of born-again globals was
also reported by Bell et al. (2003) and Bell et al. (2004).
61
Knight et al. (2004) suggested that product quality, marketing competence and
product differentiation are drivers of superior international performance for born
globals, and found support for positive relationships between international
performance and these three attributes for a sample of US firms. However, for the
Danish firms in their sample, only marketing competence was positively associated
with international performance.
2.8.3 Other Determinants of Born Global Performance

The concept of learning in the context of performance has been examined in a study
by Zahra et al. (2000). They developed a model, incorporating international diversity
(e.g., number of countries, cultural diversity, and geographic segments), international
market entry modes, technological learning and new venture performance. The study
showed strong support for positive relationships between international expansion and
the breadth, depth and speed of technological learning in international markets,
which, in turn, was a driver of new venture performance (measured as return on
equity (ROE) and sales growth).
2.8.4 Antecedents of Born Global Performance

In addition to indirect relationships, several studies have also looked at direct
relationships between determinants and international performance of born globals.
For example, Kundu and Katz (2003) examined the formation and growth process of
born global firms, considering how variables pertaining to the organisation
emergence process are related to export performance. At the level of the individual
entrepreneur, they found that professional and/or technical education tended to be
associated with stronger export performance for the associated firms. In addition,
technological innovativeness was positively related to export intensity. On the other
hand, there was no support for a relationship between export performance and the
entrepreneurs international experience and strategic orientation. At the firm level,
firms with more foreign-trained employees tended to display higher export
performance. In contrast, higher foreign market coverage of the firm was not
associated with better export performance.
62
Some authors have also examined direct relationships between international

performance and factors that include international entrepreneurial orientation, market
orientation, and business strategy. Considering Porters (1980) generic strategies,
Knight and Cavusgil (2005) found that international entrepreneurial orientation,
technological leadership, focus and differentiation strategy tend to be associated with
higher international performance among born globals, compared to less-
internationalised firms. Zhang et al. (2009) found positive relationships between
international entrepreneurial capability and two types of international performance
(strategic and operational). Ruokonen and Saarenketo (2009) suggested that
entrepreneurial orientation is linked to superior international performance if it is
embedded in strong market and learning orientations. On the other hand, Frishammar
and Andersson (2009) did not find strong evidence of strategic orientations (i.e.,
entrepreneurial and market orientation) being an antecedent of better international
performance of small firms.
Other studies have looked at international market entry modes and their implications
for performance. Zahra et al. (2000) found a direct positive relationship between
international expansion (defined as international diversity and modes of entry) and
new venture performance.
In conclusion, born global performance studies have focussed on entrepreneurial

characteristics and business strategies, with a marketing emphasis. In the next
sections, the study provides a review of the measurement of firm, export, and born
global performance.
2.9 Measurement of Firm Performance

In line with the studys research objective of examining performance measures of
born global firms, this section reviews the extant literature on performance
measurement. The focus in this thesis is on organisational performance, as
considered primarily in the strategic management and international business
literatures. Organisational performance has been described as a multi-faceted
phenomenon that involves various viewpoints (e.g., shareholder versus employees),
63
time periods (e.g., long-term versus short-term), and criteria (e.g., market share
versus profit) (Snow & Hrebiniak, 1980).
Venkatraman and Ramanujam (1986) developed a conceptualisation that illustrates

various approaches to measuring organisational performance; see Figure 2.4. They
distinguished between three different types of performance.
Figure 2.4: Domains of Business Performance
Domain of financial
performance (e.g., sales growth,
profitability etc.)
Domain of financial (e.g., sales

growth, profitability) and
operational performance (e.g.,
market share)
Domain of organisational
effectiveness (e.g., survival of
the firm, reputation of the firm)
Source: Adapted from Venkatraman & Ramanujam (1986)
The first type relates to financial performance, which is an outcome-based indicator

of performance and is described as the narrowest conception of business
performance (Venkatraman & Ramanujam, 1986, p. 803). Some examples of
measures for financial performance include profitability (e.g., ROI), sales growth,
and earnings per share. Financial performance indicators are assumed to reflect the
achievement of economic goals of the firm. A broader conceptualisation of
performance includes financial and operational performance, incorporating non-
financial measures. These include, for example, product-market outcomes, such as
market share, introduction of new products, and marketing effectiveness and internal
process outcomes (e.g., employee satisfaction) (Venkatraman & Ramanujam, 1986;
Hult et al. 2008). These operational factors may eventually lead to financial
performance (Venkatraman & Ramanujam, 1986). The broadest conceptualisation of
64
performance relates to organisational effectiveness. Some measures for

organisational, or overall, effectiveness are survival of the firm, reputation, perceived
overall performance, and achievement of goals (Hult et al., 2008). According to
Venkatraman and Ramanujam (1986), this broad conceptualisation has received less
attention in the literature, due to the difficulty in measuring effectiveness. Instead,
the focus in strategy studies has been primarily placed on financial and operational
performance. In addition to measurement type, Venkatraman and Ramanujam (1986)
also differentiated between the sources of data (primary and secondary). Based on
the two factors, i.e., conceptualisation of performance (financial versus operational)
and data source (primary versus secondary), Venkatraman and Ramanujam (1986)
developed a matrix model where they explain 10 different approaches to measuring
business performance. This model is shown in Figure 2.5.
Figure 2.5: Framework for Classifying Approaches to Business Performance

Measurement
A Use of financial indicators with

data from two sources
1 2
indicators with data from primary

Conceptualisation of business performance in
D Use of financial and operational

B Use of financial and operational
Financial
indicators F
indicators with data from
secondary source
E
Operational
source
indicators
3 4
terms of
C Use of operational indicators

with data from two sources
Secondary Primary
Sources of data
Source: Venkatraman & Ramanujam (1986), p. 805
Four approaches (1-4) are within a particular cell, which means that one source of
data (either primary or secondary) and one performance conceptualisation (either
65
financial or operational) is adopted. The authors argued that these approaches are
rather narrow perspectives of performance and have been used seldom as
operationalisations in strategy research. In contrast, the remaining six approaches
(i.e., A-F) represent improvements in the quality of the operationalisation of business
performance. They cross cells and use a combination of either two sources of data
and one type of measurement or one source of data with two types of measurements.
Venkatraman and Ramanujam (1986) advocated the use of across-cell approaches
and argued that within-cell approaches should be avoided. However, they also
pointed out some caveats as to the use of two conceptualisations (i.e., financial and
operational indicators). Here, the issue of dimensionality of business performance
should be considered, which refers to the conflicting nature of performance
dimensions, such as long-term growth and short-term profitability. As a result,
Venkatraman and Ramanujam (1986) stated that these different performance
dimensions should not be combined into one composite dimension when measuring
performance. They suggested that each dimension should be recognised and
examined distinctively, or the dimensionality of the conceptualisation of business
performance should be tested explicitly.
Hult et al. (2008) included level of analysis in addition to the two dimensions of type
of measurement and source of data by Venkatraman and Ramanujam (1986). Level
of analysis refers to the firm-level, strategic business unit (SBU)-level, and inter-
organisational level. Hult et al. (2008) reviewed the performance measurement
literature in international business research from 1995-2005, identifying 96 articles
from highly-rated journals in management, marketing and international business,
such as Journal of International Business Studies, Strategic Management Journal,
and Academy of Management Journal. They found that 57.3% of the studies used
primary data sources, whereas 40.6% used secondary data and only 2.1% (i.e., two
studies) employed both primary and secondary data sources. With regard to the types
of measurement, 32.3% of the assessed studies used two types of measures. Out of
these studies, 67.7% employed financial and operational performance, and 32.3%
financial and overall effectiveness performance, and only 7.3% of the studies used a
combination of all three types of measures. In comparison, 59.4% of all studies used
66
only one type of performance measure. This is not in line with Venkatraman and
Ramanujam (1986), who advocated the use of combinations of types of measures and
data sources for organisational performance measurement. With regard to the
specific measures of performance, sales-based measures (e.g., sales volume, ratio of
foreign sales to total sales, sales growth) were the predominant measure for financial
performance (52% of all assessed studies), whereas market share was mostly
employed for operational performance (44%), and perceived overall performance
was the most frequently used measure for overall effectiveness (47%). As far as the
level of analysis is concerned, 52.9% of studies looked at the firm level, followed by
the inter-organisational unit (24.5%) and the strategic business unit (22.6%). The
vast majority of studies measured performance at one level (92.7%), with 6.3% of
the studies measuring performance at two levels, and only one study measuring
performance at all three levels.
2.10 Measurement of Export Performance

Export performance has been measured through a variety of different indicators on
different dimensions. Similar to the determinants of export performance, the
literature on export performance measurement is rather scattered and characterised
by difficulties with conceptualising export performance measures (Sousa, 2004). The
following discussion is organised according to the level of analysis, frame of
reference, time frame, data collection method, and the measures themselves,
following Matthyssens and Pauwels (1996) classification of export performance
measurement. Figure 2.6 provides an overview about the measurement of export
performance.
67
Figure 2.6: Measurement of Export Performance
Level of analysis:
- Corporate (Francis & Collins-Dodd, Frame of reference:
2000) - Domestic (Beamish et al., 1993)
- Export venture (Cavusgil & Zou,1994) - Industry (Chetty & Hamilton, 1993)
- Product (Madsen, 1989) - Goal (Cavusgil & Zou, 1994)
- Objective (Gencturk & Kotabe, 2001)
- Subjective (Katsikeas et al., 1996)
Export performance measures:

- Financial (Cadogan et al., 2005)
- Non-financial (Prasad et al., 2001)
- Generic (Morgan et al., 2004)
Export performance measurement
Time frame:
- Historical (Piercy et al., 1998) Data collection method:
- Current (Brouthers & Nakos, 2005) - Primary data (Dhanaraj & Beamish,
- Future (Robertson & Chetty, 2000) 2003)
- Secondary data (Zahra et al., 1997)
Source: Adapted from Matthyssens & Pauwels (1996)
68
2.10.1 Level of Analysis of Export Performance Measurement

The level or unit of analysis refers to the organisational level at which performance is
measured: corporate, export venture, or product (Katsikeas et al., 2000). The
corporate level examines the overall export activity of the firm, whereas research at
the export venture level looks at a specific product/market combination. With the
product level, an individual product or product line is investigated (Matthyssens &
Pauwels, 1996; Katsikeas et al., 2000).
Many export studies have looked at the corporate level. These include, for example,
Beamish et al. (1993), Katsikeas et al. (1996), Robertson and Chetty (2000), Francis
and Collins-Dodd (2000), and Brouthers and Nakos (2005). Katsikeas et al. (2000)
concluded that 84% of 103 reviewed export studies used the firm as the level of
analysis. One of the strengths of investigating the corporate level is that it can offer
insights into the sustained export performance of a firm (Matthyssens & Pauwels,
1996). The export venture level has been adopted in a few studies. For example,
Cavusgil and Zou (1994) identified the export venture as the unit of analysis.
Research at the export venture level provides an analysis of the success or failure of a
particular product to an overseas market. Yet, it has been argued that the export
venture level does not give insights to the long-term export performance of a
company in that failure in a particular venture may be considered as part of a
learning process for overall corporate export success (Matthyssens & Pauwels,
1996). Very few studies looked at the product level (e.g., Madsen, 1989). The review
by Katsikeas et al. (2000) revealed that only 4 out of 103 assessed export studies
adopted the product level.
2.10.2 Frame of Reference of Export Performance Measurement

The frame of reference relates to the standards against which performance is
evaluated (Katsikeas et al., 2000). Five frames can be identified: domestic, industry,
goal, objective, and subjective (Matthyssens & Pauwels, 1996). With the domestic
frame, the performance in an export market is evaluated against the actual
performance in the domestic market. This approach has been used in several studies,
e.g., Beamish et al. (1993) and Madsen (1989). The popularity of the domestic frame
69
is manifested in the high use of the export/total sales ratio as a performance measure.
Katsikeas et al. (2000) cautioned that the use of a domestic frame of reference may
be problematic, due to the focus on export performance in relation to domestic
performance. For example, the reasons for high export intensity may lie in poor
performance in the domestic market and its small size, rather than efficient export
practises. The industry-related frame assesses export performance against the
performances of competitors and has, thus, an important strategic dimension, as it
gives an indication of the firms competitive advantage in the market (Chetty &
Hamilton, 1993). In the goal-related frame of reference, a firms export performance
is evaluated against its own goals. This is also a suitable approach, as it recognises
that each individual firm may have different internal goals in comparison to its
competitors. In contrast to the domestic and industry-related frame, it has received
less attention in the export literature and has been adopted in few studies (e.g.,
Cavusgil & Zou, 1994; Diamantopoulos & Kakkos, 2007). In an objective frame of
reference, objective indicators of performance are utilised, such as market share and
export/sales ratio (Beamish et al., 1993). The sample average is often used as the cut-
off point between successful and non-successful firms. In a subjective frame, the
assessment of performance is based on the reference point that the firms choose, so
firms evaluate their export performance according to their own standards. In
adopting a subjective frame of reference, Likert-scales are often used as performance
indicators (Katsikeas et al., 1996). However, the use of a subjective frame has its
drawbacks. For example, it may be difficult to compare the results, as the same
performance may be viewed as a success by one firm and as a failure by another
(Matthyssens & Pauwels, 1996). In this respect, cultural influences and other
contextual factors may play a role in how performance is perceived. According to
Matthyssens and Pauwels (1996), an objective frame of reference tends to have a
higher reliability than subjective ones, whereas subjective frames are generally
assumed to be more valid. However, it should be noted that it is very difficult to get
accurate objective performance figures in particular from SMEs due to the sensitivity
of the data (Sapienza, Smith, & Gannon, 1988). It has also been reported that
subjective measures are correlated with objective performance indicators (Dess &
Robinson, 1984). As a result, many studies have adopted a subjective frame of
70
reference as opposed to an objective one (e.g., Robertson & Chetty, 2000; Katsikeas
et al., 1996).
2.10.3 Time Frame of Export Performance Measurement

The temporal frame gauges a firms performance according to a time horizon. Three
time frames can be identified: historical, current, and future (Katsikeas et al., 2000).
Historical performance has been used frequently in export studies, with time frames
for the previous two, three, and five years. For example, Katsikeas et al. (1996)
looked at export performance (export sales, market share, and profitability) over the
previous three years, whereas Cavusgil and Zou (1994) examined export sales
growth and export profitability over the previous five years. The application of
historical performance measures may give some indication of sustained export
performance, as it can balance short-term fluctuations of export performance
(Katsikeas et al., 2000); this approach has also been termed a dynamic orientation
(Matthyssens & Pauwels, 1996). In addition, current export performance has been
measured in some studies. For example, Brouthers and Nakos (2005) examined
current export profitability, relative to domestic market profitability. Despite the
potential importance of future performance, very few studies have examined this
dimension. For instance, Robertson and Chetty (2000) asked respondents to estimate
their export performance for the next three years.
2.10.4 Data Collection Methods in Export Performance Measurement

In terms of the data collection method, two sources of data can be differentiated:
primary and secondary. For primary sources, data are obtained directly from
firms/organisations through, for example, questionnaires that require managers self-
assessment of export performance, or interviews with the firms management.
Secondary data consist of publicly available data, such as firms annual reports and
published case studies. In terms of the empirical approach, most export studies have
used primary data, generally in the form of postal questionnaires and, to a lesser
extent, in-depth interviews. Zou and Stan (1998) stated that mail surveys are the
dominant form of data collection in export performance research. The preference for
primary data may be attributed to the difficulty of obtaining publicly available data
from small firms (Robertson & Chetty, 2000). Furthermore, it has been argued that
71
managers are guided more by subjective measures than objective ones and, thus,
perceived performance may be more important than actual performance (Madsen,
1989). In addition, objective and financial data may be difficult to compare in
international business research, due to different and sometimes competing
accounting standards for international firms (Hult et al., 2008).
2.10.5 Export Performance Measures in Empirical Studies

Export performance measures can be classified into three groups: financial, non-
financial, and generic (Matthyssens & Pauwels, 1996; Katsikeas et al., 2000).
Financial measures involve sales-, profit-, and market share-related measures,
whereas non-financial indicators include factors, such as export market penetration,
and the contribution of exporting to company reputation (Sousa, 2004). Generic
measures involve, for example, perceived export success, and satisfaction with
export performance (Katsikeas et al., 2000). The literature on export performance
measures is scattered, as shown by the large number of performance indicators found
in reviews of the export performance literature. For example, Katsikeas et al. (2000)
reported 42 different performance indicators and Sousa (2004) found 50 measures.
However, there are a few key measures that have been used consistently in export
studies. These pertain to financial indicators, and include export intensity (i.e.,
export/total sales ratio), export sales growth, export sales volume, and export
profitability (Katsikeas et al., 2000). This is consistent with Sousa (2004), in a review
of 43 export performance studies from 1998-2004. Other measures that were used,
but rarely, include contribution of exporting to company reputation, achievement of
export objectives, rate of new market entry, and number of export transactions
(Sousa, 2004).
When adopting export performance measures, it is possible to use one single

indicator, or multiple and composite indicators. One of the limitations of employing
a single measure pertains to its inherent difficulty in capturing the multi-
dimensionality of performance. In contrast, multiple measures of export performance
may provide more insight into the dynamics of performance (Matthyssens &
Pauwels, 1996). Similarly, Murphy, Trailer, and Hill (1996) argued that multiple
72
measures of performance should be used. In addition, the dimensionality of

performance is an important consideration, which refers to the categories of
financial, operational, and organisational effectiveness performance (Venkatraman &
Ramanujam, 1986). Generally, the use of performance measures from multiple
dimensions is advocated (Hult et al., 2008). The use of multiple dimensions allows
the examination of each dimension independently or formation of a composite
measure. Venkatraman and Ramanujam (1986) called for the adoption of a multi-
dimensional approach, where each performance dimension is examined
independently, arguing that a unidimensional composite of a multidimensional
concept such as business performance tends to mask the underlying relationships
among the different subdimensions (p. 807). In the context of export performance,
export sales, export growth, and export profit are common dimensions
(Matthyssens & Pauwels, 1996). Other studies have formed a composite scale, by
combining different dimensions (e.g., Cavusgil & Zou, 1994).
2.11 Measurement of Born Global Performance

Born global performance has been measured in a variety of ways. In accordance with
the previous section, the thesis reviews the different measures, based on the
classification by Matthyssens and Pauwels (1996). Please refer to Figure 2.7 for a
summary about born global performance measurement.
73
Figure 2.7: Measurement of Born Global Performance
Level of analysis:
Frame of reference:
- Corporate (Kuivalainen et al., 2007)
- Domestic (Autio et al., 2000)
- Export venture (Knight & Cavusgil,
- Industry (Kuivalainen et al., 2007)
2004)
- Goal (Knight & Cavusgil, 2004)
- Objective (McDougall & Oviatt, 1996)
- Subjective (Knight & Cavusgil, 2004)
Born global performance measures:

- Financial (Jantunen et al., 2008; Crick,
2009)
- Non-financial (Mort & Weerawardena,
2006)
Born global performance measurement
- Generic (Knight & Cavusgil, 2004)
Time frame:
- Historical (Kundu & Katz, 2003) Data collection method:
- Current (McDougall & Oviatt, 1996) - Primary data (Crick, 2009)
- Secondary data (Knight et al., 2004)
Source: Based on the conceptualisation by Matthyssens & Pauwels (1996) and adapted for born globals by the author
74
2.11.1 Level of Analysis of Born Global Performance Measurement

The majority of born global studies have used the firm as the unit of analysis when
measuring performance. These include, for example, Jantunen et al. (2008), Autio et
al. (2000), Crick (2009), Kuivalainen et al. (2007), and Kundu and Katz (2003).
There are also some studies that have adopted the venture level, such as Knight and
Cavusgil (2004), and Knight et al. (2004), who based their performance
measurement scales on Cavusgil and Zou (1994).
2.11.2 Frame of Reference of Born Global Performance Measurement

In terms of the frame of reference, born global performance studies have
predominantly used a domestic and industry-related frame. Examples of a domestic
frame include Autio et al. (2000), and Zahra et al. (2000), while Kuivalainen et al.
(2007) adopted an industry-related frame. Crick (2009) adopted a goal-related frame
of reference. Knight and Cavusgil (2004) and Knight et al. (2004) used a
combination of a domestic-, industry-, and goal-related frame of reference. Many
born global studies have employed subjective measures (e.g., Knight & Cavusgil,
2004; Jantunen et al., 2008; Crick, 2009), whereas objective indicators have been
used relatively seldom (McDougall & Oviatt, 1996).
2.11.3 Time Frame of Born Global Performance Measurement

With regard to the time horizon of born global performance measurement, the focus
has been placed on past and current performance. Several studies have examined the
international performance of previous years (ranging from one to three). For example,
Kuivalainen et al. (2007) looked at profit performance over the last three years,
which is consistent with the time frame adopted by Knight et al. (2004). Kundu and
Katz (2003) investigated export growth as compared to the previous year. In addition,
some studies used the current performance (e.g., McDougall & Oviatt, 1996). No
born global performance study was found that considered anticipated future
performance.
75
2.11.4 Data Collection Methods in Born Global Performance Measurement

Many born global studies have tended to use primary data sources when
investigating international performance. Similar to export studies, it may be
explained by the difficulty in obtaining publicly available data from small firms, such
as born globals. Among primary sources, several studies used self-administered mail
questionnaires (e.g., Knight & Cavusgil, 2004; Jantunen et al., 2008), whereas other
researchers adopted interviews and case studies as the data collection method (Chetty
& Campbell-Hunt, 2004). Knight and Cavusgil (2004) and Knight et al. (2004) used
a combination of qualitative and quantitative research, by developing a postal survey
based on the insights from initial interviews with managers. Crick (2009) used a
survey, followed by the main qualitative data collection.
2.11.5 Born Global Performance Measures in Empirical Studies

Many born global studies have adopted financial and generic performance measures,
where respondents were asked about their level of satisfaction with their firms
international performance. For example, Knight and Cavusgil (2004) investigated the
level of satisfaction with product performance, in terms of market share and sales
growth, and looked at the perceived success of the product in its main export market.
Similarly, Jantunen et al. (2008) examined the amount of satisfaction with
international activities with regard to sales volume, market share, profitability,
market entry, image development, and knowledge development. Kuivalainen et al.
(2007) used the degree of satisfaction with sales and profit performance. Crick
(2009) adopted overseas sales growth, sales volume, profitability and market share.
In addition, other economic measures have been used by several authors. For
instance, Autio et al. (2000) employed growth in international sales as a percentage
of total sales for the previous five years, and Zahra et al. (2000) adopted return on
equity (ROE). Mort and Weerawardena (2006) argued that profit and return on
investment (ROI) may not be appropriate performance measures for born globals, as
these firms may have not yet achieved the stage of sustained growth, and opted to
use the entry of born globals into multiple, international markets and rapid market
expansion as measures for international performance. In contrast to the export
performance literature, export intensity has not been used widely in the measurement
76
of the performance of born global firms; this may be explained by the fact that this
indicator is used predominantly as a criterion to define born globals. In addition, born
global studies have primarily incorporated financial measures, in accordance with the
export performance literature.
2.12 Chapter Summary

This chapter reviews the extant literature on the determinants and measurement of
born global firms. In doing so, firm, export, and born global performance are
discussed to provide an integrated and comprehensive perspective. The chapter
highlights the heterogeneity of studies, in terms of the definition and
operationalisation of born globals, such as the time span until first
internationalisation and the international sales ratio. In addition, the general features
of born global firms are described, e.g., flexible organisational attributes and the
managerial global vision of the firms. An overview about the state-of-the-art of the
born global literature is given and the various theoretical schools of
internationalisation are outlined (e.g., economic school of FDI theory). In addition,
the chapter highlights the different theoretical frameworks pertaining to explaining
variations in firm performance (e.g., industrial organisation theory).
The study finds that the export performance literature is extensive in scope and rather
scattered. The internal and external factors as antecedents of export performance are
discussed, along with the export performance measurement. In reviewing export
performance measures, the level of analysis, frame of reference, time frame, and data
collection methods are described. The study suggests that there is a wide
heterogeneity in employed performance measures. Export sales, export sales growth
and export profitability emerge as the most commonly used export performance
measures in the literature.
Compared to export performance, the born global performance literature is rather

new and is in its relative infancy. Generally, two different approaches to examining
born global performance can be identified and are highlighted: one stream looks at
indirect relationships through antecedents of born global strategy, business strategy
77
and international performance, while the second approach is to examine direct

relationships between determinants and performance. Some important drivers of
international performance for born globals include the international entrepreneurial
orientation of the firm, customer focus, product quality, and focus strategy. In terms
of born global performance measurement, several studies have formed single,
composite performance measures (e.g., Knight & Cavusgil, 2004; Jantunen et al.,
2008), while others examined different types of performance (e.g., sales performance,
profit performance, and sales efficiency performance) (Kuivalainen et al., 2007;
Crick, 2009). The majority of born global studies tend to use subjective performance
measures. While most studies incorporate financial indicators, it can be concluded
that there is a wide range of different performance measures employed in born global
studies, similar to the export performance literature.
78
CHAPTER 3
CONCEPTUAL MODEL AND HYPOTHESIS

DEVELOPMENT
In this chapter, the theoretical basis of the study is outlined and the conceptual model
of the thesis is presented. Building on the literature review and drawing on various
literature strands that include exporting, international entrepreneurship, strategic
management, and networks, research hypotheses are advanced to develop the model.
The conceptual model involves several constructs: firm and managerial
characteristics, networks, business strategy, external environment, control variables
(e.g., firm size), and international performance.
79
Chapter 3 Conceptual Model and Hypothesis Development
3.1 Overview of Conceptual Model and Theoretical Basis

As noted earlier, the main research objective of this study is to examine the
determinants and measurement of international performance for born globals. To this
end, an integrated approach to born globals is adopted and different literature strands,
such as exporting, international entrepreneurship, networks, and strategic
management are incorporated. The research questions pertain to the determinants of
international performance of born globals, and important measures for assessing the
international performance of these firms. In order to answer the research questions
and achieve the research objectives, the study adopts a comparative approach by
analysing the international performance measurement and determinants of born
globals along with more traditional non-born global firms. The key theoretical
frameworks of the study are a combination of the resource-based view of the firm
(RBV) (e.g., Wernerfelt, 1984; Barney, 1991; Conner, 1991) and the network
perspective on internationalisation (e.g., Johanson & Mattson, 1988; Coviello &
Munro, 1997; Styles, Patterson, & Ahmed, 2008). The application of these two
theoretical perspectives to this study is discussed, followed by the presentation of the
conceptual model of the thesis and the development of the research hypotheses.
The resource-based view of the firm is one of the most widely accepted theoretical
perspectives in the strategic management field (Newbert, 2007, p. 121). The RBV
has also emerged as a dominant perspective in international entrepreneurship
research (Young, Dimitratos, & Dana, 2003), and is considered a valid framework
for explaining the international activities of born globals (McDougall et al., 1994).
As outlined in Section 2.6.3, the RBV places its primary emphasis on the firm and its
internal resources and capabilities (Barney, 1991; Grant, 1991; Wernerfelt, 1984).
Based on the two assumptions that resources are distributed heterogeneously among
firms in an industry and that these resources are immobile, one of the key tenets of
the RBV is that differences in endowments of resources can lead to competitive
advantage and superior performance of firms. In order to enable a firm to create
competitive advantage, these resources must meet four conditions of being valuable,
rare, inimitable, and non-substitutable (Barney, 1991). It has been argued that
inimitability is the most important attribute in the RBV (Newbert, 2007; Barney,
80
2001). Resources have been classified into organisational, human and physical
capital (Barney, 1991).
This study focuses primarily on organisational and human capital. Physical capital is
not emphasised as born global firms tend to lack extensive holdings of property,
equipment, plants, and other physical assets, and this is generally not a major driver
for international performance for born globals (Cavusgil & Knight, 2009). In
addition, the study incorporates primarily intangible resources in developing the
conceptual model. This is due to the fact that not all resources are necessarily equally
important to create competitive advantage (Barney, 1991). More specifically,
tangible resources are generally easier to imitate by competitors, thus being a
relatively weak source of competitive advantage and economic benefit (Newbert,
2007; Grant, 1991). Intangible resources, on the other hand, tend to have relatively
high barriers to duplication, and are, therefore, a stronger source of sustained
competitive advantage and superior firm performance compared to tangible assets
(Hall, 1993; Barney, 1991). Intangible resources include, for example, patents,
trademarks, copyrights, organisational culture, employee know-how, reputation, and
corporate brand (Hall, 1992, 1993). The literature suggests that born global firms
often lack tangible assets (e.g., financial resources), and emphasises the key role and
relevance of intangible resources for achieving superior performance for these firms
(e.g., Knight & Cavusgil, 2004; Rialp et al., 2005a; Mudambi & Zahra, 2007).
As indicated in Chapter 1, the second main theoretical framework adopted in this

study is the network perspective on internationalisation. This perspective views the
market as a collection of relationships among firms, such that organisations are
interconnected and dependent on each other (Johanson & Mattson, 1988).
Coordination is not necessarily achieved through the price mechanism and/or
organisational hierarchies, but through interaction among firms within a broadly
defined network, where price is only one of the influencing factors. Exchange
relationships need to be established with other firms, in order to obtain access to
external resources, and sell products. An assumption in the network approach is that
firms are dependent on resources that are controlled by other firms. A firm can gain
81
access to these resources through its position in the network. Thus, the development
of a firms position in the network is very important and is referred to as a market
asset. Relationships among firms evolve over time, and are characterised by mutual
orientation and social exchange processes (Johanson & Mattson, 1987; Johanson &
Vahlne, 1992). While there is competition within the network, complementarity is an
important concept in the network perspective, with specific inter-firm dependence
relations that are both direct to firms to which there are exchange relationships, and
indirect to counterparts relationships (Johanson & Mattson, 1988). The network
perspective has been widely adopted in born global research (e.g., Sharma &
Blomstermo, 2003; Chetty & Campbell-Hunt, 2004; Freeman et al., 2006).
Grounded in these two theoretical frameworks, the conceptual model of this study
involves several constructs that are considered to be associated with the international
performance of born global firms. The model is shown in Figure 3.1.
Figure 3.1: Conceptual Model of the Study
Firm and Managerial Characteristics:

- International entrepreneurial orientation
- Product/service quality
- Board of Directors/Advisory Boards
service function + (H1-5)
- Market orientation
- Learning orientation
Networks: International Performance:

- Leveraging of managements personal + (H6-7) - Financial
contacts - Operational
- International trade shows as networking - Organisational effectiveness
platform - Perceived success
+ (H8)
Business Strategy:
- Niche strategy
Control Variables:
- Firm size
- Firms international experience
+ (H9-10) - Industry
External Environment: - Entry mode
- Foreign market attractiveness
- Internationalisation of market
82
The model consists of six key constructs: firm and managerial characteristics,
networks, business strategy, external environment, control variables (i.e., firm size,
firms international experience, industry, and entry mode) and international
performance. The expected relationships between the constructs and international
performance are highlighted in the model. These constructs are derived primarily
from the extant export performance and born global literatures as will be explained
later in this chapter. The constructs underpinning the model are briefly outlined
below, followed by a detailed analysis in Sections 3.2-3.9.
Grounded in the RBV (e.g., Barney, 1991; Wernerfelt, 1984), the model incorporates
intangible organisational and human resources. The organisational resources relate to
international entrepreneurial orientation, product/service quality, market orientation
and learning orientation. Thus, the study considers the value of a unique corporate
culture for achieving superior international performance (Knight & Cavusgil, 2004),
coupled with a high-quality product/service (Rennie, 1993), a focus on
implementation of the marketing concept by creating superior customer value
(Narver & Slater, 1990), and emphasis on learning and knowledge orientation within
the firm (Baker & Sinkula, 1999; Jantunen et al., 2008). The role of Board of
Directors/Advisory Board is included in the conceptual model as intangible human
resources. Due to the young age and relative inexperience of born globals compared
to larger firms, the advice and internationalisation guidance from their Boards of
Directors can be instrumental for born global firms to overcome challenges to
successful internationalisation (Luostarinen & Gabrielsson, 2006; Ahn, Meeks, &
Bednarek, 2008). As a result, the conceptual model considers the corporate
governance structure of born global firms.
Based on the network perspective on internationalisation (e.g., Johanson & Mattson,

1988), the study focuses on the role of the leveraging of networks in the
internationalisation of born global firms, and incorporates an examination of the
external environment. More specifically, it considers the concepts of managements
personal networks, the leveraging of international trade shows as networking
platforms, and the external environment (i.e., internationalisation of the market and
83
foreign market attractiveness). As will be outlined in detail later in this chapter, the
high importance of personal networks for born global success has been identified in
the literature (e.g., Rialp, Rialp, Urbano, & Vaillant, 2005b; Andersson & Wictor,
2003). In addition, international trade shows have been found to serve as a key
vehicle to improve international performance through establishing networks with
customers and other stakeholders (e.g., distributors, suppliers, government) (Evers &
Knight, 2008). The internationalisation of the market, defined as the extent,
intensity, and degree of relationships across borders in the industry in general
(Madsen & Servais, 1997, p. 572) can enable firms to access the networks of other
companies in a global network, resulting in superior international performance. The
attractiveness of overseas markets in terms of, for example, large size and growth
potential, has also been identified as an important antecedent of firm performance in
the export literature (e.g., Mavrogiannis, Bourlakis, Dawson, & Ness, 2008).
Derived from the strategic management literature (e.g, Miller, 1986; McDougall &
Robinson, 1990), the model incorporates a consideration of niche strategy for born
global firms. This is based on the fact that born globals tend to pursue niche
strategies for competing successfully in overseas markets (Chetty & Campbell-Hunt,
2004; Bell et al., 2003; Rialp et al., 2005a; Knight & Cavusgil, 1996).
International performance is included as the dependent variable in the conceptual

model. As indicated in Chapter 1, the study integrates different types and dimensions
of international performance, in order to provide a more nuanced and differentiated
view of performance. Thus, the model incorporates a consideration of financial and
operational performance, organisational effectiveness, and perceived success as the
types of international performance in line with Venkatraman & Ramanujam (1986),
Hult et al. (2008), and Styles (1998). In developing the international performance
measures, the study considers the three dimensions of efficiency, effectiveness and
adaptability as suggested by Walker & Ruekert (1987).
In addition, the conceptual model includes four control variables: firm size, firms
international experience, industry, and entry mode. Firm size and firms international
84
experience are common control variables in performance studies, as they tend to be

related to international performance regardless of other antecedents (Jantunen et al.,
2008; Francis & Collins-Dodd, 2000). A manufacturing dummy variable is used to
control for any industry-related influences on international performance (Brouthers,
2002). Finally, as indicated in Chapter 1, the study incorporates various entry modes
that born global firms may use to enter overseas markets. In order to control for the
potential impact of entry mode on international performance, an export entry dummy
variable to the companys first foreign market is included (Zahra et al., 2000).
As mentioned above, the study integrates the RBV and the network perspective on
internationalisation as theoretical frameworks for this thesis. The rationale for
adopting these perspectives lies primarily in the complementarity of the two
approaches. While the RBV focuses on internal resources and capabilities of the firm,
the network perspective emphasises knowledge building through external networks.
A combination of these two frameworks has also been applied in the born global
literature. For example, Freeman and Cavusgil (2007) integrated the RBV and the
network view in their study on the mindsets of Australian born global managers. In
the literature, a holistic approach to examining internationalisation has been
advocated (e.g., Coviello & McAuley, 1999; McDougall & Oviatt, 2000). Rialp et al.
(2005a) argued that the use of a single theoretical framework for explaining the
acceleration of international operations by young smaller firms appears to be
somewhat reductionist and would likely inhibit any further theory development on
this issue (p. 155). As a result, Rialp et al. (2005a) called for adopting a
combination of multiple theories and frameworks to obtain a more holistic
understanding of the early internationalisation process and phenomena at hand. In the
context of born global firms, various single theoretical frameworks have been used
(e.g., knowledge-based view of the firm) as well as a combination of several
frameworks (e.g., Madsen & Servais, 1997; Andersson & Wictor, 2003) (please refer
to Chapter 2 for a review). To conclude, consistent with the line of reasoning of
Rialp et al. (2005a) and Coviello and McAuley (1999), this study adopts multiple
theories as a basis to examine the drivers and measurement of international
performance for born globals.
85
The born global literature has yielded a few conceptual performance frameworks that
include the studies by Knight and Cavusgil (2004) and Knight and Kim (2009).
These performance models provide a useful basis (e.g., the role of product/service
quality, international entrepreneurial orientation) on which this thesis expands. This
manifests itself primarily in form of the (1) incorporation of new, relevant constructs
(e.g., corporate governance structure, international trade shows), (2) adoption of a
comparative perspective between born globals and non-born globals, and (3)
consideration of various entry modes and industries of born global firms.
It is important to note that besides the grounding in the literature, the rationale for
incorporating the constructs in the model was further supported in the exploratory
interviews that are outlined in Chapter 5. This included for example, the role of the
intangible resources identified in the model, such as product/service quality and
market orientation.
The individual constructs of the conceptual model and the rationale for incorporating
them are explained in detail in the following sections, along with the development of
the research hypotheses.
3.2 International Entrepreneurial Orientation

The importance of the individual in considering a firms internationalisation has been
stressed in entrepreneurship studies (Andersson, 2000). Born globals are generally
viewed as being entrepreneurial in nature (Oviatt & McDougall, 1994). Thus, the
study draws on literature related to international entrepreneurship, which has been
defined as the discovery, enactment, evaluation, and exploitation of opportunities
across national borders to create future goods and services (Oviatt & McDougall,
2005, p. 7). Exporting has been viewed as an entrepreneurial act by some scholars
(Ibeh & Young, 2001). Andersson (2000) defined three different types of
entrepreneurs: technical, marketing, and structural. The technical entrepreneur is
mainly interested in the development of new products and technology rather than
internationalisation per se. Internationalisation may thus occur through an enquiry
from the firms international network, which often leads to exporting or licensing
86
agreements. As such, the approach to international markets for the technical

entrepreneur is typically reactive and generally characterised as an international pull-
strategy. On the other hand, the marketing entrepreneur has identified a need in the
market and is proactive in developing new international markets. In reaching new
customers, the marketing entrepreneur tends to commit large resources to penetrate
markets quickly, which is manifested in the more frequent use of greenfield
investments. The choice of markets may be more dependent on personal preferences
and networks, rather than rational calculation. Thus, the marketing entrepreneur
typically uses an international push-strategy. Finally, the structural entrepreneur is
trying to restructure companies and industries, and tends to operate in mature
industries, aiming to combine organisations through mergers and acquisitions.
Internationalisation is the consequence of the overall firm strategy, rather than a
strategic goal for this type of entrepreneur (Andersson, 2000). It can be argued that
entrepreneurs in born global firms most likely fit the description of the marketing
entrepreneur, in terms of the proactive approach, and some aspects of the technical
entrepreneur, with regard to the focus on developing innovative, new products.
Entrepreneurial orientation relates to a firms strategic orientation and specific

entrepreneurial traits associated with decision-making styles, practices and methods;
thus, it can be viewed as a combination of proactiveness, innovativeness, and risk-
taking (Covin & Slevin, 1989). Lumpkin and Dess (1996) added two more
dimensions: autonomy and competitive aggressiveness. With regard to
entrepreneurial characteristics, Stewart, Watson, Carland, and Carland (1999)
identified three key traits: achievement motivation, risk propensity, and preference
for innovation, finding that entrepreneurs displayed higher levels of these three
characteristics compared to corporate managers in larger firms. Kocak and Abimbola
(2009) noted that entrepreneurial orientation is a key organisational capability of
born global firms that assists in identifying and exploiting opportunities, and
expanding into overseas markets. Lee, Lee, and Pennings (2001) referred to
entrepreneurial orientation as an important intangible organisational resource that
provides sustained competitive advantage, as firms cannot buy a high level of
87
entrepreneurial orientation from the market, and should invest a large amount of time
to cultivate such culture.
International entrepreneurial orientation involves a proactive approach towards the

identification of overseas markets. It is also linked to a managers global vision and
competitive posture (Knight, 2001; Knight & Cavusgil, 2004). Zhang et al. (2009)
introduced the concept of international entrepreneurship capability and defined it as a
firm-level ability to leverage resources via a combination of innovative, proactive,
and risk-seeing activities to discover, enact, evaluate, and exploit business
opportunities across borders (p. 296). They argued that this capability enables firms
to leverage resources and exploit opportunities in international markets to achieve
superior performance. Karra et al. (2008) identified three entrepreneurial capabilities
that were important for successful international new venture creation: international
opportunity identification, institutional bridging, and a capacity and preference for
cross-cultural collaboration.
Several born global studies have incorporated international entrepreneurial

orientation in their analysis of performance. For example, Knight and Cavusgil
(2004) found that international entrepreneurial orientation (defined as a combination
of innovativeness, managerial vision, and proactive competitive posture) tends to
engender specific business strategies (e.g., quality focus) that are positively related to
international performance. Similarly, Jantunen et al. (2008) reported that an
entrepreneurial orientation is associated with better performance in international
markets. In a study of Finnish born globals, Kuivalainen et al. (2007) found that
international entrepreneurial orientation (i.e., a combination of proactiveness, risk-
taking, and competitive aggressiveness) is a driver of the scale and scope of born
global strategy, which, in turn, is related to higher export performance. Knight and
Cavusgil (2005) found support for a direct, positive relationship between
international entrepreneurial orientation and international performance among born
global firms. It is important to note that these studies have generally considered the
link between international entrepreneurial orientation and a single, composite
measure of performance; this study expands on this approach, to consider various
88
aspects of performance, which was also suggested by Jantunen et al. (2008) as an

avenue for future research.
The positive relationship between international entrepreneurial orientation and

international performance is consistent with the resource-based view of the firm.
This perspective posits that performance is related to firms resource endowments; in
the context of born globals, entrepreneurial qualities constitute important intangible
human and organisational capital resources (Barney, 1991; Conner, 1991). This leads
to the first hypothesis of the study:
Hypothesis 1: International entrepreneurial orientation is positively
related to the international performance of born global
firms.
3.3 Product/Service Quality and Corporate Governance Structure

Product/service quality has been been identified as a key intangible organisational
resource (Cho & Pucik, 2005) and has been mentioned as an important factor for the
performance of a firm. In their study on the PIMS (Profit Impact of Market Strategy)
principles, Buzzell and Gale (1987) argued that customer-perceived quality is
positively associated with profitability (e.g., ROI), and tends to have a positive
indirect relationship with growth (e.g., market share) through its impact on perceived
value. They stated that in the long run, the most important single factor affecting a
business units performance is the quality of its products and services, relative to
those of its competitors (Buzzell & Gale, 1987, p. 7).
The export performance literature also provides some insights into the performance
implications of quality. For example, in a study of Portuguese and UK firms, Lages,
Lages, and Lages (2005) found that product/service quality was perceived as the
most important determinant of export performance, followed by price
competitiveness/value for money, service quality and relationships with
importers/trust. This is consistent with Moen (2000), who noted that product quality,
personal selling, and distribution efficiencies had positive relationships with export
performance. Similarly, Thirkell and Dau (1998) found in a study of 253 New
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Zealand manufacturing exporters that product quality focus was an antecedent of

superior export performance.
In the context of born globals, the quality characteristics of the firms product/service
also tend to be critical for firm performance. Knight and Cavusgil (2004) found that a
quality product/service was a driver of superior international performance of born
globals. Other studies showed that product quality, combined with marketing
competence and product differentiation, were positively related to the international
performance of born global firms (Knight et al., 2004). Rennie (1993) argued that
born globals typically compete on the basis of quality and value created through
innovative technology and product design. In a study of Australian high-value-added
manufacturing exporters, 58% of the respondents indicated that superior quality was
their key competitive advantage, making it the most important factor, followed by
technology and marketing skills (McKinsey & Co., 1993). Sharma and Blomstermo
(2003) supported these findings in a qualitative study of Scandinavian firms, arguing
that product quality and reliability can be important factors assisting born globals to
obtain orders from their foreign customers. McDougall et al. (2003) found that born
globals tend to put more emphasis on product quality, innovation, and service, in
their firm strategies, compared to domestic new ventures. Following from this
discussion, the next hypothesis is:
Hypothesis 2: Product/service quality is positively related to the
international performance of born global firms.
Gassmann and Keupp (2007) argued that there is a lack of attention on organisational
and/or structural factors as potential determinants of rapid born global
internationalisation. Rather, they noted that the emphasis has been placed on
cognitive characteristics of entrepreneurs in born global firms. This study considers
the role of the corporate governance structure of born globals, by examining the
impact of a Board of Directors and/or Advisory Board. In the context of the RBV,
the Board of Directors constitutes an important intangible human resource (Barney,
1991). It should be noted that the existence of a Board of Directors is not necessarily
restricted to large and publicly listed companies. For example, in a recent study of
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304 high-growth companies in New Zealand, 98% of the firms were privately owned,
but, 73% had a formal Advisory Board and/or Board of Directors, despite not being
legally obliged to do so (Ahn et al., 2008).
Three core roles of Boards of Directors have been identified: control, service, and
resource dependence (Pearce & Zahra, 1992; Huse, 1993; Johnson, Daily, &
Ellstrand, 1996). As for the control role, the Board is responsible for monitoring,
evaluating and rewarding executive performance, and the selection of top managers.
The service role is related to providing advice to CEO, formulating firm strategy,
linking the firm with its external environment, and bringing resources to the firm.
Finally, in the resource-dependence role, the Board of Directors responsibilities lie
primarily in providing legitimacy and bolstering the public image of the firm, and
providing expertise and counsel (Pearce & Zahra, 1992; Johnson et al., 1996;
Hillman & Dalziel, 2003). These roles have been examined empirically in several
studies. For example, Judge & Zeithaml (1992) found that Board of Directors
involvement in strategic decisions of firms was positively related to financial
performance. George, Wood, and Khan (2001) concluded that firms with Board of
Directors that actively pursued networking had generally better performance (i.e.,
return on assets and return on expenditure) than firms with less emphasis on
networking strategy. Van den Heuvel, Van Gils, and Voordeckers (2006) found
evidence that the service role of Board of Directors was perceived as more important
than the control role in a study of small Belgian firms. Consistent with Van den
Heuvel et al. (2006), Ahn et al. (2008) found that the provision of strategic direction
and advice was perceived to be the most important role of Advisory Boards and/or
Boards of Directors, followed by management accountability, and governance
culture. In their study, more than half of the sample firms indicated that their boards
had high or very high influence on creating value in the firm through strategic advice,
compliance, and industry contacts.
In an early article about born globals, Madsen and Servais (1997) raised the issue of
the corporate governance structure, arguing that an understanding of the composition
of the Board of Directors and their networks may provide important insights into
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interconnectedness with other firms. Andersson and Wictor (2003) found evidence of
Board of Directors providing networks in industry, research and financial sector.
Luostarinen and Gabrielsson (2006) mentioned several examples of born global
firms that overcame managerial challenges associated with their youth through their
Advisory Boards and Board of Directors, consisting of university professors and
founders of other born global firms. While not quantitatively assessing the
relationship, the authors noted that Boards of Directors/Advisory Boards are vital in
guiding and advising entrepreneurs in born globals, and, thus, play an important role
in the success of the firm. In addition, the assistance of Boards of Directors/Advisory
Boards, in terms of creating value within the firm through the provision of industry
contacts, may be particularly relevant for born globals that rely on networks,
especially early in their internationalisation efforts (Crick & Spence, 2005). It can be
concluded that the literature highlights, in particular, the importance of the service
role of Board of Directors for firm success. Accordingly, it is hypothesised:
Hypothesis 3: The extent of Board of Directors/Advisory Boards service
function is positively related to the international
performance of born global firms.
3.4 Market Orientation and Learning Orientation

Market orientation refers to the implementation of the marketing concept (Kohli &
Jaworski, 1990) and is the very heart of modern marketing management and
strategy (Narver & Slater, 1990, p. 20). Kohli and Jaworski (1990) defined market
orientation as the organization-wide generation of market intelligence pertaining to
current and future customer needs, dissemination of the intelligence across
departments, and organization-wide responsiveness to it (p. 6). Intelligence
generation involves analysing information regarding the needs and preferences of
customers, and includes monitoring competitors actions and environmental scanning.
Intelligence dissemination relates to the flow and communication of such
information and necessitates the participation of all departments throughout a firm
(e.g., R&D for the development and design of a product). Responsiveness pertains to
reactive behaviour of the firm, as an outcome of market intelligence creation and
dissemination and includes, for example, the selection of target markets and
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designing and offering products that aim to fulfil customers needs and preferences
(Kohli & Jaworski, 1990). Adopting an organisational culture emphasis, Narver and
Slater (1990) offered an operationalisation of market orientation as a combination of
customer orientation, competitor orientation, interfunctional coordination, long-term
focus, and profit objective. Slater and Narver (1995) noted that the primary focus of
market orientation is on creating superior customer value, which is based on
knowledge derived from customer and competitor analysis (p. 68). Both Kohli and
Jaworski (1990) and Narver and Slater (1990) share similarities in terms of the focus
on customers and competitors, and processes that include information acquisition,
distribution, and responsiveness. Hunt and Morgan (1995) noted that market
orientation is an intangible resource that is socially complex in its structure, has
components that are highly interconnected, has mass efficiencies, and is probably
increasingly effective the longer it has been in place (p. 12).
Many studies have examined how market orientation is related to business

performance in a domestic context. Market orientation has generally been found to
be positively related to organisational performance, operationalised as change in
relative market share, new product success, and overall performance (Baker &
Sinkula, 1999; Slater & Narver, 1994), business profitability (Narver & Slater, 1990),
and organisational commitment (Jaworski & Kohli, 1993).
Subsequent studies have also examined the link between market orientation and
export performance. For example, Thirkell and Dau (1998) found that marketing
orientation was positively related to export performance, operationalised as export
market share, profitability, market diversification, and customer satisfaction.
Building on the study of Kohli and Jaworski (1990), Cadogan et al. (1999) developed
a measure for export market orientation, incorporating export market intelligence,
export intelligence dissemination, and export intelligence responsiveness. Examining
this measure in an empirical study, Cadogan et al. (2002) found that firms with high
export market orientation tend to have higher export performance. The positive
relationship between market orientation and export performance has been supported
93
in several studies (e.g., Rose & Shoham, 2002; Racela, Chaikittisilpa, &
Thoumrungroje, 2007).
Market orientation has received some examination in the born global context. Knight
and Cavusgil (2004) incorporated international marketing orientation in their study
of US born global firms. Operationalising it as a managerial mindset that
emphasises the creation of value, via key marketing elements, for foreign
customers (Knight & Cavusgil, 2004, p. 130), they found that born globals
business strategies tend to be a function of their international marketing orientations.
In turn, the born globals business strategies were drivers of international
performance (Knight & Cavusgil, 2004). Blesa, Monferrer, Nauwelaerts, and
Ripolles (2008) found that market orientation mediates the relationship between
early international commitment and international positional advantages. Frishammar
and Andersson (2009) found little support for a positive relationship between market
orientation and international performance and raised the issue that market orientation
may assume a different meaning in small international firms. Therefore, they called
for adaptation of the standard operationalisations of market orientation to the specific
context of international SMEs (e.g., focus on informal rather than formal activities,
and considering the individuals and entrepreneurs rather than centering on collective
aspects). In a qualitative study of Finnish software firms, Ruokonen and Saarenketo
(2009) concluded that a high market orientation combined with learning orientation
may be a strong indicator of whether the companies are able to achieve sustained
competitive advantage and superior international performance. Thus, the literature
supports a positive relationship between market orientation and firm performance.
Based on this discussion, the next hypothesis is:
Hypothesis 4: Market orientation is positively related to the international
performance of born global firms.
Learning orientation has its foundation in organisational learning theory, which

views the firm as a learning organisation (e.g., Senge, 1990; Fiol & Lyles, 1985).
Organisational learning has been defined as the process of improving actions
through better knowledge and understanding (Fiol & Lyles, 1985, p. 803) and tends
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to be related to better business performance (Senge, 1990). It has been suggested that
learning orientation complements market orientation, and provides a foundation for
competitive advantage (Slater & Narver, 1995). More specifically, learning
orientation refers to a mechanism that facilitates adaptive learning in the firm (Baker
& Sinkula, 1999). Sinkula et al. (1997) noted that learning orientation influences the
degree to which an organization is satisfied with its theory in use and, hence, the
degree to which proactive learning occurs (p. 309). Firms with higher levels of
learning orientation tend to encourage employees to think outside the box (Baker
& Sinkula, 1999). Three organisational values have been conceptualised pertaining
to the learning orientation of a firm (Sinkula et al., 1997; Senge, 1990): a)
commitment to learning, b) open-mindedness, and c) shared vision. Commitment to
learning reflects the degree to which firms value learning and promote a learning
culture. Open-mindedness is linked to the concept of unlearning, which includes
the challenging of old routines, assumptions and beliefs. Baker and Sinkula (1999)
noted that unlearning is at the heart of organisational change and open-mindedness is
a prerequisite for the success of unlearning. Shared vision relates to managerial
direction of the learning process, in terms of helping employees to work towards a
common goal (Sinkula et al., 1997). Learning orientation has been conceptualised as
an intangible organisational resource in several studies (e.g., Hult, Ketchen, &
Nichols, 2003; Collis, 1991; Uhlenbruck, Meyer, & Hitt, 2003).
The concept of learning orientation has been addressed in some empirical studies. It
has been generally found to be positively related to organisational performance, in
terms of new product success, change in relative market share, and overall
performance (Baker & Sinkula, 1999), and innovativeness (Hult, Hurley, & Knight,
2004). In addition, some authors found a mediating effect of learning orientation on
the relationship between entrepreneurial orientation and firm performance (e.g., sales
growth, earnings per share) (Wang, 2008), while others suggested a positive
relationship between learning and market orientation (Mavondo, Chimhanzi, &
Stewart, 2005). In an international context, Zahra et al. (2000) found support for a
positive relationship between international expansion and the breadth, depth and
speed of technological learning. Baker and Sinkula (1999) concluded that the
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combination of both a strong market and learning orientation are associated with
long-term competitive advantage.
With regard to born global firms, there is limited research about the concept of
learning orientation. Of the few studies that examined it, Jantunen et al. (2008) found
that learning orientation is positively related to international performance. This is
consistent with Kropp, Lindsay, and Shoham (2006) in a study of South African
firms. The concept of learning advantages of newness, introduced by Autio et al.
(2000), suggest that firms that internationalise early after inception are more flexible,
in terms of being able to learn quickly the competencies required for growth in
foreign markets. Accordingly, the next hypothesis is:
Hypothesis 5: Learning orientation is positively related to the
international performance of born global firms.
3.5 Networks
According to the network perspective on internationalisation, a selling firm cannot be
analysed in isolation, but must be studied in the wider context of the market
environment where the company operates. In this respect, specific inter-firm
dependence relations directly to other firms and indirectly through the partners
relationships are emphasised. As a result, rather than firm-specific advantages, the
interdependencies of firms are important in the internationalisation process of the
firm (Johanson & Mattson, 1988).
The concept of social capital recognises the intangible implications that may arise
from a network and its inter-firm relationships. Social capital relates to the resources
a firm acquires from its network of relationships, and has been defined as the
sum of the actual and potential resources embedded within, available through,
and derived from the network of relationships possessed by an individual or
social unit. Social capital thus comprises both the network and the assets that
may be mobilized through the network. (Nahapiet & Ghoshal, 1998, p. 243)
This definition stresses not only resources embedded within the network, but also the
access to other sources of resources through the network. Social capital has been
classified into internal and external aspects (Yli-Renko, Autio, & Tontti, 2002). In
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the context of firms, internal social capital relates to the extent and quality of
relationships between individuals or units within a firm, whereas firm-external social
capital refers to relationships between a firm and other stakeholders, e.g., customers,
distributors, and suppliers. Operationalising external social capital as the extent and
quality of management contacts, customer and supplier involvement (i.e., proportion
of customers/suppliers that are close and cooperative) and internal capital as the
extent and quality of interdepartmental and interpersonal cooperation in the firm,
Yli-Renko et al. (2002) found that knowledge intensity was positively related to
internal and external social capital. In addition, they found support for a positive
association between external social capital and foreign market knowledge. The
concept of social capital has also been used in research on market entry modes. For
example, Chetty and Agndal (2007) argued that social capital can act as a trigger and
enabler of entry mode change in a firms internationalisation process (e.g., from a
low-commitment to a high-commitment entry mode).
In terms of social capital, the role of networks for born global firms has been studied
widely. Coviello and Munro (1997) examined the relationship between networks and
firms internationalisation processes. Based on case studies of small New Zealand
software companies, they found that the choice of foreign market(s) and entry mode
tended to be shaped by formal and informal network relationships, often resulting
from a relationship with a large international partner. This supports the findings of
Johanson and Vahlne (1992), who argued that the establishment and development of
business relationships are key issues in the entry process and that market entry
strategy emerges out of the interplay between actors in the foreign market and the
focal firm (p. 24). Griffith and Harvey (2004) highlighted the importance of
managerial characteristics, and proposed that firm success is dependent, to some
extent, on the ability of marketing managers to develop social capital within the
companys global network.
Freeman et al. (2006) emphasised the role of born global managers extensive
personal network contacts in firms development and rapid internationalisation. This
is consistent with McDougall et al. (1994), who found that the personal contacts of
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born global managers helped them to expand in international markets. They argued
that due to the fact that born globals partners often come from the personal network
of the born global founder, opportunistic behaviour could be avoided, which can
pose a limitation in hybrid organisational structures. This is particularly relevant in
light of the prevalence of hybrid governance structures of born globals. Andersson
and Wictor (2003) noted that personal contacts represent a key factor in
internationalisation strategy implementation and provide the main network for born
globals, due to their young age and lack of stability in routines, systems and
processes. Based on a comparative case study approach, Rialp et al. (2005b) found
that born globals make more use of personal networks than traditional exporters.
Crick and Spence (2005) emphasised the importance of existing networks, often
resulting from the managements previous international experience, as a resource that
enabled firms to enter overseas markets. Similarly, Zou and Ghauri (2010) found in a
case study of three Chinese high-tech new ventures that personal contacts of the
senior management were a main source of network knowledge for the firms. In the
context of personal networks, the notion of network insidership as developed by
Johanson and Vahlne (2009) may become relevant. Johanson and Vahlne (2009)
argued that the liability of outsidership plays a more important role than the
liability of foreignness, thereby making network insidership a crucial issue for
firms to be successful.
Loane and Bell (2006) raised the issue that born globals may have no pre-existing
networks at their start, to assist with developing international capabilities. Based on a
study of entrepreneurial firms in four different countries, the authors found that a
large number of born globals could not leverage on existing networks, but built new
networks to help them to initiate internationalisation. In a similar vein, the born
global literature has attempted to differentiate between types of networks. For
example, Mort and Weerawardena (2006) identified both fundamental and secondary
networks, in a study of Australian born global firms. Fundamental networks are those
that were inherited by the firm at formation and that allowed the exploitation of
initial opportunities in international markets, while secondary networks are
established in the growth process of the firm, to respond to market competition and
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further advance internationalisation. Mort and Weerawardena (2006) noted that the
strategic role of the founder/manager of the born global is critical in identifying and
establishing both fundamental and secondary networks. This lends support to the
importance of managements personal networks and can be linked to the
entrepreneurial perspective on internationalisation, which highlights the role of the
individual in the internationalisation process (Andersson, 2000). Sharma and
Blomstermo (2003) examined the strength of network ties (i.e., a combination of
amount of time, emotional intensity, intimacy, reciprocity of services) and
differentiated between weak and strong ties. They argued that weak ties are
advantageous for born globals as they provide more heterogenous knowledge and are
less costly to maintain than strong ties. Using the case study of the born global
company Helax, Sharma and Blomstermo (2003) also highlighted the importance of
the extensive personal ties of the chair of the company for the success of the firms
internationalisation endeavours.
In the context of firm success, Chetty and Campbell-Hunt (2003) found that business
networks can provide firms with market access and knowledge, technology, finance,
access to distribution channels and R&D. Oviatt and McDougall (1994) pointed to a
proprietary network (p. 60) of born globals, consisting of close alliances in several
countries, as a source of competitive advantage. Freeman et al. (2006) argued that
strong relationships with large foreign partners helped to overcome constraints to
rapid internationalisation, such as lack of economies of scale, and insufficient
financial and knowledge resources.
The relational view on performance can also give valuable insights into inter-firm
relationships. Drawing on relational exchange theory, Styles et al. (2008) developed
a conceptual model for export performance, by examining the characteristics of
relationships between exporters and importers. Adopting a dyadic research design,
they found a positive relationship between commitment to each other (i.e., exporter
and importer) and export performance. In addition, they stated that mutual trust is
positively associated with reciprocal commitment. In a similar vein, Lages et al.
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(2005) argued that relationships with importers and trust played important roles in
enhancing export performance.
The literature emphasises the importance of networks in the internationalisation

process of born globals, in particular personal networks. Accordingly, the next
hypothesis is:
Hypothesis 6: The leveraging of managements personal networks is
positively related to the international performance of born
global firms.
International trade shows represent a valuable means for firms to improve their
international exposure, and to promote products and services (Evers & Knight, 2008).
Each year, thousands of trade fairs are held, worldwide. For example, in 2009, there
were 139 trade fairs in Germany with 154,000 exhibiting firms and 8.9 million
visitors (Association of the German Trade Fair Industry, 2010). Tradeshows
worldwide accounted for more than $100 billion in annual direct spending in 2004
(Inc.com, 2010).
It should be noted that attending trade shows is not restricted to large companies, but
also smaller firms often participate in trade fairs. According to the US Trade Show
Bureau, 44% of all exhibitors in the USA have less than 50 employees (U.S. Small
Business Administration, 2010). This may be attributed to the fact that trade shows
represent a cost-effective medium for international marketing to meet a large number
of potential business partners (Evers & Knight, 2008). This can be particularly
suitable for resource-constrained companies, such as born global firms. It has been
indicated that trade shows tend to be viewed favourably, especially by those firms
that are already prepared to export (Wilkinson & Brouthers, 2000). Trade shows may
also provide opportunities to develop the export business, and increase the overseas
experience of managers and knowledge of international markets (Axinn, 1988).
Axinn (1988) suggested that attending trade shows also yield improvements in export
sales and elicit enquiries from clients. Gopalakrishna, Lilien, Williams, and Sequeira
(1995) found evidence for a positive impact of trade shows on the economic returns
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for the firm. In a similar vein, Wilkinson and Brouthers (2000) found a positive
association between trade shows and the level of state exports. In a follow-up study
of US SMEs, Wilkinson and Brouthers (2006) concluded that the use of trade shows
contributed positively to SME satisfaction with export performance. In the context of
born globals, McAuley (1999) highlighted the importance of trade shows for starting
to export in a study of Scottish born global firms in the arts and crafts sector.
Generally, firms attend trade shows for two different types of motives: selling and
non-selling (Shipley, Egan, & Wong, 1993; Hansen, 1996). Selling objectives are
related to achieving direct sales and revenue from participating at trade shows,
whereas non-selling motives are concerned with relationship- and image building,
information gathering, and market testing (Shipley et al., 1993). In a study of 104
UK firms, Blythe (2000) found that meeting new customers was the most important
objective for exhibitors at trade shows. This is consistent with an earlier study by
Shipley et al. (1993) who found that non-selling motives (e.g., meeting and
interacting with customers, enhancing company image) were more important
objectives than selling motives, such as taking sales orders. Rice (1992) highlighted
the role of interaction processes between suppliers and customers at trade shows and
proposed that social and informational exchanges rather than financial exchanges are
important in the early stages of a relationship between two parties. In the context of
born globals, this implies that the role of social networking is crucial to develop new
relationships with customers. Due to the relatively young age of born global firms,
they may more likely attend trade shows to establish new contacts and identify new
customers or business partners (e.g., distributors, agents). The size and experience of
a company as important determinants for different motives of attending trade shows
has also been suggested by Rice (1992). More specifically, experienced and larger
firms may tend to participate in trade shows for achieving sales, while younger and
smaller firms may look for networking opportunities (Rice, 1992). Based on a
qualitative study of 37 Irish and New Zealand born globals in the seafood industry,
Evers and Knight (2008) found that trade shows were primarily used as a networking
tool with potential buyers and other business partners (e.g., suppliers) (vertical
networks) and officials from government or industry organisations (horizontal
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networks). This networking enabled them to identify new business opportunities and
successfully expand in overseas markets. The network view of internationalisation
(e.g., Johanson & Mattson, 1988) offers a sound theoretical base in explaining the
networking motives of firms for attending international trade shows, in order to grow
their business worldwide. Based on this discussion, the next hypothesis is:
Hypothesis 7: The role of international trade shows as a networking
platform is related to better international performance of
born global firms.
3.6 Business Strategy

Considering business strategy, Gabrielsson and Kirpalani (2004) mentioned four
specific distribution channels that born globals tend to use, in order to operate
successfully in international markets. These pertain to MNEs as (1) systems
integrators, and (2) distributors of born global products/services, (3) networks, and
(4) the internet. With regard to MNEs as systems integrators, Gabrielsson and
Kirpalani (2004) pointed to the OEM-market in the electronics industry where born
global firms are manufacturing components for large multinationals. MNEs also
provide a suitable channel for the distribution of born global products and/or services.
F-Secure, a Finnish software provider, is mentioned as an example, whose products
are distributed by various large telecommunications firms worldwide (e.g., Deutsche
Telekom in Germany, and Wanadoo in France). The formation of networks often
emerges through links from specialised firms, which can lead to distribution channels
for born globals. Finally, the internet is mentioned as a marketing and distribution
method; this has been successfully applied by firms such as Amazon and eBay that
have developed into large, global firms.
The role of large MNEs for born globals international market entry is a recurring
theme in the literature. For example, Coviello and Munro (1997) found in a study of
New Zealand small software firms that the development of a relationship with one
large, foreign customer was a key driver for initial international market entry and
foreign market selection, and enabled the firms to tap into the global network of
the MNE. This is consistent with Freeman et al. (2006), who found that collaboration
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with large foreign partners and customers was one of the strategies that born globals
use to help overcome constraints to rapid internationalisation such as lack of
economies of scale, and financial and/or knowledge resources. Client followership
is another strategy for born globals, which has been identified by some authors (e.g.,
Bell, 1995; Bell et al., 2004) and occurs when firms enter new export markets as a
result of the internationalisation strategies of their domestic clients (Bell, 1995, p.
65). Bell et al. (2004) argued that client followership is one of the strategies that tend
to be commonly more frequently applied by born globals than by traditional
exporters.
Porter (1980) developed a typology of three generic strategies: cost leadership,

differentiation, and focus. In a cost leadership strategy, the firms goal is to become
the lowest cost producer in an industry, which can be achieved through factors such
as economies of scale and proprietary technology. Thus, the competitive advantage
of a firm that adopts a cost leadership strategy relates to it low-cost position.
Typically, such a firm serves a broad target market and sells standard or no-frills
products. In a differentiation strategy, a firm competes on the basis of its uniqueness
in dimensions that are valued by the buyer, such as product features and image. This
uniqueness generally leads to the charging of a premium price. A focus strategy
relates to the choice of a narrowly defined segment in an industry, which serves as
the target market of the firm. In a focus approach, a firm tailors its strategy to this
particular industry segment, by adopting either a cost or a differentiation focus within
its narrow target segment (Porter, 1980).
Findings from the export literature indicate a positive relationship between the use of
a differentiation strategy and export performance (Baldauf et al., 2000). In the
context of born globals, the applications of focus and differentiation strategies have
been shown to be positively associated with international performance (Knight &
Cavusgil, 2005). Many born globals adopt niche strategies in their
internationalisation efforts (e.g., Knight & Cavusgil, 1996; Chetty & Campbell-Hunt,
2004; Rennie, 1993); niche strategies are equivalent to Porters (1980) focus strategy
with differentiation (Miller, 1986). In terms of the match between the organisational
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structure and strategy, Miller (1986) suggested that the use of a niche differentiation
strategy may be appropriate for small firms with simple structures; most born globals
fit this categorisation. Accordingly, the next hypothesis is:
Hypothesis 8: The extent of pursuit of a niche strategy is positively
firms.
3.7 External Environment

The role of the external environment and its relationship with performance has
received less attention in the born global literature, with primary focus being placed
on entrepreneurial and organisational characteristics and firms formation processes
(Aspelund et al., 2007). The environment has been considered largely as a factor that
engenders and facilitates the development of born global firms. This relates, for
example, to advances in communications technology, more reliable and economical
transportation, and new market conditions, where niche products play an increasingly
important role (Madsen & Servais, 1997; Knight & Cavusgil, 1996). Small size and
isolation of some domestic markets (e.g., New Zealand) have also been mentioned as
drivers of the emergence of born globals (Chetty & Campbell-Hunt, 2004; Freeman
et al., 2006). Madsen and Servais (1997) developed a conceptual framework for
analysing the appearance of born globals, operationalising the environment as the
degree of market internationalisation, and industry factors such as the level of
technology (high/low). Similarly, Rialp et al. (2005a) incorporated environmental
factors, including sector type (high/low tech, service), geographic context (country,
rural/urban), and local and international networks, and proposed that these factors
may moderate the way in which a born globals intangible resources contribute to its
strategic behaviour (e.g., timing and pace of internationalisation, scope of
international strategy).
The attractiveness of the domestic and export market have also been investigated in
born global studies. For instance, Moen (2002) looked at the differences between
born globals and low-involvement exporters, finding that home market
unattractiveness (i.e., low market growth rate, small size, and necessity of exporting
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for survival) and export market attractiveness (i.e., high growth rate, demand and
profit potential) are significantly higher for born globals than for the other exporters.
The export literature can provide complementary insights into this issue. For
example, Madsen (1989) found that export market attractiveness, operationalised as
competitive intensity, market size and growth, and general economic growth in the
export country, had a positive relationship with export performance (i.e., export sales
and profitability). On the other hand, domestic market attractiveness (i.e., degree of
absence of competition, sales and profit potential relative to firm goals) was
negatively associated with export performance (Madsen, 1989). In a study of Greek
food and beverage firms, Mavrogiannis et al. (2008) found that export market
attractiveness was positively related to the adaptation of the export marketing mix,
which, in turn, showed a positive association with export performance.
The network view on internationalisation posits that successful internationalisation

may depend more on the position of a firm in a foreign network than on firm-specific
advantages (Johanson & Mattson, 1988). In this respect, the degree of
internationalisation of the market, which has been defined as the extent, intensity,
and degree of relationships across borders in the industry in general (Madsen &
Servais, 1997, p. 572), plays an important role. Johanson and Mattson (1988) argued
that the internationalisation process of firms tends to be faster, and may result in
more rapid establishment of sales subsidiaries in highly internationalised markets, as
the need for integration and co-ordination are likely to be higher, relative to less
internationalised markets. This study proposes that a highly internationalised market
may also provide a wider international network from which the firm can benefit.
Aspelund et al. (2007) concluded, in a comprehensive review of born global studies,
that there is a gap in the literature with regard to the role of the external environment,
including the degree of internationalisation of the market. Following this, the
external environment is incorporated into this study.
Building on the literature about the external environment in the context of exporting
and born global firms, the study proposes that domestic market attractiveness is
105
negatively associated with the international performance of born global firms. While
this proposition is not tested in the study, due to the expected very low level of
variation of domestic market attractiveness for the two sample countries (i.e., New
Zealand and Australia) over a short time period, it is an important issue for future
research. The hypotheses related to the external environment are as follows:
Hypothesis 9: The attractiveness of main foreign markets is positively
firms.
Hypothesis 10: The degree of internationalisation of the market is
positively related to the international performance of born
global firms.
3.8 International Performance

International performance is adopted as the dependent variable in the study. As
outlined in the literature review in Chapter 2, there is a wide heterogeneity in
employed performance measures, in the export and born global literature (Katsikeas
et al., 2000; Sousa et al., 2008). Venkatraman and Ramanujam (1986) distinguished
between three different types of performance: financial and operational performance,
and organisational effectiveness. This conceptualisation was also adopted by Hult et
al. (2008) who differentiated between financial and operational performance and
overall effectiveness. Shoham (1998) identified three dimensions of sales,
profitability, and change (in sales and profitability). In the EXPERF scale, Zou,
Taylor, and Osland (1998) developed the dimensions of financial export performance,
strategic export performance, and satisfaction with export venture. Based on
Cavusgil & Zou (1994), Styles (1998) used sales growth and profitability,
achievement of strategic objectives, and perception of success as the performance
measures. Sousa (2004) categorised export performance measures into sales-related,
profit-related, market-related, general and miscellaneous indicators. Katsikeas et al.
(2000) differentiated between economic measures (i.e., sales-related, profit-related,
and market share-related), non-economic measures (i.e., product-related, market-
related, and miscellaneous), and generic measures. Table 3.1 summarises the key
dimensions of performance used in the literature.
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Table 3.1: Dimensions of Performance
Author Dimension and Performance Type
Walker & Ruekert (1987) - Effectiveness

- Efficiency
- Adaptability
Venkatraman & Ramananujam (1986) - Financial performance
- Operational performance
- Organisational effectiveness
Shoham (1998) - Sales
- Profitability
- Change (sales and profitability)
Zou et al. (1998) - Financial export performance
- Strategic export performance
- Satisfaction with export venture
Styles (1998) - Sales growth and profitability
- Achievement of strategic objectives
- Perception of success
Katsikeas et al. (2000) - Economic measures
- Sales-related
- Profit-related
- Market share-related
- Non-economic measures
- Product-related
- Market-related
- Miscellaneous
- Generic measures
Sousa (2004) - Sales-related
- Profit-related
- Market-related
- General
- Miscellaneous
Hult et al. (2008) - Financial performance
- Operational performance
- Overall effectiveness
Considering the multidimensionality of performance, this study adopts measures on

each of the three types of financial, operational performance and organisational
effectiveness based on the influential, seminal study by Venkatraman and
Ramananujam (1986) and Hult et al. (2008). Moreover, in line with Styles (1998),
the study incorporates perceived success due to the importance of this generic
measure, and to provide a holistic assessment of performance (Katsikeas et al., 2000).
In developing the performance measures, the study adopts indicators on all three
dimensions of effectiveness, efficiency, and adaptability consistent with Walker &
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Ruekert (1987). The respective international performance measures on each of the

three dimensions are outlined in the next chapter.
3.9 Control variables

The conceptual model incorporates four control variables: firm size, firms
international experience, industry, and entry mode.
As indicated in Chapter 2, the majority of born globals are generally relatively small
in size. Firm size may affect performance in that larger companies tend to have more
resources at their disposal to deploy for internationalisation (Kuivalainen et al., 2007).
As a result, the study controls for firm size.
In addition, studies have suggested that firms international experience is a driver of

superior international performance (e.g., Cavusgil & Zou, 1994; Dean et al., 2000).
Thus, a control variable for firms international experience is incorporated in the
model.
This study examines multiple industries, such as manufacturing and ICT, in order to
provide an integrated approach to the study of born global firms. To control for
industry-related impacts on performance, a manufacturing dummy variable is
included in the model (Brouthers, 2002).
In line with the integrated approach adopted in this thesis, various potential entry
modes of born global firms are examined. These include, for example, exporting,
licensing, strategic alliance, joint-venture, and wholly-owned sales subsidiaries.
Accordingly, an export entry dummy variable to the firms first international market
is used in the model (Brouthers, Nakos, Hadjimarcou, & Brouthers, 2009).
3.10 Chapter Summary

This chapter describes the conceptual model of the study, building on the resource-
based view of the firm (RBV) and the network perspective on internationalisation.
Drawing on several literature strands, including exporting, entrepreneurship, strategic
management and networks, 10 research hypotheses are developed. The conceptual
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model incorporates the following constructs: firm and managerial characteristics,

networks, business strategy, external environment, control variables (e.g., firm size
and industry), and international performance. In developing the model, the study
focuses on intangible organisational and human resources, which include, for
example, international entrepreneurial orientation and product/service quality. The
model also incorporates a consideration of networks and the external environment,
consistent with the network view on internationalisation. Based on the strategic
management literature, the role of niche strategy is taken into account in the model.
Table 3.2 provides a summary of the hypotheses.
Table 3.2: Summary of Hypotheses

Dependent variable: International Performance
Hypothesis number Explanatory Variable Expected sign
H1 International entrepreneurial orientation +

H2 Product/service quality +
H3 Board of Directors/Advisory Boards service +
function
H4 Market orientation +
H5 Learning orientation +
H6 Leveraging of managements personal +
networks
H7 International trade shows as networking +
platform
H8 Niche strategy +
H9 Foreign market attractiveness +
H10 Internationalisation of the market +
In the next chapter, the study outlines the research methodology that is employed to
test the hypotheses and answer the research questions.
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CHAPTER 4
RESEARCH METHODOLOGY
This chapter covers the methodology employed in the study. The research paradigm
is discussed, and the mixed methods approach is outlined. In doing so, the qualitative
and quantitative components of the study are described, which include the research
instruments, the sample selection, and measurements of the dependent and
explanatory variables. In addition, the chapter outlines the statistical analyses for
testing the hypotheses and answering the research questions.
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Chapter 4 Research Methodology
4.1 Research Paradigm

Epistemology refers to the theory of knowledge and is related to the question of what
is (or should be) regarded as acceptable knowledge in a discipline (Bryman & Bell,
2007). There are two major approaches in business research: positivism and
interpretivism.
In a positivist approach, methods from the natural sciences are applied to study social
reality. The positivist paradigm is based on several principles (Bryman & Bell,
2007). First, only phenomena that are confirmed by the senses can genuinely be
considered as knowledge (i.e., principle of phenomenalism). Second, the purpose of
research is to generate theories that can be tested (i.e., principle of deductivism).
Third, knowledge comes from the gathering of facts that provide the basis for laws
(i.e., principle of inductivism). Fourth, science must be conducted in a way that is
value free (i.e., objective). Fifth, there is a clear distinction between scientific and
normative statements. Thus, in a positivist approach, there is the assumption of an
objective, social reality and the researcher is seen as independent from the subject of
the research (Houghton, 2008; Remenyi, Williams, Money, & Swartz, 1998).
Replicated findings are considered as true (Guba & Lincoln, 1994). A post-
positivist approach is related to the positivist perspective in that there is the
assumption of an objective reality. However, reality can never be fully understood,
only approximated, according to the post-positivist perspective (Denzin & Lincoln,
2005). Reality is viewed as imperfectly reachable, due to flawed human intellectual
mechanisms and the intractable nature of phenomena (Guba & Lincoln, 1994). As
such, post-positivism posits that our understanding of reality is constructed and
research is influenced by the values of the investigators (Tashakkori & Teddlie,
1998). In this perspective, replicated findings are probably true (Guba & Lincoln,
1994). Quantitative research is generally based on a post-positivist paradigm
(Tashakkori & Teddlie, 1998).
In comparison, in an interpretivist approach, it is argued that the methods of natural

sciences cannot be applied to the social world. Thus, the subject of social sciences
(i.e., people and their institutions) is viewed as fundamentally different to that of the
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natural sciences (Bryman & Bell, 2007). There is no assumption of a single,

objective reality as in the positivist approach; instead, the focus is on subjective
consciousness, which implies that the world consists of a series of multiple realities,
each of which is unique and depending on the circumstances and individuals
involved. For an interpretivist, the world is socially constructed (Remenyi et al.,
1998). In addition, the researcher is not independent from the subject of research, but
interacts with it and is an intrinsic part of it (Creswell, 1994; Guba & Lincoln, 1994).
The interpretivist paradigm places a stronger emphasis on understanding human
behaviour, rather than explaining it (as in positivism) (Bryman & Bell, 2007). An
interpretivist approach typically underlies qualitative research methods (Tashakkori
& Teddlie, 1998).
In this thesis, a mixed qualitative and quantitative research design is adopted,

consistent with the post-positivist paradigm, on the basis that it reflects common
understandings regarding both the nature of reality and the conduct of social and
behavioral research in the second half of the twentieth century (Tashakkori &
Teddlie, 1998, p. 8). In light of the nature of the research questions, which partly
relate to firm behaviour, the quantitative research design is complemented with a
qualitative component, in order to provide additional insights into the dynamics of
firm performance. Mixed method designs have been defined as those that include at
least one quantitative method (designed to collect numbers) and one qualitative
method (designed to collect words), where neither type of method is inherently
linked to any particular inquiry paradigm (Greene, Caracelli, & Graham, 1989, p.
256). According to Teddlie and Tashakkori (2003), mixed method research studies
use qualitative and quantitative data collection and analysis techniques in either
parallel or sequential phases (p. 11). Synthesising 19 definitions for mixed methods
from leading scholars in this area, Johnson, Onwuegbuzie, and Turner (2007) offered
the following suggestion:
Mixed methods research is the type of research in which a researcher or team
of researchers combines elements of qualitative and quantitative research
approaches (e.g., use of qualitative and quantitative viewpoints, data
collection, analysis, inference techniques) for the broad purposes of breadth
and depth of understanding and corrobation. (p. 123)
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Hohenthal (2006) argued that mixed methods are particularly appropriate in the area
of international entrepreneurship, as two research traditions are combined (i.e.,
international business with a quantitative focus and entrepreneurship with a
qualitative emphasis). Similarly, Coviello and Jones (2004) proposed combining
positivist and interpretivist methods within a dynamic research design in
international entrepreneurship research. Mixed methods have been employed
scarcely in born global research (Loane & Bell, 2006; Knight & Cavusgil, 2004).
This study adopts a sequential mixed methods approach as proposed by Tashakkori
and Teddlie (1998). The main purpose of mixed methods in this thesis is
development and initiation (Greene et al., 1989). Development refers to using the
results from one method to help develop or inform the other method, in order to
increase the validity of constructs and inquiry results. Initiation seeks the discovery
of new perspectives of frameworks by using results from one method with those of
the other method to increase the breadth and depth of inquiry results and
interpretations (Greene et al., 1989). Accordingly, this study adopts a research
design, with exploratory interviews being used to inform the quantitative survey
instrument. This takes primarily the form of helping develop the measurement of the
constructs in the survey. In line with the initiation purpose, the results from the
qualitative interviews and quantitative survey are jointly used to offer a richer and
more in-depth understanding of the phenomena at hand. According to Tashakkori
and Teddlie (1998), a qualitative/quantitative sequencing is common in mixed
methods designs as in most quantitative survey research, the quantitative closed-
ended instruments are developed after exploratory qualitative interviews have been
analyzed (p. 47). Following this logic, the qualitative interviews help to improve the
criterion validity (also known as construct validity) of the quantitative survey
instrument in the study. In the following sections, the qualitative and quantitative
research components are described.
4.2 Qualitative Component

For the qualitative part of the thesis, an interview approach is used; this is the
dominant form of qualitative methods in international business research (Andersen &
Skaates, 2004). It has been suggested that interviews are often the primary data
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source in qualitative research, as they can provide rich, empirical information

(Eisenhardt & Graebner, 2007). The main purpose of the interviews is to: (1) obtain a
deep understanding of the phenomena at hand, (2) help inform the survey instrument
(e.g., by operationalising the model constructs), and (3) seek initial confirmation of
the conceptual model. Construct validity is expected to be increased through the
application of interviews and a subsequent survey instrument (Edmondson &
McManus, 2007).
4.2.1 Sample Selection

In qualitative research, the sampling process is, in general, theoretically rather than
statistically driven (Miles & Huberman, 1994; Eisenhardt, 1989). Qualitative studies
tend to use a purposive approach as random sampling may reduce the logic and
coherence that are characteristic of social processes to uninterpretable sawdust
(Miles & Huberman, 1994, p. 27). Consistent with this line of thought, the study
adopts a purposeful sampling approach (Miles & Huberman, 1994).
The main criteria for interview selection included being a New Zealand or Australian
independently-owned company, and having exporting activities. Firms were selected
that differ in their industry sector, company size, and foreign market selection, to
provide variation for the analysis. The firms details and characteristics were
obtained through extensive internet research (e.g., company and government export
agency websites, newspaper articles) and information from the Dun & Bradstreet
database. The companies were contacted via a postal invitation letter outlining the
purpose and objectives of the research (see Appendix A for a copy of the cover
letter). This was followed-up by phone calls where arrangements of the interviews
(e.g., time and location) were confirmed. In total, eight interviews were conducted
(five New Zealand and three Australian companies), which was considered sufficient
as saturation of answers was perceived as the interviews progressed (Glaser &
Strauss, 1967). This is also consistent with studies that proposed a sample size of six
to 12 interviews for homogeneous samples (Guest, Bunce, & Johnson, 2004; Kuzel,
1992). The sample companies belonged to a variety of industry sectors, including
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manufacturing, ICT, and education, and had an average of 38 employees. A detailed

profile of the interviewed companies is outlined in Chapter 5.
4.2.2 Data Collection

The data were collected via in-depth interviews with the firms CEOs/owners or
export/sales managers, as these informants are likely to be able to provide the most
extensive and accurate information about the companies international activities. The
interviews centred on the topics of determinants and measurement of international
performance for the firms. To this end, semi-structured, in-depth interviews were
held, in which managers were asked questions related to their companies
international activities, internationalisation process and international performance. In
addition, the participants were asked how international performance is measured and
assessed in their firms. This is of particular interest to explore, as it has been
suggested that practitioners may use different performance measures, compared to
academics (Matthyssens & Pauwels, 1996). Semi-structured interviews were chosen,
in order to enable better comparison across the cases, and to ensure that the
qualitative data were consistent enough to categorise and analyse (Morse, 2005).
The interviews were conducted via telephone/Skype or face-to-face at the

companies premises. The main reasons for doing interviews by phone/Skype
included the authors research budget constraints as well as the interviewees limited
availability in New Zealand and Australia. In fact, two interviews were conducted by
Skype while the managers were on business overseas (USA and Vietnam). Each
interview lasted for approximately one hour. Prior to the interviews, the managers
completed a consent form indicating agreement to participate in the study in line with
the standards of Victoria University of Wellingtons Human Ethics Committee
(HEC). The consent form emphasised the voluntary nature of participation and
assured the confidentiality of all interview data. A copy of the invitation letter and
participant consent form can be found in Appendices A and B. Appendix C outlines
the interview protocol for all semi-structured interviews. It should be noted that the
protocol does not include any emerging questions that evolved in the course of the
interviews and that were asked by the interviewer as appropriate.
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4.2.3 Data Analysis

Qualitative data analysis generally involves three concurrent flows of activity: data
reduction, data display, and conclusion drawing/verification (Miles & Huberman,
1994). These three activities are interactive and interrelated and, therefore, form a
continuous and iterative process (Miles & Huberman, 1994).
The interviews were audio-recorded and then transcribed in Microsoft Word before
importing into the computer software NVivo (Version 8) for data analysis. The use
of computer-assisted qualitative data analysis (CAQDAS) has been recommended in
the literature due to its benefits in terms of providing rigour and validity which is
difficult to achieve with manual methods (Lindsay, 2004). NVivo is an efficient tool
for doing advanced qualitative analysis and is widely used in qualitative research
(Bazeley, 2007). Following the recommendations by Miles and Huberman (1994),
the interview transcripts were thoroughly checked and evolving patterns and themes
identified and conclusions drawn. The qualitative research design involved pre-
conceptualisation of issues developed from the literature review and conceptual
model outlined in Chapters 2 and 3 (Miles & Huberman, 1994). Sinkovics, Penz, and
Ghauri (2008) termed this method a-priori categorisation. During data analysis, the
coding process also included a-posteriori categorisation with open coding to allow
for the emergence of new themes (Sinkovics et al., 2008). In sum, descriptive and
subsequent pattern coding was applied in the course of the data analysis (Miles &
Huberman, 1994).
4.3 Quantitative Component

Data for the quantitative research component is collected via a web-based survey
instrument. The rationale for choosing a web-based survey, as well as the procedure
for sample selection, survey development and administration, and the measurements
of the variables are described in the following. In addition, the statistical analyses
used for testing the hypotheses and answering the research questions are presented.
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4.3.1 Research Instrument

With the advent of the internet, the emergence of electronic-based surveys has
become increasingly important in recent years (Couper, 2000). Dillman (2000)
argued that electronic survey methods have the potential for bringing efficiencies of
comparable importance to the design and administration of self-administered
questionnaires (p. 352). Electronic survey methods can be differentiated into email
and web-based surveys (Sue & Ritter, 2007). In an email survey, the survey is either
in the body of the email or attached as a document for the respondent to complete.
Advantages of email surveys include the fast delivery and response speed, and low
costs. One major drawback is that anonymity is often not possible, as the researcher
can see the email addresses of the respondents, which may negatively impact on the
response rates (Sue & Ritter, 2007). In a web-based survey, the respondents are
referred to a website, where the survey is stored on a network server. While bearing
similar benefits as email surveys, the email addresses of respondents are not visible
in a web-based approach, thus guaranteeing anonymity (Jansen, Corley, & Jansen,
2007). Table 4.1 provides an overview about the benefits and drawbacks of web-
based surveys compared to mail questionnaires.
Table 4.1: Advantages and Drawbacks of Web-based Surveys Compared to Mail
Questionnaires
Advantages of web-based versus mail survey Drawbacks of web-based versus mail
survey
Costs: Visual appearance:
Lower costs (Dixon & Turner, 2007) Appearance of the survey may differ
- no printing of survey required for respondents due to different monitor
- no costs for postage sizes, web browsers, and operating
- overcome international systems (Dillman, 2000)
boundaries as barriers to conduct
surveys (Dillman, 2000)
Layout/Design: Spam email:
More opportunities in terms of layout Web-based survey may be seen as spam
(e.g., colour) email (Dixon & Turner, 2007)
Interactive feature to guide respondents
(jump questions) (Griffis et al., 2003)
Data entry/Administration of survey: Technology problems:
Easier to administer (e.g., tracking of Crash of server, unstable internet
response rates, sending of reminder) connection (Jansen et al., 2007)
Direct data entry through server
- reduction of manual data entry
errors (Sue & Ritter, 2007)
Delivery and Response speed:
Quicker delivery and turn-around time
(Kwak and Radler, 2002)
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The first advantage of web-based surveys relates to the lower costs compared to mail
questionnaires. In web-based surveys, there are no costs involved for printing and
postage (Dixon & Turner, 2007). As a result, it is generally easier to access a wider
geographic sample, thus overcoming international boundaries as barriers to conduct
surveys (Dillman, 2000). Another advantage refers to the greater possibilities, in
terms of layout and design of the web-based survey. Examples include the use of
multiple colours, a more dynamic design, and the interactive feature of web-based
surveys to guide respondents by skipping questions (i.e., items that do not apply) that
can be confusing in mail surveys (Griffis, Goldsby, & Cooper, 2003). In addition, the
administration of the survey and data entry is facilitated in web-based surveys.
Response rates can be more easily tracked, and the survey responses are captured and
stored directly through the server, which largely minimises the errors that may result
from manual data entry of mail questionnaires (Sue & Ritter, 2007). Furthermore, the
delivery and response speed is likely to be faster in web-based surveys than mail
questionnaires (e.g., Kwak & Radler, 2002; Griffis et al., 2003).
In terms of disadvantages of web-based surveys, they may not look the same way for
the respondents; this could be caused by, for example, different web-browsers, and
monitor sizes (Dillman, 2000). Also, non-response and privacy issues can be of
concern in that web-based surveys may be regarded as spam email, resulting in the
reluctance of respondents to complete the survey (Dixon & Turner, 2007).
Technology problems are another potential drawback of web-based surveys. For
example, servers, where the surveys are stored, may crash, and internet connections
may be interrupted (Jansen et al., 2007).
While some studies found higher response rates for web-based surveys (e.g., Griffis
et al., 2003), mail questionnaires seem to have a higher response rate than web-based
surveys (e.g., Kwak & Radler, 2002). In a meta-analysis of 39 comparative survey
studies published between 1995 and 2006, Shih and Fan (2008) concluded that mail
questionnaires generally have higher response rates than web-based surveys. The
authors also found that attributes of the target population type accounted for some of
the variation of the differences in response rates between web-based and mail
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surveys. In comparative studies with college students as the target population, web-
based surveys had, on average, higher response rates than mail questionnaires. It
should be noted that while the nature of the survey (i.e., mail or web-based) may play
an important role for response rates, the appropriate design and implementation
procedures are often critical in attaining effective response rates (Dillman, 2000).
In this study a web-based survey is adopted as the research instrument, due to its
advantages compared to mail surveys, in particular, the ease of accessing a wider
geographic sample and the increased response speed. Coverage bias is likely to be
minimised in this manner, as it is expected that most managers of the internationally
active firms (i.e., the target population in this study) are familiar with the internet and
relatively technology-savvy. The development and administration of the survey is
described in Sections 4.3.3 and 4.3.4.
4.3.2 Research Sample

As outlined in Section 2.1, there are various operationalisations of born global firms.
Based on the literature review in Chapter 2 and the seminal work from Oviatt and
McDougall (1994), who defined an international new venture as a business
organization that, from inception, seeks to derive significant competitive advantage
from the use of resources and the sale of outputs in multiple countries (p. 49), the
study adopts an operationalisation of a born global firm with the following three
features:
Internationalisation starting within three years of establishment of the firm
AND
At least 25% of total sales from international markets within three years of
establishment of the firm
AND
Independently owned (i.e., start-up operation or spin-off from other firm,
excluding subsidiaries of multinational enterprises (MNEs)
The first feature of the studys born global operationalisation relates to the rapidity of
international market entry. A born global is operationalised as a firm that starts to
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internationalise within three years after establishment. This time frame is consistent
with many born global studies (e.g., Knight & Cavusgil, 2004; Moen, 2002; Mort &
Weerawardena, 2006; Servais et al., 2007). In addition, firms with at least 25% sales
from international markets within three years after company establishment are
operationalised as born globals, according to this studys definition, based on Knight
(1997). This 25% international sales cut-off has been used widely in born global
research (e.g., Mort & Weerawardena, 2006; Andersson & Wictor, 2003; Madsen et
al., 2000; Knight & Cavusgil, 2004; Spence & Crick, 2009). It should be noted that
the study uses the international sales ratio that also incorporates sales through other
entry modes besides exporting (e.g., licensing) rather than a pure export sales ratio.
The rationale for using the international sales ratio is to provide a more integrated
approach of born global firms in line with the work of Crick and Jones (2000).
Finally, only independently-owned firms (i.e., start-ups and spin-offs from other
firms) are considered as born globals, while subsidiaries of MNEs are excluded. This
operationalisation is based on Zahra (2005) and Aspelund et al. (2007), who raised
the issue of incorporating spin-off firms in a definition of born globals.
In order to develop the sampling frame, the following criteria were employed: (a)
establishment date of the firm, (b) location, and (c) exporting activities. With regard
to the establishment date of the firm, companies were selected that were founded
between 1999 and 2009. The rationale for this selection lies in the measurement of
firm performance. As the study examines the international performance of born
globals for the first five years after the initial internationalisation, relatively young
firms were chosen, in order to reduce potential memory bias of respondents. In
addition, several researchers have used a company age of 20 years or younger, in
order to operationalise born globals (Knight, 1997). Moen (2002) argued that the
period after 1990 is characterised by increasing drivers for the emergence of born
globals, including advances in communication and process technology.
Regarding the home base of firms, companies from New Zealand and Australia were
selected, with no distinction being made among regions within the two countries.
Born global firms tend to be an important phenomenon in both countries (e.g.,
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Rennie, 1993; Liesch et al., 2007; Chetty & Campbell-Hunt, 2004). In addition, the
adoption of a multi-country approach is advocated in research on small firm
internationalisation (Coviello & McAuley, 1999). The inclusion of New Zealand and
Australia in the sample frame ensured that the two largest economies in Oceania
were examined in this study.
The last criterion refers to firms that have exporting activities. As previously noted in
Chapter 2, born globals have been found in different sectors, such as high-technology
(Crick & Jones, 2000), arts and crafts (McAuley, 1999), and manufacturing (Madsen
et al., 2000). To provide a richer perspective, and in keeping with the goal of
developing a more holistic understanding of the issues, the sample was selected
across various sectors, in different industries, and was not focussed on one particular
segment of the market. Also, firm size was not a selection criterion. As born global
firms are not defined by their size (Oviatt & McDougall, 1994), firm size was not
included as a filter (but was incorporated in the analysis).
The Dun & Bradstreet database was used to develop the sampling frame for the
research, according to the criteria mentioned above. Dun & Bradstreet is the worlds
leading source of information and insight on businesses with a global commercial
database of 177 million business records. The Dun & Bradstreet New Zealand and
Australia divisions hold information on 2.8 million businesses (Dun & Bradstreet,
2010).
It is important to emphasise that both born globals and traditional

internationalising firms were incorporated in the sample frame. A comparison
between these two types of firms is likely to lead to more robust results and offers a
more integrated perspective on the determinants and measurement of international
performance of born globals, relative to traditionally internationalising firms.
4.3.3 Survey Development and Pre-Testing

The survey was developed to collect primary data on international performance and
various constructs assumed to be associated with performance, such as
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product/service quality and market orientation. The computer software Qualtrics was
chosen, in order to create a web-based survey instrument. Qualtrics is used by many
universities worldwide as well as corporate and government clients, and is a user-
friendly and professional survey tool (Qualtrics, 2010). Due to these features and a
licensing agreement between Victoria University of Wellington and Qualtrics, this
software was selected for developing the web-based survey. The questionnaire
consisted of several sections that cover the research hypotheses, as described in
Chapter 3. Seven-point Likert scales were used for the majority of the questions.
Likert scales are commonly-employed in social science and international business
research and are useful for statistical analysis (Cavana, Delahaye, & Sekaran, 2001).
The layout and design of the survey followed the principles of web-based survey
development, as outlined by Dillman (2000). For example, it included page breaks
where appropriate (i.e., optimising the number of items per screen without the need
for scrolling) and other additional features, such as automatic skipping of non-
applicable questions (Toepoel, Das, & Van Soest, 2009). The questionnaire also
incorporated a survey progress bar and the ability to go forward and backward
between the questions, which are essential components for designing efficient web-
based surveys (Lumsden, 2007).
Pre-testing is an important part of survey development and can serve different

purposes, such as validity testing, an evaluation whether there are any production
mistakes with the survey, and whether respondents understand all questions (i.e.,
learning purpose) (Dillman, 2000). To increase validity, the survey was first
thoroughly checked by subject matter experts that included the authors supervisory
committee and two senior academics (in the areas of marketing and international
business) from Victoria University of Wellington. As the next step, the survey was
pre-tested on 10 managers of born global and non-born global firms. The feedback
and suggestions were incorporated in the form of minor amendments to wording,
survey design and order of questions.
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4.3.4 Administration of the Survey

In total, 2,000 firms were invited to participate in the survey, 1,000 each from New
Zealand and Australia. Initially, a postal letter containing the link to access the web-
based survey was sent to all 2,000 companies. The letter described the purpose of the
study and explained that all responses would be strictly anonymous and treated in
confidence. In addition, respondents were offered a summary report of the findings
as an incentive to complete the survey.
The usage of additional contacts, following the initial invitation to participate, is

likely to affect the response rate. Dillman (2000) argued that survey response rates
are generally 20-40% lower, if there is no follow-up contact. Accordingly, a
personalised email was distributed one week after the initial contact reiterating the
information from the postal letter and containing the survey link. The approach of
using advance postal mail notification followed by email contact was adopted in line
with Kaplowitz, Hadlock, and Levines (2004) recommendations for administering
web-based surveys. Another reminder email was sent one week after the first email
thanking those who have responded, and reminding those who had not yet responded
to complete the survey.
The web-based survey instrument is presented in Appendix E, along with the initial
postal cover letter (Appendix D) and the two follow-up emails (Appendices F and
G). The survey is organised into four main parts:
Part 1: Going international
Part 2: Factors influencing the companys international performance
Part 3: International performance measurement
Part 4: General company information (e.g., firm age, number of employees,
international sales ratio, international market selection and entry mode)
The detailed measurement of the constructs is outlined in the following section.
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4.3.5 Measurements of Constructs

The measurements were derived from previously validated measures found in the
existing literature, wherever possible, in order to test the hypotheses outlined in
Chapter 3. Also, the findings from the exploratory interviews were incorporated in
the measurements, thus improving the criterion validity of the survey instrument.
Please refer to Tables 4.2 and 4.3 for a detailed overview of the measurements of the
constructs. Most of the variables were measured using seven-point Likert scales.
Table 4.2: Summary of Measurement for Explanatory Variables
Construct Measurement Sources
International 12 items, 7-point Likert scales Knight & Cavusgil

entrepreneurial (Question 4) (2004); Hughes &
orientation Morgan (2007);
- Proactiveness Knight & Kim
- Innovativeness (2009); Nummela et
- Global mindset al. (2004); interviews
- Perseverance
Product/Service 3 items, 7-point Likert scales Menon et al. (1997)
quality (Question 3)
- Praise for product/service quality by international
customers
- Better product/service quality than major competitors
- International customers conviction of companys
high product/service quality offering
Board of 5 items, 7-point Likert scales Huse (1993, 2007);
Directors/Advisory (Questions 5 and 6) interviews
Boards service
function - As advisors for senior management for issues such as
corporate strategy, human resources, organisation
- Networking and gaining contacts with external
stakeholders (e.g. banks, customers, suppliers,
government)
- As advisors for senior management for financial and
legal issues
- Lobbying and influencing external stakeholders (e.g.
banks, customers, suppliers, government)
- Developing and advising on the firms international
strategy
Market orientation 15 items, 7-point Likert scales Narver & Slater
(Question 8) (1990)
- Customer orientation
- Competitor orientation
- Interfunctional coordination
Learning 11 items, 7-point Likert scales Sinkula et al. (1997);
orientation (Question 7) Baker & Sinkula
(1999)
- Commitment to learning
- Open-mindedness
- Shared vision
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Table 4.2: Summary of Measurement for Explanatory Variables Contd
International trade 5 items, 7-point Likert scales Evers & Knight

shows as (Questions 13 and 14) (2008); Shipley et al.
networking (1993); interviews
platform - Identify new business partners (e.g. distributors, joint
venture partners, industry associations)
- Meet new customers
- Identify key players in the industry
- Establish contacts and develop wider networks in the
industry
- Maintain relationships with existing customers
Leveraging of 2 items, 7-point Likert scales Andersson & Wictor
managements (Question 15) (2003); Freeman et
personal networks al. (2006); interviews
- Importance of personal contacts as provider of
networks for internationalisation
- Amount of pre-existing personal networks for
Niche strategy 8 items, 7-point Likert scales Moen (2002); Liesch
(Question 9) et al. (2007);
interviews
- Targeting of specialised needs in international markets
- Product/service as new and innovative way of meeting
a demand
- Emphasis on uniqueness of product/service in
international marketing
- Product/service highly specialised for international
markets
- Product/service unique with respect to technology
- International strategy to serve an unmet market need
- Focus on exploiting niche in market
- Targeting of relatively new and untapped markets
worldwide
Foreign market 3 items, 7-point Likert scales Cavusgil & Zou
attractiveness (Question 11) (1994); Madsen
(1989)
- Foreign market size
- Foreign market potential
- Sophistication of marketing infrastructure in main
foreign markets
Internationalisation 4 items, 7-point Likert scales Madsen & Servais
of the market (Question 12) (1997); Johanson &
Mattson (1988)
- Degree of internationalisation of the industry
- Degree of interdependence of business relationships
within the industry, worldwide
- Number of international customers, distributors,
competitors, suppliers and other business partners in
the industry
- Importance of maintaining business relationships due
to the interconnectedness and integration of the
industry
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Table 4.3: Summary of Measurement for Dependent Variables
Financial 4 items, 7-point Likert scales Knight & Cavusgil

performance (Questions 16 and 17) (2004); Crick (2009);
interviews
Level of importance and degree of satisfaction with:
- International sales
- International sales growth
- International profitability
- Return on investment (ROI) from international
business
Operational 6 items, 7-point Likert scales Venkatraman &
performance (Questions 16 and 17) Ramanujam (1986);
Vorhies et al. (1999);
Level of importance and degree of satisfaction with: interviews
- Market share in international markets
- New product/service introduction in international
markets
- Time to market for new products/services
internationally
- Number of successful new products/services in
international markets
- Global reach (i.e. presence in strategically located
countries worldwide)
- Gaining a foothold in international markets
Organisational 2 items, 7-point Likert scales Cadogan et al.
effectiveness (Questions 16 and 17) (2002); Thirkell &
Dau (1998); Hult et
Level of importance and degree of satisfaction with: al. (2008); interviews
- International reputation of the firm
- Overall international performance
Perceived success 2 items, 7-point Likert scales Styles (1998);
(Questions 18 and 19) interviews
- Success of main international business
- Success of main international business from
competitors perspective
All international performance measures relate to the companys main international business and refer
to the first five years after the firms initial internationalisation
The descriptions for these constructs are outlined in the following sections.
4.3.5.1 Measuring Explanatory Variables

The thesis adopts the following explanatory constructs: five refer to firm and
managerial characteristics, two relate to networks, one refers to business strategy,
and two are related to the external environment. These constructs are explained in the
following.
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4.3.5.1.1 Measuring International Entrepreneurial Orientation

The measures for international entrepreneurial orientation are derived primarily from
Knight and Cavusgil (2004), Knight and Kim (2009), and Hughes and Morgan
(2007). Based on these studies and the interview findings (see Chapter 5), the thesis
draws on the concepts of proactiveness, innovativeness, global mindset, and
perseverance following Frishammar and Anderssons (2009) call for developing
suitable operationalisations of entrepreneurial orientation in the context of small
firms. In particular, the concept of perseverance emerged from the qualitative portion
of the study. Question 4 of the survey is used to capture international entrepreneurial
orientation (please refer to Appendix E).
4.3.5.1.2 Measuring Product/Service Quality

The level of product/service quality includes several dimensions: performance (i.e.,
primary operating characteristics of a product/service), features (i.e., secondary
characteristics that supplement the products/services basic functioning), reliability
(i.e., probability of a products failing within a specified period of time), durability
(i.e., a measure of product life), serviceability (i.e., speed, courtesy, and competence
of repair), and aesthetics (i.e., the look, feel, sound, taste or smell of a product)
(Garvin, 1984). These dimensions relate to both the intrinsic characteristics of the
product/service and its associated services. In this thesis, the measurements of
product/service quality are adopted from Menon, Jaworski, and Kohli (1997).
Question 3 of the questionnaire is related to measuring product/service quality (see
Appendix E).
4.3.5.1.3 Measuring Board of Directors/Advisory Boards Service Function

The role of a Board of Directors and/or Advisory Board is incorporated in this study,
due to these bodies potential implication for firm performance and value creation
through the provision of industry contacts (Luostarinen & Gabrielsson, 2006;
Madsen & Servais, 1997). Respondents were asked whether their firms have a Board
of Directors and/or Advisory Board, along with the extent to which any such bodies
provide advice in terms of the internationalisation of the company. The measurement
scale for Board of Directors/Advisory Boards service function is based on the work
127
of Huse (1993, 2007) and the findings from the interviews. Questions 5 and 6 are
used to develop this construct (see Appendix E).
4.3.5.1.4 Measuring Market Orientation

Market orientation has been operationalised in several different ways (e.g., Narver &
Slater, 1990; Kohli & Jaworski, 1990; Kohli, Jaworski, & Kumar, 1993). Two of the
most widely used operationalisations of market orientation are from Narver and
Slater (1990) and Kohli and Jaworski (1990). In this study, market orientation is
measured by drawing on the Narver and Slater (1990) conceptualisation, on the basis
that it is more grounded in organisational culture and behavioural measures,
compared to the Kohli and Jaworski (1990) scale that focuses on market information
intelligence. Please refer to Question 8 of the survey for the measurement items for
market orientation (see Appendix E).
4.3.5.1.5 Measuring Learning Orientation

As previously mentioned, learning orientation has often been examined in
combination with market orientation (Baker & Sinkula, 1999; Mavondo et al., 2005).
Learning orientation is measured by selecting adapted scales from the widely used
and established operationalisation by Sinkula et al. (1997). Question 7 of the
questionnaire is used to capture learning orientation (see Appendix E).
4.3.5.1.6 Measuring Networks

There has been little research that examines how born global firms acquire and
maintain their networks for internationalisation (Evers & Knight, 2008). In this study,
the importance of senior managements personal networks for born global firms is
emphasised in line with Andersson and Wictor (2003) and Freeman et al. (2006). The
construct is measured by the amount and level of importance of managements
personal networks for providing internationalisation networks (see Question 15 in
Appendix E). Based on Shipley et al. (1993), Evers and Knight (2008) and the
findings from the interviews, the role of international trade shows as networking
platforms is recognised in this study. Respondents were asked how important
networking objectives were for attending international trade shows (Shipley et al.,
1993; Evers & Knight, 2008) (see Questions 13 and 14 in Appendix E).
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4.3.5.1.7 Measuring Business Strategy

As outlined in Chapter 2, a positive relationship is hypothesised between the extent
of pursuit of a niche strategy and the international performance of born globals.
Measures for a niche strategy are derived primarily from Moen (2002) and Liesch et
al. (2007) and the interview findings, and involve, for example, the extent of
product/service specialisation for international markets and the targeting of new and
relatively untapped markets worldwide. The niche strategy construct is developed
by Question 9 in Appendix E.
4.3.5.1.8 Measuring External Environment

The external environment is represented by foreign market attractiveness and the
internationalisation of the market. Measurements for foreign market attractiveness
are based on Cavusgil and Zou (1994), and Madsen (1989) and comprise foreign
market size, foreign market potential and sophistication of the marketing
infrastructure in international markets (see Question 11 in Appendix E). In addition,
the internationalisation of the market is measured, drawing on Madsen and Servais
(1997), and asking respondents about the degree of interdependence and extent of
international relationships within the industry, and the degree of international
customers, distributors, competitors, suppliers, and other business partners within the
industry (see Question 12 in Appendix E).
4.3.5.2 Measuring International Performance

The thesis employs one dependent variable: international performance. As described
in Chapter 2, performance can be measured by subjective and objective indicators
(Hult et al., 2008). There are some challenges associated with the use of objective
performance data in the context of small, entrepreneurial firms. These are highlighted
by Sapienza et al. (1988), who argued that
It is quite common for owner/entrepreneurs to refuse to provide objective and
actual measures of organizational performance to researchers. Furthermore,
often when such data are made available, they are not representative of the
firms actual performance, as many owner/entrepreneurs for a variety of
reasons report manipulated performance outcomes (e.g., profits). (p. 46)
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As noted earlier, public data, such as annual reports, are often not available for small
firms, which makes it difficult to verify the accuracy of self-reported information
(Robertson & Chetty, 2000). Many studies in the born global literature have adopted
subjective measures (e.g., Knight & Cavusgil, 2004; Jantunen et al., 2008). It has
also been noted that subjective and objective performance measures tend to be
correlated (Dess & Robinson, 1984). In consideration of the arguments above,
subjective performance measures are used in this thesis.
The study examines multiple dimensions and measures of international performance,

following Venkatraman and Ramanujam (1986), Matthyssens and Pauwels (1996)
and Murphy et al. (1996). Hult et al. (2008) also advocated the use of multiple types
of performance. There appears to be agreement in the literature that performance is a
multidimensional construct (Bhargava, Dubelaar, & Ramaswami, 1994; Morgan &
Strong, 2003; Walker & Ruekert, 1987). The performance dimensions employed in
the thesis include: financial (e.g., international sales), operational (e.g., market share
in main international markets), organisational effectiveness (e.g., international
reputation of the firm), and perceived success (e.g., success as perceived by main
competitors) (Venkatraman & Ramanujam, 1986; Hult et al., 2008; Styles, 1998). It
is important to emphasise that it is intended to examine different types of
international performance. The rationale for this approach is to provide a more
differentiated analysis, in the context of investigating relationships between internal
and external factors and particular aspects of international performance. Thus, it is
expected to gain deeper insights into the multidimensionality of international
performance. In this regard, the study incorporates performance measures on each of
the three dimensions of performance introduced by Walker and Ruekert (1987): (1)
effectiveness (i.e., international sales, international sales growth, market share in
international markets, global reach, international reputation of the firm, overall
international performance), (2) efficiency (i.e., international profitability, ROI from
international markets, success of main international business, success of main
international business from competitors perspective) and (3) adaptability (i.e., new
product/service introduction in international markets, time to market for new
130
products/services internationally, number of successful new products/services in

international markets, gaining a foothold in international markets).
The international performance measures are weighted by multiplying the level of

importance by the level of satisfaction for each measure as indicated by the survey
respondents. This approach of weighting performance measures is aimed at offering
a more fine-grained view of performance and has been adopted in previous studies
(e.g., Thirkell & Dau, 1998; Robertson & Chetty, 2000; Dau, 1991; Gupta &
Govindarajan, 1984).
In developing the performance measures, the thesis draws on the extant literature and
the exploratory interviews outlined in Chapter 5. Financial measures include the
level of importance and degree of satisfaction with the firms international sales,
international sales growth, international profitability, and return on investment (ROI)
from international business (Knight & Cavusgil, 2004; Crick, 2009). This is in line
with the three key performance measures of export sales, export sales growth and
export profitability that are commonly adopted in the export performance literature
(Katsikeas et al., 2000). Operational measures involve the level of importance and
degree of satisfaction with market share in international markets, new
product/service introduction in international markets, time to market for new
products/services internationally, number of successful new products/services in
international markets, global reach, and gaining a foothold in international markets
(Venkatraman & Ramanujam, 1986; Vorhies, Harker, & Rao, 1999). This dimension
mainly incorporates the adaptability dimension of performance (Walker & Ruekert,
1987). Organisational effectiveness measures involve the level of importance and
degree of satisfaction with international reputation of the firm and overall
international performance (Cadogan et al., 2002; Thirkell & Dau, 1998). Finally,
perceived success is measured by the rate of success of main international business
as perceived by respondents and as perceived by main international competitors
(Styles, 1998) consistent with the common use of perceived success in the export
literature (Katsikeas et al., 2000). These measures are included to provide insights
131
into the broader implications of international performance to the firm (Hult et al.,
2008).
In terms of the time frame, respondents are asked to evaluate the international
performance for the first five years following the companys initial
internationalisation. This time frame is intended to provide insights into the crucial
first years of a born globals international endeavours, and to incorporate an
assessment of sustained international performance. Five-year time horizons have
been applied in previous performance studies (e.g., Cavusgil & Zou, 1994; Thirkell
& Dau, 1998). As outlined in Chapter 2, other common time frames adopted in the
literature include the previous one to three years (e.g., Knight & Cavusgil, 2004)
The frame of reference against which the international performance measures are
related to is primarily the companys own goals and expectations. This reference
frame is selected based on Diamantopoulos and Kakkos (2007) finding that firms
perceive their own plan as a more important performance measurement benchmark
than against competitors. A combination of goal-and competitor-related frame is
adopted for the perceived success construct in line with other studies (Styles, 1998).
Questions 16-19 of the survey are used to develop the international performance
construct (see Appendix E).
The study uses the firm as the level of analysis for performance measurement. While
some studies have used the venture level (e.g., Cavusgil & Zou, 1994; Knight &
Cavusgil, 2004) (see Chapter 2), Styles (1998) argued that smaller firms are less
able to isolate the performance of a specific export venture from total export
performance (p. 27). Consistent with this line of reasoning and following other born
global studies (e.g., Jantunen et al., 2008), the study adopts the firm-level as the unit
of analysis for international performance measures.
4.3.5.3 Control Variables

In line with previous performance studies, the study controls for the firms
international experience, operationalised as the number of years it has been involved
in international activities (Francis & Collins-Dodd, 2000), along with firm size
132
(operationalised as companys annual gross sales) (Jantunen et al., 2008), and

industry sector (operationalised as dummy variable for manufacturing firms)
(Brouthers, 2002). In addition, due to the potential implications of entry mode choice
on performance (Zahra et al., 2000), entry mode is controlled for by including a
dummy variable for exporting to the first foreign market. Questions 22, 28, 32 and 34
in Appendix E are developed to capture the control variables. In addition, differences
among the firms are analysed by various attributes, such as foreign market entry
mode, and first main overseas markets.
4.3.6 Data Analytical Tools

Preliminary data analysis involved the calculation of descriptive statistics and
frequencies of the variables used in the study along with graphical inspection of plots.
Summated scales were computed based on exploratory factor analysis and reliability
analysis which was assessed based on Cronbachs alpha.
Ordinary least squares (OLS) regression modelling was used as the main statistical
tool to test the hypotheses. Regression-type modelling is widely-employed in the
international business literature, and has been adopted in born global research
(Kuivalainen et al., 2007; Jantunen et al., 2008). Multiple regression is suitable for
assessing the degree and character of relationships between dependent and
explanatory variables (Hair, Black, Babin, Anderson, & Tatham, 2006). Residual
analysis was employed, to check the model assumptions: (1) normality, (2)
homoscedasticity (constant variance), and (3) independence of the error terms.
Potential multicollinearity among the explanatory variables was assessed using
variance inflation factors (VIF) and pairwise correlations. Several performance-
related dependent variables were modelled. The different attributes of international
performance served as dependent variables, with the goal of understanding how the
various factors explain the several distinct aspects of performance. Regression
modelling was undertaken separately for two sample groups: born global and non-
born global firms. While the results for the born global sample were used to test the
hypotheses, the modelling with the non-born global sample allowed valuable
133
comparison, thereby enhancing the rigour and interpretability of the studys findings.
All testing was done using 90%, 95% and 99% confidence.
In addition to regression-type modelling, T-tests, analysis of variance (ANOVA),

confidence intervals for proportions, and Pearsons chi-square tests (crosstabulations)
were used, in order to answer the research questions and examine international
performance measures, psychic distance levels to first overseas markets, and
industry-related differences in terms of entry mode choice and international market
selection.
The statistical software SPSS (Version 18) was employed for undertaking the
quantitative analyses in the study.
4.4 Chapter Summary

This chapter highlights the research methodology used in this study. The thesis
adopts a mixed methods approach with exploratory interviews and a subsequent web-
based survey instrument. The key purpose of the interviews is to (1) help validate the
conceptual model, (2) develop a richer understanding of the performance
mechanisms of born global firms, and (3) to assist in informing the constructs of the
web-based survey. The primary goal of the mixed methods design is to increase the
rigour of the study, developing an integrated understanding of the international
performance determinants and measurements for born global firms.
Semi-structured, in-depth interviews are conducted with the CEOs/owners or

export/sales managers of five New Zealand and three Australian born global firms
via phone/Skype and face-to-face. The web-based survey instrument is developed
based on the extant literature, and by incorporating the interview findings. It is
distributed to a total of 2,000 New Zealand and Australian companies in various
industry sectors that fit certain specified criteria, including year of establishment, and
presence of exporting activities. The sampling frame incorporates born global firms
and more conventional non-born global firms to add robustness to the studys
findings, and to provide a valuable comparative perspective.
134
Ordinary least squares (OLS) regression modelling is used to test the hypotheses of
the study. Additionally, T-tests, analysis of variance (ANOVA), confidence intervals
for proportions, and crosstabulations are conducted to answer the research questions,
and examine international performance measurement, psychic distance levels, entry
mode decisions, and international market selection.
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CHAPTER 5
QUALITATIVE ANALYSIS
As the first step in the mixed methods approach, this chapter outlines the findings
from the exploratory, semi-structured interviews of eight born global companies in
New Zealand and Australia. The main rationale for conducting the interviews is to
provide rich insights into the determinants and measurement of born global
performance, and inform the subsequent quantitative survey by refining
measurement items. The in-depth interviews were carried out between June and
August 2009 and involved companies from various industries, including
manufacturing, ICT and education.
136
Chapter 5 Qualitative Analysis
5.1 Introduction
This chapter describes the findings and key themes from the in-depth interviews that
were conducted with the CEOs/owners or export/sales managers of eight born global
companies in New Zealand and Australia. The exploratory interviews were the first
step in the mixed methods approach adopted in this thesis. The purpose of the
interviews was to offer rich insights into the performance dynamics of born globals,
and to assist in informing the development of the quantitative survey (e.g., by
refining measurement items). The interviews were intended to test the suitability and
relevance of the conceptual model, thus seeking initial confirmation and validation.
5.2 Interview Process

As outlined in the previous Chapter 4, semi-structured, in-depth interviews were
carried out with eight born global firms (five New Zealand, three Australian). The
firms were contacted via a postal letter explaining the purpose of the research which
was followed-up by phone calls to confirm interview arrangements (see Appendix A
for a copy of the cover letter). The companies details were obtained through internet
research, such as government export agency websites and business newspaper
articles, and further verified through the Dun & Bradstreet company database. The
sampling process followed a purposive approach (Miles & Huberman, 1994) with the
main criteria being a New Zealand- or Australian-based company, and being an
exporter. Five interviews were conducted via phone/Skype, and three interviews
were held face-to-face at the companies offices. The decision to use phone/Skype
versus face-to-face interviews was mainly guided by the availability of the managers
and the authors financial considerations. The interviews were carried out between
June and August 2009 and each interview took approximately one hour. It was
decided to choose semi-structured interviews as it allows the exploration of key
topics based on an interview guide and simultaneously gives the researcher discretion
to follow new leads (Bernard, 2006) (see Appendices B and C for participant consent
form and interview protocol). All interviewed companies could be characterised as
born globals and were purposively selected from various industries, including ICT,
manufacturing, food, oil and gas, and education in line with the integrated approach
of the thesis. The companies were established between 1994 and 2003 and went first
137
international, on average, within 1.5 years after firm establishment. The average
international sales ratio three years after company establishment was 62.9%. Tables
5.1 and 5.2 provide a summary of the key interview details and a profile of the firms.
Table 5.1: Key Interview Details
Time frame Conducted between June and August 2009
Number of interviews 8
Type of interviews Semi-structured, in-depth
5 phone/Skype interviews
3 face-to-face interviews
Location of companies 5 New Zealand firms
3 Australian firms
Interviewees CEO/owner or export/sales manager
Duration of interviews Approximately 1 hour each
Table 5.2: Profile of Interviewed Companies

FOOD ICT1 ICT2 EDUC OIL WINE MFG1 MFG2
Number of 15 70 75 32 50 8 15 42
employees
Industry Food ICT ICT Education Oil and Wine Manu- Manu-
Gas facturing facturing
Year of 2001 2001 1999 2003 2002 1998 2003 1994
establishment
Year of first 2003 2002 2001 2005 2003 1998 2006 1997
internatio-
nalisation
International 60% 99% 98% 51% 50% 75% 40% 30%
sales ratio
three years
after firm
establishment
First main USA, South France, Singapore Middle USA, UK, Hong USA, UK,
international Australia, Korea, Europe Canada East Europe Kong, Australia
markets Singapore USA, UK, Singapore
Japan, UK, USA,
Taiwan Taiwan
Entry mode Export Export, Export Export, Export, Export Export, Licensing,
to first main WOM Strategic Joint- WOS Export,
international alliance Venture Strategic
markets alliance
In order to preserve anonymity, the company names are not revealed. Instead, the companys industry is used
as an ID (e.g., FOOD, ICT1 etc.)
WOM=Wholly-owned manufacturing subsidiary, WOS=Wholly-owned sales subsidiary
The interviews were audio-recorded and transcribed prior to being used for further
qualitative data analysis with the computer software NVivo (Version 8). In doing so,
emerging patterns and themes were identified and respective conclusions drawn,
consistent with the established guidelines by Miles and Huberman (1994). As
outlined in Chapter 4, the research design of the qualitative component of the study
involved prior conceptualisation of issues developed from the literature review and
138
conceptual model (Miles & Huberman, 1994). Thus, the conceptual model guided
the coding of the interviews. In addition, the coding process included a-posteriori
categorisation with open coding to take into account the emergence of new themes
and patterns (Sinkovics et al., 2008). In essence, a combination of descriptive and
pattern coding was applied for data analysis (Miles & Huberman, 1994). The sample
size of eight companies was considered adequate as saturation of answers was
perceived as the interviews progressed (Glaser & Strauss, 1967). This is also in line
with studies that recommended a sample size of six to eight (Kuzel, 1992) and six to
12 interviews (Guest et al., 2004) for homogenous samples.
5.3 Findings from the Interviews

The interview findings can be classified into the following key themes in terms of the
determinants and measurement of international performance for the companies:
Firm and managerial characteristics
Networks
Strategy and environmental factors
International performance measurement
Advice for prospective international firms
Firm and managerial characteristics can be further differentiated into
internationalisation planning, international entrepreneurial orientation, staff morale,
product/service quality, and role of Board of Directors. Networks comprise customer
engagement skills, managements personal networks and international trade shows.
Strategy and environmental factors consist of blue ocean strategies, multi-faceted
approach to international market selection, foreign market characteristics,
internationalisation of the industry, currency fluctuations, and funding. In terms of
international performance measurement, the type and importance of various criteria
are highlighted, and the advice for prospective internationalising firms is related to
interviewees recommendations for achieving superior international performance.
Figure 5.1 summarises the coding structure used to analyse the interviews. It should
be noted that the figure includes the first two coding levels (e.g., networks (level 1),
role of international trade shows (level 2)) for ease of illustration and layout.
139
Figure 5.1: Coding Structure for Interviews
Determinants and measurement of

international performance
Firm and managerial Networks Business strategy and external International performance Advice for prospective
characteristics environment measurement international companies
Internatio- International
Role of Blue ocean Multi-faceted Financial Operational
nalisation entrepreneurial approach to Dont sprint a
planning orientation managements strategy Go out in
personal networks international marathon! markets
market selection and
understand
Staff morale Product/service
Other the
quality Role of Foreign market Internationalisation (marketing, markets!
international trade characteristics of the industry technical, Grow within
shows miscellaneous) capacity and dont
put the company
Board of at risk!
Directors role Customer Funding Currency Partner
engagement skills fluctuations with a
local!
Be tight about
payment terms!
Have a
decent
Think of yourself product to
as a global sell!
company and
execute across the
board!
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5.3.1 Firm and Managerial Characteristics

Internationalisation planning was a concept that emerged from the interviews.
Many of the interviewees stated that they planned very carefully for
internationalisation as the following excerpts illustrate:
We started in 2003 with the internationalisation process. We basically for
the first 12 months, we sat down, there was only 3 of us, and we designed a
product that we knew could go into the international marketplace. After 12
months we started manufacturing it, tested it locally in Australia and
probably had our first export sales by late 2003, early 2004. Australia is a
very good testing ground for new technology so we went to our backyard and
tested it and get some background information on things, but, ultimately, the
international markets was where we gonna make our money. (OIL)
In a similar vein, the representative from MFG1 commented:

From 2003 to 2006, we just set all our intellectual property rights, patents,
trademarks, copyrights and so on and so forth. And basically proto-typed and
tested and broke and cracked and did everything to make sure that what
were gonna bring to market was second to none. So we went global in
2006. (MFG1)
Internationalisation planning was carried out, for example, through product design
and development, and publication of patents/trademarks. The manager from MFG1
explained the importance of setting up patents and intellectual property rights in
order to get orders from large retailers:
And so big-box retailers are not going to invest money in products that they
cant sell. And you actually, when you sign up with these companies, you
have to sign a waiver to say that the product is registered, is patented, and
that you are not infringing on anyone elses rights. So I definitely believe that
that is a definite, strong point. (MFG1)
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As the comment from MFG 1 suggests, patents were used as an intangible

knowledge asset to prepare for internationalisation. This has also been identified in
the born global literature (Mudambi & Zahra, 2007).
Interestingly, one company representative mentioned that their first

internationalisation was by accident rather than through a planned approach:
Australia was by accident. It just kind of happened. The US actually we
looked out. Because we were actually looking for countries that were Western
countries, that understood the food market. Yeah, Australia happened
because we got a big piece of work over there and there was no planning in
that. It just kind of happened by a phone call. I dont even know who the
company was when I rang them up and how big they actually were. They are
a huge company, whereas the USA was far more planned in our approach.
(FOOD)
This comment from the manager of FOOD emphasises the accidental nature of the
first export order. However, the companys second international market (USA) was
selected more strategically and involved a planned approach.
In Chapter 2, the proactive attitude towards internationalisation that tends to be

adopted by born global managers was discussed. In a similar vein, these interview
excerpts lend support to a rational, planned approach to internationalisation which
has been found to be positively related to export performance in the context of
smaller firms (Zahra et al., 1997; Bijmolt & Zwart, 1994; Knight, 2000). On the
other hand, as illustrated by the case of FOOD, there is also some support for Crick
and Spences (2005) and Spence and Cricks (2006) finding of serendipity that
played an important role in the internationalisation process of high-technology UK
and Canadian SMEs.
International entrepreneurial orientation was a concept that was strongly

prevalent in all interviews. All managers seemed to be very entrepreneurial and
extremely passionate about their business. A recurring concept was the global
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mindset of the managers. This postulates that managers perceive the world rather
than the domestic market as their companys marketplace and see the potential huge
opportunities that global markets can offer to their business. For example:
Id say I dont even think of us as an exporter. I think of us as a global
company. I mean you dont think of Coca-Cola as an exporter or HP as being
an exporter. And I think its, my personal view is, I think it limits the
companys thinking if they think of themselves as an exporter.
We are an international company and so, you know, I dont think New
Zealand companies to grow should think of themselves as exporters unless
the mentality is to sit behind the desk here and put stuff on ships and export it.
We have to be in our markets and the difference to my mind is thats an
international company not somebody who sits here and puts stuff on boats. So
I dont like the term exporter. So we had, as I said, we had the mindset
always that it was an international strategy and so it was just getting on
planes and addressing those international markets and being seen as a global
player. (ICT1)
The interviewee from MFG1 noted that:

I suppose my mindset was if I can sell this in Australia, I can sell it
anywhere in the world. (MFG1)
The first excerpt from ICT1 is particularly interesting as it implies that thinking of
oneself as an exporter that sits behind the desk and puts stuff on boats and exports
it is a detrimental mindset to the international development of a company. Instead, it
appears to advocate a broader outlook in terms of thinking as a global company that
is actively there in its overseas markets and that may also entail various
internationalisation activities, such as licensing and foreign direct investment.
Looking at the case companies, five out of the eight interviewed firms were not
pure exporters, but used additional foreign servicing modes besides exporting to
enter their first international markets (e.g., licensing, wholly-owned sales and
manufacturing subsidiaries, and strategic alliances). This mindset of being a global
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company has important implications for the firms positioning on the international
marketplace and the benefits associated with being perceived as a global company
rather than an exporter. As will be outlined later, visiting foreign markets and
engaging with international customers were important mechanisms for the companies
to increase their international exposure and be seen as a global player, as well as
enhance their international performance. In addition, the manager from ICT1
commented:
It was really born as an international company. You know, I guess we
started the first products were sold in New Zealand, but the strategy right
from the start was to take it global. (ICT1)
This demonstrates the global mindset adopted by ICT1. It is a good example that
emphasises the international orientation of the company, and gives literal support to
the term born global firm.
As indicated above, passion was another common theme that was stated frequently.
For example, the managers from MFG1 and MFG2 commented:
Im following a passion. Im following a dream. And everything that Im
doing you can look at it from a, you know, textbook point of view. Its just
something thats really just coming natural to me as a CEO Im an
entrepreneur at heart. Its in my blood, its in my family. My dad was an
entrepreneur. He developed a range of products in his industry. And also did
exactly what Im doing worldwide. (MFG1)
I think its just passion. About wanting to do the business. Basically, having
the vision and passion to go offshore. (MFG2)
The representative from ICT2 argued that passion should be accompanied by

business skills to ensure company success:
Entrepreneurs are driven by passion, but they often lack business skills.
There are very few entrepreneurs that have both passion and business skills.
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If passion is complemented with business skills, then there will be successful

entrepreneurs. (ICT2)
This suggests that passion by itself may not be sufficient for successful entrepreneurs.
If entrepreneurs lack business skills, the wider top management team or other
external factors, such as business relationships may play an important role in offering
business skills. As will be outlined later, the Board of Directors were instrumental in
providing internationalisation advice to the entrepreneur from MFG1.
The attribute of perseverance was also considered as an important driver for

performing successfully in overseas markets:
And perseverance. Very, very important. Without perseverance we would
have given up a long time ago. Because it is very, very hard to break into
international markets. But its gotta be a long-term plan. So thats some of
the characteristics that you need. (MFG2)
The first rule of business is to stay in business. (ICT2)
You know, were only about 5% through of where I wanna be. But I
understand and I recognise and Im getting to learn this a little bit more as I
get a little bit older that theres no reason to sprint a marathon. But Im not
desperate to do anything. I wanna do it and execute it 100% correctly. If I
feel its the right man for the job, then Im prepared to wait. I mean Im not
into a quick fix. Im into long-term strategic relationships. (MFG1)
The metaphor Theres no reason to sprint a marathon by the manager from MFG1
elegantly captures the dimension of perseverance and long-term outlook. It suggests
that understanding the bigger picture is important for these companies to succeed
internationally as opposed to looking for a quick fix.
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Innovativeness emerged from the interviews and comes in the form of technical
improvements, and innovative business processes as the following interview excerpts
from OIL and FOOD demonstrate:
Weve been very innovative in the way that we designed the tool to make it a
lot easier for the customer. We actually won an innovation award in 2004 for
the product. Were trying on a daily basis to be innovative in the way we
approach different markets and different business strategies and presenting
opportunities to customers that they may not normally see. Sometimes they
work, sometimes they dont. Thats the learning curve we go through on a
daily basis. (OIL)
Weve just changed the shape of our container. We had to build a new
container to be able to do it, because no one else is doing it. And we launched
it about two months ago. And people have said to me: Wow, thats a big,
bold move to move away from, you know, the traditional round to rectangle.
And we had our reasons for doing it. We think we shouldnt be doing the
same thing. (FOOD)
The interviewee from MFG2 added that innovativeness is a key component for the
company to do business in the global marketplace arguing that the firms products
are not competing against low-cost producers, but are differentiated by their degree
of innovativeness. Similarly, the representative from ICT1 argued that an innovative
orientation is increasingly important for the company in the future in order to stay
ahead and not to get run over by competitors. However, the costs of
innovativeness were highlighted by the manager from FOOD who mentioned the
difficulty of educating consumers about the companys new products:
Sometimes its easy to do, be same-same. Where with innovativeness comes
a cost and the whole education process. So its all fine and well for the
government to sit there in their offices and say, you know, the only way that
New Zealand is going to get out of the bottom of the OECD is to become
innovative. Great, but at the end of the day theres a lot of education and
theres a lot of money that needs to go in behind that. (FOOD)
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The concept of opportunity identification also evolved from the interviews. For
example, the manager from MFG1 commented:
Id like to go back what I first said initially. Im just following, its just
coming natural. You know, I see an opportunity and I jump on it and I
execute it and I make sure it happens. I dont sit here and think about what
could have been? I dont ever want to die wondering, I suppose. (MFG1)
This suggests a proactive and aggressive approach towards the identification of new
international market opportunities. It underlines the drive of the entrepreneurs to
make things happen.
In conclusion, these characteristics highlight the entrepreneurial nature of the

companies which was a common thread in all interviews. It is consistent with the
entrepreneurial perspective on internationalisation and emphasises the importance of
the entrepreneur within the company as discussed in Chapter 3 (e.g., Knight &
Cavusgil, 2004).
In a similar vein to international entrepreneurial orientation, the importance of staff

morale was often highlighted by the managers. They praised the commitment of
their staff to work hard towards the goals of the company. The manager from FOOD
noted that their firm resembles a big family where everyone has respect for
everybody else, and where all employees are important to the business. Similarly,
the representative from MFG1 commented that the employees in the company are
hungry to make a difference:
We definitely got a fantastic group of people within the organisation. The
business operator its me alone, you know, my team in Australia, my New
York staff, and the guys down here at the West Coast here, you know, theyre
good, theyre good people. And theyre hungry to make a difference not only
for the company but for themselves, and I think thats a quick testament to
where we are at. (MFG1)
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A strong theme appearing in the interviews was the high focus on product/service
quality. All eight interviewees mentioned that it was critical for their international
performance.
Quality is a big one and it was one of the reasons, it was one of the primary
reasons why we got the follow-on business from HP. As you can imagine in
the consumer PC market, they track every single fault and then they have a
lead table of what are the most common faults whether its the webcam or the
mouse or the LCD screen or the hard-drive or the motherboard or whatever
it is. And our product was not on the Top 20 list of failures. And that was
pretty important. It gave them confidence that if they made the decision for us
again, they would have a, you know, a robust product in the field. So they
dont have the reverse logistics problem, and, you know, failures in the field
and the managing all of that. So, yes, quality is very important. (ICT1)
Quality. Absolutely. Quality is very, very important for us. Quality in the
product and quality in the packaging, everything. You know that it all fits
together. (FOOD)
Several benefits accrue from product/service quality, such as acquiring follow-on

business from customers, and building a good reputation in the industry. These
interview comments lend further support to the hypothesis developed in Chapter 3 in
terms of product/service quality (Rennie, 1993).
This study examines the corporate governance structure of born global firms and its
relationship to international performance. Accordingly, the interviewees were asked
about the role of Board of Directors in their companies. All interviewed firms
mentioned that they had a Board of Directors. Two basic types of roles could be
identified from the interviews: strategic and governance.
Board of Directors strategic role:
They [Board of Directors] are employed for their time, and thats at board
level. And they advise the company, they advise me to steer the company in
this direction or in that direction, you know. Yeah, like I said before, I know
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where Im at as a professional. And I seek the advice and assistance of those

people that have been there and done it before. So as a 28-year old running
this company that Ive built from the ground up, definite, definite critical
aspect and definite testament of where were at today. (MFG1)
The board of directors can help so your company survives. Many small
firms are not surviving and the first rule of business [to stay in business] is
the most important one for every new company. (ICT2)
We also have three customer advisory boards which resulted from the
tender process and our first clients. They are based in Australia, Europe and
the US and they help us to engage with other clients. They act as reference
sites and are extremely important for customer relationships I guess its the
traditional role of the board, for product strategy and how we equip our
subsidiaries for example. They provide us with both human and capital
resources which is necessary to develop our international presence. And they
also help us in terms of our trademarks. (EDUC)
This strategic role is similar in conceptualisation to the service role of a Board of

Directors discussed in Chapter 3 (Huse, 2007). In the context of born globals, this
guidance role is assumed to be important for achieving superior international
performance (Andersson & Wictor, 2003). The excerpt from MFG1 underscores the
importance of a Board of Directors that have been there and done it before for the
successful international development of the firm. Some interviewees stated that their
Board of Directors adopted more a governance rather than strategic role:
Board of Directors governance role:
Theyre primarily supportive rather than directive. Its still my call and my
running of the business that theyre here to provide advice and prevent
mistakes I suppose. But, yeah, its more of a supportive role than a directive
role. (OIL)
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Its more of a governance role than a strategic role. So its more a, you
know, going through the numbers, signing off on strategy, rather than being
intimately involved in the strategy. Theres not a lot of value-added. (ICT1)
In contrast to the strategic role, the governance function is more passive in nature,
and for formality purposes, rather than being actively involved in international
strategy advice and internationalisation guidance. It suggests a more hands-off-
approach of the Board of Directors.
Some interviewees expressed their aspiration to have a stronger Board of Directors

noting that the Board will become increasingly relevant in the future as the firms
further expand worldwide. The following interview comments demonstrate these
issues:
Board of Directors future role:
I think in the future more and more important [role of Board of Directors]
as we try to do more things. Were looking at things like joint ventures,
bigger distribution agreements. Also, rolling out our branding offshore. So
its gonna be much, much more important to have a more rounded view of
what the global strategic plan is. So we need expertise from outside our
current expertise. So its gonna be more and more important, as time goes on,
for us to seek out external experience. (MFG2)
Well, look, I mean we should have a stronger board. I think we should have
more internationalisation experience, but, you know, largely, we dont. These
are private equity guys, they are finance guys, thats why we got an
independent director on to just being able to add some value in terms of
internationalisation, exit strategies. But, you know, in terms of how to or
using international networks and that sort of thing, no, we dont have any of
that. (ICT1)
Other firm characteristics that were mentioned include product loyalty. For example,
the manager from FOOD noted that the nature of the companys products (organic) is
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generally attractive to people in many parts of the world. As a result, customers are
very loyal to the companys products and this helps in achieving consistent
international sales. With regard to the international experience of the senior
management, the interviews revealed mixed and inconclusive results. The manager
from EDUC mentioned that the senior management teams international experience
is key to growing internationally, whereas the interviewees from FOOD and MFG1
explained that they did not have any prior international business experience, but still
performed very well internationally.
5.3.2 Networks
The concept of customer engagement skills evolved in the course of the interviews.
This relates to customer relationship skills and knowing how to approach customers
in an appropriate manner. For example:
I think it was more the experience of knowing how to engage with these big
companies. And I think, well, my background was with IBM, so you know you
have a good experience of how to do that. I mean its I think you just gotta
know how to approach the companies like an HP, and a Dell, and a
Panasonic and a Sony, and an LG and a Samsung, you know those are big
companies, theyre complex companies. You gotta have the confidence to be
able to or the knowledge of how to go in. (ICT1)
Being responsive to enquiries, being proactive, keeping in contact with your

people. We dont ever put our product on a boat and wave good-bye to it.
Were very much there. And I think that if thats your idea of exporting, then
you will be sadly mistaken. And I think its being there. You know, like its
being there constantly. You cant do it from sitting here in New Zealand. You
have to be there. (FOOD)
As the comments suggest, being there in the markets and meeting and engaging
with customers were considered as key ingredients for performing successfully on an
international stage. As mentioned earlier, this may also be an important part of
positioning the firm as a global company as opposed to an exporter. It can be
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argued that the concept of customer engagement skills is fairly similar to the
conceptual construct of market orientation outlined in Chapter 3 (Narver & Slater,
1990). The interview comments further indicate that international trade shows were
a very important means to engage with international customers. In general, trade
shows were brought forward frequently as an efficient way to facilitate
internationalisation and perform successfully in international markets:
A classic example is that I put myself out there at a global trade show in
February in the US, actually this year, and I actually landed a very, very
large customer. And that customer had so much success that he took it upon
himself or one of the directors of that company took it upon himself to
introduce me to a couple of key people here in the United States. And because
Ive proven myself with that relationship anything that this certain director
told his colleagues was gospel. And it definitely led me down the track to
bigger and better things here in the US. (MFG1)
Similarly, the interviewee from MFG2 commented:

The other thing is the trade show network: meeting people at tradeshows.
Often you see the same people and sometimes, for example, you know, were
in the process of discussing our future joint venture in the Czech Republic.
And thats the direct result of building a relationship with a person that weve
seen at a big tradeshow in Germany about three times in the last 10 years. So
were very aware of who he is, what his business is, and the timing now is
right to discuss a joint-venture. So thats basically from some of the networks
that weve built up from tradeshow activity, visiting and meeting people at
tradeshows in the same industry. (MFG2)
The importance of trade shows and meeting customers for networking and
exploration of new opportunities were highlighted by the manager from ICT1:
Its just, you know, youve gotta go, you gotta go on planes, you gotta go to
tradeshows, meet people, and you just grow it that way. Wed be at trade
shows, wed make people come by the stand, collect cards, wed call on them,
theyd introduce us to other people, and then, its just you dont know
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necessarily where the opportunities come from, but the opportunities start to
open up. So I think trade shows have been an important part for us in
opening up networks. (ICT1)
The representative from FOOD emphasised the importance of the social aspect of
meeting customers at international trade shows:
They [networks] had been built up primarily by me spending a HUGE
amount of time offshore. And you cant underestimate and this is what I think
is one of the major issues that New Zealand have when theyre exporting they
dont spend enough time in the marketplace. They dont spend enough time
socialising. And they will turn up to do a tradeshow for a given sake. Maybe
theyve got a distributor. Theyll turn up, theyll stand on the stand, and then
theyll leave again. I dont do that. As a general rule, I will help set up the
stand, Ill help pull down the stand, and its a really neat way to build a
relationship outside of business. So, its, yeah, networks are very, very
important and they do help. (FOOD)
The advantages of attending international trade shows included the relatively low
cost, the building of new networks that led to additional customers and partners, the
establishment of social relationships with customers, and the learning effects for the
companies. These networking benefits are similar to those put forward by Evers and
Knight (2008).
In terms of other networks, some managers mentioned that they were members of
specific Chambers of Commerce around the world which assisted them to access
industry-based networks. The managers from ICT1 and WINE stated that New
Zealand Trade and Enterprise (New Zealand government export agency) were
relatively helpful in opening up networks. The importance of the personal nature of
networks was stressed by the manager from FOOD who explained that the entry into
the UK was based on a relationship that I had who knew somebody who knew
somebody sort of thing. Similarly, other interviewees commented that their senior
management teams personal networks helped them with international expansion.
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Also, through a couple of our senior staff, their actual networks and
business have been very, very useful in developing new relationships from
their past careers. So, for example, Ive got a guy that was running a US
operation and he used to live in Japan for 12 years. Hes actually networked
into a lot of business into Japan so hes got contacts to some of the Japanese
companies. So were working with some of them on some future opportunities.
So thats been a direct result of his networks, his personal networks that hes
built up over his career. Also, we have a network of people who have come
out of Western Europe through our Operations Manager who is from the
Netherlands. And he has created opportunities for us to hire a salesperson in
Europe who was connected to businesses that we want to reach in Western
and Eastern Europe. So thats been useful and thats the direct result of a
network that came with a person, you know, a senior staff member that came
to the company. (MFG2)
It may be argued that these personal networks provide an important avenue for these
managers as they facilitate international expansion and, thus, are relevant for their
international performance. Born globals often lack an established network of
business relationships due to their young age and small size (Oviatt & McDougall,
1994). Personal contacts of the management team can help in accessing networks
resulting in superior international performance (Freeman et al., 2006).
The importance of personal contacts as a driver for international performance was

not universally shared by all interviewees. The manager from ICT1 noted that
personal networks were not critical for the companys internationalisation and
performance as exemplified in the following:
Not really. No, that hasnt. I wouldnt say personal networks have gotten us
any business. I mean I think its probably helped over timeIt wasnt pre-
existing networks. We didnt get to where we are through established
networks. (ICT1)
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5.3.3 Business Strategy and External Environment

With regard to their companys international strategy, some managers stated that
they were very focussed on what they were doing in terms of foreign market
selection and employed blue ocean strategies:
I think it comes back to that focus and leverage. You know blue ocean
strategies? It basically says its the analogy that they use is the Cirque du
Soleil. You think of circus as traditional circus and you think of animals and
you think of, you know, clowns, and hay around the floor and that sort of
thing. And they took circus and they made a whole new category. And they
own that category. And theyve left circuses way behind. Thats a blue ocean.
Youre not going to the bloody red oceans of where the established
competitors are. You go to where there are no competitors. And so we
focused on industries that are either new or have an inflexion point driving
them towards our products for the first time or driving them to the use of our
products. And consumer was one of those on the back of the iPhone and then
with Windows 7 going to be a multi-touch operating system, we really
focussed on that marketplace. And surprisingly, the competition was slow to
catch on. So weve ignored the traditional markets where the entrenched
competitors are and weve gone after the new markets, and they are the high-
growth markets. So weve been very focussed on that as a strategy. Going for
new markets, going for markets with inflexion points driving to first time use
of our products. (ICT1)
The term blue ocean strategy was originally coined by Kim and Mauborgne (2005).
These blue ocean strategies suggest that new and untapped markets were targeted
rather than the established markets with strong and large competitors. This may
result in first-mover advantages for the firm which was noted as a primary reason to
enter the US market by the manager from WINE. The creation of new markets was
also mentioned by the manager from MFG2:
We are effectively trying to break down the barriers of trade in China and
India, and Russia for example. We are all trying to go there and work out a
strategy to get into those markets. So I think theres a barrier. It takes time. It
155
takes a lot of time to break those. And those markets are actually creating
new markets and new opportunities. Theyre not there already. (MFG2)
The multi-faceted, strategic approach to international market selection is

illustrated in the following comments:
Weve only got probably four to five markets around the world, where
theres probably 50 or 60 and weve only entered the smaller markets
strategically to get a good name and as that name grows, well be entering
those larger markets. So theres a huge potential for what were doing as
long as we keep doing it well, presenting quality tools on time and with a
good safety record. (OIL)
I think its a multi-faceted approach. As weve said weve got licensing

going on. We are in the process of negotiating a joint-venture agreement at
the moment in Central America that is likely to provide us a manufacturing
base as well in that part of the world. And we just mentioned before that we
are looking at a similar type of arrangement in the Czech Republic. So in the
future our strategy will be to have multiple locations, strategic beachheads
for manufacturing and distribution. We may end up with four or five strategic
manufacturing locations through either licensing, partners or joint-ventures
and from there we will use those locations to penetrate the closer markets.
Some of it is driven by cost reduction, some of it is driven by just having the
need for local input to make it viable because of the long lead times at New
Zealand and the funding costs of shipping a product for 60 or 70 days across
the water. So for us to go international, we need to have a multi-faceted
approach to our global strategy. (MFG2)
As the comment from the manager of MFG2 illustrates, the firms international
strategy was multi-faceted, which means that various entry strategies and modes
were adopted that were suitable to the peculiarities of the respective foreign markets.
In addition, strategic beachheads were considered for manufacturing and distribution
in order to springboard into strategically important markets for the company. This
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is consistent with the diversity of entry modes referred to earlier. It also supports the
characteristic of flexibility of born global firms described in Chapter 2 (e.g.,
Luostarinen & Gabrielsson, 2006).
In terms of the external environment, all managers stated that their firms industry
was highly internationalised and dynamic in nature. The internationalisation of the
industry was regarded as an important determinant that influenced their companies
international performance. For example:
Its in every country in the world. Its probably the most internationalised
industry in the world. And its very dynamic. You have to understand I have
been dealing with a person here in Vietnam working for Shell and a week
later I ring Shell in Norway and its the same man on the phone. Its a very
migratory industry and the networks you form within the industry are very
dynamic and can be quite helpful. (OIL)
I think very internationalised. E-learning is an international industry. It

allows institutions worldwide to implement solutions. It is not restricted to
countriesI think it is extremely important [for international performance].
We developed partnerships locally and then internationally. There are
greater opportunities to partner. And it is also the nature of the product.
(EDUC)
Referring to the excerpts, the benefits of the internationalisation of the industry

included, for example, reputational advantages, and bigger opportunities to partner.
These interview findings lend support to the theoretical hypothesis developed in
Chapter 3 in terms of the internationalisation of the market (Madsen & Servais,
1997).
The foreign market characteristics of the interviewed companies displayed two

key features: high market potential and large market size.
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High market potential

Ok, in all the markets that we are in, there is huge potential because there
isnt a lot around, particularly where our product is concerned, there is
nothing like it around. And the market is huge, because I think no one else is
doing what were doing. So absolutely, I think there is and so the UK has got
a massive amount of potential for us. Absolutely huge amount of potential for
us. (FOOD)
Large market size

I think the American market is attractive because its so big. That is so
massive but it is extremely competitive. (MFG2)
But here in the US, its so large that, you know, I can only cope at the
moment with West Coast distribution. I mean one guy was Yeah, I like to try.
Give me three containers on 60 day terms. Oh my god, you know, thats like
nearly half a million box worth of products. (MFG1)
The manager from MFG2 noted that the company is attempting to have a presence in
established as well as emerging markets. While the attractiveness of the established
markets would stem mainly from the size and the developedness, the emerging
markets would offer huge growth potential due to their newness. The company is
trying to get a good balance between established and emerging international
markets. However, the manager noted that breaking into emerging markets is very
hard and requires a lot of time.
In terms of fiscal issues, currency fluctuations of the New Zealand and Australian
dollar were a factor influencing the firms international business activities. For
example, the manager from MFG2 commented:
Other barriers for us here are the fluctuation of the New Zealand dollar is a
big problem continually moving sort of 10 to 15 or 20% within a few months.
So thats a major challenge for any exporter, particularly linked to the New
Zealand dollar. The New Zealand dollar is extremely volatile and thats a
158
problem for us in terms of knowing. Particularly that we manufacture here

[New Zealand]. (MFG2)
When asked about how to protect against currency fluctuations, the interviewees
mentioned the following:
Well, what weve actually done is set up a manufacturing facility in Vietnam
which basically is all US expenditure, US dollar expenditure. So we
manufacture both in Australia and in Vietnam and that gives us a split or a
hedging of currency in a unique sort of way. We also, in most of our contracts,
we basically sell in US dollars 90% of the time. And thats why set up in
Vietnam to put our cost base in US dollars. So there are many unique ways.
We havent really gotten into hedging too much. We probably will now as
were getting larger. We have hedged previously forward machinery, but very
rarely we hedged on sale of goods. But that will become more prevalent the
larger we get. (OIL)
Setting up a manufacturing facility in the respective foreign market as well as the

usage of financial instruments, such as hedging and forward cover contracts were
some of the countermeasures to protect against unexpected currency movements. The
manager from MFG2 noted the difficulty of using forward cover contracts to
mitigate the effects from exchange rate movements. As illustrated above and
discussed earlier, some of the interviewed companies adopted high-involvement
entry modes in addition to exporting which may be partly attributed to these currency
challenges.
Funding was another important issue that was put forward by the managers. The
companies often used either personal funds (e.g., MFG2), or obtained external grants
from government export agencies, such as New Zealand Trade and Enterprise
(NZTE) and Australian Trade Commission (Austrade). However, the difficulty of
raising capital was brought forward by some managers. For example:
If we had been better funded, we could have grown faster to put it that way.
And funding of New Zealand companies, one of my big frustrations is, were
159
supposed to be the sort of company that New Zealand is trying to engender.

You know, thats what we hear all the time that we need to get away from the
agricultural base, that it needs high-tech, research and development, you
know, all that sort of thing. Well, thats what we are and we could not raise
money in New Zealand. We tried and tried and tried and tried. And we
couldnt raise it. And capital is the lifeblood; you cant organically grow a
company like this on the back of retained earnings. You have to invest for
growth because otherwise youre just gonna be left behind. And so it does
take a lot of capital right upfront because youve got to run as hard and as
fast as you can or you gonna lose that competitive advantage. If youre an
innovation-based business, youve gotta go to get it out there while the
innovation is still fresh and that takes money. So, it is, to start with, you have
to invest. So funding is critical. (ICT1)
These comments underline how critical funding can be for a new start-up company to
grow. The manager from ICT1 seemed very frustrated about the lack of funding in
New Zealand and referred to competitors in the USA which were able to raise tens
of millions of dollars without much difficulty even though they did not have a
better story.
5.3.4 International Performance Measurement

All interviewees mentioned that they were using a combination of various
international performance measures. The managers from ICT2 and MFG2 noted that
international performance is generally hard and difficult to measure. The majority of
firms placed strong importance on financial measures as demonstrated by the
following interview excerpts:
I guess we measure ourselves with the traditional financial measures. I think
interestingly, we do a lot of planning in US dollars because most of our
inputs and outputs are US dollars. The only New Zealand components are the
staff here really, because we buy everything in US dollars, we sell most things
in US dollars so we do a lot of planning in US dollars. We obviously measure
ourselves against the competitors in terms of market share, and you know
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that sort of thing. But really the measurements are Id say the traditional
measurements of revenue growth, profit growth, EBITDA. (ICT1)
By sales predominantly and sales volume. And also by the stores that were
in. But its really, its more to do with sales growth. (FOOD)
The interviewee from MFG1 explained the reasons for the importance of financial-
based measures:
Its all based around financial performance basically, you know. We
actually cut a few people out of our programme that werent performing. And
added a few people into the programme which definitely have raised the bar
of who we are and what we do. But it all comes down to finances. If its not
there, we cant buy it. If its not, you know, if the sale hasnt been made, we
cant move forward. At the end of the day, like I said, if my staff member
wants a pay rise of 5,000 dollars, and then I view their targets in sales, I
mean, where am I supposed to get the money from? (MFG1)
The most common financial performance measures were international sales,

international sales growth, return on investment (ROI), and international profit.
Besides these measures, the manager from ICT1 mentioned EBITDA (i.e., earnings
before interest, tax, depreciation and amortisation), and the representative from
EDUC noted that the company is using the financial value of new clients (i.e.,
additional revenue by new clients) as an international performance measurement.
In addition to financial measures, operational performance measures were also

mentioned during the interviews. For example, the manager from MFG2 noted that
the company prefers non-financial rather than financial measures:
So we are not using any financial measurements for measuring performance,
but more the non-financial stuff which is around market share and basically
our global reach. So its really about basically for us trying to get a global
presence in as many major markets as possible and then sort of growing it
from there through a combination of direct export, direct investment and
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sales with our own entity which we have in the USA, and also through
licensing. (MFG2)
Similarly, the representative from EDUC stated the importance of market share:
Absolutely, this is very important. Market share is very important for us.
75% of all polytechnics and 50% of all universities in Australia use our
products. And seven states in the US are using our product, which I think is a
remarkable achievement if you consider that there are only 51 states in the
US. (EDUC)
The manager from ICT1 noted that the time to market for new products is an
important operational performance measurement:
Its quickly turning prototypes into products or ideas into products, so its,
you know, product life-cycle. Getting products to markets quickly. (ICT1)
Market share was the most common operational performance measure adopted by the
sample firms. Another important operational measure that was mentioned was global
reach, which relates to the strategic, worldwide dispersion of international markets a
company is active in. Other measures included marketing measures, such as brand
awareness (EDUC), percentage of dollar spent on advertising and promotion (WINE)
and marketing promotion (MFG1); technical measures, e.g., equipment failure rates
(ICT2) and technical benchmarks (OIL); and miscellaneous measures, such as
number of visitors at trade shows and amount of follow-on business from there
(EDUC), and website search engine optimisation (MFG1).
5.3.5 Advice for new internationalising firms

As the concluding interview question, the managers were asked for their most
important piece of advice for any new company that is planning to internationalise.
The replies were as follows:
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Dont sprint a marathon!

Dont sprint a marathon. Theres no such thing as an overnight success. I
think no matter what anyone thinks Ive been here six years making the firm
be where its at, running really forward in the last three to four years. So, you
know, dont let perception deceive you. (MFG1)
I think be prepared it will take a lot longer than you anticipate. Two to three
times to whatever you plan. The worst case scenario is it can take between
two and five years to develop a market. You may actually even spend two to
three years trying to develop a market and you still wont think youre close.
So be prepared for a long, hard time developing new markets. (MFG2)
Go out in markets and understand the markets!

You gotta get out there in your markets. You know, I think tradeshows is a
good way of getting the name out there and its a relatively inexpensive way.
And if you identify what your key tradeshows are, thats where you gonna
meet people, thats where you gonna meet customers, thats where you gonna
meet partners, thats where you gonna see competition to judge yourself
where you stand. Its a very good way of building up network and knowing
who the key players are and knowing. You learn a lot at tradeshows. I think
thats one of the much critical things. Thats what you do, thats what we do a
lot for our learning. (ICT1)
They need to get on a plane and go there first and understand the market
before they actually do anything. I mean I know people that have exported
without ever having been to a country before. And its all done on hearsay.
Or somebody has approached them and said why dont you, you know, we
like your product, can we export it? And that doesnt really work. I think
you actually need to go there and be seen. You need to be seen. Its no
different from doing business in your own country. People like to see you,
they like to speak to you. So if you go everywhere, you cant do anything. You
need to have that time to put aside. (FOOD)
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Grow within capacity and dont put the company at risk!

I think its highly important that people have a plan to grow within their
capacity. Were sitting in a recession at the moment, probably the worlds
worst in eighty years. Were in a position better than 99% of the companies
in Australia primarily because we basically had no debt. We had a very good
position with the bank. Its very attractive to get large orders when you start
off, but they can be crippling. We had a philosophy of growing within
ourselves and weve been able to maintain our standards as weve expanded
exponentially. To me its highly important to develop within yourself. Its very
nice having huge goals and big targets. You should always have goals, but
goals should be realistic and not put the company at risk. (OIL)
Partner with a local!

And also be prepared that doing business in New Zealand or Australia is
not the same as in the UK, Germany, the Netherlands. Every market is
different and you need local knowledge. Partner with a local! Local
knowledge is absolutely critical and if you think you can do it without local
knowledge, then I think there will be problems. And that could be local staff,
could be a local strategic partner, or could come in a number of forms.
(MFG2)
Be tight about payment terms!

And the other thing I would say is to be very, very tight about payment terms,
because that can, they can kill you. We always spend a lot of time on payment
terms and chasing. You know, ensuring that the guys know that these are our
terms and I write them and remind them. As part of my role, say, Right, your
payment is due on such and such a day, Ill expect it in my bank account by
this. And then I write back and go back and go Hey, just remember, thats
coming up on such and such a date. So yeah, theres a lot of follow-up that
goes with that. (FOOD)
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Have a decent product to sell!

And thats all assuming that youve got a good product to start with. If you
havent got a good product to start with, dont even bother! So, yeah, you
need a good product. You need a decent product to sell. (MFG2)
Think of yourself as a global company and execute across the board!

Its really execution right across the board. Its, you know, executing on the
manufacturing, its driving down cost and its being in our markets, you know,
talking to our customers and building those relationships. But as I said, you
know, I mean a fundamental difference is thinking of ourselves as a global
company. (ICT1)
To sum up, these caveats and pieces of advice mainly centre around the importance
of firm and managerial characteristics, and company strategy for achieving superior
international performance. More specifically, they suggest that a long-term plan,
perseverance, a well-informed and strategic approach to internationalisation and
selecting overseas markets, active foreign market presence, following-up on payment
terms as well as customer engagement and local market understanding are regarded
as critical factors for international success.
5.4 Linkage between Qualitative Interviews and Quantitative Survey

As outlined earlier in this chapter, the key purpose of the interviews was to (1) seek
initial validation of the conceptual model, (2) inform the quantitative survey
instrument, and (3) provide rich insights into the determinants and measures of
international performance for born globals. In doing so, the interviews helped to
improve the criterion validity of the survey instrument. The interviews supported
many of the concepts that were raised in the theoretical discussion in Chapter 3. In
particular, the international entrepreneurial orientation of the firms was strongly
evident during the interviews. This included the global mindset of the managers and
the notion of perseverance to doing international business. Consequently, these
findings were used in the operationalisation of the international entrepreneurial
orientation construct of the survey instrument. Other key themes from the interviews
165
were the strong focus on product/service quality, the relevance of a Board of

Directors/Advisory Board and the usage of international trade shows, thereby
providing support for initial validation of the conceptual model. The interviewed
companies adopted a variety of different indicators to measure international
performance with the most important ones being financial-based, such as
international sales volume, return on investment (ROI) and international sales growth.
As a result, the interviews helped to inform the survey instrument in terms of
operationalising the performance construct in the conceptual model (i.e., global
reach and new product/service introduction in international markets). The
findings from the interviews were also useful in the discussion of the quantitative
results and conclusions of the study which are outlined in Chapters 7 and 8. Thus,
consistent with the mixed methods approach of this thesis, the results from the
interviews were integrated with the findings from the quantitative survey instrument
(please see Chapter 7).
5.5 Chapter Summary

As the first step in the mixed methods approach adopted in this thesis, semi-
structured, exploratory interviews were conducted with the CEOs/owners or
export/sales managers of eight born global firms based in New Zealand and Australia.
A purposive sampling approach was adopted and companies were selected that differ
in size, industry sector, and international market selection. The in-depth interviews
took, on average, one hour and were carried out face-to-face or by phone/Skype
depending on the managers availability. The key themes of the interviews are
summarised in Table 5.3.
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Table 5.3: Summary of the Key Themes of the Interviews
Topic Issue Selected illustrative quotes
Firm and Managerial - Internationalisation planning Id say I dont even think of us as an exporter. I think of us as a global company. I mean you dont think of
Characteristics - International entrepreneurial orientation: Coca-Cola as an exporter or HP as being an exporter. And I think its, my personal view is, I think it limits
global mindset, passion, perseverance, the companys thinking if they think of themselves as an exporter.
innovativeness, opportunity-identification Im following a passion. Im following a dream. And everything that Im doing you can look at it from a,
- Staff morale you know, textbook point of view. Its just something thats really just coming natural to me as a CEOIm
- Product/service quality an entrepreneur at heart. Its in my blood, its in my family.
- Board of directors role: strategic, Quality. Absolutely. Quality is very, very important for us. Quality in the product and quality in the
governance packaging, everything. You know that it all fits together.
And they [Board of Directors] advise the company, they advise me to steer the company in this direction or
in that direction, you know. Yeah, like I said before, I know where Im at as a professional. And I seek the
advice and assistance of those people that have been there and done it before. So as a 28-year old running
this company that Ive built from the ground up, definite, definite critical aspect and definite testament of
where were at today.
Networks - Attendance at international trade shows Its just, you know, youve gotta go, you gotta go on planes, you gotta go to tradeshows, meet people, and
- Usage of managements personal networks you just grow it that way. Wed be at trade shows, wed make people come by the stand, collect cards, wed
- Customer engagement skills call on them, theyd introduce us to other people, and then, its just you dont know necessarily where the
opportunities come from, but the opportunities start to open up. So I think trade shows have been an
important part for us in opening up networks.
Business Strategy and - Blue ocean strategy So weve ignored the traditional markets where the entrenched competitors are and weve gone after the
External - Multi-faceted approach to international new markets, and they are the high-growth markets. So weve been very focussed on that as a strategy. Going
Environment market selection for new markets, going for markets with inflexion points driving to first time use of our products.
- Internationalisation of the industry I think its a multi-faceted approach. As weve said weve got licensing going on. We have at this point not
- Foreign market characteristics: high approached our internationalisation with manufacturing direct investment and manufacturing offshore, but
market potential, large market size, we are in the process of negotiating a joint-venture agreement at the moment in Central America that is likely
balance between established and emerging to provide us a manufacturing base as well in that part of the world.
markets Ok, in all the markets that we are in, there is huge potential because there isnt a lot around, particularly
- Currency fluctuations where our product is concerned, there is nothing like it around.
- Funding Raising capital for funding export and international growth is potentially a problem. Attracting enough
funding to execute the plan properly and have enough time to execute the growth plans so thats a potential
problem.
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Table 5.3 Summary of the Key Themes of the Interviews Contd

Topic Issue Selected illustrative quotes
International - Variety of different performance measures: Its all based around financial performance basically, you know. We actually cut a few people out of our
Performance - Financial (e.g., international sales, programme that werent performing. And added a few people into the programme which definitely have
Measurement international sales growth, ROI, EBITDA, raised the bar of who we are and what we do. But it all comes down to finances. If its not there, we cant
international profit) buy it. If its not, you know, if the sale hasnt been made, we cant move forward. At the end of the day, like
- Operational (e.g., market share, global I said, if my staff member wants a payrise of 5,000 dollars, and then I view their targets in sales, I mean,
reach) where am I supposed to get the money from?
- Other (e.g., brand awareness, equipment So we are not using any financial measurements for measuring performance, but more the non-financial
failure rates, number of visitors at stuff which is around market share and basically our global reach. So its really about basically for us trying
tradeshows and follow-on business from to get a global presence in as many major markets as possible and then sort of growing it from there through
there) a combination of direct export, direct investment and sales with our own entity which we have in the USA,
and also through licensing.
- Importance of financial performance
measures
- Market share as most common operational

measure
Advice for - Dont sprint a marathon! Dont sprint a marathon. Theres no such thing as an overnight success. I think no matter what anyone
Prospective - Go out in markets and understand the thinks Ive been here six years making the firm be where its at, running really forward in the last three to
International markets! four years. So, you know, dont let perception deceive you.
Companies - Grow within capacity and dont put the You gotta get out there in your markets. You know, I think tradeshows is a good way of getting the name out
company at risk! there and its a relatively inexpensive way. And if you identify what your key tradeshows are, thats where
- Partner with a local! you gonna meet people, thats where you gonna meet customers, thats where you gonna meet partners,
- Be tight about payment terms! thats where you gonna see competition to judge yourself where you stand. Its a very good way of building
- Have a decent product to sell! up network and knowing who the key players are and knowing. You learn a lot at tradeshows. I think thats
- Think of yourself as a global company one of the much critical things. Thats what you do, thats what we do a lot for our learning.
and execute across the board! I think its highly important that people have a plan to grow within their capacity. Were sitting in a
recession at the moment, probably the worlds worst in eighty years. Were in a position better than 99% of
the companies in Australia primarily because we basically had no debt. We had a very good position with the
bank. Its very attractive to get large orders when you start off, but they can be crippling. We had a
philosophy of growing within ourselves and weve been able to maintain our standards as weve expanded
exponentially. To me its highly important to develop within yourself. Its very nice having huge goals and big
targets. You should always have goals, but goals should be realistic and not put the company at risk.
Its really execution right across the board. Its, you know, executing on the manufacturing, its driving
down cost and its being in our markets, you know, talking to our customers and building those relationships.
But as I said, you know, I mean a fundamental difference is thinking of ourselves as a global company.
168
The interviews offered rich insights into the how and why of performance
drivers and measures for born global firms. In summary, the findings and
observations from the interviews provided a useful platform for the quantitative
analysis, which is presented in the next chapter.
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CHAPTER 6
QUANTITATIVE ANALYSIS
This chapter presents the results and analysis of 310 responses from a web-based
survey instrument which was distributed to New Zealand and Australian companies.
It gives an overview of the data preparation and reliability procedures prior to data
analysis and outlines the key descriptive statistics of the variables in the study. The
chapter covers the testing of the hypotheses, and outlines the statistical analyses to
answer the research questions. It concludes with a summary of the quantitative
findings.
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Chapter 6 Quantitative Analysis
6.1 Introduction
As indicated in Chapter 4, the thesis adopts a mixed methods approach with
qualitative interviews and a subsequent quantitative survey instrument. This chapter
outlines the analysis and findings from the quantitative web-based survey which was
administered in the period from April-July 2010. Table 6.1 gives an overview of the
statistical analyses for the quantitative part of the study.
Table 6.1: Overview of Statistical Analyses
Issue Statistical analysis
Hypothesis testing - Ordinary least squares (OLS) regression

modelling
International performance - Independent samples T-test

measurement - One-way analysis of variance (ANOVA)
Additional research findings: - Independent samples T-test

Internationalisation planning, - Pearsons chi-square test (Crosstabulations)
domestic expansion prior to first - Confidence intervals for proportions
Psychic distance, entry mode, and

international market selection
6.2 Survey Response

Table 6.2 summarises the response rate of the web-based survey. A total of 2,000
questionnaires was distributed to New Zealand and Australian companies via postal
letter and email containing the web link to the survey (see Section 4.3.4 for more
details). 328 surveys were returned which corresponds to a total response rate of
16.4%. 18 of the received questionnaires had missing data resulting in a usable
response rate of 15.5% (310 companies).
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Table 6.2: Summary of Response Rate
Number of surveys Percentage
Total mail out of survey 2,000 100%

(1,000 New Zealand and 1,000 Australian firms)
Survey returned and completed 310 15.5%

(203 New Zealand and 107 Australian firms)
Survey not completed due to:
a) Insufficient email address 59 3.0%

b) Lack of capacity (e.g., 66 3.3%

time, staff) (37 New Zealand and 29 Australian firms)
c) Lack of interest 22 1.1%

d) Not being an international 57 2.9%

company (39 New Zealand and 18 Australian firms)
e) Sensitivity of business data 5 0.3%

The sample size of 310 companies compares well with similar studies in the born
global literature (e.g., Knight & Cavusgil, 2004), and is large enough to be useful for
undertaking statistical analyses and modelling.
6.3 Data Preparation

Prior to conducting statistical analysis, the survey data are checked and potential
biases are assessed. The procedures are outlined below.
6.3.1 Non-Response Bias

Non-respondents may differ significantly from respondents with respect to attributes,
such as demographics, motivation, and behaviour which may affect the studys
results and create non-response bias (Armstrong & Overton, 1977; Groves, 2006). In
order to examine whether non-response bias is affecting the data, the extrapolation
procedure as recommended by Armstrong and Overton (1977) is followed. Thus,
early and late respondents are compared according to key demographic and firm
characteristics, including number of full-time employees, companys annual gross
sales, company age, companys international experience, international sales ratio,
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industry (i.e., manufacturing or other), location (i.e., New Zealand or Australia) and
position in the company (i.e., Owner/CEO or other). It is assumed that late
respondents can proxy non-respondents as they are likely to have not responded if
there had been no extensive follow-up (Groves, 2006). In line with other studies (e.g.,
Weiss & Heide, 1993; Sousa, Ruzo, & Losada, 2010), early responses are defined as
the first 75% of returned surveys, and the last 25% are categorised as late responses.
This proportion reflects well the order of surveys received with 25% of responses
(i.e., late respondents) being obtained after the reminder emails were sent. Overall,
241 early and 69 late respondents are identified.
Independent samples T-tests (for continuous variables) and crosstabulation with

Pearsons chi-square testing (for discrete variables) are conducted to test for
differences between early and late respondents in terms of demographic and firm
characteristics. Table 6.3 shows the results of the T-tests.
Table 6.3: Testing for Non-Response Bias: T-tests
Variable Early Late Sig.

respondents respondents
Number of full-time employees Mean 25.68 27.69 NS

Std. Deviation 58.04 49.97
N 233 68
Companys annual gross sales Mean 3.18 3.27 NS
in 2009 Std. Deviation 1.62 1.76
N 236 67
Company age Mean 10.61 11.49 NS
N 236 67
Companys years of doing Mean 7.05 7.12 NS
international business Std. Deviation 2.94 3.21
N 238 68
International sales ratio in 2009 Mean 47.03 43.32 NS
N 241 69
International sales ratio three Mean 38.25 30.53 NS
years after company Std. Deviation 37.93 34.92
establishment N 232 66
NS=Not significant
Values for Companys annual gross sales are: 1=less than NZ/A$500,000, 2= > NZ/A$500,000 - $1 million,
3= > NZ/A$1 million - NZ/A$5 million, 4= > NZ/A$5 million - NZ/A$10 million, 5= > NZ/A$10 million
NZ/A$20 million, 6= > NZ/A$20 million - NZ/A$30 million, 6=more than NZ/A$ 30 million
Values for Companys years of doing international business are: 1=less than 1 year, 2= >1-2 years, 3= >2-3
years, 4= >3-4 years, 5= >4-5 years, 6= >5-6 years, 7= >6-7 years, 8= >7-8 years, 9= >8-9 years, 10= >9-10
years, 11= >more than 10 years
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There are no significant differences between early and late respondents in terms of
number of full-time employees, companys annual gross sales in 2009, company age,
companys years of doing international business, international sales ratio in 2009,
and international sales ratio three years after company establishment at 95%
confidence level. The results of crosstabulations assessed using Pearsons chi-square
test are summarised in Table 6.4.
Table 6.4: Testing for Non-Response Bias: Crosstabulations and Pearsons Chi Square
Test
Variable Early Late Total Sig.

respondents respondents
Manufacturing Yes 73 20 93 NS
No 168 49 217
Total 241 69 310
Location New Zealand 156 47 203 NS

Australia 85 22 107
Total 241 69 310
Owner/CEO Yes 194 51 245 NS

No 46 18 64
Total 240 69 309
NS=Not significant
Consistent with the results from the T-test, there are no significant differences
between early and late respondents with regard to industry sector (i.e., manufacturing
or other), location (i.e., New Zealand or Australia), and position in the company
(CEO/owner or other). The results from both analyses (T-test and Pearsons chi
square test) provide an indication that non-response bias is not a serious concern in
the study.
6.3.2 Common Method Variance

Common method bias can be a main source of measurement error and relates to
variance that is attributable to the measurement method rather than to the construct
of interest (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003, p. 879). It can pose a
problem in self-reported research and often occurs when data for dependent and
independent variables are collected from the same respondent at the same time
(Podsakoff & Organ, 1986). In the international business literature, common method
174
bias has been identified as an issue to address (Chang, van Witteloostuijn, & Eden,
2010). The study uses Harmans single-factor test in order to check the potential
presence of common method bias (Harman, 1976; Podsakoff et al., 2003). According
to this test, all items from each construct in the study are put into an exploratory
factor analysis (with no rotation) to determine whether the majority of the variance
can be accounted for by one general factor (Podsakoff et al., 2003). If one single
factor emerges or one factor accounts for more than 50% of the variance of the items
in the factor analysis, then this indicates the presence of common method bias
(Harman, 1976). The test is conducted for this study and the results reveal multiple
factors with the largest factor accounting for 25.98% of the variance of the items.
This indicates that common method bias seems not to be present according to
Harmans single-factor test.
Common method bias is also reduced by employing a mixed methods approach

through qualitative interviews and the quantitative survey instrument, which are both
conducted at different times. This further improves the validitity of the data. In
addition, the survey respondents are predominantly from small firms (the average
number of employees is around 25), and not from large MNEs. Using single
respondents from small firms may pose fewer issues in terms of common method
bias compared to single respondents from large companies.
6.4 Descriptive Statistics

As mentioned in Section 6.2, a total of 328 surveys are received with 310 usable
responses. In terms of the distribution of the respondents, 147 companies can be
classified as born global firms (BGs) and 163 as non-born global firms (Non-BGs).
Firms are categorised as born global firms according to the criteria outlined in
Section 4.3.2. Table 6.5 shows the distribution of the respondents by type of firm and
home country.
175
Table 6.5: Distribution of Born Global and Non-Born Global Firms
Type of firm Number of firms and Origin

percentage
Born global firms 147 (47.4%) 102 New Zealand firms (69.4%)
(BG) 45 Australian firms (30.6%)
Non-born global firms 163 (52.6%) 101 New Zealand firms (62.0%)
(Non-BG) 62 Australian firms (38.0%)
TOTAL 310 (100%) 203 New Zealand firms (65.5%)

107 Australian firms (34.5%)
There are more responses from New Zealand firms compared to Australian
companies which can be probably attributed to the fact that the surveys were
distributed from New Zealand. Overall, there is a balanced and even breakdown of
BG and Non-BG firms making it very useful for comparative analysis.
In Table 6.6, the distribution of BG and Non-BG firms with regard to industry type is
summarised.
Table 6.6: Distribution of BG and Non-BG Firms by Industry Type
Industry type BG firms Non-BG firms

(Number of responses (Number of responses
and percentage) and percentage)
Manufacturing Manufacturing 40 (27.2%) 51 (31.3%)

Subtotal (Manufacturing) 40 (27.2%) 51 (31.3%)
Service Education 7 (4.8%) 2 (1.2%)
Financial and Insurance 1 (0.7%) 0 (0.0%)
Services
Information and 31 (21.1%) 33 (20.2%)
Communication, ICT
Professional, Scientific and 18 (12.2%) 26 (16.0%)
Technical Services (e.g.,
Consulting)
Subtotal (Service) 57 (38.8%) 61 (37.4%)
Other Agriculture, Forestry and 17 (11.6%) 13 (8.0%)
Fishing
Mining 3 (2.0%) 5 (3.1%)
Construction 2 (1.4%) 5 (3.1%)
Other 28 (19.0%) 28 (17.2%)
Subtotal (Other) 50 (34.0%) 51 (31.3%)
TOTAL 147 (100%) 163 (100%)
176
The service industry (i.e., Education, Financial and Insurance Services, Information
and Communication, ICT, and Professional, Scientific and Technical Services)
represents the biggest proportion of responses for BGs (38.8%) and Non-BGs
(37.4%), followed by other (i.e., Agriculture, Forestry, and Fishing, Mining,
Construction, and Other) (BG=34.0%, Non-BG=31.3%) and manufacturing
(BG=27.2%, Non-BG=31.3%). The table highlights that there is a wide spread of
industries which fits well with the studys overall research objective of providing an
integrated approach of born global firms. It suggests that born global firms are not
necessarily only found in high-tech industries such as ICT, but also in other
industries (e.g., Agriculture, Forestry and Fishing; Manufacturing).
Table 6.7 displays the data obtained from the respondents on the companys annual
gross sales in 2009 by industry type.
Table 6.7: Distribution of BG and Non-BG Firms by Industry Type and Companys
Annual Gross Sales in 2009
Companys annual BG firms Non-BG firms

gross sales in 2009 (Number of responding (Number of responding
(NZ/A$) companies and percentage) companies and percentage)
M S O Subtotal M S O Subtotal
Less than $500,000 12 7 12 26 (17.9%) 8 16 5 29 (18.5%)
> $500,000 - $1 million 5 5 6 16 (11.0%) 6 9 6 21 (13.4%)
> $1 million - $5 million 14 27 14 55 (37.9%) 20 23 14 57 (36.3%)
> $5 million - $10 5 8 8 21 (14.5%) 5 10 9 24 (15.3%)
million
> $10 million - $20 5 0 7 12 (8.3%) 5 1 3 9 (5.7%)
million
> $20 million - $30 0 0 6 6 (4.2%) 1 0 3 5 (3.1%)
million
More than $30 million 2 3 4 9 (6.2%) 3 1 9 13 (8.3%)
TOTAL 38 55 52 145 (100%) 48 60 49 157 (100%)
M=Manufacturing, S=Service (i.e., Professional, Scientific, and Technical Services, Information and
Communication, ICT, Education, Financial and Insurance Services), O=Other (i.e., Agriculture,
Forestry, and Fishing, Mining, Construction, Other)
About two thirds of all respondents for the BG and Non-BG sample have annual
sales of up to NZ/A$5 million. It should be noted that NZ$ and A$ are treated as
effectively equal in this table. The biggest proportion of firms falls in the NZ/A$1-5
million annual sales category.
177
The average number of full-time employees is 23.45 for the BG sample (SD=43.95)
and 28.53 for the Non-BG sample (SD=65.35). Table 6.8 outlines the distribution of
full-time employees for BG and Non-BG firms according to five constructed
categories (0-19, 20-49, 50-99, 100-199, and 200-500 employees).
Table 6.8: Distribution of BG and Non-BG Firms by Number of Full-Time Employees

and Industry Type
Number of full- BG firms Non-BG firms

time employees (Number of responding (Number of responding
companies and percentage) companies and percentage)
0-19 27 33 34 94 (66.2%) 38 42 45 112 (70.4%)
20-49 9 16 10 35 (24.6%) 7 15 4 31 (19.5%)
50-99 2 1 4 7 (4.9%) 3 1 0 6 (3.8%)
100-199 1 2 0 3 (2.1%) 3 0 0 3 (1.9%)
200-500 0 1 2 3 (2.1%) 3 1 0 7 (4.4%)
TOTAL 39 53 50 142 (100%) 51 59 49 159 (100%)
The vast majority (approximately 95%) of the sample firms employ fewer than 100
people with the biggest share in the 0-19 employees range (BG=66.2% and Non-
BG=70.4%). For classification purposes, while there are various definitions in New
Zealand and Australia, a SME is commonly defined in New Zealand as a firm that
employs up to 19 people (Ministry of Economic Development New Zealand, 2010).
In Australia, a firm that employs fewer than 200 people is generally considered a
SME (Australian Bureau of Statistics, 2002).
The companies are relatively young with around 10 years of age (BG sample:
Mean=9.62, SD=6.70; Non-BG sample: Mean=11.88, SD=7.92). Table 6.9 displays
the number of sample firms in terms of six different age categories.
178
Table 6.9: Distribution of BG and Non-BG Firms by Company Age and Industry Type
Company age BG firms Non-BG firms
(in years) (Number of responding (Number of responding
companies and percentage) companies and percentage)
0-5 12 6 14 32 (21.9%) 3 10 5 18 (11.1%)
6-10 17 32 16 65 (44.5%) 22 28 21 71 (43.8%)
11-15 7 11 18 36 (24.7%) 14 17 13 44 (27.2%)
16-20 2 3 3 8 (5.5%) 6 3 4 13 (8.0%)
21-50 0 3 1 4 (2.7%) 5 3 7 15 (9.3%)
50-60 1 0 0 1 (0.6%) 1 0 0 1 (0.6%)
TOTAL 39 55 52 146 (100%) 51 61 50 162 (100%)
As shown in Table 6.9, more than 80% of all firms are up to 15 years old
(BG=91.1%, Non-BG=82.1%). The biggest proportion of BG and Non-BG firms is
in the 6-10 years range with around 44% of all companies (BG=44.5%, Non-
BG=43.8%).
With regard to the international experience, the companies years of doing

international business are highlighted in Table 6.10.
Table 6.10: Distribution of BG and Non-BG Firms by Years of Doing International

Business and Industry Type
Years of doing BG firms Non-BG firms
international (Number of responding (Number of responding
business companies and percentage) companies and percentage)
Less than 1 year 1 0 1 2 (1.4%) 2 3 0 5 (3.1%)
> 1 - 2 years 0 2 3 5 (3.4%) 4 3 3 10 (6.3%)
> 2 - 3 years 4 4 3 11 (7.6%) 3 10 5 18 (11.3%)
> 3 - 4 years 6 2 5 13 (9.0%) 2 3 5 11 (6.9%)
> 4 - 5 years 4 5 2 11 (7.6%) 5 8 5 18 (11.3%)
> 5 - 6 years 7 2 4 13 (9.0%) 5 4 6 15 (9.4%)
> 6 - 7 years 4 6 2 12 (8.2%) 3 8 3 14 (8.8%)
> 7 - 8 years 3 6 5 14 (9.7%) 7 3 1 11 (6.9%)
> 8 - 9 years 1 5 2 8 (5.5%) 1 4 4 9 (5.6%)
> 9 - 10 years 5 15 16 36 (24.8%) 13 11 12 36 (22.5%)
More than 10 years 4 7 9 20 (13.8%) 5 4 5 14 (8.8%)
TOTAL 39 54 52 145 (100%) 50 61 49 160 (100%)
179
86.2% (BG sample) and 92.2% (Non-BG sample) of the respondents have up to 10
years international experience. About one quarter of all sample firms have been
doing international business for between 9 and 10 years. Overall, the distribution of
the data suggests that while these companies are still relatively young, they have
already gained solid experience in international business and have probably passed
the stage of start-up failure that can be quite common within the first few years
after company establishment (Townsend, Busenitz, & Arthurs, 2010; Romanelli,
1989). This further improves the rigour and practical relevance of the studys
findings.
The domestic and international sales ratios of the survey respondents are summarised
in Table 6.11.
Table 6.11: Distribution of BG and Non-BG Firms by Domestic and International Sales
Ratios
N Min Max Mean Median Std.

Deviation
BG sample Domestic sales in 2009 % 147 0 70 26.36 20.00 26.61
International sales in 147 25 100 72.01 80.00 28.40
2009 %
Domestic sales three years 139 0 75 28.35 20.00 25.01
after company
establishment %
International sales three 139 25 100 71.65 80.00 25.01
years after company
establishment %
Non-BG Domestic sales in 2009 % 163 1 99 71.17 80.00 29.00

sample International sales in 163 1 99 22.94 15.00 24.08
2009 %
Domestic sales three years 159 80 100 85.00 95.00 27.50
after company
establishment %
International sales three 159 0 20 5.85 3.00 6.79
years after company
establishment %
There are some substantial differences with regard to the sales ratios of BG and Non-
BG firms. Whereas the proportion of international sales three years after company
establishment constitutes, on average, about 6% of total sales for the Non-BG
companies, the mean percentage of international sales for the BG sample is more
180
than 70%. Similarly, the average international sales ratios in 2009 between the two
types of firms are noticeably different (22.94% and 72.01% respectively).
With regard to the start of internationalisation, Table 6.12 displays the number of
years from company establishment to going international for the first time. The
sample BG firms start to internationalise, on average, in the very first year after
foundation, while Non-BG firms tend to take over four years from company
establishment to their initial international venture.
Table 6.12: Distribution of BG and Non-BG Firms by Number of Years from Company
Establishment to First Internationalisation

Deviation
BG sample 139 0 3 0.74 0.00 1.00
Non-BG sample 159 0 37 4.25 3.00 5.99
As Table 6.13 illustrates, the distribution of survey respondents is fairly similar for
BG and Non-BG firms. About 80% of all respondents are the companies owners or
CEOs.
Table 6.13: Distribution of BG and Non-BG Firms by Survey Respondents
Position BG firms Non-BG firms

(Number of responses and (Number of responses and
percentage) percentage)
Owner/CEO 116 (78.9%) 129 (79.6%)

Marketing/Export Manager 16 (10.9%) 7 (4.3%)
General Manager 7 (4.8%) 9 (5.6%)
Director 4 (2.7%) 6 (3.7%)
Other 4 (2.7%) 11 (6.8%)
TOTAL 147 (100%) 163 (100%)
6.5 Reliability
This section gives an overview of the reliability and validity procedures that are
conducted prior to the subsequent statistical analyses. The main procedure is
exploratory factor analysis for investigating the underlying structure of the variables.
In addition, reliability analysis is carried out, in order to examine the internal
consistency of the scale items.
181
Prior to conducting factor and reliability analysis, the variables used in the study are
checked for normality. The results reveal that the variables are relatively normally
distributed.
6.5.1 Exploratory Factor Analysis

Exploratory factor analysis is useful for investigating the underlying structure of a set
of variables and combining a large number of variables to an interpretable and
manageable set of factors that capture aspects of the underlying dimensions (Cavana
et al., 2001; Field, 2005). By reducing the number of variables, factor analysis
achieves parsimony by explaining the maximum amount of common variance in a
correlation matrix using the smallest number of explanatory concepts (Field, 2005,
p. 620). Factor analysis also allows the incorporation of multi-item measures into a
study, and facilitates the development of useful inputs into regression modelling.
As previously indicated, the dataset comprises responses from New Zealand and
Australian companies. As these survey responses may differ in nature and thus result
in divergent factors, the dataset is split according to geographic location, and
separate exploratory factor analyses for the New Zealand and Australian subsamples
are undertaken. In addition, individual factor analyses are carried out for the BG and
Non-BG sample and the complete dataset. In total, five separate factor analyses (i.e.,
New Zealand, Australia, BG, Non-BG, and Complete) are conducted for each
construct and factors are extracted based on common item and factor loadings across
all five subsamples. The rationale for this procedure is that if the same factors are
found across all five subsets, then these common factors can be used for the
subsequent analyses for the BG and Non-BG samples. It should be noted that
separate factor analyses are carried out for each construct rather then putting all items
in one single factor analysis as the purpose is primarily to check the uni-
dimensionality of each theoretically-based construct.
Principal component analyses with varimax rotation are run and factors extracted
based on eigenvalues of over 1 (Kaiser, 1960) and the scree plot (Cattell, 1966) (i.e.,
graphical inspection of the screeplot with the number of factors retained based on
182
inflexion of the curve). The results of the factor analyses are summarised in
Appendix H. These factor analyses all relate to the complete dataset for ease of
illustration.2 There are consistent item and factor loadings for all constructs for the
five subsets (i.e., New Zealand, Australia, BG, Non-BG, and Complete). The only
discrepancies relate to the market orientation construct where different factor
loadings are observed across the subsamples. In this case, several items are deleted
and only those that are common across all five subsamples are combined to one
factor.
One factor is created for the constructs product/service quality (based on 3 items,
question 3 in the survey), Board of Directors/Advisory Boards service function (5
items, survey questions 5 and 6), learning orientation (11 items, survey question 7),
leveraging of managements personal networks (2 items, survey question 15), niche
strategy (8 items, survey question 9), foreign market attractiveness (3 items, survey
question 11), and internationalisation of the market (4 items, survey question 12)
suggesting uni-dimensionality. Two factors are created for international
entrepreneurial orientation (i.e., global mindset & perseverance (6 items) and
innovativeness & proactiveness (6 items) (survey question 4) and market orientation
(i.e., customer orientation (7 items) and competitor orientation (4 items) (survey
question 7). In terms of the dependent variable international performance, three
factors are developed: financial performance (5 items, survey questions 16 and 17),
operational performance (7 items, survey questions 16 and 17), and perceived
success (2 items, survey questions 18 and 19). The two items for organisational
effectiveness (i.e., overall international performance and international reputation of
the firm) load on the financial performance (overall international performance) and
operational performance construct (international reputation of the firm), respectively.
Each of the constructs explains more than the recommended 50% of the variance
(Hair et al., 2006).
2
The factor analysis results for all other four subsamples are available from the author upon request.
183
6.5.2 Reliability Analysis

The reliability of a scale provides an indication of how free it is from random error
(Pallant, 2001). There are four types of reliability analyses: test-retest, inter-rater or
inter-observer, parallel-forms, and internal consistency (Field, 2005). The thesis
employs internal-consistency reliability analysis. Internal consistency refers to the
degree to which the items that make up the scale are homogeneous and hang
together (Pallant, 2001, p. 85). Thus, internal consistency reliability analysis
examines to what extent the items of a scale or factor measure the same underlying
construct (Field, 2005). Cronbachs alpha is a standard indicator of internal-
consistency reliability. A generally accepted rule of thumb is that Cronbachs alpha
should be greater than 0.7 in order for the scale to be considered reliable (Nunnally,
1978; Hair et al., 2006).
The distributions of the created factors are examined, and they show relatively
normal distributions. Reliability analyses are conducted for each of the created
factors and they display Cronbachs alphas above the generally accepted threshold of
=0.70 (Nunnally, 1978; Hair et al., 2006). The Cronbachs alpha for the construct
leveraging of managements personal networks is below the 0.70 threshold and,
therefore, the two items of this construct are used as separate explanatory variables in
the subsequent regression analyses. In terms of the foreign market attractiveness
construct, the item sophistication of the marketing infrastructure is deleted which
results in a higher Cronbachs alpha. The factors and respective Cronbachs alphas
are summarised in Table 6.14.
184
Table 6.14: Summary of Created Factors and Cronbachs alpha
Construct Variance Cumulative Cronbachs

explained variance alpha
(%) explained
(%)
International entrepreneurial orientation: 50.5 0.91
Global mindset & perseverance (6 items)
65.2
International entrepreneurial orientation: 14.7 0.86
Innovativeness & proactiveness (6 items)
Product/Service quality (3 items) 77.7 77.7 0.85
Board of Directors/Advisory Boards service function 71.5 71.5 0.90
(5 items)
Market orientation: Customer orientation (7 items) 43.7 0.83
52.6
Market orientation: Competitor orientation (4 items) 8.9 0.72
Learning orientation (11 items) 52.9 52.9 0.91
Leveraging of managements personal networks (2 70.5 70.5 0.56
items)
International trade shows as networking platform (5 52.1 52.1 0.72
items)
Niche strategy (8 items) 58.9 58.9 0.90
Foreign market attractiveness (2 items) 66.2 66.2 0.80
Internationalisation of the market (4 items) 60.4 60.4 0.78
International performance: Financial (5 items) 62.0 0.94
72.2
International performance: Operational (7 items) 10.2 0.91
International performance: Perceived success (2 83.4 83.4 0.80
items)
The two items are not combined due to the low Cronbachs alpha and used as two separate explanatory
variables in subsequent analyses
The third item sophistication of marketing infrastructure is deleted in the course of reliability analysis to
improve the Cronbachs alpha
The descriptives for the variables in the study along with their respective
operationalisations as emerged from factor and reliability analyses are summarised in
Table 6.15.
185
Table 6.15: Descriptive Statistics for Variables in Regression Model

Deviation
International performance: Financial:
International sales 144 6 49 34.41 35.00 11.14
International sales growth 143 6 49 33.73 35.00 11.51
BG International profitability 143 5 49 32.45 35.00 11.66
sample Return on investment (ROI) from 141 5 49 29.80 30.00 11.61
Overall international performance 140 6 49 32.42 35.00 10.91
International sales 160 4 49 24.12 24.00 11.03

International sales growth 158 4 49 23.80 24.00 10.83
Non-BG International profitability 158 4 49 24.49 25.00 10.95
sample Return on investment (ROI) from 159 3 49 23.15 24.00 11.06
Overall international performance 157 4 49 23.98 24.00 11.18
International performance: Operational:

Market share in international markets 142 2 49 23.39 24.00 11.34
International reputation of the firm 141 6 49 35.17 36.00 11.06
New product/service introduction in 141 6 49 29.13 28.00 10.76
Global reach (i.e. presence in 144 4 49 26.23 25.00 12.14
strategically located countries
BG worldwide)
sample Time to market for new 142 3 49 25.09 25.00 11.22
products/services internationally
Gaining a foothold in international 144 6 49 29.69 30.00 11.67
markets
Number of successful new 139 4 49 25.75 25.00 10.96
products/services in international
markets
Market share in international markets 157 1 49 16.94 16.00 10.62

International reputation of the firm 156 6 49 31.17 30.00 11.41
New product/service introduction in 159 1 49 22.82 20.00 11.20
Global reach (i.e. presence in 158 1 49 19.35 18.00 10.65
strategically located countries
Non-BG worldwide)
sample Time to market for new 158 1 49 19.61 18.00 10.55
products/services internationally
Gaining a foothold in international 159 4 49 22.87 20.00 10.75
markets
Number of successful new 155 1 49 18.97 16.00 9.95
products/services in international
markets
International performance: Perceived success:

Success of main international 147 2 7 5.29 5.00 1.25
business
BG
sample
business from international

business
Non-BG
sample
business from international
186
Table 6.15: Descriptive Statistics for Variables in Regression Model Contd

Deviation
International entrepreneurial orientation: Global mindset and perseverance:
World instead of NZ/Australia as 147 3 7 6.46 7.00 0.89
firms marketplace
Persistence in doing international 147 4 7 6.49 7.00 0.77
business
Vision to be a truly global company 147 1 7 6.05 7.00 1.33
BG Long-term, strategic approach to 147 2 7 5.90 6.00 1.15
sample internationalisation
Strong determination to do 147 2 7 6.50 7.00 0.78
international business
Regular communication to 146 2 7 5.64 6.00 1.20
employees about mission to be
successful overseas
World instead of NZ/Australia as 163 1 7 5.04 6.00 1.81

firms marketplace
Persistence in doing international 163 1 7 4.94 5.00 1.69
business
Vision to be a truly global company 163 1 7 4.36 5.00 1.92
Non-BG Long-term, strategic approach to 162 1 7 4.96 5.00 1.59
sample internationalisation
Strong determination to do 163 1 7 5.31 6.00 1.56
international business
Regular communication to 161 1 7 4.66 5.00 1.71
employees about mission to be
successful overseas
International entrepreneurial orientation: Innovativeness and proactiveness:

Seek out new ways to do things 144 2 7 6.13 6.00 0.97
Initiate actions to which other 146 1 7 5.60 6.00 1.22
companies respond
Introduction of improvements and 147 3 7 6.07 6.00 0.94
BG innovations in company
sample Excel at identifying opportunities 146 2 7 5.47 6.00 1.16
Try to take initiative in every 147 2 7 5.78 6.00 1.11
situation
Company is creative in the way it 147 3 7 5.83 6.00 1.07
operates
Seek out new ways to do things 158 2 7 5.86 6.00 1.11

Initiate actions to which other 162 2 7 5.08 5.00 1.32
companies respond
Introduction of improvements and 163 3 7 5.83 6.00 0.98
Non-BG innovations in company
sample Excel at identifying opportunities 162 1 7 5.19 5.00 1.28
Try to take initiative in every 163 1 7 5.42 6.00 1.12
situation
Company is creative in the way it 162 2 7 5.59 6.00 1.05
operates
187

Deviation
Product/service quality:
International customers praise 147 1 7 6.07 6.00 1.06
product/service quality
Product/service quality better than 147 1 7 5.79 6.00 1.13
BG
major competitors
sample
International customers are convinced 147 1 7 5.93 6.00 1.05
that company is offering very high-
quality products/services
International customers praise 160 3 7 5.74 6.00 1.04

product/service quality
Product/service quality better than 162 1 7 5.52 6.00 1.12
Non-BG
major competitors
sample
International customers are convinced 161 3 7 5.70 6.00 0.98
that company is offering very high-
quality products/services
Board of Directors/Advisory Boards service function:

As advisors for senior management 92 1 7 4.97 5.00 1.67
for corporate strategy, human
resources, organisation
Networking and gaining contacts 92 1 7 4.71 5.00 1.83
with external stakeholders
BG
sample
for financial and legal issues
Lobbying and influencing external 92 1 7 4.30 4.00 1.84
stakeholders
Developing and advising on the 91 1 7 4.95 5.00 1.73
firms international strategy

for corporate strategy, human
resources, organisation
Networking and gaining contacts 79 1 7 4.19 4.00 1.90
with external stakeholders
Non-BG
sample
for financial and legal issues
Lobbying and influencing external 79 1 7 3.90 4.00 2.02
stakeholders
Developing and advising on the 79 1 7 4.72 5.00 1.90
firms international strategy
Market orientation: Customer orientation:

Objectives driven by customer 146 2 7 5.81 6.00 1.09
satisfaction
Monitoring level of commitment to 147 2 7 5.61 6.00 1.13
serving customer needs
Strategy based on understanding of 147 3 7 6.11 6.00 0.91
customer needs
BG Functions are integrated in serving 147 2 7 5.71 6.00 1.13
sample the needs of target market
Business strategies are driven by 147 3 7 5.90 6.00 0.96
beliefs about how to create better
value for customers
Systematic and frequent measurement 146 1 7 4.75 5.00 1.52
of customer satisfaction
Close attention to after-sales service 147 1 7 5.50 6.00 1.39
188

Deviation
Market orientation: Customer orientation:
Objectives driven by customer 162 3 7 5.88 6.00 1.05
satisfaction
Monitoring level of commitment to 160 1 7 5.44 6.00 1.22
serving customer needs
Strategy based on understanding of 161 2 7 6.06 6.00 0.98
customer needs
Non-BG Functions are integrated in serving the 160 2 7 5.70 6.00 1.14
sample needs of target market
Business strategies are driven by 160 2 7 5.82 6.00 1.10
beliefs about how to create better
value for customers
Systematic and frequent measurement 160 1 7 4.66 5.00 1.47
of customer satisfaction
Close attention to after-sales service 160 2 7 5.56 6.00 1.27
Market orientation: Competitor orientation:

Sharing of information about 147 2 7 5.61 6.00 1.10
competitors strategies
Free communication about customer 147 3 7 5.76 6.00 1.15
BG experiences within company
sample Discussion of competitors strengths 147 1 7 5.35 6.00 1.31
and strategies
Target opportunities for competitive 147 3 7 6.01 6.00 0.99
advantage
Sharing of information about 161 1 7 5.34 5.00 1.31

competitors strategies
Free communication about customer 160 1 7 5.61 6.00 1.20
Non-BG experiences within company
sample Discussion of competitors strengths 160 1 7 5.07 5.00 1.42
and strategies
Target opportunities for competitive 159 1 7 5.81 6.00 1.03
advantage
Learning orientation:
Companys ability to learn as key to 147 2 7 5.67 6.00 1.21
competitive advantage
Common purpose throughout 147 2 7 5.92 6.00 0.93
company
Reflect on shared assumptions about 147 4 7 5.85 6.00 0.96
way of doing business
Learning as key to improvement 147 2 7 5.92 6.00 1.02
Agreement on company vision across 147 2 7 5.52 6.00 1.08
all levels, functions, and divisions
BG High value of open-mindedness 147 4 7 6.16 6.00 0.88
sample Employee learning as investment not 147 2 7 5.79 6.00 1.10
expense
Commitment of all employees to the 146 2 7 5.71 6.00 1.05
company
Encouraging employees to think 146 4 7 6.05 6.00 0.91
outside the box
Learning as key commodity to 147 3 7 5.87 6.00 0.99
guarantee survival of the company
Employees as partners in charting the 145 2 7 5.44 5.00 1.14
direction of the company
189

Deviation
Learning orientation:
Companys ability to learn as key to 162 2 7 5.56 6.00 1.08
competitive advantage
Common purpose throughout company 163 1 7 5.74 6.00 1.05
Reflect on shared assumptions about 162 2 7 5.69 6.00 1.07
way of doing business
Learning as key to improvement 163 1 7 5.86 6.00 1.07
Agreement on company vision across 161 2 7 5.38 6.00 1.18
all levels, functions, and divisions
High value of open-mindedness 163 3 7 5.96 6.00 0.99
Non-BG
sample Employee learning as investment not 163 1 7 5.75 6.00 1.17
expense
Commitment of all employees to the 163 1 7 5.44 6.00 1.28
company
Encouraging employees to think 163 1 7 5.86 6.00 1.14
outside the box
Learning as key commodity to 162 1 7 5.75 6.00 1.18
guarantee survival of the company
Employees as partners in charting the 161 1 7 5.11 5.00 1.24
direction of the company
Leveraging of managements personal networks:

Importance of managements personal 147 1 7 5.84 6.00 1.47
contacts as provider of networks for
BG
sample
Amount of pre-existing personal 147 1 7 4.62 5.00 1.99
Importance of managements personal 163 1 7 5.58 6.00 1.43

Non-BG internationalisation
sample
Amount of pre-existing personal 162 1 7 4.43 5.00 1.93
International trade shows as networking platform:

Identify new business partners (e.g. 119 1 7 5.79 6.00 1.37
distributors)
Meet new customers 118 1 7 6.32 7.00 1.03
BG Identify key players in the industry 119 1 7 5.90 6.00 1.22
sample Establish contacts and develop wider 119 4 7 6.36 7.00 0.73
networks in the industry
Maintain relationships with existing 118 1 7 6.14 6.00 1.08
customers
Identify new business partners (e.g. 106 1 7 5.69 6.00 1.55

distributors)
Meet new customers 106 1 7 5.87 6.00 1.55
Non-BG Identify key players in the industry 105 1 7 5.77 6.00 1.30
sample Establish contacts and develop wider 106 2 7 6.06 6.00 1.15
networks in the industry
Maintain relationships with existing 105 1 7 5.52 6.00 1.68
customers
190

Deviation
Niche strategy:
Emphasis on uniqueness of 146 4 7 6.28 6.00 0.84
product/service in international
marketing
Targeting of specialised needs in 147 1 7 5.95 6.00 1.18
Product/service as new and innovative 146 1 7 5.78 6.00 1.23
way of meeting a demand
BG Product/service highly specialised for 146 1 7 5.34 6.00 1.59
sample international markets
Product/service unique with respect to 147 1 7 4.93 5.00 1.69
technology
International strategy to serve an unmet 147 1 7 5.16 5.00 1.68
market need
Focus on exploiting niche in market 147 1 7 5.80 6.00 1.33
Targeting of relatively new and
untapped markets, worldwide 147 1 7 4.91 5.00 1.72
Emphasis on uniqueness of 162 2 7 5.61 6.00 1.17

product/service in international
marketing
Targeting of specialised needs in 162 1 7 5.41 6.00 1.39
Product/service as new and innovative 161 1 7 5.08 5.00 1.43
way of meeting a demand
Non-BG Product/service highly specialised for 161 1 7 4.69 5.00 1.72
sample international markets
Product/service unique with respect to 159 1 7 4.38 4.00 1.91
technology
International strategy to serve an unmet 160 1 7 4.78 5.00 1.61
market need
Focus on exploiting niche in market 161 1 7 5.22 6.00 1.64
Targeting of relatively new and 159 1 7 4.37 4.00 1.93
untapped markets, worldwide
Foreign market attractiveness:

BG Foreign market size 146 1 7 5.32 6.00 1.66
sample Foreign market potential 145 2 7 5.82 6.00 1.24
Non-BG Foreign market size 161 1 7 4.01 4.00 2.14

sample Foreign market potential 160 1 7 4.89 5.00 1.75
Internationalisation of the market:

Highly internationalised industry 147 1 7 5.88 7.00 1.67
Highly interdependent business 145 1 7 5.47 6.00 1.52
relationships worldwide
Large number of international 147 1 7 5.58 6.00 1.68
BG customers, distributors, competitors,
sample suppliers and other business partners
Importance of maintaining business 146 2 7 6.07 6.00 1.15
relationships internationally due to
interconnectedness and integration of
industry
191

Deviation
Internationalisation of the market:
Highly internationalised industry 161 1 7 5.37 6.00 1.73
Highly interdependent business 161 1 7 4.94 5.00 1.64
relationships worldwide
Large number of international 161 1 7 5.44 6.00 1.50
Non-BG customers, distributors, competitors,
sample suppliers and other business partners
Importance of maintaining business 160 1 7 5.28 6.00 1.55
relationships internationally due to
interconnectedness and integration of
industry
Control variables:
Companys annual gross sales 145 1 7 3.21 3.00 1.63
BG Years of doing international business 145 1 11 7.43 8.00 2.90
sample Manufacturing dummy 147 0 1 0.29 0.00 0.45
Export entry mode dummy 147 0 1 0.71 1.00 0.46
Companys annual gross sales 158 1 7 3.19 3.00 1.68

Non-BG Years of doing international business 161 1 11 6.73 7.00 3.05
sample Manufacturing dummy 163 0 1 0.31 0.00 0.47
Export entry mode dummy 163 0 1 0.64 1.00 0.48
kept as separate variables
Values for Companys annual gross sales are: 1=less than NZ/A$500,000 , 2= >NZ/A$500,000-$1 million,
3= >NZ/A$1 million-NZ/A$5 million, 4= >NZ/A$5 million-NZ/A$10 million, 5= >NZ/A$10 million-NZ/A$20
million, 6= >NZ/A$20 million-NZ/A$30 million, 6=more than NZ/A$ 30 million
Values for Years of doing international business are: 1=less than 1 year, 2= >1-2 years, 3= >2-3 years, 4= >3-
4 years, 5= >4-5 years, 6= >5-6 years, 7= >6-7 years, 8= >7-8 years, 9= >8-9 years, 10= >9-10 years, 11=
>more than 10 years
Prior to estimating multiple regression models, a correlation matrix is computed to

assess potential multicollinearity. The correlation matrices for the born global and
non-born global samples are displayed in Tables 6.16 and 6.17. The pairwise
correlation coefficients are well below the 0.8 threshold giving a first indication that
there are not serious problems with multicollinearity (Hair et al., 2006). In addition,
variance inflation factors (VIF) are used to evaluate multicollinearity in the
regression models which is covered in Section 6.7.
192
Table 6.16: Correlation Matrix and Descriptives (Born Global Sample)

Constructs Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
1. International Performance:
Financial 32.53 10.26 1
Operational 27.52 8.45 .69** 1
Perceived Success 5.23 1.20 .71** .56** 1
4. International entrepreneurial orientation:
Global mindset & perseverance 6.18 0.74 .30** .46** .33** 1
Innovativeness & proactiveness 5.81 0.83 .38** .59** .35** .63** 1
6. Product/Service quality
5.93 0.97 .34** .39** .36** .17* .36** 1
7. Board of Directors/Advisory Boards
service function 4.80 1.43 .09 .12 .08 .34** .20* .07 1
8. Market Orientation:
Customer orientation 5.64 0.91 .37** .53** .31** .37** .63** .44** .28** 1
Competitor orientation 5.68 0.85 .36** .42** .40** .51** .52** .22** .40** .48** 1
10. Learning Orientation
5.80 0.75 .31** .43** .26** .48** .56** .23** .38** .62** .66** 1
11. International trade shows as networking
platform 6.10 0.73 .15 .32** .14 .29** .25** .06 .35** .31** .43** .37** 1
12. Importance of management's personal
internationalisation 5.84 1.47 .08 .11 .12 .13 .11 .10 .37** .27** .27** .25** .44** 1
13. Amount of pre-existing personal
networks for internationalisation 4.62 1.99 .04 -.04 .07 .06 -.04 .10 .21* .11 .14 .08 .22** .32** 1
14. Niche Strategy
5.53 1.00 .06 .37** .05 .33** .40** .14 .24* .34** .32** .36** .26** .15 -.04 1
15. Foreign market attractiveness
5.57 1.31 .00 .19* .15 .33** .17* .11 .04 .06 .09 .03 -.05 .07 -.08 .37** 1
16. Internationalisation of the market
5.75 1.15 .17* .10 .14 .24** .21* .19* .17 .08 .20* .15 .14 .17* .16* .08 .07 1
17. Companys annual gross sales
3.21 1.64 .32** .26** .37** .20* .17* .13 -.04 .08 .23** .00 -.33 -.18* .02 -.16* .01 -.01 1
18. Years of doing international business
7.43 2.90 .15 .06 .02 -.05 .06 .06 .10 .10 .02 -.02 -.14 -.07 .19* .10 -.06 .01 .19* 1
19. Manufacturing dummy
0.29 0.45 -.03 .03 .04 .12 .05 -.03 .11 -.01 .00 .02 .27** .11 -.02 .14 .14 -.06 .00 .07 1
20. Export entry mode dummy
0.71 0.46 .17* .15 .10 -.05 .07 .05 .11 .15 -.01 -.03 .00 .06 .00 .02 .03 .00 .01 .08 .19*
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)
193
Table 6.17: Correlation Matrix and Descriptives (Non-Born Global Sample)

Constructs Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
Financial 23.95 9.60 1
Operational 21.58 8.62 .69** 1
Perceived Success 4.53 1.33 .62** .52** 1
Global mindset & perseverance 4.88 1.40 .33** .53** .34** 1
Innovativeness & proactiveness 5.47 0.86 .17* .36** .19* .55** 1
6. Product/Service quality
5.65 0.90 .36** .36** .45** .34** .35** 1
7. Board of Directors/Advisory Boards
service function 4.46 1.65 .04 .31** -.08 .41** .27* .06 1
Customer orientation 5.59 0.88 .08 .29** .09 .26** .52** .17* .12 1
Competitor orientation 5.46 0.95 .04 .22** .01 .25** .40** .03 .20 .64** 1
10. Learning Orientation
5.65 0.81 .21** .35** .21** .41** .50** .32** .32** .58** .57** 1
11. International trade shows as networking
platform 5.80 1.01 .10 .33** -.03 .02 .23* .15 .35** .19* .30** .05 1
12. Importance of management's personal
internationalisation 5.58 1.43 .12 .09 .06 .07 .07 -.02 .25* .00 .13 .01 .44** 1
13. Amount of pre-existing personal
networks for internationalisation 4.43 1.93 .17* .11 .14 .07 -.02 .02 .14 .03 .13 .09 .27* .32** 1
14. Niche Strategy
4.97 1.26 .34** .51** .29** .50** .43** .39** .30** .20* .19* .33** .26** .15 -.04 1
15. Foreign market attractiveness
4.46 1.78 .33** .32** .24** .45** .25** .30** .07 .07 .00 .07 -.05 .07 -.08 .37** 1
16. Internationalisation of the market
5.26 1.26 .13 .14 -.05 .18* .22** .02 .17 .20** .20** .19* .14 .17* .16* .08 .07 1
17. Companys annual gross sales
3.19 1.68 .03 -.04 .09 .08 .11 .00 -.22 .10 .24** .10 -.33** -.18* .02 -.16* .01 -.01 1
18. Years of doing international business
6.73 3.05 -.10 -.14 .08 -.04 -.09 -.04 -.14 .04 .04 -.01 -.14 -.07 .19* -.10 -.06 .01 .19* 1
19. Manufacturing dummy
0.31 0.47 .23** .24** .17* .07 .06 ,15 .08 .02 -.13 -.04 .27** .11 -.02 .14 .14 -.06 .00 .07 1
20. Export entry mode dummy
0.64 0.48 .00 .04 .02 -.02 .01 .10 .06 .00 -.04 .01 .00 .06 .00 .02 .03 .00 .01 .08 .19*
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)
194
6.6 Initial Data Analysis

Prior to testing the hypotheses, some statistical analyses are performed to better
gauge the characteristics of the BG and Non-BG firms. Independent samples T-tests
are conducted to check for potential mean differences in the constructs between the
two sample groups. The results of the T-tests are summarised in Table 6.18.
Table 6.18: T-test Results for Constructs in Regression Model
Variable BG firms Non-BG Sig.

firms
International entrepreneurial orientation: Mean 6.18 4.88 ***
Global mindset & perseverance Std. Deviation 0.74 1.40
N 146 160
International entrepreneurial orientation: Mean 5.81 5.47 ***
Innovativeness & proactiveness Std. Deviation 0.83 0.86
N 142 156
Product/service quality Mean 5.93 5.65 ***
N 147 160
Board of Directors/Advisory Boards Mean 4.80 4.46 NS
service function Std. Deviation 1.43 1.65
N 91 79
Market orientation: Customer orientation Mean 5.64 5.59 NS
N 145 158
Market orientation: Competitor orientation Mean 5.68 5.46 **
N 147 158
Learning orientation Mean 5.80 5.65 *
N 145 156
Leveraging of managements personal Mean 5.84 5.58 NS
networks: Importance of contacts as provider Std. Deviation 1.47 1.43
of networks for internationalisation N 147 163
Leveraging of managements personal Mean 4.62 4.43 NS
networks: Amount of pre-existing personal Std. Deviation 1.99 1.93
networks for internationalisation N 147 162
International trade shows as networking Mean 6.10 5.80 **
platforms Std. Deviation 0.73 1.01
N 117 104
Niche strategy Mean 5.53 4.97 ***
N 145 155
Foreign market attractiveness Mean 5.57 4.46 ***
N 145 160
Internationalisation of the market Mean 5.75 5.26 ***
N 144 160
*p<0.10; **p<0.05; ***p<0.01
NS=not significant
195
There are significant differences between the BG and Non-BG sample in terms of
almost all constructs, e.g., product/service quality, international entrepreneurial
orientation, learning orientation, niche strategy, and foreign market attractiveness.
BG firms have, on average, significantly higher scores on these constructs than Non-
BG companies (0.01<p<0.10). With regard to Board of Directors/Advisory Boards
service function, customer orientation and leveraging of managements personal
networks, there are no significant mean differences between the two samples. Overall,
these results suggest that born global and non-born global firms have different
characteristics, providing justification for analysing them separately.
6.7 Hypothesis Testing

As indicated in Chapter 4, ordinary least squares (OLS) regression modelling is used
to test the hypotheses. Multiple regression is a suitable analytic tool to objectively
evaluate the degree and character of relationships between dependent and
independent variables (Hair et al., 2006).
Separate regression models are conducted for the BG and Non-BG sample. The
rationale for running regressions on the Non-BG sample is to provide comparisons
that improve the robustness of the results from the BG sample. Models 1-6 relate to
hypotheses 1-10 (except H3 and H7). For hypotheses 3 and 7, separate regressions
are undertaken by including the variables Board of Directors/Advisory Boards
service function (H3) and International trade shows as networking platform (H7),
respectively. These hypotheses are tested individually as inclusion of the two
constructs in the main regression analyses (i.e., models 1-6) would reduce the sample
size considerably biasing the general results (only about 50% of all sample firms
have a Board of Directors/Advisory Board and around 70% attended international
trade shows). The regression models 7-18 are computed to test H3 and H7.
As mentioned in Section 4.3, all regression models contain four control variables:
firm size (operationalised as companys gross sales in 2009), firms international
experience (operationalised as years of doing international business), industry
196
(operationalised as manufacturing dummy), and entry mode (operationalised as

export entry dummy).
In order to assess multicollinearity, VIF scores of up to 3 are considered as

appropriate for not creating problems in terms of model interpretation and estimation.
This is much lower and more stringent than the often-recommended VIF value of 10
(Hair et al., 2006).
6.7.1 Testing Hypotheses 1-10 (except 3 and 7)

The hypotheses predict positive relationships between the independent variables (e.g.,
international entrepreneurial orientation, foreign market attractiveness) and
international performance. As indicated previously, three types of international
performance (i.e., financial, operational and perceived success) emerge from the
factor and reliability analyses. Multiple regression analyses are conducted with all
explanatory variables and each type of international performance as the dependent
variable.
The regression results for each of the three types of international performance
predicted by international entrepreneurial orientation, product/service quality, market
orientation, learning orientation, leveraging of managements personal networks,
niche strategy, foreign market attractiveness, and internationalisation of the market
are displayed in Table 6.19.
197
Table 6.19: Regression Estimates for International Performance (Testing Hypotheses 1-

10, except 3 and 7) (BG Sample)
Model 1: Model 2: Model 3:

Financial Operational Perceived
Performance Performance Success
Intercept -15.901 (8.886)* -25.936 (6.202)*** -0.982 (1.078)
International entrepreneurial 2.567 (1.524)* 2.286 (1.086)** 0.227 (0.184)
orientation: Global mindset &
perseverance (H1)
International entrepreneurial 2.533 (1.512)* 2.115 (1.077)* 0.099 (0.183)
orientation: Innovativeness &
proactiveness (H1)
Product/service quality (H2) 2.805 (0.879)*** 1.946 (0.716)*** 0.387 (0.106)***
Market orientation : Customer -0.941 (1.316) 1.022 (0.915) -0.072 (0.160)
orientation (H4)
Market orientation : Competitor 2.500 (1.297)* 0.973 (0.909) 0.400 (0.154)**
orientation (H4)
Learning orientation (H5) 1.525 (1.654) 0.779 (1.155) 0.016 (0.195)
Leveraging of managements -0.295 (0.608) -0.024 (0.434) -0.014 (0.074)
personal networks: Importance of
internationalisation (H6)
personal networks: Amount of pre-
existing personal networks for
internationalisation (H6)
Niche strategy (H8) -2.725 (0.941)*** 0.563 (0.608) -0.135 (0.105)
Foreign market attractiveness (H9) -0.689 (0.703) -0.160 (0.485) 0.026 (0.083)
Internationalisation of the market -0.561 (0.806) -0.847 (0.560) -0.049 (0.096)
(H10)
Companys annual gross sales 1.153 (0.548)** 0.822 (0.367)** 0.188 (0.064)***
Years of doing international business 0.406 (0.289) 0.042 (0.201) 0.019 (0.035)
Manufacturing dummy -0.815 (1.736) -1.149 (1.245) 0.030 (0.212)
Export entry mode dummy 4.093 (1.829)** 2.156 (1.242)* 0.326 (0.214)
N 118 117 127
R 0.442 0.573 0.404
Adj. R 0.360 0.510 0.324
Max. VIF 2.840 2.864 2.759
*p<0.10; **p<0.05; ***p<0.01
Standard errors in parentheses.
The highest VIF is 2.864 (Model 2) which is well below the stated threshold
implying that multicollinearity is not affecting any of the models. In addition, the
residual histograms for all three models show relatively normal, bell-shaped
distributions indicating that the assumption of normality is met. The residual
scatterplots reveal no pattern, suggesting that the residuals are independent and have
constant variance (homoscedasticity). There are no substantial outliers. As a result, it
can be concluded that the three models are acceptable. The R squares range from
198
0.404 (Model 3) to 0.573 (Model 2) suggesting that 40.4% to 57.3% of the variation
in international performance are explained by the models.
H1 with respect to international entrepreneurial orientation receives considerable

support as indicated by the positive and significant coefficients for global mindset &
perseverance and innovativeness & proactiveness with regard to financial (p<0.1)
and operational performance (p<0.05) (Models 1 and 2).
Similarly, there is strong support for H2 relating to product/service quality across all
three types of international performance (p<0.01).
H4 with regard to market orientation is partially supported for competitor orientation

in terms of financial performance (p<0.10) (Model 1) and perceived success (p<0.05)
(Model 3).
On the other hand, H5 pertaining to learning orientation and H6 with regard to

leveraging managements personal networks are not supported in any of the three
models.
Similarly, H8 dealing with niche strategy is not supported for operational

performance and perceived success and contradicted for financial performance
(p<0.01).
H9 with respect to foreign market attractiveness and H10 pertaining to

internationalisation of the market receive no support.
The estimated coefficient for the control variable companys annual gross sales is
positive and significant for financial performance (p<0.05), operational performance
(p<0.05) and perceived success (p<0.01). The two control variables years of doing
international business and manufacturing dummy are not significant in any of the
three models. On the other hand, the estimated coefficient for the export entry mode
dummy variable is positive and significant for financial performance (p<0.05) and
199
operational performance (p<0.10) indicating that, ceteris paribus, firms that enter
their first overseas market by exporting tend to have higher international
performance with respect to these measures than firms that use another initial entry
mode.
As above indicated, regressions are also conducted with the Non-BG sample to
enable a valuable comparative perspective and improve the interpretability of the BG
results. Table 6.20 shows the results of the regression models for the Non-BG sample.
Table 6.20: Regression Estimates for International Performance (Testing Hypotheses 1-

10, except 3 and 7) (Non-BG Sample)

Intercept -5.010 (7.762) -8.405 (6.256) -0.050 (1.087)
International entrepreneurial 0.136 (0.802) 1.803 (0.663)*** 0.264 (0.116)**
perseverance
International entrepreneurial -1.425 (1.333) -1.438 (1.066) -0.201 (0.185)
proactiveness
Product/service quality 2.059 (0.965)** 0.787 (0.778) 0.500 (0.134)***
orientation
Market orientation : Competitor -0.832 (1.187) 0.668 (0.947) -0.172 (0.167)
orientation
Learning orientation 2.219 (1.388) 0.904 (1.083) 0.245 (0.189)
Leveraging of managements 0.016 (0.644) -0.118 (0.485) 0.123 (0.086)
Leveraging of managements 0.978 (0.462)** 0.538 (0.357) 0.049 (0.063)
Niche strategy 1.244 (0.767) 1.859 (0.633)*** 0.034 (0.108)
Foreign market attractiveness 1.026 (0.507)** 0.237 (0.407) 0.063 (0.070)
Internationalisation of the market 0.732 (0.670) 0.024 (0.536) -0.139 (0.092)
Companys annual gross sales 0.637 (0.493) 0.004 (0.395) 0.099 (0.067)
Years of doing international business -0.466 (0.261)* -0.473 (0.203)** 0.045 (0.036)
Manufacturing dummy 4.356 (1.746)** 3.719 (1.405)*** 0.110 (0.247)
Export entry mode dummy -1.360 (1.579) -0.247 (1.257) -0.122 (0.219)
N 132 129 135
R 0.313 0.437 0.335
Adj. R 0.225 0.362 0.251
Max. VIF 2.353 2.364 2.362
*p<0.10; **p<0.05; ***p<0.01
200
Consistent with the models 1-3, the highest VIF for the models 4-6 is 2.364 (Model 5)
indicating no presence of multicollinearity. In addition, the assumptions of normality,
homoscedasticity and independence are checked and met.
With regard to international entrepreneurial orientation, there are significant, positive

relationships between global mindset & perseverance and operational performance
(p<0.01) (Model 5) and perceived success (p<0.05) (Model 6). In contrast to the BG
sample, there is no significant relationship between innovativeness & proactiveness
and any of the three types of international performance.
Similar to the BG sample, the regression analysis reveals significant, positive

relationships between product/service quality and financial performance (p<0.05)
and perceived success (p<0.01). However, unlike the BG sample, there is no
significant association between product/service quality and operational performance.
In contrast to the BG sample, no significant relationships are observed between

market orientation and any of the three types of international performance.
In line with the BG sample, there are no statistically significant relationships between
learning orientation and international performance.
The leveraging of managements personal networks is positively related to financial

performance (p<0.05), which differs from the results obtained from the BG firms
where no significant relationships are found.
In contrast to the BG sample, the pursuit of a niche strategy is positively related to

operational performance (p<0.01), and the estimated coefficient for foreign market
attractiveness indicates a positive relationship with financial performance (p<0.05),
unlike the BG sample.
The results reveal no significant relationships between the internationalisation of the

market and any of the three types of international performance.
201
In terms of the control variables, there is no significant relationship between the

companys annual gross sales and any of the three performance types. The variable
years of doing international business which indicates no significant relationship for
the BG sample is negatively related to financial (p<0.05) and operational (p<0.01)
performance. The manufacturing dummy variable is positively related to financial
(p<0.05) and operational performance (p<0.05) suggesting that holding all other
variables in the model constant, manufacturing companies tend to have better
performance compared to firms from other industry sectors. Unlike the BG sample,
no statistically significant relationships are found between the export entry dummy
variable and international performance.
To sum up, there are some differences between the BG and Non-BG sample. For
example, innovativeness and proactiveness and competitor orientation show
significant and positive relationships with international performance solely with
regard to the BG sample. In addition, the leveraging of managements personal
networks and the pursuit of a niche strategy are positively related to international
performance only for the Non-BG firms. On the other hand, some similarities can be
observed among the two samples. For example, the estimated coefficients for
product/service quality and global mindset and perseverance indicate strong, positive
relationships with international performance for both BGs and Non-BGs. The
findings of the regression analyses, including a comparison between BGs and Non-
BGs, will be discussed in-depth in Chapter 7.
6.7.2 Testing Hypothesis 3

Additional regression analyses are run to test H3 and 7. In models 7 to 9, the variable
Board of Directors/Advisory Boards service function is included in the
regression analysis. The models related to testing H3 are displayed in Table 6.21.
202

(BG Sample)

Intercept -10.559 (13.232) -21.975 (9.993)** -2.946 (1.509)*
Board of Directors/Advisory -0.438 (0.881) -0.406 (0.658) -0.110 (0.093)
Boards service function (H3)
International entrepreneurial 0.478 (2.182) 2.871 (1.757) 0.567 (0.251)**
perseverance
International entrepreneurial 2.977 (1.850) 2.726 (1.418)* 0.125 (0.212)
proactiveness
Product/service quality 2.951 (1.500)* 0.564 (1.156) 0.224 (0.174)
orientation
Market orientation : Competitor 1.974 (1.709) 0.836 (1.257) 0.299 (0.191)
orientation
Leveraging of managements -0.879 (0.800) 0.213 (0.613) 0.045 (0.090)
Leveraging of managements 0.264 (0.568) -0.246 (0.437) -0.028 (0.063)
Niche strategy -2.312 (1.330)* 0.439 (0.983) -0.269 (0.145)*
Foreign market attractiveness -0.987 (1.102) -0.352 (0.823) 0.195 (0.118)*
Companys annual gross sales 1.427 (0.758)* 0.440 (0.553) 0.234 (0.081)***
Years of doing international business 0.547 (0.384) 0.033 (0.292) 0.065 (0.043)
Manufacturing dummy 1.151 (2.280) -1.481 (1.786) 0.176 (0.265)
Export entry mode dummy 4.549 (2.332)* 2.969 (1.750)* 0.292 (0.263)
N 74 74 80
R 0.435 0.460 0.472
Adj. R 0.276 0.309 0.337
Max. VIF 2.658 2.564 2.640
*p<0.10; **p<0.05; ***p<0.01
The low VIFs indicate no serious concern about multicollinearity. In addition,

residual analysis suggests the presence of normality, homoscedasticity and
independence. The estimated coefficient for Board of Directors/Advisory Boards
service function is not significant in any of the models 7-9, marginal to the other
variables in the models, thereby offering no support for H3.
203
Consistent with previous hypothesis testing, regressions are conducted for the Non-
BG sample, in order to compare the results between the two types of firms. Table
6.22 highlights the results for the Non-BG companies.

(Non-BG Sample)

Intercept -14.544 (13.685) -16.167 (9.945) -0.109 (1.918)
Board of Directors/Advisory -0.430 (0.855) -0.171 (0.606) -0.188 (0.120)
Boards service function
International entrepreneurial 0.130 (1.369) 2.350 (1.000)** 0.140 (0.190)**
perseverance
International entrepreneurial 1.159 (2.548) 1.943 (1.871) 0.430 (0.354)
proactiveness
Product/service quality 3.196 (1.629)* 0.564 (1.192) 0.467 (0.228)**
Market orientation : Customer -2.815 (2.603) -0.138 (1.859) -0.227 (0.366)
orientation
Market orientation : Competitor 1.181 (2.015) 1.737 (1.481)* -0.217 (0.282)
orientation
Learning orientation 0.126 (2.340) -0.050 (1.675)* 0.159 (0.329)
Leveraging of managements 0.094 (1.193) -0.224 (0.845) 0.099 (0.167)**
Leveraging of managements 0.173 (0.818) 0.180 (0.582) -0.017 (0.114)
Niche strategy 1.286 (1.309) 1.425 (0.954) -0.047 (0.184)
Foreign market attractiveness 0.978 (0.809) -0.628 (0.597) -0.042 (0.110)
Internationalisation of the market 1.115 (1.111) -0.406 (0.807) 0.048 (0.151)
Companys annual gross sales 1.614 (0.803)* 0.286 (0.575) 0.117 (0.112)
Years of doing international business -0.282 (0.409) -0.177 (0.292) 0.063 (0.057)
Manufacturing dummy 4.311 (2.755) 3.986 (1.982)* 0.051 (0.387)
Export entry mode dummy -1.855 (2.580) 0.156 (1.859) 0.236 (0.361)
N 65 63 66
R 0.351 0.513 0.308
Adj. R 0.135 0.344 0.081
Max. VIF 2.923 2.932 2.867
*p<0.10; **p<0.05; ***p<0.01
After checking the assumptions of OLS regression modelling, there are no significant
marginal relationships between Board of Directors/Advisory Boards service
204
function and any of the three types of international performance. This is consistent
with the findings from models 7-9.
6.7.3 Testing Hypothesis 7

In order to test H7, separate regressions are estimated by including the variable
international trade shows as networking platform in the models 13-15. Table 6.23
illustrates the results for testing H7.

(BG Sample)

Intercept -19.357 (11.948) -26.528 (8.465)*** -0.439 (1.246)
International trade shows as 0.544 (1.441) 0.834 (1.042) -0.040 (0.151)
networking platform (H7)
International entrepreneurial 1.152 (1.803) 1.883 (1.302) 0.113 (0.189)
perseverance
International entrepreneurial 2.445 (1.142) 2.433 (1.202)** 0.091 (0.176)
proactiveness
Product/service quality 2.896 (1.142)** 1.721 (0.821)** 0.409 (0.120)***
orientation
Market orientation : Competitor 1.451 (1.499) 0.714 (1.086) 0.281 (0.158)*
orientation
Learning orientation 3.992 (1.932)* 0.376 (1.392) 0.179 (0.201)
Leveraging of managements -0.171 (0.788) 0.301 (0.568) 0.091 (0.084)
Niche strategy -2.612 (1.140)** 0.794 (0.813) -0.200 (0.118)*
Foreign market attractiveness 0.185 (0.919) -0.093 (0.636) 0.124 (0.092)
Companys annual gross sales 1.444 (0.625)** 0.846 (0.428)* 0.148 (0.063)**
Years of doing international business 0.615 (0.330)* 0.177 (0.238) 0.036 (0.035)
Manufacturing dummy -0.282 (1.952) -1.032 (1.458) 0.189 (0.208)
Export entry mode dummy 3.905 (2.062)* 1.947 (1.443) 0.327 (0.211)
N 95 95 102
R 0.409 0.519 0.387
Adj. R 0.287 0.420 0.272
Max. VIF 2.826 2.745 2.769
*p<0.10; **p<0.05; ***p<0.01
205
In line with the other regression results, the VIF values are below 3 indicating that
multicollinearity is not affecting any of the models 13-15. The residuals are also
relatively normally distributed, there is no indication of heteroscedasticity, and the
residuals show independence. H7 is not supported as indicated by the insignificant
estimated coefficient for international trade shows as networking platform.
The regression results for the Non-BG sample in terms of international trade shows
as networking platform are summarised in Table 6.24.
(Non-BG Sample)

Intercept -10.559 (11.980) -19.983 (9.897)** 0.461 (1.565)
International trade shows as -0.728 (1.377) 1.119 (1.155) -0.190 (0.179)
networking platform
International entrepreneurial 0.535 (1.050) 2.055 (0.895)** 0.371 (0.147)**
perseverance
International entrepreneurial -0.852 (1.921) -1.507 (1.587) -0.122 (0.256)
proactiveness
Product/service quality 2.960 (1.213)** 1.578 (1.021)* 0.442 (0.160)***
orientation
Market orientation : Competitor -0.990 (1.598) -0.322 (1.285) -0.262 (0.211)
orientation
Leveraging of managements 1.658 (0.985)* 0.613 (0.722) 0.286 (0.118)**
Leveraging of managements 0.379 (0.650) 0.541 (0.497) 0.019 (0.081)
Niche strategy 2.175 (1.036)** 2.254 (0.857)** 0.142 (0.136)
Foreign market attractiveness 0.404 (0.714) -0.147 (0.580) 0.028 (0.093)
Internationalisation of the market 0.336 (0.879) -0.495 (0.737) -0.095 (0.115)
Companys annual gross sales 1.105 (0.747) 0.974 (0.610) 0.155 (0.096)
Years of doing international business -0.477 (0.363) -0.580 (0.278)** 0.028 (0.046)
Manufacturing dummy 3.748 (2.298) 3.156 (1.871)* 0.029 (0.308)
Export entry mode dummy -2.632 (2.139) 0.223 (1.706) 0.147 (0.279)
N 87 84 89
R 0.374 0.506 0.385
Adj. R 0.231 0.388 0.248
Max. VIF 2.372 2.398 2.440
*p<0.10; **p<0.05; ***p<0.01
206
After checking the OLS assumptions, the results reveal no significant relationship
between international trade shows as networking platform and any of the three types
of international performance (models 16-18), which is consistent with the BG sample.
6.8 Testing of International Performance Measures

The second research question of this study relates to the international performance
measurement of born global firms. Specifically, it examines what important
international performance measures are in the context of born globals. In order to
answer this research question, T-tests and analysis of variance (ANOVA) are
undertaken to compare the means of various international performance measures
between born global and non-born global firms. These are discussed in turn in the
next sections.
6.8.1 Level of Importance of International Performance Measures

Table 6.25 shows the T-test results for comparing the mean levels of importance of
international performance measures between born global and non-born global firms.
207
Table 6.25: T-test Results for Level of Importance of International Performance

Measures
Variable BG firms Rank Non-BG Rank Sig.

firms
International sales Mean 6.61 1 5.60 3 ***
N 147 161
International sales growth Mean 6.52 2 5.52 =4 ***
N 147 160
International profitability Mean 6.36 3 5.77 2 ***
N 146 159
Overall international Mean 6.32 4 5.52 =4 ***
performance Std. Deviation 0.95 1.34
N 146 161
International reputation of Mean 6.19 5 5.91 1 **
the firm Std. Deviation 1.07 1.18
N 147 159
Return on investment Mean 6.04 6 5.50 6 ***
(ROI) from international Std. Deviation 1.08 1.34
business N 147 160
Gaining a foothold in Mean 5.94 7 5.36 7 ***
international markets Std. Deviation 1.22 1.43
N 147 160
New product/service Mean 5.67 8 4.99 8 ***
introduction in Std. Deviation 1.23 1.51
international markets N 146 161
Global reach (i.e. presence Mean 5.37 9 4.62 9 ***
in strategically located Std. Deviation 1.52 1.70
countries worldwide) N 147 160
Number of successful new Mean 5.30 10 4.58 11 ***
products/services in Std. Deviation 1.36 1.52
Time to market for new Mean 5.29 11 4.60 10 ***
products/services Std. Deviation 1.39 1.70
internationally N 145 159
Market share in Mean 5.05 12 4.21 12 ***
N 146 160
*p<0.10; **p<0.05; ***p<0.01
Scale of 1 (Not important at all) to 7 (Extremely important)
BG firms tend to place significantly higher levels of importance on all 12

international performance measures (p<0.01 or p<0.05) compared to Non-BG
companies. The ranks of the respective measures are for information purposes only
and have not been statistically tested.
208
Table 6.26 shows the results pertaining to the comparisons of the mean levels of
importance for the aggregated performance measures (i.e., financial and operational
performance). It should be noted that perceived success is not included in the table,
as this construct relates to different questions in the survey instrument as compared
to financial and operational performance (please see Section 6.5.1). Given the
subjectivity and difficulty for managers to rate the importance level of perceived
success, this construct was, therefore, operationalised in a different manner in
comparison to financial and operational performance.
Table 6.26: T-test Results for Level of Importance of International Performance

Measures (by Types of Performance)
Variable BG firms Non-BG firms Sig.
Financial performance Mean 6.38 5.58 ***

N 145 157
Operational performance Mean 5.52 4.91 ***
N 142 155
*p<0.10; **p<0.05; ***p<0.01
Similar to the previous Table 6.26, born global firms have generally significantly
higher levels of importance placed on financial and operational performance
(p<0.01) as compared to non-born global firms.
One-way analysis of variance (ANOVA) is conducted in order to compare the mean

level of importance for international performance measures across the three industry
sectors (i.e., Manufacturing, Service, Other). The results for the born global sample
are summarised in Table 6.27.
209
Table 6.27: ANOVA Results for Level of Importance of International Performance

Measures, based on Industry (BG sample)
Born Global firms

Variable Manu- Service Other Sig. Conclusion based
facturing (S) (O) on confidence
(M) intervals for the
mean
International sales Mean 6.73 6.55 6.58 NS
Std. Deviation 0.55 0.81 0.78
N 40 55 52
International sales Mean 6.73 6.35 6.54 * M>S
growth Std. Deviation 0.60 1.00 0.73
N 40 55 52
International Mean 6.55 6.11 6.49 ** M>S
profitability Std. Deviation 0.75 1.08 0.86
N 40 55 51
Return on investment Mean 6.08 5.75 6.33 ** O>S
(ROI) from Std. Deviation 1.05 1.14 0.96
international business N 40 55 52
Market share in Mean 5.18 5.00 5.00 NS
international markets Std. Deviation 1.60 1.60 1.47
N 40 54 52
International Mean 6.38 6.13 6.12 NS
reputation of the firm Std. Deviation 0.98 1.02 1.18
N 40 55 52
New product/service Mean 5.95 5.55 5.59 NS
introduction in Std. Deviation 1.20 1.14 1.34
international markets N 40 55 51
Global reach (i.e. Mean 5.73 5.11 5.37 NS
presence in Std. Deviation 1.26 1.73 1.44
strategically located N 40 55 52
Time to market for Mean 5.51 5.17 5.25 NS
new products/services Std. Deviation 1.37 1.42 1.37
internationally N 39 54 52
Gaining a foothold in Mean 6.20 5.80 5.88 NS
N 40 55 52
Number of successful Mean 5.66 5.05 5.29 NS
in international N 38 55 52
markets
Overall international Mean 6.50 6.24 6.27 NS
performance Std. Deviation 0.64 0.93 1.16
N 40 54 52
*p<0.10; **p<0.05; ***p<0.01
Communication, ICT, Education, Financial and Insurance Services), O=Other (i.e., Agriculture, Forestry, and
Fishing, Mining, Construction, Other)
NS=Not significant
As Table 6.27 illustrates, there are significant differences in the mean levels of
importance of international performance measures among the three industry types
(i.e., manufacturing, service and other) in terms of international sales growth,
210
international profitability and return on investment (ROI) from international business.

More specifically, BG manufacturing firms tend to place significantly more
importance to international sales growth (p<0.10) and international profitability
(p<0.05) compared to service firms, based on confidence interval analysis.
Companies that belong to the Other industry category, consider, on average, return
on investment (ROI) from international business as significantly more important
compared to service firms (p<0.05).
For comparative purposes, ANOVAs are also undertaken for the non-born global
firms. Table 6.28 highlights the results.
211

Measures, based on Industry (Non-BG sample)
Non-Born Global firms

mean
N 51 61 48
International sales Mean 5.98 5.38 5.19 ** M>O
N 51 61 47
N 50 60 48
Return on investment Mean 5.82 5.41 5.28 NS
Market share in Mean 4.88 4.00 3.75 *** M>O
N 51 60 48
N 50 60 48
New product/service Mean 5.43 4.84 4.73 ** M>O
Global reach (i.e. Mean 5.06 4.72 4.04 ** M>O
Gaining a foothold in Mean 5.65 5.52 4.85 ** M>O
N 51 61 47
Number of successful Mean 5.12 4.33 4.28 *** M>O
markets
Overall international Mean 5.80 5.52 5.19 * M>O
N 51 61 48
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
In terms of the Non-BG sample, there are significant differences among the industry
types with regard to mean level of importance attached to international sales growth
(p<0.05), market share in international markets (p<0.01), new product/service
212
introduction in international markets (p<0.05), global reach (p<0.05), gaining a

foothold in international markets (p<0.05), number of successful new
products/services in international markets (p<0.01), and overall international
performance (p<0.10). Manufacturing firms, on average, place significantly higher
levels of importance on these performance measures as compared to companies in
the Other industry category.
The ANOVA results for testing the mean differences for level of importance of the
aggregated international performance measures are displayed in Tables 6.29 (BG
sample) and 6.30 (Non-BG sample).

Measures (by Types of Performance), based on Industry (BG sample)
Born Global firms

mean
Financial Mean 6.52 6.20 6.47 * M>S
N 40 54 51
Operational Mean 5.78 5.37 5.48 NS
N 38 53 51
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
213

Measures (by Types of Performance), based on Industry (Non-BG sample)

mean
Financial Mean 5.88 5.54 5.30 ** M>O
N 50 60 46
Operational Mean 5.34 4.84 4.55 *** M>O
N 50 58 46
*p<0.10; **p<0.05; ***p<0.01
Compared to service firms, BG manufacturing firms generally consider financial

performance significantly more important (p<0.10) (see Table 6.29).
As Table 6.30 illustrates, Non-BG manufacturing companies tend to place

significantly more importance to financial (p<0.05) and operational performance
(p<0.01) than firms in the Other industry category.
6.8.2 Level of Satisfaction with International Performance

In addition, T-tests are conducted to examine the mean level of satisfaction with
international performance. The results for the comparison of BGs and Non-BGs are
shown in Table 6.31.
214
Table 6.31: T-test Results for Level of Satisfaction with International Performance

firms
International reputation of Mean 5.59 1 5.16 1 ***
N 141 158
N 144 160
International sales growth Mean 5.16 3 4.25 5 ***
N 143 159
New product/service Mean 5.08 =4 4.43 2 ***
Overall international Mean 5.08 =4 4.28 3 ***
N 141 157
N 144 160
N 144 159
business N 141 159
N 143 158
*p<0.10; **p<0.05; ***p<0.01
Scale of 1 (Not satisfied at all) to 7 (Extremely satisfied)
Consistent with the previous results, BG firms tend to be significantly more satisfied
with their international performance for all measures (p<0.01) as compared to the
Non-BG companies.
215
As displayed in Table 6.32, born global firms generally have higher satisfaction
levels than non-born global firms in terms of the aggregated types of international
performance (i.e., financial and operational) (p<0.01).
Table 6.32: T-test Results for Level of Satisfaction with International Performance (by
Types of Performance)

N 137 156
N 136 155
*p<0.10; **p<0.05; ***p<0.01
The mean level of satisfaction with international performance across the three
industry sectors are compared with ANOVA. The results are illustrated in Table 6.33.
216
Table 6.33: ANOVA Results for Level of Satisfaction with International Performance,
based on Industry (BG sample)
Born Global firms

mean
N 40 53 51
International sales Mean 4.78 5.13 5.49 * O>M
N 40 52 51
N 40 53 51
Market share in Mean 4.05 4.58 4.80 ** O>M
N 40 52 51
N 39 52 50
N 40 53 51
markets
N 40 51 50
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
BG firms in the Other category are generally significantly more satisfied with their
level of international sales growth (p<0.10) and market share in international markets
(p<0.05) compared to manufacturing companies.
217
In terms of the non-born global firms, the ANOVA results are summarised in Table
6.34.
Table 6.34: ANOVA Results for Level of Satisfaction with International Performance,
based on Industry (Non-BG sample)

mean
N 51 61 47
N 51 61 46
International Mean 4.53 4.26 3.83 * M>O
N 51 61 47
Market share in Mean 4.10 4.00 3.53 * M>O
N 51 61 45
N 51 60 46
N 51 61 46
markets
N 51 60 45
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
218
Manufacturing Non-BG firms have generally significantly higher levels of

satisfaction with their levels of international sales (p<0.05), international sales
growth (p<0.05), international profitability (p<0.10) and market share in
international markets (p<0.10) than firms in the Other category.
With regard to the aggregated international performance measures, the ANOVA

results are shown in Tables 6.35 and 6.36.
Table 6.35: ANOVA Results for Level of Satisfaction with International Performance
(by Types of Performance), based on Industry (BG sample)
Born Global firms

mean
Financial Mean 4.82 5.00 5.31 NS
N 40 48 49
N 38 49 49
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
Table 6.36: ANOVA Results for Level of Satisfaction with International Performance
(by Types of Performance), based on Industry (Non-BG sample)

mean
Financial Mean 4.58 4.20 3.95 * M>O
N 51 60 44
Operational Mean 4.47 4.27 3.99 * M>O
N 51 59 44
*p<0.10; **p<0.05; ***p<0.01
As Table 6.35 illustrates, there are no significant differences in the mean levels of
satisfaction for financial and operational performance among the three different
industry sectors in terms of the BG sample.
219
In contrast, Non-BG manufacturing firms tend to be significantly more satisfied with

their levels of financial and operational performance (p<0.10) than firms in the
Other industry sector (see Table 6.36).
6.8.3 Weighted International Performance

T-tests are also conducted to check the means for the weighted international
performance scores (i.e., the level of importance multiplied by the level of
satisfaction for each international performance measure) as displayed in Table 6.37.
Table 6.37: T-test Results for Weighted International Performance

firms
International reputation of Mean 35.17 1 31.17 1 ***
N 141 156
N 144 160
International sales growth Mean 33.73 3 23.80 5 ***
N 143 158
N 143 158
Overall international Mean 32.42 5 23.98 4 ***
N 140 157
business N 141 159
N 144 159
New product/service Mean 29.13 8 22.82 8 ***
N 142 157
*p<0.10; **p<0.05; ***p<0.01
220
As Table 6.37 illustrates, BG firms have, on average, significantly higher scores for
all international performance measures (p<0.01) compared to Non-BG companies.
The results for the aggregated international performance scores are shown in Table
6.38.
Table 6.38: T-test Results for Weighted International Performance (by Types of
Performance)

N 135 153
N 132 151
*p<0.10; **p<0.05; ***p<0.01
BG firms tend to have significantly higher mean performance scores for financial
and operational performance (p<0.01) compared to the Non-BG sample.
Finally, one-way ANOVA is undertaken to compare industry differences within the

BG and Non-BG samples in terms of the mean weighted international performance
scores. The results for the born global firms are summarised in Table 6.39.
221
Table 6.39: ANOVA Results for Weighted International Performance, based on

Industry (BG sample)
Born Global firms

mean
Std. Deviation 12.89 11.46 9.23
N 40 53 51
N 40 52 51
N 40 53 50
Return on investment Mean 29.33 27.33 32.70 * O>S
Market share in Mean 22.30 23.10 24.53 NS
N 40 51 51
N 39 52 50
N 40 53 51
markets
N 40 50 50
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
In terms of the BG firms, companies in the Other industry sector tend to have
significantly higher scores for return on investment (ROI) from international
business as compared to service firms (p<0.10).
222
With regard to the non-born global firms, the ANOVA results for the mean weighted
international performance scores are shown in Table 6.40.
Table 6.40: ANOVA Results for Weighted International Performance, based on

Industry (Non-BG sample)

mean
Std. Deviation 10.26 11.44 10.57
N 51 61 47
International sales Mean 28.25 22.39 20.56 *** M>O
N 51 61 45
International Mean 27.08 24.50 21.62 ** M>O
N 50 60 47
Return on investment Mean 25.73 22.98 20.37 * M>O
Market share in Mean 20.45 16.77 13.22 *** M>O
N 51 60 45
N 50 59 46
New product/service Mean 26.84 24.34 20.46 *** M>O
Global reach (i.e. Mean 21.76 20.25 15.59 ** M>O
Gaining a foothold in Mean 24.94 23.97 19.17 ** M>O
N 51 61 46
Number of successful Mean 22.31 18.22 16.09 *** M>O
markets
Overall international Mean 27.31 23.33 20.93 ** M>O
N 51 60 45
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
223
In terms of the Non-BG companies, there are more significant differences in the
mean weighted international performance scores across the three industry sectors.
Compared to Other companies, manufacturing firms have generally significantly
higher performance scores for international sales (p<0.05), international sales growth
(p<0.01), international profitability (p<0.05), return on investment (ROI) from
international business (p<0.10), new product/service introduction in international
markets (p<0.01), global reach (p<0.05), gaining a foothold in international markets
(p<0.05), number of successful new product/services in international markets
(p<0.01), and overall international performance (p<0.05).
In addition, one-way ANOVA is conducted for the aggregate types of international

performance. The results are shown in Tables 6.41 (BG sample) and 6.42 (Non-BG
sample).
Table 6.41: ANOVA Results for Weighted International Performance (by Types of
Performance), based on Industry (BG sample)
Born Global firms

mean
Financial Mean 31.80 31.29 34.34 NS
N 40 47 48
N 37 47 48
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
224
Table 6.42: ANOVA Results for Weighted International Performance (by Types of
Performance), based on Industry (Non-BG sample)

mean
Financial Mean 27.14 23.27 21.08 *** M>O
N 50 59 43
Operational Mean 24.61 21.38 18.41 *** M>O
N 50 57 43
*p<0.10; **p<0.05; ***p<0.01
With regard to the BG firms (Table 6.41), there are no significant differences in
weighted financial and operational performance among the various industry sectors.
This is in contrast to the Non-BG sample (Table 6.42), where manufacturing firms
have, on average, significantly higher scores of weighted financial and operational
performance (p<0.01) than Other companies.
6.9 Additional Research Findings

Additional analyses are conducted that are relevant to the internationalisation process
and performance for born global firms. They consist of internationalisation planning,
domestic expansion prior to exporting as well as psychic distance, entry mode and
international market selection of born globals. These themes were identified through
a literature review on born globals (please see Chapter 2), or appeared in the
qualitative interviews.
6.9.1 Internationalisation Planning and Domestic Expansion prior to

Internationalisation
Internationalisation planning is a topic that emerged from the interviews (see Chapter
5). As a result, it was also incorporated in the quantitative survey instrument (see
Question 1 in Appendix E). The T-test results are summarised in Table 6.43.
225
Table 6.43: T-test Results for Internationalisation Planning

Planned to do first international Mean 6.18 5.35 ***
business and active preparation Std. Deviation 1.30 1.66
N 145 150
Rather unplanned approach to Mean 2.11 3.71 ***
first international business and Std. Deviation 1.72 2.09
triggered by unexpected event N 122 144
*p<0.10; **p<0.05; ***p<0.01
Scale of 1 (strongly disagree) to 7 (strongly agree)
BG firms generally plan and prepare more for their first international business
activity compared to Non-BG firms (p<0.01). Compared to BGs, Non-BG firms tend
to adopt a more unplanned approach to first internationalisation which is triggered by
an unexpected event (p<0.01).
Crosstabulations and chi-square tests are used in order to check whether there are
significantly different distributions for BG and Non-BG firms in terms of domestic
expansion prior to first internationalisation, presence of Board of Directors/Advisory
Board, and attendance of international trade shows. The results are displayed in
Tables 6.44 to 6.46.
Table 6.44: Crosstabulation and Pearsons Chi-Square Test for Domestic Expansion
prior to First Internationalisation
Variable BG firms Non-BG firms Total Sig.

Domestic expansion prior to No 83 22 105 ***
first internationalisation Yes 64 138 202
Total 147 160 307
*p<0.10; **p<0.05; ***p<0.01
Table 6.45: Crosstabulation and Pearsons Chi-Square Test for Presence of Board of
Directors/Advisory Board

Presence of Board of No 55 84 139 **
Directors/Advisory Board Yes 92 79 171
Total 147 163 310
*p<0.10; **p<0.05; ***p<0.01
Table 6.46: Crosstabulation and Pearsons Chi-Square Test for Attendance of

International Trade Shows

Attendance of international No 28 56 84 ***
trade shows Yes 119 107 226
Total 147 163 310
*p<0.10; **p<0.05; ***p<0.01
226
Non-BG firms tend to expand significantly more often in their domestic market prior
to first internationalisation (p<0.01). In addition, BG companies are more likely to
have a Board of Directors/Advisory Board, relative to Non-BG firms (p<0.05).
Finally, BG firms are more likely to attend international trade shows than Non-BG
companies (p<0.01).
6.9.2 Psychic Distance, Entry Mode, and International Market Selection

As indicated in the literature review in Chapter 2, psychic distance is a concept that
has received much attention in the literature since the work of Johanson and Vahlne
(1977). In the context of born globals, some authors have argued that the concept of
psychic distance might be less relevant as these firms may start going international
by entering psychically distant foreign markets (Aspelund et al., 2007; Bell et al.,
2003; Moen & Servais, 2002). Crick and Jones (2000) found that perceived growth
opportunities for the companys niche products rather than psychic distance was
important decision criterion for international market selection of high-technology
SMEs. Many studies have used the cultural distance scales from Hofstede (1980) as a
proxy for psychic distance and calculated a composite index based on Kogut and
Singh (1988) (Tihanyi, Griffith, & Russel, 2005). However, Hofstedes scales have
been criticised for being too narrow and only capturing the cultural aspect of psychic
distance without considering other key areas, such as political and educational issues
(Shenkar, 2001). Therefore, the psychic distance scale developed by Dow and
Karunaratna (2006) is used in this study. Dow and Karunaratnas scale is
multidimensional in nature and incorporates differences in language, religion,
education, industrial development and political system. In the calculation of psychic
distance scores, the companys home country (i.e., New Zealand or Australia) and
first foreign market are considered. It should be noted that a Kogut and Singh-like
measure (1988) is not used to calculate the psychic distance scores due to its limited
applicability to the Dow and Karunaratna scale. The following example based on the
language differences between Australia-New Zealand and Australia-Myanmar
illustrates this. According to Dow and Karunaratnas scale, the factor score for
language differences for Australia-New Zealand is -3.389 (this negative value
indicates relatively low difference between these two countries in terms of language).
227
The factor score for language differences between Australia-Myanmar is 0.526

suggesting stronger language differences as compared to Australia-New Zealand.
However, if these two values are put in an index following Kogut and Singh (1988),
the result is quite different, suggesting a higher positive value for language
differences between Australia-New Zealand than Australia-Myanmar. This implies
larger psychic distance between Australia and New Zealand than between Australia
and Myanmar, which is clearly inaccurate. Therefore, a different methodology is
adopted in this thesis. The means and standard deviations of the factor scores for
each of the five dimensions are checked. Due to the differences in means and
standard deviations, the data are standardised using z-scores and then summated
accordingly for a final psychic distance score.
The results of the T-tests for psychic distance scores between the home market (New
Zealand or Australia) and the first overseas market are shown in Tables 6.47 and
6.48.
Table 6.47: T-test Results for Psychic Distance (First Foreign Market) (New Zealand
Sample)
Psychic distance score Mean -1.13 -1.28 *

N 93 94
*p<0.10; **p<0.05; ***p<0.01
Table 6.48: T-test Results for Psychic Distance (First Foreign Market) (Australia
Sample)
Psychic distance score Mean -0.90 -1.09 NS

N 37 57
*p<0.10; **p<0.05; ***p<0.01
NS=Not significant
In terms of the New Zealand sample (Table 6.47), the mean psychic distance score is
significantly lower for Non-BG (-1.28) than for BG firms (-1.13) (p<0.10)
suggesting that Non-BG firms are more likely to first enter psychically closer
markets compared to BGs. With regard to the Australian sample (Table 6.48), there
228
are no significant differences in the mean psychic distance scores between the BG
and Non-BG firms.
The results suggest that psychic distance plays some role in foreign market selection
for the sample firms. To further shed light on this phenomenon, the location of the
first overseas markets along with the respective entry modes and order of entry are
examined in the following.
Table 6.49 summarises the first main foreign countries entered by the sample firms.
Table 6.49: Distribution of BG and Non-BG Firms by Location of Companys First
Main International Markets
Country BG firms Non-BG firms

(Number of responses and (Number of responses and
percentage) percentage)
USA 79 (53.7%) 46 (28.2%)

Australia/New Zealand 72 (49.0%) 112 (68.7%)
UK 55 (37.4%) 35 (21.5%)
Japan 28 (19.0%) 14 (8.6%)
Singapore 24 (16.3%) 26 (16.0%)
China 22 (15.0%) 15 (9.2%)
Germany 18 (12.2%) 2 (1.2%)
South Korea 13 (8.8%) 8 (4.9%)
Thailand 11 (7.5%) 12 (7.4%)
Indonesia 10 (6.8%) 10 (6.1%)
Malaysia 9 (6.1%) 11 (6.7%)
India 8 (5.4%) 5 (3.1%)
Netherlands 8 (5.4%) 0 (0.0%)
Taiwan 7 (4.8%) 3 (1.8%)
Canada 6 (4.1%) 2 (1.2%)
Hong Kong 6 (4.1%) 4 (2.5%)
South Africa 5 (3.4%) 5 (3.1%)
France 4 (2.7%) 2 (1.2%)
Sweden 3 (2.0%) 0 (0.0%)
Papua New Guinea 2 (1.4%) 5 (3.1%)
Italy 2 (1.4%) 0 (0.0%)
Chile 2 (1.4%) 2 (1.2%)
Switzerland 2 (1.4%) 0 (0.0%)
Philippines 2 (1.4%) 1 (0.6%)
United Arab Emirates 2 (1.4%) 1 (0.6%)
Dubai 2 (1.4%) 1 (0.6%)
Kazakhstan 2 (1.4%) 0 (0.0%)
Fiji 1 (0.7%) 2 (1.2%)
Brunei 0 (0.0%) 2 (1.2%)
New Caledonia 0 (0.0%) 3 (1.8%)
Other 40 (27.2%) 29 (17.8%)
This table shows the companys first main international markets and includes multiple countries per company as
indicated by survey responses. Therefore, the total percentage does not add up to 100%.
229
The five most frequently entered first foreign markets for BG firms are USA (79
responses, 53.7%), Australia/New Zealand (72, 49%), UK (55, 37.4%), Japan (28,
19%), and Singapore (24, 16.3%).
Non-BG firms choose the following foreign countries most frequently:

Australia/New Zealand (112 responses, 68.7%), USA (46, 28.2%), UK (35, 21.5%),
Singapore (26, 16%), and China (15, 9.2%).
While the first main foreign markets are very similar for BG and Non-BG firms,
there is a more even and balanced spread of countries for BGs. In contrast,
Australia/New Zealand is by far the dominant foreign market choice for Non-BGs.
This may offer an explanation for the results obtained for psychic distance mentioned
earlier.
To check whether there is a statistically significant difference in the distribution of

foreign countries for BG and Non-BG firms, confidence intervals for proportions are
calculated. The results for the top 12 overseas markets are shown in Table 6.50.
Table 6.50: Confidence Intervals for Proportions in terms of Companys First Main
International Markets
Country 95% Confidence Intervals for 95% Confidence Intervals for

proportions proportions
BG firms Non-BG firms
USA (0.457, 0.618) (0.213, 0.351)

Australia/New Zealand (0.409, 0.571) (0.616, 0.758)
UK (0.296, 0.452) (0.152, 0.278)
Japan (0.127, 0.254) (0.043, 0.129)
Singapore (0.104, 0.223) (0.103, 0.216)
China (0.092, 0.207) (0.048, 0.136)
Germany (0.069, 0.175) (-0.046, 0.029)
South Korea (0.043, 0.134) (0.016, 0.082)
Thailand (0.032, 0.117) (0.034, 0.114)
Indonesia (0.027, 0.109) (0.025, 0.098)
Malaysia (0.023, 0.099) (0.029, 0.106)
India (0.018, 0.091) (0.004, 0.057)
Based on these confidence intervals, the following conclusions can be drawn as

summarised in Table 6.51.
230
Table 6.51: Decisions based on 95% Confidence Intervals for Proportions in terms of
Companys First Main International Markets
Country Result
USA BG > Non-BG

Australia/New Zealand BG < Non-BG
UK BG > Non-BG
Japan No significant difference
Singapore No significant difference
China No significant difference
Germany BG > Non-BG
South Korea No significant difference
Thailand No significant difference
Indonesia No significant difference
Malaysia No significant difference
India No significant difference
BG firms tend to enter USA, UK, and Germany significantly more frequently as their
first overseas markets compared to Non-BG firms. On the other hand, Australia/New
Zealand tends to be chosen significantly more often by Non-BG firms than by BG
companies. There is no significant difference between BG and Non-BG firms in
terms of entering the following countries: Japan, Singapore, China, South Korea,
Thailand, Indonesia, Malaysia and India.
Table 6.52 shows the order in which BG and Non-BG firms enter their first main
foreign markets.
231
Table 6.52: Distribution of BG and Non-BG Firms by Location and Order of Entry to Companys First Main International Markets
Order of entry
Country 1 2 3 4 5 6 7 8 9 10 11
USA 41 (28.5%) 24 (25.5%) 6 (8.3%) 3 (7.0%) 2 (8.3%)
Australia/New 35 (24.3%) 16 (17.0%) 6 (8.3%) 6 (14.0%) 3 (12.5%) 1 (10.0%) 1 (100%)
Zealand
UK 15 (10.4%) 14 (14.9%) 20 (21.3%) 2 (4.7%) 1 (4.2%) 1 (100%)
Japan 8 (5.6%) 7 (7.4%) 5 (6.9%) 3 (7.0%) 3 (30.0%) 1 (16.7%) 1 (33.3%)
Singapore 3 (2.1%) 4 (4.3%) 3 (4.2%) 9 (20.9%) 2 (20.0%) 1 (16.7%) 1 (33.3%)
China 4 (2.8%) 4 (4.3%) 3 (4.2%) 5 (11.6%) 3 (12.5%) 1 (10.0%) 1 (16.7%) 1 (100%)
Germany 1 (0.1%) 2 (2.1%) 7 (9.7%) 5 (11.6%) 2 (8.3%) 1 (10.0%)
South Korea 1 (0.1%) 4 (4.3%) 4 (5.6%) 3 (7.0%) 1 (16.7%)
Thailand 2 (0.1%) 3 (3.2%) 1 (2.3%) 3 (12.5%) 1 (16.7%) 1 (33.3%)
Indonesia 2 (2.1%) 2 (2.8%) 2 (4.7%) 2 (8.3%) 1 (10.0%) 1 (16.7%)
BG
Malaysia 2 (0.1%) 2 (2.1%) 1 (1.4%) 3 (12.5%) 1 (10.0%)
sample
India 3 (2.1%) 2 (2.1%) 2 (2.8%) 1 (2.3%)
Netherlands 3 (2.1%) 1 (1.1%) 1 (2.3%)
Taiwan 1 (0.1%) 1 (2.3%)
Canada 1 (0.1%) 1 (1.4%)
Hong Kong 1 (0.1%) 1 (1.1%) 2 (2.8%) 1 (4.2%)
South Africa 1 (1.4%)
France 1 (1.1%)
Sweden 1 (0.1%)
Italy 1 (0.1%)
Switzerland 1 (4.2%)
Philippines 1 (0.1%)
Other 20 (13.9%) 7 (7.4%) 9 (12.5%) 1 (2.3%) 3 (12.5%)
TOTAL 144 (100%) 94 (100%) 72 (100%) 43 (100%) 24 (100%) 10 (100%) 6 (100%) 3 (100%) 1 (100%) 1 (100%) 1 (100%)
232
Table 6.52: Distribution of BG and Non-BG Firms by Location and Order of Entry to Companys First Main International Markets (Contd)
Order of entry
Country 1 2 3 4 5 6 7 8 9 10 11
USA 17 (11.0%) 14 (15.7%) 10 (19.2%) 1 (5.9%)
Australia/New 87 (56.1%) 14 (15.7%) 3 (5.8%) 2 (11.8%)
Zealand
UK 12 (7.7%) 7 (7.9%) 11 (21.2%) 2 (11.8%) 1 (20.0%)
Japan 3 (1.9%) 5 (5.6%) 3 (5.8%) 1 (5.9%) 1 (20.0%)
Singapore 9 (5.8%) 11 (12.4%) 2 (3.8%) 2 (11.8%) 1 (16.7%)
China 3 (1.9%) 9 (10.1%) 1 (5.9%) 1 (16.7%) 1 (20.0%)
Germany 1 (1.1%) 1 (1.9%)
South Korea 2 (2.2%) 2 (3.8%) 2 (11.8%) 1 (20.0%)
Thailand 1 (0.1%) 6 (6.7%) 4 (7.7%) 1 (5.9%)
Indonesia 1 (0.1%) 4 (4.5%) 1 (1.9%) 1 (5.9%) 1 (16.7%) 1 (20.0%) 1 (100%)
Non- Malaysia 2 (0.1%) 2 (2.2%) 4 (7.7%) 1 (5.9%) 2 (33.3%)
BG India 1 (1.1%) 2 (3.8%) 1 (5.9%) 1 (16.7%)
sample Taiwan 1 (0.1%) 1 (1.9%)
Canada 1 (0.1%) 1 (1.1%)
Hong Kong 1 (1.9%)
South Africa 2 (2.2%) 1 (5.9%)
France 1 (0.1%) 1 (1.9%)
Papua New 2 (0.1%) 1 (1.1%)
Guinea
Chile 1 (0.1%) 1 (1.1%)
Dubai 1 (1.9%)
New 1 (0.1%)
Caledonia
Other 12 (7.7%) 8 (9.0%) 5 (9.6%) 1 (5.9%)
TOTAL 155 (100%) 89 (100%) 52 (100%) 17 (100%) 6 (100%) 5 (100%) 1 (100%)
233
According to the BG sample, USA is the most frequently entered first foreign market
(41 responses, 28.5%), followed by Australia/New Zealand (35, 24.3%), UK (15,
10.4%), and Japan (8 responses, 5.6%). With regard to the second entered market,
the results are fairly similar. In terms of the third entered foreign country, UK is most
frequently chosen (21.3%), followed by Germany and USA and Australia/New
Zealand.
Australia/New Zealand is by far the most popular first foreign market (87 responses,
56.1%) for the Non-BG firms (Table 6.53). USA is the second most frequently
entered first international country (17 responses, 11.0%), followed by UK (12
responses, 7.8%), and Singapore (9 responses, 5.8%). Looking at the second entered
countries, the choice of countries is more spread with 15.7% of responses for both
Australia/New Zealand and USA, followed by Singapore (12.4%) and China (10.7%).
Consistent with the previous Table 6.49, it is interesting to note that the Non-BG
firms mainly focus on Australia/New Zealand as their first international market,
whereas there is a much wider and balanced spread in terms of the BG sample. These
findings may also shed light on the results for psychic distance where New Zealand
Non-BGs tend to enter more psychically close countries as their first overseas market
compared to BG firms (see Table 6.47).
As discussed in Section 2.5, it has been indicated that BG firms often have hybrid
governance structures in that they enter foreign markets through alliances or other
non-equity modes (Oviatt & McDougall, 1994). In the BG literature, the majority of
quantitative studies have focused exclusively on exporters without examining other
potential entry modes that these companies might use. In this study, the entry mode
choice for the respective foreign markets is investigated. Table 6.53 displays the
entry modes used for the companys first main international markets according to
industry type.
234
Table 6.53: Distribution of BG and Non-BG Firms by Industry Type and Entry Mode
to Companys First Main International Markets
Entry mode to first BG firms Non-BG firms

main international (Number of responses and (Number of responses and
markets percentage) percentage)
Exporting 91 112 135 338 (69.5%) 84 67 79 230 (62.5%)
Licensing 3 8 4 15 (3.1%) 4 16 3 23 (6.3%)
Franchising 0 3 0 3 (0.6%) 3 0 0 3 (0.8%)
Strategic alliance 1 18 13 32 (6.6%) 6 24 7 37 (10.1%)
Joint venture 4 11 5 20 (4.1%) 4 10 0 14 (3.8%)
Wholly-owned sales 4 28 8 40 (8.2%) 3 16 5 24 (6.5%)
subsidiary
Wholly-owned 1 2 0 3 (0.6%) 1 1 1 3 (0.8%)
manufacturing subsidiary
Other 2 22 11 35 (7.2%) 7 21 6 34 (9.2%)
TOTAL 106 204 176 486 (100%) 112 155 101 368 (100%)
Exporting is by far the dominant entry mode for BG (69.5%) and Non-BG firms
(62.5%). Strategic alliances and licensing is also used by the sample firms (around
10-15% of all market entry modes). It is interesting to see that joint ventures and
wholly-owned sales subsidiaries are also used with a combined share of about 10-
12% of all employed market entry modes. This suggests that equity-based modes
may play a relevant role in the foreign activities of these firms.
In order to check whether there are industry-related differences in terms of entry

mode choice, 95% confidence intervals for proportions are calculated. The results are
displayed in Table 6.54.
235
Table 6.54: Confidence Intervals for Proportions in terms of Industry Type and Entry
Modes to Companys First Main International Markets
Entry mode BG firms Non-BG firms

95% confidence intervals for proportions 95% confidence intervals for proportions
M S O M S O
Exporting (0.792, 0.925) (0.481, 0.617) (0.705, 0.830) (0.670, 0.830) (0.354, 0.510) (0.720, 0.863)
Licensing (-0.033, 0.060) (0.013, 0.066) (0.007, 0.045) (0.001, 0.070) (0.055, 0.151) (-0.003, 0.063)
Franchising 0 (-0.002, 0.031) 0 (-0.003, 0.057) 0 0
Strategic (-0.009, 0.028) (0.049, 0.127) (0.035, 0.113) (0.012, 0.095) (0.098, 0.212) (0.020, 0.119)
alliance
Joint venture (0.014, 0.071) (0.023, 0.085) (0.004, 0.053) (0.001, 0.070) (0.026, 0.103) 0
Wholly- (0.014, 0.071) (0.090, 0.185) (0.015, 0.076) (-0.003, 0.057) (0.055, 0.151) (0.007, 0.092)
owned sales
subsidiary
Wholly- (-0.009, 0.028) (-0.004, 0.023) 0 (-0.009, 0.026) (-0.06, 0.019) (-0.009, 0.029)
owned
manufacturing
subsidiary
Other (-0.007, 0.045) (0.065, 0.150) (0.027, 0.098) (0.018, 0.107) (0.082, 0.189) (0.013, 0.106)
Based on these confidence intervals for proportions regarding entry mode choice to
the sample firms first main international markets, the following conclusions can be
made as shown in Table 6.55.
Table 6.55: Decisions based on 95% Confidence Intervals for Proportions in terms of
Industry Type and Entry Modes to Companys First Main International Markets
Entry mode BG firms Non-BG firms
Exporting S < M, O S < M, O

Licensing No significant difference No significant difference
Franchising No significant difference No significant difference
Strategic alliance S>M S>M
Joint venture No significant difference No significant difference
Wholly-owned sales S > M, O No significant difference
subsidiary
Wholly-owned No significant difference No significant difference
manufacturing
subsidiary
Other S>M No significant difference
In terms of the BG sample, service firms tend to use exporting significantly less
frequently than manufacturing and other companies. In addition, there are generally a
significantly higher proportion of service firms that employ strategic alliances as
compared to manufacturing companies. Service firms tend to use wholly-owned sales
subsidiary significantly more often than manufacturing and other companies. There
236
is also a significant difference in the use of other entry modes between service and
manufacturing firms. In terms of the use of licensing, franchising, joint venture and
wholly-owned manufacturing subsidiaries, no significant differences among service,
manufacturing and other firms can be observed.
With regard to the Non-BG sample, the same results as for the BG firms are obtained
for exporting and strategic alliances. In contrast to the BG sample, there is no
significant difference in the use of wholly-owned sales subsidiaries and other entry
modes. Consistent with the BG firms, no significant differences among the three
industry sectors are observed in terms of licensing, franchising, joint venture, and
wholly-owned manufacturing subsidiaries.
Table 6.56 displays the entry modes used for the companys first main international
markets along with the respective order of entry.
237
Table 6.56: Distribution of BG and Non-BG Firms by Entry Mode and Order to First Main International Markets
Order of entry
Entry mode 1 2 3 4 5 6 7 8 9 10 11
Exporting 100 (64.1%) 78 (72.9%) 59 (70.2%) 32 (66.7%) 21 (70.0%) 8 (57.1%) 5 (38.4%) 2 (50.0%) 1 (100%) 1 (100%)
Licensing 9 (5.8%) 3 (2.8%) 1 (1.2%) 1 (2.1%) 2 (6.7%)
Franchising 1 (0.9%)
Strategic 12 (7.7%) 4 (3.7%) 7 (8.3%) 6 (12.5%) 2 (6.7%) 1 (7.1%)
alliance
BG
Joint venture 3 (1.9%) 4 (3.7%) 3 (3.6%) 4 (8.3%) 1 (3.3%) 2 (14.3%)
sample
Wholly-owned 15 (9.6%) 10 (9.3%) 6 (7.1%) 3 (6.3%) 1 (3.3%) 2 (14.3%) 1 (7.7%) 1 (25.0%)
sales subsidiary
Wholly-owned 1 (0.6%) 1 (0.9%) 1 (3.3%)
manufacturing
subsidiary
Other 16 (10.3%) 6 (5.6%) 8 (9.5%) 2 (4.2%) 2 (6.7%) 1 (7.1%) 7 (53.8%) 1 (25.0%)
TOTAL 156 (100%) 107 (100%) 84 (100%) 48 (100%) 30 (100%) 14 (100%) 13 (100%) 4 (100%) 1 (100%) 1 (100%)
Exporting 98 (59.0%) 63 (66.3%) 36 (67.9%) 14 (60.9%) 4 (66.7%) 2 (40.0%) 1 (100%)

Licensing 6 (3.6%) 7 (7.4%) 3 (5.7%) 3 (13.0%)
Franchising 1 (0.6%) 1 (1.1%) 1 (20.0%)
Strategic 16 (9.6%) 8 (8.4%) 4 (7.5%) 2 (8.7%) 1 (16.7%) 1 (20.0%)
alliance
Non-
Joint venture 8 (4.8%) 3 (3.2%) 3 (5.7%) 2 (8.7%)
BG
Wholly-owned 16 (9.6%) 5 (5.3%) 1 (1.9%)
sample
sales subsidiary
Wholly-owned 1 (0.6%) 1 (1.1%) 1 (1.9%)
manufacturing
subsidiary
Other 20 (12.0%) 7 (7.4%) 5 (9.4%) 2 (8.7%) 1 (16.7%) 1 (20.0%)
TOTAL 166 (100%) 95 (100%) 53 (100%) 23 (100%) 6 (100%) 5 (100%) 1 (100%)
238
The results of Table 6.56 are consistent with those of the previous Table 6.53. For
example, in terms of the very first overseas market, exporting has a share of 64.1%
(i.e., 100 out of 156 responses) (BG sample) and 59.0% (i.e., 98 out of 166
responses) (Non-BG sample) of the employed entry modes. It is important to note
that almost 10% of both the BG (15 responses) and Non-BG firms (16 responses) in
the sample entered their very first international market through wholly-owned sales
subsidiaries. Similarly, strategic alliances were used in 7.7% (BG sample) and 9.6%
(Non-BG sample) of all first entry modes. There are similar distributions of entry
modes for the overseas markets that were entered subsequently (i.e., 2nd to 11th).
Table 6.57 summarises the sample firms first main foreign markets and the
respective entry mode choices.
239
Table 6.57: Distribution of BG and Non-BG Firms by Location and Entry Mode to Companys First Main International Markets
Entry mode
Country Exporting Licensing Franchising Strategic Joint WOS WOM Other
alliance venture
USA 54 (17.2%) 4 (25.0%) 1 (100%) 6 (20.7%) 9 (23.1%) 7 (16.3%)
Australia/New Zealand 48 (15.3%) 5 (31.3%) 5 (17.2%) 2 (11.8%) 9 (23.1%) 7 (16.3%)
UK 36 (11.5%) 3 (18.8%) 6 (20.7%) 4 (23.5%) 5 (12.8%) 2 (4.7%)
Japan 20 (6.4%) 2 (12.5%) 2 (6.9%) 2 (11.8%) 1 (2.6%) 8 (18.6%)
Singapore 18 (5.7%) 3 (10.3%) 1 (5.9%) 2 (5.1%) 2 (4.7%)
China 17 (5.4%) 1 (3.4%) 3 (17.6%) 3 (7.7%) 1 (2.3%)
Germany 13 (4.1%) 1 (6.3%) 3 (10.3%) 2 (5.1%) 1 (33.3%) 1 (2.3%)
South Korea 13 (4.1%) 1 (5.9%) 1 (2.6%)
Thailand 9 (2.9%) 1 (3.4%) 1 (33.3%) 1 (2.3%)
Indonesia 9 (2.9%) 2 (4.7%)
Malaysia 8 (2.5%) 1 (5.9%) 1 (2.3%)
India 5 (1.6%) 2 (11.8%) 1 (33.3%) 1 (2.3%)
Netherlands 4 (1.3%) 1 (6.3%) 1 (3.4%) 1 (2.6%)
BG sample Taiwan 6 (1.9%) 1 (2.3%)
Canada 4 (1.3%) 1 (2.3%)
Hong Kong 4 (1.3%) 1 (2.6%)
South Africa 3 (1.0%) 1 (3.4%) 1 (2.3%)
France 2 (0.6%)
Sweden 1 (0.3%)
Papua New Guinea 2 (0.6%)
Italy 1 (2.6%)
Chile 1 (0.3%)
Switzerland 2 (0.6%)
Philippines 2 (0.6%) 1 (2.6%)
United Arab Emirates 1 (0.3%) 1 (2.6%)
Dubai 2 (4.7%)
Kazakhstan 1 (0.3%) 1 (3.4%)
Fiji 1 (0.3%)
Other 30 (9.6%) 2 (6.9%) 1 (5.9%) 2 (5.1%) 5 (11.6%)
TOTAL 314 (100%) 16 (100%) 1 (100%) 29 (100%) 17 (100%) 39 (100%) 3 (100%) 43 (100%)
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Table 6.57: Distribution of BG and Non-BG Firms by Location and Entry Mode to Companys First Main International Markets (Contd)
Entry mode
Country Exporting Licensing Franchising Strategic Joint WOS WOM Other
alliance venture
USA 27 (12.4%) 2 (10.0%) 1 (33.3%) 6 (19.4%) 2 (9.1%) 1 (33.3%) 3 (8.3%)
Australia/New Zealand 69 (31.7%) 6 (30.0%) 1 (33.3%) 6 (19.4%) 7 (43.8%) 10 (45.5%) 12 (33.3%)
UK 19 (8.7%) 2 (10.0%) 4 (12.9%) 3 (18.8%) 6 (27.3%) 1 (33.3%) 1 (2.8%)
Japan 10 (4.6%) 2 (6.5%) 1 (4.5%) 1 (2.8%)
Singapore 15 (6.9%) 3 (15.0%) 3 (9.7%) 2 (12.5%) 3 (8.3%)
China 9 (4.1%) 1 (5.0%) 1 (33.3%) 1 (3.2%) 1 (6.3%) 1 (4.5%) 1 (2.8%)
Germany 2 (0.9%)
South Korea 5 (2.3%) 1 (5.0%) 1 (6.3%) 1 (2.8%)
Thailand 10 (4.6%) 1 (5.0%) 2 (6.5%) 1 (6.3%)
Indonesia 6 (2.8%) 1 (5.0%) 1 (33.3%) 2 (5.6%)
Malaysia 5 (2.3%) 1 (5.0%) 1 (3.2%) 1 (6.3%) 3 (8.3%)
Non-BG
India 3 (1.4%) 1 (3.2%) 1 (2.8%)
sample
Taiwan 2 (0.9%) 1 (2.8%)
Canada 2 (0.9%) 1 2.8%)
Hong Kong 2 (0.9%) 1 (4.5%) 1 (2.8%)
South Africa 2 (0.9%) 1 (5.0%)
France 1 (0.5%) 1 (3.2%) 1 (2.8%)
Papua New Guinea 3 (1.4%) 1 (2.8%)
New Caledonia 2 (0.9%) 1 (3.2%)
Chile 2 (0.9%)
United Arab Emirates 1 (0.5%)
Brunei 1 (3.2%)
Fiji 1 (0.5%)
Other 20 (0.9%) 1 (5.0%) 1 (3.2%) 1 (4.5%) 3 (8.3%)
TOTAL 218 (100%) 20 (100%) 3 (100%) 31 (100%) 16 (100%) 22 (100%) 3 (100%) 36 (100%)
WOS=Wholly-owned sales subsidiary
WOM=Wholly-owned manufacturing subsidiary
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Looking at the distribution of entry modes for the respective overseas markets,
exporting is used in many countries, reflecting the popularity of this entry mode. In
terms of the BG sample, 45% of all sample firms exporting activities are done in
USA, Australia/New Zealand and UK. Similarly, the bulk of licensing activities is
concentrated in these countries. In terms of equity modes, the majority of all used
wholly-owned sales subsidiaries are formed in USA (23.1%) and Australia/New
Zealand (23.1%).
With regard to the Non-BG sample, approximately one third of all export activities is
conducted in Australia/New Zealand, followed by USA (12.4%), and UK (8.3%). A
similar distribution applies to the other entry modes (e.g., licensing, joint venture)
with Australia/New Zealand being the dominant market. An exception is the use of
strategic alliances which is spread more evenly across various countries.
Overall, these findings are consistent with the previous tables regarding entry mode
and overseas market selection.
6.10 Summary of Quantitative Findings

The quantitative findings of the study are summarised in this section, including the
results of hypothesis testing (Table 6.58), an overview of the results for international
performance measurement (Table 6.59), and additional findings in terms of
internationalisation planning, domestic expansion prior to first internationalisation,
psychic distance, entry mode and international market selection (Tables 6.60-6.63).
242
Table 6.58: Summary of the Results of the Hypotheses
Hypotheses Constructs in regression model Results

BG sample Non-BG sample
H1: International entrepreneurial orientation is International entrepreneurial Financial performance supported not significant
positively related to the international performance orientation: Global mindset & Operational performance supported positive relationship
of born global firms. perseverance Perceived success not supported positive relationship
International entrepreneurial Financial performance supported not significant
orientation: Innovativeness & Operational performance supported not significant
proactiveness Perceived success not supported not significant
H2: Product/service quality is positively related to Product/service quality Financial performance supported positive relationship
the international performance of born global firms. Operational performance supported not significant
Perceived success supported positive relationship
H3: The extent of Board of Directors/Advisory Board of Directors/Advisory Financial performance not supported not significant
Boards service function is positively related to the Boards service function Operational performance not supported not significant
international performance of born global firms. Perceived success not supported not significant
H4: Market orientation is positively related to the Market orientation: Customer Financial performance not supported not significant
international performance of born global firms. orientation Operational performance not supported not significant
Perceived success not supported not significant
Market orientation: Competitor Financial performance supported not significant
orientation Operational performance not supported not significant
Perceived success supported not significant
H5: Learning orientation is positively related to the Learning orientation Financial performance not supported not significant
international performance of born global firms. Operational performance not supported not significant
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Table 6.58: Summary of the Results of the Hypotheses Contd
Hypotheses Constructs in regression model Results

H6: The leveraging of managements personal Importance of managements Financial performance not supported not significant
networks is positively related to the international personal contacts as provider of Operational performance not supported not significant
performance of born global firms. networks for internationalisation Perceived success not supported not significant
Amount of pre-existing personal Financial performance not supported positive relationship
networks for internationalisation Operational performance not supported not significant
H7: The role of international trade shows as a International trade shows as Financial performance not supported not significant
networking platform is positively related to the networking platform Operational performance not supported not significant
international performance of born global firms. Perceived success not supported not significant
H8: The extent of pursuit of a niche strategy is Niche strategy Financial performance not supported not significant
positively related to the international performance Operational performance not supported positive relationship
of born global firms. Perceived success not supported not significant
H9: The attractiveness of main foreign markets is Foreign market attractiveness Financial performance not supported positive relationship
positively related to the international performance Operational performance not supported not significant
of born global firms. Perceived success not supported not significant
H10: The degree of internationalisation of the Internationalisation of the market Financial performance not supported not significant
market is positively related to the international Operational performance not supported not significant
performance of born global firms. Perceived success not supported not significant
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Table 6.59: Summary of International Performance Measures
Performance Comparison BG firms only Non-BG firms only

criteria BG and Non-BG firms
Level of - BG firms tend to place significantly higher Industry-related differences: Industry-related differences:
importance of levels of importance on all international - Manufacturing firms tend to attach significantly - Compared to the Other industry category,
international performance measures compared to higher levels of importance to financial manufacturing firms tend to have
performance Non-BG companies. performance compared to service companies. significantly higher levels of importance
measures - Manufacturing firms tend to place significantly attached to financial and operational
more importance to international sales growth performance
and international profitability than service - Manufacturing firms consider, on average,
firms. Companies in the other industry category many performance measures significantly
generally consider return on investment (ROI) more important than Other companies (e.g.,
from international business significantly more international sales growth, market share in
important than service firms. international markets, global reach).
Level of - BG firms tend to be significantly more Industry-related differences: Industry-related differences:

satisfaction with satisfied with their levels of international - There is not much variation in the level of - Manufacturing firms tend to be significantly
international performance compared to Non-BG satisfaction with different performance measures. more satisfied with international sales,
performance companies. Firms in the Other industry have, on average, international sales growth, international
higher levels of satisfaction with international profitability and market share in international
sales growth and market share in international markets than firms in the Other
markets compared to manufacturing firms. category.
- There is no significant difference in the level of - Manufacturing firms are, generally,
satisfaction with the aggregated financial and significantly more satisfied with the
operational performance measures among the aggregated financial and operational
different industry types. performance compared to Other companies.
Weighted - BG firms tend to have significantly higher Industry-related differences: Industry-related differences:
international weighted international performance scores - There are no significant differences in - Manufacturing firms tend to have
performance for all measures compared to Non-BG weighted performance among the different significantly higher weighted financial and
companies industry types. operational performance than Other
companies.
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Table 6.60: Summary of Other Research Findings
Topic Findings
Internationalisation planning Compared to Non-BGs, BG firms tend to plan and prepare
significantly more for their first international business activity.
Compared to BGs, Non-BGs tend to adopt a more unplanned

approach to first international business which is triggered by an
unexpected event.
Domestic expansion prior to Compared to BGs, Non-BG firms tend to expand significantly more
first internationalisation often in their domestic market prior to first going international.
Presence of Board of Compared to Non-BGs, BG firms are more likely to have a Board of
Directors/Advisory Board Directors/Advisory Board.
Attendance of international Compared to Non-BGs, BG firms are more likely to attend
trade shows international trade shows.
Table 6.61: Summary of Psychic Distance
Sample firms Findings

New Zealand sample Compared to Non-BGs, New Zealand BGs are more likely to enter
psychically more distant foreign countries as their first main overseas
market
Australian sample There is no significant difference between Australian BGs and Non-
BGs in terms of psychic distance level of first main overseas market
Table 6.62: Summary of International Market Selection

Compared to Non-BGs, BG firms tend to choose Compared to BGs, Non-BGs tend to select the
significantly more often the following countries following country significantly more often as one
as their first main international markets: of their first main international markets:
- USA - Australia/New Zealand
- UK
- Germany
Table 6.63: Summary of Foreign Market Entry Mode

Service firms tend to use the following entry Service firms tend to use the following entry
modes significantly more often than modes significantly more often than
manufacturing companies: manufacturing companies:
- Strategic alliance - Strategic alliance
- Wholly-owned sales subsidiary
- Other
Manufacturing companies are more likely to use Manufacturing companies are more likely to use
the following entry mode than service firms: the following entry mode than service firms:
- Exporting - Exporting
There are interesting results for the BG firms and several differences as well as
similarities between BGs and Non-BGs emerge from these analyses. These findings
and their potential implications will be discussed in-depth in the following chapter.
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CHAPTER 7
DISCUSSION
This chapter presents the discussion of the results of the study. To this end, the
results from the qualitative interviews and quantitative survey instrument are
integrated in line with the mixed methods approach. The chapter concludes with a
summary of the key findings from the qualitative and quantitative part and highlights
the main implications.
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Chapter 7 Discussion
7.1 Introduction
This study has two main research objectives: (1) to examine the determinants of
international performance for born global firms, and (2) to investigate important
international performance measures in the context of born globals. In order to
achieve these objectives, an integrated conceptual model was developed and tested
based on the resource-based view of the firm (RBV) (Barney, 1991), and the
network-based view of internationalisation (Johanson & Mattson, 1988; Sharma &
Blomstermo, 2003). The constructs in the conceptual model were identified through
an extensive literature review and were further refined and supported in the
exploratory interviews, which are outlined in Chapter 5. In terms of the research
methodology, a mixed methods approach with exploratory interviews and a
subsequent survey instrument was employed in this thesis to increase the depth and
robustness of the study. As indicated in Chapter 4, the main purpose of mixed
methods in this study was development (i.e., using the results from one method to
help develop or inform the other method) and initiation (i.e., using the results from
one method with those of the other method to increase the breadth and depth of
results and interpretations) (Greene et al., 1989). A comparative approach with more
conventional non-born global firms was adopted, in order to improve the rigour of
the findings for born global firms. This chapter integrates and discusses the findings
from the qualitative interviews and quantitative surveys, following the
recommendations by Tashakkori and Teddlie (1998).
7.2 The Role of Firm and Managerial Characteristics

Firm and managerial characteristics were the first major construct of the conceptual
model, and were predicted to be positively related to international performance of
born global firms. The construct consisted of international entrepreneurial orientation,
product/service quality, Board of Directors/Advisory Boards service function,
market orientation, and learning orientation. Each of these variables is discussed in
turn.
Factor analysis of the sample data revealed two variables for international
entrepreneurial orientation: (1) global mindset and perseverance and (2)
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innovativeness and proactiveness. The study found that global mindset and
perseverance as well as innovativeness and proactiveness were positively related
with financial and operational performance of born globals. In terms of non-born
global firms, there were positive associations between global mindset and
perseverance and operational performance and perceived success; however, no
significant relationships were observed between innovativeness and proactiveness
and any of the three types of international performance.
As indicated in Chapter 5, the interviews strongly supported the concept of

international entrepreneurial orientation and its implications for driving international
performance in the context of born globals. It was perceived as the most distinct and
strongest theme during the interviews by the author.
The findings of the study are consistent with the extant born global literature (e.g.,
Knight & Cavusgil, 2004; Knight & Cavusgil, 2005; Kuivalainen et al., 2007) that
highlighted the importance of international entrepreneurial orientation for achieving
superior international performance. This study found differences in terms of
international entrepreneurial orientation and the relationship with each of the three
types of performance. For example, in the Non-BG sample, global mindset and
perseverance were positively related with operational performance and perceived
success, but not with financial performance. This suggests that in the context of
conventional, non-born global firms, the adoption of a global mindset is more related
to softer performance criteria, such as international reputation of the firm. It may
mean that a global mindset and perseverance are important prerequisites for reaching
out to international markets quickly, for example, by improving the companys
global reach and through better development of new products internationally, but
may not necessarily result in higher financial performance. In contrast, for born
global firms, a global mindset and perseverance tend to be antecedents of superior
financial and operational performance. The concept of perseverance was a new
entrepreneurial characteristic that emerged from the qualitative component of the
study, and was aptly captured by the interview metaphor there is no reason to sprint
a marathon (please see Chapter 5.3.1). This advances the IE literature that has
249
tended to focus on the three dimensions of proactiveness, risk-taking and

innovativeness in the context of entrepreneurial orientation (e.g., Covin & Slevin,
1989; Kuivalainen et al., 2007). Interestingly, innovativeness and proactiveness were
not statistically significant performance drivers for Non-BG firms, but tend to
engender better financial and operational performance for born global firms. An
explanation for the lack of relationship between proactiveness and innovativeness
and international performance for the conventional, non-born global firms may be
that these firms generally start to internationalise in a more reactive manner in
comparison to born globals. As indicated in Table 6.43 in Section 6.9.1, the first
internationalisation tends to be significantly more unplanned and triggered by an
unexpected event for non-born global firms as compared to born globals. This may
imply that being proactive is not as critical for non-born global firms, in order to
achieve superior international performance. It suggests that innovative and proactive
postures are unique factors for competing successfully overseas for BGs compared
to Non-BGs. Thus, it highlights the critical role of innovativeness and proactiveness
for early and rapidly internationalising firms in advancing their international
performance. It also lends support to the notion that armchair exporting (Francis &
Collins-Dodd, 2000, p. 99) may not be advisable for born globals in the international
marketplace.
Overall, the findings for international entrepreneurial orientation fit well in the
context of entrepreneurial capabilities that have been raised in recent studies (Zhang
et al., 2009; Karra et al., 2008; Zhou, Barnes, & Lu, 2010). For example, based on
case studies of entrepreneurial firms in Turkey, Karra et al. (2008) identified three
types of entrepreneurial capabilities (i.e., international opportunity identification,
institutional bridging, and preference and capacity for cross-cultural collaboration)
that were important for international new venture success. Zhang et al. (2009) found
that international entrepreneurial capability is positively related with strategic and
operational performance. The findings of this thesis also provide support to analysing
the components of international entrepreneurial orientation separately as proposed by
Frishammar and Andersson (2009) and Morgan and Strong (2003). As indicated in
Chapter 2, internationalisation is viewed as an entrepreneurial act according to the
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entrepreneurial perspective on internationalisation (Andersson, 2000; Ibeh & Young,

2001). The results of this study imply strong support to the E part
(=entrepreneurship) of the IE (=international entrepreneurship) literature.
Hypothesis 2 with regard to product/service quality received strong support in this

study. Product/service quality showed significant, positive relationships with all three
types of international performance for the born global sample. The results were fairly
similar for the Non-BG firms with the exception of a non-significant relationship in
terms of operational performance. The strong focus on product/service quality was
also consistently evident in all exploratory interviews (please refer to Chapter 5).
These results can be linked back to Rennies (1993) seminal study of Australian born
global firms. Rennie (1993) found that quality was perceived as the key competitive
advantage for born globals, followed by technology and marketing. Knight and
Cavusgil (2004), Calantone and Knight (2000), and Larimo (2006) also found
evidence of a quality focus engendering superior international performance for born
global firms. In addition, positive relationships between a product quality focus and
performance have been observed in the export literature (Thirkell & Dau, 1998;
Lages et al., 2005). The results of this thesis indicate that product/service quality is a
critical factor for achieving international success for both born global firms and non-
born global companies. During the qualitative interviews, the manager of MFG2
summed up the importance of a decent product to sell for prospective
internationalising firms and recommended that if you havent got a good product to
start with, do not even bother [to go international].
The study examined the role of Board of Directors for born global firms due to the
potential importance for successful internationalisation (Luostarinen & Gabrielsson,
2006) and the paucity of research in this area. The quantitative results from
regression modelling indicated no support for a strong role of Board of
Directors/Advisory Board in advancing the international performance of BGs and
Non-BGs.
251
The findings are in contrast to some studies that predicted a more prevalent and
distinct role of the Board of Directors for international success in the context of born
globals (Luostarinen & Gabrielsson, 2006; Ahn et al., 2008) and general firm
performance (George et al., 2001; Judge & Zeithaml, 1992). The qualitative
interviews may shed light on the non-significant relationship between Board of
Directors service function and international performance. As noted by the
interviewees from the companies ICT1 and MFG2, the Board of Directors may play
a more important role in the future as the firms grow bigger. As outlined in Chapter 6,
the average age of the born global sample companies in this study was around 10
years with about 23 employees, indicating the relative infancy of the firms compared
to more established firms. It implies that while the companies have probably passed
the stage of early start-up failure, it is plausible to assume that they may be still in
the growth and development phase.
An alternative explanation may be that the Board of Directors of born global firms
fulfils more governance function with not much value-added rather than a strategic
position. This was also an emerging theme in the exploratory interviews and put
forward by two of the eight interviewed companies. Looking at the frequency of
presence of Board of Directors, the quantitative analysis showed that BGs were more
likely to have a Board of Directors compared to Non-BGs (see Table 6.45 in Section
6.9.1). As outlined in Chapter 5, this was consistent with the exploratory interviews
where all companies had a Board of Directors. This suggests that BGs attach
importance on establishing a Board of Directors, lending support to Ahn et al.s
(2008) finding of the prevalence of Board of Directors in high-growth firms.
However, their role was insignificant in explaining variations in international
performance, over and above the other variables in the models, such as international
entrepreneurial orientation and foreign market attractiveness. It could be conjectured
that the role of Board of Directors is not as critical in driving the international
performance of born global firms as, for example, product/service quality.
Another implication could be that additional attributes of Board of Directors may be

useful for our understanding of performance determinants for born global firms. For
252
example, Gleason et al. (2006) found that US born global firms had Board of
Directors with significantly higher international experience compared to those of
domestic companies. Future research may examine the personal characteristics of
Board of Directors and how they may be related as antecedents of international
performance for born global firms.
The study predicted a positive association between market orientation and

international performance. Market orientation was operationalised as customer
orientation and competitor orientation based on the results from factor and reliability
analyses of the survey data. The quantitative regression results offered support for
this hypothesis with regard to competitor orientation, but no support for customer
orientation. No significant relationships for customer and competitor orientation
were found for the Non-BG sample.
The findings from the in-depth interviews provided evidence of a more distinct role
for customer orientation for born global firms. For example, according to the
interviews, visiting international markets and engaging with international customers
were considered key mechanisms for the firms to enhance their international
performance. In this respect, the manager from MFG1 noted that the company
always looks at the customer first, while the interviewee from ICT1 commented
that knowing how to engage with these big companies and being in our markets
and talking to our customers were key ingredients for international success.
This concept of customer engagement is supported by Liesch et al. (2007) who

concluded in a qualitative study of 18 Australian born globals that servicing and
engaging with customers before and after the sale were critical components for the
firms to carve out their competitive advantage in international markets.
Overall, the findings of this thesis regarding market orientation parallel those of other
studies in the export performance (e.g., Thirkell & Dau, 1998; Rose & Shoham,
2002; Racela et al., 2007) and born global literature (Knight & Cavusgil, 2004;
Ruokonen & Saarenketo, 2009; Kocak & Abimbola, 2009). They provide support to
253
the notion of market orientation as being the heart of modern marketing management
(Narver & Slater, 1990). The positive results for competitor orientation, in particular,
indicate that adopting a competitor focus engenders superior international
performance for born global firms. This finding can be linked to the importance of
competitor analysis for business performance which is a central aspect in the field of
strategic management (Chen, 1996; Subramanian & Ishak, 1998). It may be that
competitor orientation is not as critical for non-born global firms to achieve superior
international performance, as they may follow their domestic clients abroad (Bell et
al., 2003), or may enter overseas markets where competition is relatively low. The
lack of support for customer orientation in the quantitative part of the study may be
explained by the fact that most born global firms had high levels of customer
orientation, so differences in customer orientation may not have explained variations
in international performance. In sum, the findings suggest that market orientation
tends to be an important factor in understanding the antecedents of international
performance for born global firms. Future research could expand on examining the
role of customer orientation and its implications for the international performance of
born global firms.
It has been argued that learning orientation may complement market orientation in
achieving superior business performance (Baker & Sinkula, 1999). Consistent with
this line of reasoning, it was hypothesised that learning orientation is positively
associated with international performance. The study revealed no support for this
relationship in the quantitative part in terms of the BG and Non-BG sample.
This contradicts earlier studies that found positive associations between learning
orientation and organisational performance for both small and larger firms (Baker &
Sinkula, 1999) and in the context of born globals (Jantunen et al., 2008). An
explanation for the lack of support in this thesis may be that learning orientation was
subsumed by the concept of market orientation. It may also imply that learning
orientation could be a mediating variable between entrepreneurial orientation and
performance (Wang, 2008) rather than being directly related to international
performance. Similarly, Kocak and Abimbola (2009) suggested that learning
254
orientation fulfils a mediating role between entrepreneurial orientation and

innovation. In a case study of three Chinese international new ventures, Zou and
Ghauri (2010) found evidence of proactive international learning orientations among
the sample firms and proposed that international learning orientation play a
mediating role in the relationship between knowledge learning of high-tech new
ventures and degree of international engagement and commitment. It should be noted
that the results of the thesis do not indicate that learning orientation was not highly
valued by born globals. On the contrary, as shown earlier (see Table 6.18), born
global firms had, on average, significantly higher levels of learning orientation than
non-born global firms. In the interviews, the importance of learning was also
apparent. For example, the manager from ICT1 noted that the company is starting to
put much more emphasis on professional development and learning and process and
things like that, and explained that growing people is becoming a key issue for the
firm.
The lack of support for the hypothesis demonstrates that, ceteris paribus, learning
orientation did not marginally contribute to explain variations in international
performance of born global firms. It could be inferred that the adoption of a learning
orientation may be related to outcomes other than financial and operational firm
performance, e.g., increased employee motivation and job satisfaction. The field of
human resource management might offer a fruitful starting point for further
exploring this area (Egan, Yang, & Bartlett, 2004; Chang & Lee, 2007; Joo & Lim,
2009).
7.3 The Role of Networks

Based on the network-based view of internationalisation (e.g., Johanson & Mattson,
1988), an important part in this thesis is the focus on networks and how they are
related to international performance. As outlined in Chapter 3, personal networks of
management and the leveraging of international trade shows were identified as
critical concepts for born global firms to perform successfully in international
markets.
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Hypothesis 6 examined the role of personal networks of management and predicted a

positive relationship between the leveraging of managements personal networks and
international performance of born global firms. There was no support for this
relationship for the born global sample in the quantitative portion of the study.
This is inconsistent with previous studies that highlighted the key role of personal
networks for BGs for successful internationalisation (Freeman et al., 2006;
Andersson & Wictor, 2003). Interestingly, there was also no support for the notion
that born global firms place more importance on personal contacts and have more
personal networks compared to non-born globals (see Table 6.18). This is in contrast
to Rialp et al.s (2005b) study who found that BGs used more personal networks than
traditional exporters in the internationalisation process. The results from the
interviews might explain the lack of support for this relationship. For example, the
manager from ICT1 commented that it was not personal networks that were
important for their international performance, but more the ability to engage with
customers, such as visiting customers and international markets, and maintaining
effective customer relationship management. The findings of the thesis are more in
line with Thai and Chong (2008) who concluded, based on a case study of four
Vietnamese born globals, that pre-existing personal networks are not a must-have
for born globals (p. 95). Also, Loane and Bell (2006) suggested that born global
firms may not have many pre-existing networks.
With regard to the Non-BG sample, there was partial support for a positive
relationship between the leveraging of managements personal networks and
international performance. This implies that personal networks are a more important
driver for superior international performance for Non-BGs than for BGs, marginal to
the other variables in the models. It may be explained by the fact that compared to
Non-BGs, BGs tend to be more likely to attend international trade shows and use
industry-based networks, such as Chambers of Commerce, in order to gain
international exposure and develop relationships for internationalisation (see Table
6.18 and Chapter 5). As a result, it may be not so critical for born global firms if the
relationship/contact is acquired through personal networks or other means, such as
256
trade shows. The findings suggest that capitalising on managements personal

networks is more relevant for international success for non-born global firms. It may
also imply that the process of internationalisation is more formalised in born global
firms as compared to non-born globals.
The study examined the role of international trade shows for the international
performance of born globals. Previous research has highlighted the importance of
networking at international trade shows for born global firms (Evers & Knight, 2008),
and studies have found that attending trade shows may yield positive economic
returns for the firm and increase export sales (Gopalakrishna et al., 1995; Wilkinson
& Brouthers, 2000; Axinn, 1988; Wilkinson & Brouthers, 2006). It was predicted
that the leveraging of international trade shows as a networking platform is positively
related to the international performance of born global firms. The empirical evidence
gathered in the quantitative part of the study did not support this hypothesis.
These findings indicate that the leveraging of international trade shows tends not to
result in immediate, direct variations in international performance for born globals.
The evidence generated from the qualitative interviews suggests that the benefits of
international trade shows may be more indirect and lead to, for example, company
learning rather than being directly related to financial or operational outcomes. Other
benefits of leveraging international trade shows may be that employees gain overseas
experience and knowledge of potential export markets as suggested by Axinn (1988).
In addition, indirect benefits of international trade fairs may include increased
product awareness and interest (Gopalakrishna et al., 1995). The thesis also showed
that networking purposes (e.g., meeting customers) were, in general, significantly
more important for BGs than for Non-BGs when attending trade fairs, lending
support to Evers and Knights (2008) finding (see Table 6.18). In addition, BGs were
more likely to attend international trade shows compared to Non-BGs (see Table
6.46). This is consistent with Axinns (1988) study that found that exporters using
trade shows derived over 20% of their sales from exports, whereas exporters that did
not use trade shows obtained less than 10% of their sales from exports.
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These quantitative results in terms of networking motives and frequency of attending

international trade shows imply that born global firms tend to perceive international
trade shows as an important tool in their internationalisation process, in order to
compete in international markets. The findings from the exploratory interviews in
which the role of international trade shows evolved as a key theme strengthen this
notion. For example, the manager from MFG1 commented that he landed a very,
very large customer at a global trade show which led the company down the track
to bigger and better things in the US.
In addition, the relatively cost-effective nature of international trade shows was

mentioned in the interviews, which is consistent with Evers and Knight (2008) and
Axinn (1988). In sum, international trade shows appear to be commonly utilised by
born global firms in their internationalisation process, and provide interesting scope
for further research of international activities of born globals.
7.4 The Role of Business Strategy

In terms of business strategy, the adoption of niche strategies is particularly relevant
to born global firms (Chetty & Campbell-Hunt, 2004; Bell et al., 2003; Knight &
Cavusgil, 1996; Moen, 2002). Based on the literature review, the study predicted that
the pursuit of a niche strategy is a driver of international performance for BGs. The
empirical evidence at hand did not offer any support to this hypothesis.
This contradicts some studies that suggested a positive association between niche
strategy and export performance (Zucchella & Palamara, 2006). The non-significant
relationship observed in this study suggests that other factors, such as market
orientation are more efficient in understanding the performance antecedents of born
globals. It is important to note that niche strategies tend to be more commonly
applied by born globals as evidenced by the significantly higher level of niche focus
compared to non-born global firms (see Table 6.18). Also, the qualitative portion of
the study brought forward the concept of blue ocean strategies (Kim & Mauborgne,
2005), which are conceptually similar to niche strategies. This is consistent with the
literature that reported more extensive use of niche strategies among born globals
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than among non-born globals (Moen, 2002; Etemad, 2004; Bell et al., 2004).
However, the performance implications of pursuit of a niche strategy were less clear
and were not supported in this thesis in the quantitative component of the study. This
is in line with the work of Larimo (2006) that did not find evidence of a positive
relationship between niche focus and born global performance in a study of Finnish
exporters.
Another explanation for the non-supported relationship between niche strategy and
international performance may be that the international strategy of born global firms
is multi-faceted as put forward by the manager from MFG2 during the qualitative
portion of the study. For example, it could mean that BGs adopt a niche strategy, but
also complement this with other strategic approaches. It might be that BGs may not
necessarily emphasise too much product specialisation, but may also aim at breadth
in product lines, in order to appeal to a bigger market and achieve critical mass.
McDougall and Robinson (1990) examined the competitive strategies that new
ventures tend to use for market entry and found evidence for two major types of
strategies: niche and aggressive growth. While niche strategies focus on a specific
market segment, aggressive growth strategies are characterised by large-scale entry
and broad product lines that are competitively priced. It has been suggested that
firms that adopt aggressive growth strategies on a large scale tend to have superior
financial and market performance than those that use niche strategies (Biggadike,
1976 as cited in McDougall & Robinson, 1990). This may offer an explanation for
the findings in terms of the born global firms. Interestingly, niche strategy was
positively related to operational performance for the Non-BG sample implying that
the pursuit of a niche strategy tends to be a stronger driver of international
performance for Non-BGs than for BGs, over and above the other variables in the
models.
7.5 The Role of the External Environment

Compared to entrepreneurial and organisational characteristics, the role of the
external environment in explaining the performance outcomes of born globals has
received less research attention (Aspelund et al., 2007). Drawing on the network
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perspective of internationalisation (e.g., Sharma & Blomstermo, 2003), this study

examined two key parts of the external environment: foreign market attractiveness
and internationalisation of the market.
Hypothesis 9 predicted a positive association between foreign market attractiveness

and international performance of born global firms. The evidence at hand from the
quantitative analysis offered no support for this hypothesis. This is inconsistent with
previous studies in the export performance literature (Madsen, 1989; Mavrogiannis et
al., 2008). It may be explained by the fact that large markets, while being attractive,
may also mean increased and stronger competition as suggested by the manager from
MFG2 in the interviews. Another implication may be that internal factors, such as
product/service quality, rather than external market factors tend to be more useful in
explaining variations of international performance for born globals. Overall, the
results indicate that the attractiveness of international markets does not necessarily
translate into performance advantages for born global firms. Similar to the previously
discussed concepts of learning orientation and niche strategy, BGs also perceived, on
average, their main international markets to be more attractive compared to Non-BGs
(see Table 6.18). In terms of the Non-BG sample, a positive and significant
relationship was found between foreign market attractiveness and financial
performance which is more in line with the export literature mentioned above. As a
consequence, it can be concluded that foreign market attractiveness tends to be a
stronger antecedent of financial performance for Non-BGs than for BGs, over and
above the other variables in the model.
In terms of the internationalisation of the market, the study found no significant

relationship with any of the three types of international performance for both the BG
and Non-BG sample. The internationalisation of the market was operationalised in
this study based on Madsen and Servais (1997) definition as the extent, intensity,
and degree of relationships across borders in the industry in general (p. 572). It
should be noted that BG firms perceived their market to be more internationalised
than Non-BGs (please refer to Table 6.18). The high degree of internationalisation of
the market was also a prevalent feature in the exploratory interviews. For example,
260
the manager from EDUC commented on the importance of the internationalisation of

the industry for providing opportunities to partner, thus achieving superior
international performance.
The studys quantitative results may mean that the internationalisation of the market
tends to be an important condition for doing international business, as compared to
being a driver of superior performance. The results also suggest that the
internationalisation of the market is an important contextual variable; however, with
regard to performance implications, it showed less explanatory power.
In the context of the external environment, the role of institutions may provide
additional insights into explaining performance variations among born global firms.
For example, government assistance, regulation and laws (e.g., product specifications,
protection of intellectual property rights) may influence the international
performance outcomes of born globals. The institutional environment may also
provide impetus for creating or hindering entrepreneurship in a country (Manolova,
Eunni, & Gyoshev, 2008).
An external event that has shaped the international business environment

dramatically relates to the Global Financial Crisis. Originating in the USA with the
subprime mortgage crisis and liquidity shortfalls of US banks in 2007, the financial
crisis led to the collapse of large financial institutions, bailout of banks, and a
downturn in share markets around the world. This strongly affected the global
economy and the availability of credit and external financing for firms (Goodhart,
2008). This study examined the potential effect of the Global Financial Crisis on the
international performance of the sample firms in the quantitative survey (see
Question 33 in Appendix E). The results revealed that there was generally only
relatively little negative effect of the crisis on the international performance of the
firms. Based on a 7-point Likert scale, where 1 represents very strong negative
effect and 7 represents very strong positive effect, the mean for the BG
companies was 3.27 (n=147, SD=1.40) and for Non-BG firms 3.45 (n=162,
SD=1.24). Thus, the means for the firms were somewhat below the middle point of 4
261
which relates to neither positive nor negative effect. An independent samples T-

test revealed no significant differences between BGs and Non-BGs in terms of the
effect of Global Financial Crisis on the international performance of the firms.
7.6 The Role of Other Determinants (Firm Size, Firms International

Experience, Industry and Entry Mode)
The study adopted four control variables in examining the determinants of
international performance for born globals: firm size, firms international experience,
industry, and entry mode. The findings for each of the control variables are discussed
in the following sections.
Firm size: The first control variable relates to firm size which has been commonly
used as a control variable in the born global and export literature (e.g., Kuivalainen et
al., 2007; Wolff & Pett, 2000). In this study, firm size was operationalised as
companys annual gross sales, following Jantunen et al. (2008).
The results from the thesis showed that companys annual gross sales were positively
related with all three types of international performance (i.e., financial, operational,
and perceived success) for the born global sample. No significant relationships were
observed for the non-born global sample.
The findings for the born global firms are consistent with studies in the extant
literature. For example, Francis and Collins-Dodd (2000) found positive associations
between annual sales and export sales in a study of small and medium-sized
Canadian high-tech companies. Similarly, Lado et al. (2004) found that firm size
(operationalised as number of employees) was positively related to export sales
volume. Kuivalainen et al. (2007) reported significant and positive relationships
between firm size (i.e., number of employees) and the degree of born globalness. The
findings are also consistent with Mudambi and Zahra (2007) who found support for
the hypothesis that larger BG foreign entrants have a higher probability of survival. It
should be noted that some studies also found evidence of non-significant
262
relationships between firm size and international performance (e.g., Zahra et al.,
2000; Jantunen et al., 2008).
With regard to the non-born global firms, the non-significant results are in line with
Zahra et al. (2000) as well as some export performance studies (e.g., Wolff & Pett,
2000).
Overall, the results are interesting in that they imply that firm size is an antecedent of
international performance for born global firms only. They indicate that, ceteris
paribus, the higher the companys total annual gross sales, the higher the
international performance for born globals. It could be inferred that born global firms
are able to better leverage from their overall firm performance for their international
markets than non-born globals. Another explanation may be that total sales and
international performance are connected with each other in that born global firms see
the domestic market as supporting their international business as suggested by
McKinsey & Co. (1993). On the other hand, firm size is generally not an indicator
for superior international performance for the more conventional, non-born global
firms. This implies that higher total sales are not necessarily associated with better
international performance for non-born globals.
Firms international experience: Similar to firm size, firms international

experience has been frequently adopted in born global performance studies as a
control variable (e.g., Zahra et al., 2000). In this thesis, firms international
experience was operationalised as the number of years the company has been doing
business internationally in line with several other studies (e.g., Francis & Collins-
Dodd, 2000; Jantunen et al., 2008).
Generally, many studies in the export performance literature have reported positive
relationships between firms international experience and export performance (e.g.,
Cavusgil & Zou, 1994; Dean et al., 2000; Francis & Collins-Dodd, 2000). In the
context of born globals, there are mixed results for the role of firms international
experience. For example, Jantunen et al. (2008) found that firms international
263
experience was not related to international performance. Some born global studies
reported positive relationships between firms international experience and
international performance (Zahra et al., 2000) as well as negative relationships
(Kundu & Katz, 2003).
The results of this study revealed no significant role for firms international
experience in predicting variation in international performance with regard to the
born global sample. In comparison, negative relationships were observed between
firms international experience and financial and operational performance in terms of
the non-born global firms.
The results from the born global sample parallel those of other studies (Jantunen et
al., 2008). They imply that firms international experience is not necessarily required
for born global firms, in order to achieve superior international performance.
With regard to the non-born global sample, the results are inconsistent with the work
of Cavusgil and Zou (1994), but are more in line with some recent export
performance studies. For example, Brouthers and Nakos (2005) found a negative
relationship between international company experience and export performance in a
study of Greek exporters. An explanation for the negative relationship observed in
this study for the non-born global firms may be that companies with less
international experience may view their international business as more central to the
overall profitability of the firm. In this regard, the concepts of unlearning and
inertia may also play an important role (Autio et al., 2000). Accordingly, firms
with more international experience may be stuck in their old routines and
processes and may not actively pursue other opportunities in international markets
which may result in lower international performance.
In sum, the empirical evidence gathered in this study suggests that, ceteris paribus,
firms international experience is not related to better international performance for
both born global and non-born global firms.
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Industry: The third control variable adopted in this study refers to industry. The
sampling frame of this thesis consisted of various industry sectors, in order to
provide heterogeneity and improve the generalisability of the findings. To control for
industry, a manufacturing dummy variable was created (Brouthers, 2002).
Studies in the extant literature have adopted one of two approaches: focus on a single
industry or incorporation of multiple industries. In general, the majority of
quantitative born global studies tend to focus on a single industry. For example, the
manufacturing industry has been examined extensively in born global research (e.g.,
Knight & Cavusgil, 2004; Knight & Kim, 2009; Frishammar & Andersson, 2009)
and in export performance studies (e.g., Thirkell & Dau, 1998; Robertson & Chetty,
2000). Other examples of single industries include software (Kundu & Katz, 2003),
and electronics (Autio et al., 2000). Some exceptions in quantitative born global
studies that looked at multiple industries include the works of Jantunen et al. (2008)
(i.e., several industrial sectors), Zahra et al. (2000) (i.e., high-technology sectors),
and Francis and Collins-Dodd (2000) (i.e., information technology and
telecommunications).
The majority of qualitative studies in the born global literature tend to use a sampling
frame with multiple industries. These include, for example, Crick and Spence (2005)
(e.g., high-tech sectors), Mort and Weerawardena (2006) (e.g., dairy, refrigeration,
information technology), Liesch et al. (2007) (e.g., pharmaceuticals, agriculture,
entertainment, digital business services), Freeman et al. (2006) (e.g., food, high-tech
communication), Rialp et al. (2005b) (information technology, gourmet food), and
Loane and Bell (2006) (e.g., software, internet-based business solutions). Some
qualitative born global case studies have also examined a single industry, e.g.,
manufacturing (Chetty & Campbell-Hunt, 2004) and software (Ruokonen &
Saarenketo, 2009).
The results of this study indicate that industry sector is not associated with
international performance for born global firms. On the other hand, industry sector is
generally a performance determinant for non-born global firms. Thus, manufacturing
265
non-born global companies tend to have marginally significantly higher financial and
operational performance than firms that belong to different industry sectors, such as
service.
The results from the born global sample are consistent with several studies. For
example, Francis and Collins-Dodd (2000) did not find evidence of industry being a
driver of international performance. In a similar vein, a recent study by Brouthers et
al. (2009) did not show a significant relationship between industry sector (i.e., food,
clothing, chemicals and other) and export performance.
Entry mode: As outlined in Chapter 1, this study adopts an integrated approach by

considering various entry modes of born global and non-born global firms. This
follows Jones (1999) call for more holistic approaches to studying born globals. To
control for any potential effects of entry mode on international performance, an
export entry dummy variable was employed.
The empirical evidence generated from this thesis shows that born global firms that
used exporting for their first international market tend to have better financial and
operational performance than firms that do not employ exporting and use a different
entry mode (e.g., joint venture, wholly-owned sales subsidiary, licensing). In terms
of the non-born global sample, entry mode was not related to international
performance.
As indicated in Chapter 2, few born global studies have examined the performance
implications of different entry modes. Many studies have focussed on exporting
firms without explicitly examining other entry modes these firms may adopt (e.g.,
Knight & Cavusgil, 2004; Jantunen et al., 2008). Of the few studies that have
examined entry modes and born global performance, Zahra et al. (2000) found that
export and licensing agreements were generally positively associated with return on
equity and sales growth. These results are consistent with the empirical evidence
from this thesis. The results of the thesis may be explained by the fact that exporting
tends to involve lower risk, lower financial resource commitment and more
266
flexibility than other entry modes that are more resource-intensive (e.g., wholly-
owned subsidiaries, joint ventures) (Leonidou & Katsikeas, 1996). However, the
results of the study are inconsistent with Gleason et al. (2006) that found superior
performance for BGs that adopted joint-ventures and acquisitions compared to BGs
that used exporting in the first six years after firm inception.
Interestingly, there were no significant relationships between entry mode and

international performance in terms of the non-born global sample. An explanation for
this insignificant relationship may relate to the industry sectors of the firms. As can
be seen from Table 6.63, Non-BG service firms tend to use more strategic alliances
than other sectors, whereas manufacturing firms generally use more exporting
compared to service firms. As shown earlier, industry sector was found to be
positively related to international performance for Non-BG firms, but not for the BG
sample. These divergent findings in terms of entry mode and industry sector further
illustrate that the determinants of international performance are generally different
for BGs and Non-BGs. They also give additional support to the notion that BGs are a
specific type of firm and different in nature compared to Non-BGs (Table 6.18
refers).
Findings from the general international business literature also provide additional
insights into the subject matter. For example, Brouthers (2002) examined
institutional, cultural and transaction cost related variables and their relationship to
entry mode choice and international performance in a study of 213 European firms.
The study revealed that companies that used wholly-owned entry modes (i.e.,
wholly-owned subsidiaries) had, on average, significantly higher financial and non-
financial performance than firms that did not adopt wholly-owned modes. These
findings diverge from this thesis and may be explained by the different sampling
frame. Brouthers (2002) examined large European firms, whereas the sample
companies in this thesis constitute small and medium-sized firms. Another study by
Pan, Li, and Tse (1999) showed that firms that adopt equity joint ventures generally
have higher profitability than those using wholly-owned operations. However, the
work of Pan et al. (1999) did not consider exporting as an entry mode which is a
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common entry mode among SMEs, and which was pertinent to this thesis. In a study
of Korean venture firms, Rhee (2008) showed that the usage of wholly-owned modes
was negatively related to firms financial performance. Applying a transaction-cost
based perspective, Brouthers and Nakos (2004) found that SMEs that used entry
modes that were consistent with transaction cost theory tended to perform better than
those firms that used other entry forms. Similarly, in a review of the international
entry mode literature, Brouthers and Hennart (2007) concluded that firms using
theoretically predicted entry modes have generally higher performance than firms
that follow other entry mode choices.
The results from the thesis provide support to the notion that entry mode choice is an
antecedent of international performance for born global firms. More specifically,
compared to other entry modes (e.g., joint venture, wholly-owned sales subsidiary),
the use of exporting tends to be related to better financial and operational
7.7 International Performance Measurement

The second research question relates to the investigation of important international
performance measures for born global firms. There seems to be agreement in the
literature that performance is a multidimensional construct (Morgan & Strong, 2003;
Bhargava et al., 1994; Walker & Ruekert, 1987). On this basis, the study examined
different types of performance, including financial, operational and perceived
success (Venkatraman & Ramanujam, 1986), in order to account for the
multidimensional nature of performance. In addition, the study incorporated
performance measures on each of the three dimensions of performance as established
by Walker and Ruekert (1987): (1) effectiveness, (2) efficiency and (3) adaptability.
As outlined in the literature review in Chapter 2, there is a wide heterogeneity in

terms of employed performance measures in the export and born global literature.
For example, Katsikeas et al. (2000) and Sousa (2004) identified more than 40
different export performance measures in review articles of the export literature.
According to Katsikeas et al. (2000), the five most frequently used measures include
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export sales intensity, export sales growth, export profitability, export sales volume,
and export sales intensity growth. In the context of born globals, many different
performance measures have been employed in the born global literature. For example,
Jantunen et al. (2008) used a single, composite scale of degree of satisfaction with
sales volume, market share, profitability, market entry, image development,
knowledge development and as a whole. Knight & Kim (2009) employed
international market share, international sales growth, international profitability, and
export intensity as performance measures. In a recent case study of four born global
firms from various industry sectors, Baldegger and Schueffel (2010) found that the
companies used a combination of different performance measures, such as market
share, financial performance, brand awareness, client feedback, economies of scale,
and employee satisfaction. It appears that the performance measurement of born
globals adopted in the literature is rather scattered. Crick (2009) concluded that there
is a lack of research on how important performance criteria are for born global firms.
On this basis, the thesis examined the importance and relevance of international
performance measures for born global firms.
The empirical evidence gathered in this study showed that born global firms
considered, on average, all 12 international performance measures as significantly
more important compared to the non-born global firms (see Table 6.25). In addition,
BGs were, in general, significantly more satisfied with their international
performance and tended to have higher weighted international performance scores
than Non-BGs (see Tables 6.31 and 6.37). As above mentioned, the literature on
performance measures of born global firms is limited and not fully developed. The
results of this thesis are fairly consistent with studies in the literature. For example,
Kuivalainen et al. (2007) found that true BGs tend to have significant higher levels
of sales, profit and sales efficiency performance compared to born internationals.
In a similar vein, Larimo (2006) concluded that truly born internationals achieved,
on average, significantly higher general foreign operation performance and
performance of the main product compared to other types of exporters. On the other
hand, Crick (2009) observed no significant differences in performance levels
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between international new ventures and born global firms in terms of overseas sales
growth, sales volume, profitability and market share.
In terms of comparisons among different industry sectors regarding performance

measurement, it appears that there have been no empirical studies undertaken in the
born global literature to the best of the authors knowledge. The study found that
manufacturing born global firms tend to place significantly more importance on
financial measures compared to service born globals. With regard to the non-born
global sample, manufacturing firms had generally significantly higher levels of
importance attached to financial and operational performance measures compared to
other companies. The results suggest that industry does matter in terms of
international performance measurement, and that firms may place different emphasis
on certain performance indicators depending on their industry sector.
With regard to the qualitative interviews, the results showed that born global firms
generally employ a variety of different performance measures which is consistent
with the export literature (Sousa, 2004). This ranged from financial (e.g.,
international sales, return on investment, profit) to operational measures (e.g., market
share, global reach), marketing-related measures (e.g., brand awareness), technical
measures (technical benchmarks, product failure rates), and miscellaneous measures
(e.g., follow-on business from international trade shows). In general, financial-based
measures were considered more important than other measures. For example, the
manager from MFG2 emphasised that its all based around financial performance
basically and that it all comes down to finances. This is in line with the key
performance indicators that were most commonly utilised in the export performance
literature, such as export sales, export sales growth and export profitability
(Katsikeas et al., 2000).
Another interesting finding from the interviews relates to the role of survival for born
global firms. For example, the representative from ICT2 emphasised several times in
the interview:
The first rule of business is to stay in business.
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This highlights the critical role of profitability for the firms. The manager from ICT2
further noted that many new companies fail because even though the entrepreneurs in
the firms are passionate, they may lack the required business skills. Data from
Statistics New Zealand show that of 43,000 new businesses that first started
operation in 2001, 79% were still operating in 2002, 57% in 2004, and 40% were still
operating in 2007. This suggests that 60% of all new businesses that were established
in 2001 ceased their business activities within six years (Statistics New Zealand,
2008).
Similarly, Pinfold (2000) found in a study of New Zealand new ventures that 42.5%
of businesses survive their first five years in business. In Australia, research by the
Productivity Commission suggests that around two thirds of all businesses are still
operating after five years, and about 50% are still in business after 10 years
(Bickerdyke, Lattimore, & Madge, 2000). While the reasons for start-up business
failure are diverse and often difficult to assess, two key causes have been identified
in the literature: lack of appropriate management skills (e.g., incompetence) and poor
financial management (e.g., inadequate accounting records and knowledge, lack of
capital) (Hall & Young, 1991; Berryman, 1994). These reasons are similar to the
comments from ICT2 mentioned above, and also refer to the role of funding that was
raised in the exploratory interviews (see Chapter 5). Further consideration of the
issue of survival of born global firms is not the focus of this thesis and is beyond the
scope of this study. However, it provides a promising area for future research.
Another interesting finding is the importance of international reputation of the firm

as a performance measure. This tended to be perceived as quite important for both
born global and non-born global companies relative to other performance measures
(see Table 6.25). It seems that besides the key financial measures of international
sales, international sales growth and international profitability, reputational issues
represent important criteria for firms to gauge their performance. This may be linked
to the exploratory interviews where managers stressed the importance of positioning
their firm as a global company rather than an exporter for competing
successfully in international markets. Interestingly, born global as well as non-born
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global firms were also very satisfied with regard to their achieved level of
international reputation which may imply that it is easier to attain than hard
performance measures, such as international profitability. As outlined in the
qualitative analysis chapter, it could be inferred that attending international trade
shows and engaging with customers may have increased the international exposure
of the firms, thereby enhancing their international reputation.
In sum, the empirical evidence generated from the thesis lends support to the notion
that performance is a multidimensional construct. More specifically, three distinct
types of international performance were identified through factor and reliability
analyses: financial performance, operational performance and perceived success. It
also suggests that financial indicators are most commonly adopted by born global
firms and regarded as more important, relative to other performance measures.
7.8 The Role of Psychic Distance and International Market Selection

The study also examined the role of psychic distance and international market
selection in the form of additional findings. These results are discussed in the
following.
According to the stages model of internationalisation (Johanson & Vahlne, 1977),

firms tend to be risk-averse and, therefore, initially enter psychically close foreign
markets before incrementally moving to psychically distant markets. This rationale is
based on experiential learning and asserts that firms increase their market
commitment gradually as they gain foreign knowledge (Johanson & Vahlne, 1977).
In contrast, proponents of the born global view argue that psychic distance does play
a secondary role in international market selection for born globals as other criteria,
such as customer potential and perceived growth opportunities for the companys
niche products are more relevant. As a result, born globals tend to target specific
niche markets rather than geographic regions, and may first enter psychically distant
markets (Crick & Jones, 2000; Moen & Servais, 2002; Bell et al., 2004; Bell, 1995).
272
This study used the scales developed by Dow and Karunaratna (2006) to calculate
psychic distance scores between the firms home country and foreign market. The
rationale for using Dow and Karunaratnas (2006) scales lies in the multidimensional
nature as they incorporate differences in language, religion, education, industrial
development and political system.
The empirical evidence from this study suggests that psychic distance plays some
role in foreign market selection among born global and non-born global firms. In
terms of the New Zealand sample, non-born global companies tend to enter
significantly psychically closer countries as their first international market compared
to born globals. However, no significant differences between the psychic distance
scores of born globals and non-born globals were observed for the Australian sample.
An explanation may be that New Zealand non-born globals may rely more on
Australia as their first foreign market, whereas Australian non-born globals may also
enter more diverse and psychically distant countries besides New Zealand. This may
be due to the geographical location of the two countries. While Australia and New
Zealand are both relatively isolated, Australia is somewhat more connected and
closer to other countries and regions (e.g., South East Asia) which results in, for
example, lower transportation costs, and may encourage Australian non-born global
firms to enter these markets. Another potential explanation could be that Australian
non-born globals may be more entrepreneurial in nature than their New Zealand
counterparts. Overall, non-born global companies tended to choose Australia/New
Zealand significantly more frequently as their international market compared to born
globals. On the other hand, born global firms, on average, chose USA, UK, and
Germany more often than non-born globals (see Tables 6.49-6.51).
To conclude, the results for the Australian sample provide support for the view that
psychic distance may also apply to born globals which is consistent with the tenets of
the traditional stages model (Johanson & Vahlne, 1977) and some born global studies.
For example, Chetty and Campbell-Hunt (2004) found in a case study approach that
New Zealand born global firms selected countries, such as Australia, USA, UK, and
273
Canada as their first international market and, thus, concluded that the concept of
psychic distance may also be applicable to born global firms. The notion that psychic
distance may be less relevant for born globals than for traditional firms is also
supported in this thesis with regard to the results from the New Zealand sample. This
is in line with a considerable body of literature (e.g., Crick & Jones, 2000; Bell et al.,
2004; Moen & Servais, 2002). In conclusion, the findings from the thesis regarding
psychic distance provide support for both views (i.e., traditional stages and born
global), and it appears that the concept of psychic distance remains to be a debatable
issue. It gives rise to future research on psychic distance and the factors that may
play a role in international market selection for born global firms.
7.9 Summary of Key Findings and Implications

A summary of the key findings of this study along with potential implications are
displayed in Tables 7.1 and 7.2.
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Table 7.1: Summary of Key Findings and Implications: Determinants of International Performance
Construct Qualitative interview findings Quantitative survey results Implications

International entrepreneurial Strong support, strong theme Financial: +-ve Financial: NS Key role of international
orientation: global mindset Operational: +-ve Operational: +-ve entrepreneurial orientation as
& perseverance Im following a passion. Im following a dream. And Perceived success: NS Perceived success: +-ve driver of financial and operational
everything that Im doing you can look at it from a, you performance for BGs
International entrepreneurial know, textbook point of view. Its just something thats really Financial: +-ve Financial: NS
orientation: innovativeness just coming natural to me as a CEOIm an entrepreneur Operational: +-ve Operational: NS Innovativeness and proactiveness
& proactiveness at heart. Its in my blood, its in my family.(MFG1) Perceived success: NS Perceived success: NS as unique performance
antecedents for born global firms
Product/service quality Strong support Financial: +-ve Financial: +-ve Critical role of product/service
Operational: +-ve Operational: NS quality for superior international
Quality. Absolutely. Quality is very, very important for us. Perceived success: +-ve Perceived success: +-ve performance of BGs and Non-
Quality in the product and quality in the packaging, BGs
everything. You know that it all fits together.(FOOD)
Board of Some support Financial: NS Financial: NS Board of Directors may play more
Directors/Advisory Boards Operational: NS Operational: NS important role for BGs as firms
service function And they [Board of Directors] advise the company, they Perceived success: NS Perceived success: NS grow bigger
advise me to steer the company in this direction or in that
direction, you know. Yeah, like I said before, I know where Board of Directors may fulfil
Im at as a professional. And I seek the advice and more governance rather than
assistance of those people that have been there and done it
strategic role in born global firms
before. So as a 28-year old running this company that Ive
built from the ground up, definite, definite critical aspect
and definite testament of where were at today. (MFG1)
Its more of a governance role than a strategic role. So its

more a, you know, going through the numbers, signing off
on strategy, rather than being intimately involved in the
strategy. Theres not a lot of value-added. (ICT1)
275
Table 7.1: Summary of Key Findings and Implications: Determinants of International Performance Contd

Market orientation: Strong support Financial: NS Financial: NS Customer engagement skills,
Customer orientation Operational: NS Operational: NS visiting international markets,
Role of customer engagement skills, visiting Perceived success: NS Perceived success: NS being there in markets as key
international markets, being there in the markets themes from interviews for BGs
I think it was more the experience of knowing how to Lack of support in survey results
engage with these big companies Its being in our may be due to most BGs
markets, you know, talking to our customers and building displaying high customer
those relationships. (ICT1)
orientation
Market orientation: Being responsive to enquiries, being proactive, keeping in Financial: +-ve Financial: NS Focus on competitors important
Competitor orientation contact with your people. We dont ever put our product on Operational: NS Operational: NS for superior financial performance
a boat and wave good-bye to it. Were very much there. And Perceived success: +-ve Perceived success: NS and perceived success of BGs
I think that if thats your idea of exporting, then you will be
sadly mistaken. And I think its being there. You know, like Competitor orientation unique
its being there constantly. You cant do it from sitting here performance antecedent for BGs
in New Zealand. You have to be there. (FOOD)
Learning orientation Some support Financial: NS Financial: NS Learning orientation may be

Operational: NS Operational: NS subsumed by market orientation.
Were starting to put much more emphasis on professional Perceived success: NS Perceived success: NS
development and learning and process and things like that. I Learning orientation may not
mean I think while we were still a start-up it was about just, have direct relationship with
you know, using peoples experience and now were also financial and operational
looking at growing people as well. (ICT1)
performance of BGs, but may be
related to other outcomes, such as
employee motivation or job
satisfaction
276

Importance of Mixed support Financial: NS Financial: NS Personal networks not must-
managements personal Operational: NS Operational: NS have for BGs
contacts as provider of Also, through a couple of our senior staff, their actual Perceived success: NS Perceived success: NS
networks for networks and business have been very, very useful in Personal networks not significant
internationalisation developing new relationships from their past careers. So, for driver of superior international
example, Ive got a guy that was running a US operation performance for BGs
Amount of pre-existing Financial: NS Financial: +-ve
and he used to live in Japan for 12 years. Hes actually
personal networks for networked into a lot of business into Japan so hes got
Operational: NS Operational: NS
internationalisation contacts to some of the Japanese companies. So were Perceived success: NS Perceived success: NS Personal networks more
working with some of them on some future opportunities. So important for Non-BGs as
thats been a direct result of his networks, his personal antecedent of better financial
networks that hes built up over his career. (MFG2) performance
Not really. No, that hasnt. I wouldnt say personal

networks have gotten us any business. I mean I think its
probably helped over timeIt wasnt pre-existing networks.
We didnt get to where we are through established
networks. (ICT1)
International trade shows as Strong support Financial: NS Financial: NS International trade shows may be
networking platform Operational: NS Operational: NS not directly related to financial
You gotta get out there in your markets. You know, I think Perceived success: NS Perceived success: NS and operational performance of
tradeshows is a good way of getting the name out there and BGs, but may manifest in
its a relatively inexpensive way. And if you identify what different outcomes, such as
your key tradeshows are, thats where you gonna meet
company learning, product
people, thats where you gonna meet customers, thats
where you gonna meet partners, thats where you gonna see awareness, and increased
competition to judge yourself where you stand. Its a very international experience of
good way of building up network and knowing who the key employees
players are and knowing. You learn a lot at tradeshows. I
think thats one of the much critical things. Thats what you International trade shows as key
do, thats what we do a lot for our learning.(ICT1) success factor for BGs from
qualitative interviews
277

Niche strategy Some support Financial: NS Financial: NS Born globals may adopt multi-
Operational: NS Operational: +-ve faceted approach to international
Blue ocean strategy Perceived success: NS Perceived success: NS strategy, and may not only aim at
product specialisation, but also at
So weve ignored the traditional markets where the bigger market to achieve critical
entrenched competitors are and weve gone after the new mass
markets, and they are the high-growth markets. So weve
been very focussed on that as a strategy. Going for new Niche strategy as unique
markets, going for markets with inflexion points driving to
operational performance
first time use of our products. (ICT1)
antecedent for Non-BGs
Foreign market Some support Financial: NS Financial: +-ve External market environment may
attractiveness Operational: NS Operational: NS be less relevant in explaining
Ok, in all the markets that we are in, there is huge Perceived success: NS Perceived success: NS performance variations of born
potential because there isnt a lot around, particularly globals compared to internal
where our product is concerned, there is nothing like it factors (e.g., product/service
around. (FOOD) quality)
Internationalisation of the Some support Financial: NS Financial: NS Internationalisation of the market
market Operational: NS Operational: NS may be important condition and
I think very internationalised. E-learning is an Perceived success: NS Perceived success: NS provide context for doing
international industry. It allows institutions worldwide to international business, but not
implement solutions. It is not restricted to countriesI think related to international
it is extremely important [for international performance]. We performance of BGs
developed partnerships locally and then internationally.
There are greater opportunities to partner. And it is also the
nature of the product. (EDUC)
Firm size N/A Financial: +-ve Financial: NS Born globals may leverage from
Operational: +-ve Operational: NS their total sales in international
Perceived success: +-ve Perceived success: NS markets
Firm size as unique performance

determinant for BGs
278
Firms international N/A Financial: NS Financial: negative Firms international experience
experience Operational: NS Operational: negative not significant performance driver
Perceived success: NS Perceived success: NS for BGs
Negative relationship for Non-

BGs may be due to difficulty of
unlearning and being stuck in
routines for firms with longer
international experience. This
may result in inertia and less
motivation to pursue
opportunities internationally and
subsequent lower performance.
Industry N/A Financial: NS Financial: +-ve Industry not performance
Operational: NS Operational: +-ve antecedent for BGs
Perceived success: NS Perceived success: NS
Non-BG manufacturing firms
tend to have significantly better
financial and operational
performance than firms from
other sectors
Entry mode N/A Financial: +-ve Financial: NS Entry mode tends to be a
Operational: +-ve Operational: NS determinant of international
Perceived success: NS Perceived success: NS performance of BGs. Exporting
BGs generally have higher
financial and operational
performance than BGs that use
other entry modes (e.g., licensing,
wholly-owned sales subsidiary)
+-ve = positive relationship
NS= Not significant
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Table 7.2: Summary of Key Findings and Implications: International Performance Measurement
Qualitative interview findings Quantitative survey results Implications
- Difficult to measure international performance - Born global firms place, on average, significantly - Born global firms tend to view international
according to some managers higher levels of importance on all international performance measures differently than non-born
performance measures compared to non-born global firms
- Variety of different performance measures global companies.
employed by sample firms: - Born global firms tend to have better international
- Financial (e.g., international sales - Born global firms tend to be significantly more performance than non-born global firms
international sales growth, ROI, EBITDA, satisfied with their level of international
international profit) performance compared to non-born global - Financial-based measures tend to be most
- Operational (e.g., market share, global reach) companies. important for born global firms
- Other (e.g., brand awareness, equipment
failure rates, number of visitors at tradeshows - Born global firms tend to have significantly higher - International reputation of the firm is, in general,
and follow-on business from there) weighted international performance scores for all also an important performance measure in the
measures compared to non-born globals. context of born globals. This may be explained by
- Importance of financial performance measures the need or desire of the firms to position
- Manufacturing born globals place, on average, themselves as a global company.
- Market share as most common operational significantly more importance to financial
measure performance measures than service born globals. - Industry sector tends to matter in terms of
international performance measurement of BGs.
- The first rule of business is to stay in business
- Its all based around financial performance basically,

you know. We actually cut a few people out of our
programme that werent performing. And added a few
people into the programme which definitely have raised
the bar of who we are and what we do. But it all
comes down to finances. If its not there, we cant buy it.
If its not, you know, if the sale hasnt been made, we
cant move forward.
- I guess we measure ourselves with the traditional

financial measures.
280
As can be seen from Table 7.1, there are similarities, but also different determinants
of international performance for born global and non-born global firms. In terms of
similarities, the concepts of product/service quality and international entrepreneurial
orientation: global mindset & perseverance were found to be drivers of superior
international performance for born global and non-born global firms. Table 7.3
summarises the common determinants of international performance for the firms
based on the empirical results from this thesis.
Table 7.3: Common Determinants of International Performance

Born global firms Non-born global firms
International entrepreneurial orientation: International entrepreneurial orientation:
Global mindset & perseverance (operational Global mindset & perseverance (operational
performance) performance)
Product/service quality (financial Product/service quality (financial
performance, perceived success) performance, perceived success)
The empirical evidence generated from this study also suggests that there are certain
performance antecedents that tend to be unique to either born global or non-born
global firms. Table 7.4 provides an overview of the unique performance determinants
for born globals and non-born globals, respectively.
Table 7.4: Unique Determinants of International Performance

Born global firms Non-born global firms
International entrepreneurial orientation: Niche strategy (operational performance)
Innovativeness & proactiveness (financial Leveraging of managements personal
and operational performance) networks: Amount of pre-existing personal
Market orientation: Competitor orientation networks for internationalisation (financial
(financial performance and perceived performance)
success) Foreign market attractiveness (financial
Firm size (companys annual gross sales) performance)
(financial and operational performance, Firms international experience (financial
perceived success) and operational performance, negative
Entry mode (export entry) (financial and relationship)
operational performance) Industry (manufacturing) (financial and
operational performance)
These results imply that born globals differ from non-born globals in terms of
international performance antecedents. More specifically, it suggests that internal
factors, such as product/service quality, international entrepreneurial orientation and
firm size mainly drive the international performance for born globals. External
factors seem to be less relevant in explaining performance differences among born
global firms. In contrast, external factors, such as foreign market attractiveness and
281
industry sector tend to be more relevant for non-born global firms in engendering
superior international performance.
The findings from the qualitative interviews provided additional insights into the
subject matter and enriched the results from the quantitative part. As a result, the
interviews helped in interpreting and illustrating the findings from the quantitative
survey. In some instances, the interview results diverged from the survey findings.
For example, international trade shows and customer engagement skills emerged as
key themes in the interviews for achieving superior international performance.
However, the survey results did not show statistically significant relationships
between these constructs and international performance. One of the key implications
from the findings is that performance determinants were varied, thereby possibly
depending on the type of firm (BG vs. Non-BG). As mentioned earlier, differences
were observed between the born global and non-born global sample in terms of
performance determinants. It could also be inferred that international performance
and its antecedents are complex and multi-faceted constructs as shown by the
different significant relationships.
In terms of international performance measurement (see Table 7.2), the key findings
relate to the generally significantly higher levels of importance and satisfaction with
all 12 performance measures for born globals compared to non-born globals. In
addition, born globals tended to achieve better performance than non-born globals.
Industry-related differences were also observed in the study with manufacturing BGs
placing, on average, significantly more importance to financial performance
measures than service BGs. The key implications relate to the fact that BGs tend to
perceive international performance measures differently than Non-BGs. It could be
conjectured that industry matters in terms of performance measurement, and that
born globals generally value financial performance more than other performance
types. It may be beneficial for future studies to incorporate these findings, for
example, by differentiating between distinct types of international performance.
In the next chapter, the conclusions and contributions of the study are highlighted.
282
CHAPTER 8
CONCLUSION
This chapter presents the conclusions of the study. The theoretical, managerial and
policy contributions of the study are highlighted, followed by an acknowledgement
of the limitations of the thesis and directions for future research.
283
Chapter 8 Conclusion
This study examined the determinants and measurement of international performance

for born global firms. As outlined in Chapter 1, born globals are an increasingly
important type of firm in the international business environment and have been found
in growing numbers in various countries, such as USA, Israel, Finland, New Zealand,
UK, and Australia (e.g., Crick & Jones, 2000; Knight & Kim, 2009; Chetty &
Campbell-Hunt, 2004; Liesch et al., 2007). The objective of this study was to fill the
research gap suggested by Knight and Cavusgil (2004) who argued that there has
been almost no empirical research that examines the factors that drive the superior
international performance of these young, highly entrepreneurial firms (p. 125). The
study adopted a comparative approach with non-born global companies, thus
following the recommendations by Schwens and Kabst (2008) and Fan and Phan
(2007). The study also addressed a research gap in terms of performance
measurement of born globals as suggested by Crick (2009).
The key findings from the thesis can be summarised as follows. International
entrepreneurial orientation tends to play a critical role in achieving superior
international performance for born global firms. In addition, product/service quality,
competitor orientation, firm size and entry mode were found to be important drivers
of international performance for born globals. The leveraging of international trade
shows, positioning as a global company rather than an exporter, and customer
engagement skills in terms of visiting customers and being there in the overseas
markets were identified in the qualitative interviews as key success factors for born
globals. Overall, the performance antecedents differed among born globals and non-
born globals. For example, innovativeness and proactiveness, competitor orientation,
firm size and entry mode tended to be unique performance determinants for born
globals, whereas niche strategy, leveraging of managements personal networks, and
external factors, such as foreign market attractiveness and industry sector, were
found to be positively related to international performance for non-born globals only,
marginal to the other variables in the model. In terms of international performance
measurement, the study found that born globals tend to place significantly more
importance to international performance measures than non-born globals. In addition,
born globals had, on average, better international performance as compared to non-
284
born global firms. Another key finding related to the importance of financial
performance measures, in particular, sales-related measures and profitability as
compared to operational indicators for born globals. An important non-financial
measure observed in this study was international reputation of the firm.
In the following sections, the theoretical, managerial and policy contributions of this
thesis are outlined, along with an acknowledgement of the limitations of the study
and directions for future research.
8.1 Contribution to Theory/Literature

The main research objectives of this study were to examine the determinants and
measurement of international performance for born global firms. As indicated in
Chapters 1 and 2, there is a lack of studies that investigate the antecedents of
international performance for born global firms. This research gap has been
highlighted by Knight and Cavusgil (2004) and Cavusgil and Knight (2009). The
contributions of the study to theory/literature are shown in Table 8.1.
285
Table 8.1: Contribution to Theory/Literature
Research findings Supports previous Contradicts previous Extends previous knowledge Contribution to
research findings research findings theory/literature
Development and testing of Knight & Cavusgil (2004); Provides new insights and knowledge into the RBV and network
integrated international Knight & Kim (2009) determinants of international performance for perspective on
performance model for BGs BGs in relatively unexplored areas, including internationalisation
corporate governance structure, international
trade shows, external environment, entry mode.
Extends conceptualisation of RBV and
network perspective on internationalisation
in the context of BGs
Extends BG performance model by Knight &

Cavusgil (2004)
International performance Provides new knowledge and insights how BGs IB performance
measurement of BGs: measure their international performance measurement
- Importance of financial-
based measures for BGs Provides new insights into the multi- BG performance
- Variety of different dimensionality of performance (effectiveness, measurement
performance measures efficiency and adaptability) and different types
used by BGs of performance (e.g., financial, operational,
- Manufacturing BGs attach organisational effectiveness) in the context of
higher importance to BGs
financial performance than
Service BGs. Provides new insights into industry-related
- Better international Larimo (2006); differences in terms of performance
performance for BGs than Kuivalainen et al. (2007) measurement
for Non-BGs
Advances IB performance measurement
literature, including BG literature
286
Table 8.1: Contribution to Theory/Literature contd
Key role of international Knight & Cavusgil (2004); Provides new knowledge about the concept of International
entrepreneurial orientation as Kuivalainen et al. (2007) international entrepreneurial orientation as a entrepreneurship
driver of international driver of BG performance literature
performance for BGs
Introduces the concept of perseverance as an RBV
important component of entrepreneurial
orientation in the context of BGs
Results imply that E part of IE is important

to understand performance drivers of BGs
Advances the conceptualisation of RBV in the

context of BGs
Export entry mode as Zahra et al. (2000) Gleason et al. (2006) Provides new knowledge about the role of International
determinant of international entry mode in the international entrepreneurship
performance for BGs entrepreneurship literature in the context of BG literature
performance
Provides more integrated view of BG firms and

international performance in terms of entry
mode implications following Jones & Young
(2009)
Industry sector not determinant Francis & Collins-Dodd Provides new knowledge about the role of International
of international performance for (2000); Brouthers et al. industry sector as a driver of international entrepreneurship
BGs (2009) performance for BGs in a comparative sense literature
with Non-BGs Industry sector tends to be
driver of international performance for Non-
BGs
287
Table 8.1: Contribution to Theory/Literature contd
Mixed methods research design Majority of BG studies used either purely International
quantitative or qualitative approach (e.g., entrepreneurship
Jantunen et al., 2008) literature
This study adopted a mixed methods approach

following the call by Hurmerinta-Peltomaki &
Nummela (2006), Bazeley (2008), and
Hohenthal (2006)
Comparative perspective of Majority of BG literature focused exclusively International

BGs and Non-BGs on BG samples (e.g., Knight & Kim, 2009) entrepreneurship
literature
This study adopted a comparative perspective
of BGs and Non-BGs following the
recommendations by Schwens & Kabst (2008)
288
Based on Table 8.1, the contributions of the study can be structured according to
conceptual model and research methodology:
(1) Contributions in terms of conceptual model:
(1a) Development and testing of an integrated performance model for born
global firms
(1b) Identification and examination of important international performance
measures in the context of born global firms
(1c) Advancement of the E (=entrepreneurship) part of IE
(1d) Incorporation of additional entry modes of born global firms besides
exporting (e.g., licensing, joint venture, strategic alliance)
(1e) Consideration of multiple industries of born globals to provide
heterogeneity and improve the generalisability of the findings
(2) Contributions in terms of research methodology:
(2a) Adoption of mixed methods research design
(2b) Integration of comparative perspective of born global and non-born
global firms in terms of performance determinants and measurement
Each of these contributions is discussed in the following.
Development and testing of integrated performance model for born global firms
The key contribution of the study is the development and testing of an integrated
model that considers the determinants and measurement of international performance
for born global firms. Based on the RBV and the network perspective on
internationalisation, the model incorporated firm and managerial characteristics,
networks, business strategy, external environment and international performance. In
developing the model, the study focused primarily on intangible resources. The
incorporation of relevant constructs that have received scant attention in the born
global literature, including corporate governance structures, international trade shows
and external environment highlights the distinctiveness of this study, and presents a
contribution to the body of scholarly knowledge regarding born global firms. In this
respect, the study suggests an extension of the operationalisation of the RBV and
network perspective on internationalisation as applied in the context of born global
289
firms. The findings support the view that internal rather than external factors tend to
be associated with better international performance of born global firms. They also
emphasise the critical role of international entrepreneurial orientation for born global
firms for performing successfully in overseas markets, lending support to Knight and
Cavusgil (2004).
Measurement of international performance for born global firms

Another important contribution to the literature relates to the measurement of
international performance for born global firms. As Crick (2009) concluded, there
appears to be no agreement in the literature about how to measure the performance of
born globals internationally. This thesis examined which international performance
measures born global firms perceive as important. The study adopted international
performance measures by incorporating different types of performance (i.e., financial,
operational, organisational effectiveness and perceived success), following
Venkatraman and Ramanujam (1986), Hult et al. (2008), and Styles (1998). This
presents a contribution to the IB performance measurement literature in light of the
fact that only 7.3% of the IB performance studies reviewed by Hult et al. (2008)
jointly considered measures on all three types of performance (i.e., financial,
operational, overall effectiveness). In addition, the three dimensions of effectiveness,
efficiency and adaptability (Walker & Ruekert, 1987) were considered in this thesis
to account for the multidimensionality of performance. Given that the adaptability
dimension tends to be an under-researched area in the born global literature, the
thesis contributes to our knowledge of performance measurement for born globals.
This integrated approach enabled a more differentiated and nuanced view of
international performance compared to studies that utilised a single, composite
measure of international performance (e.g., Knight & Cavusgil, 2005; Jantunen et al.,
2008) or examined only one type of performance (e.g., financial) (e.g., Autio et al.,
2000; Zahra et al., 2000). The empirical evidence from this study suggests that born
global firms perceive international performance measures differently than non-born
global firms. More specifically, born globals tend to place significantly more
importance to all 12 adopted international performance measures than non-born
global firms, and have better international performance as compared to non-born
290
globals. In addition, the results from the study indicate that born globals perceive
financial performance measures (e.g., international sales, profit) as more important
than operational measures (e.g., market share). This supports the notion that
performance is a multidimensional concept (Morgan & Strong, 2003; Bhargava et al.,
1994), and also suggests that it may be beneficial to examine performance in a
differentiated manner.
Advancement of the entrepreneurship part of IE

As indicated in Chapter 1, international entrepreneurship bridges the two literature
streams of international business and entrepreneurship (McDougall & Oviatt, 2000).
A key contribution of the thesis refers to the importance of the E part of IE that
was evident in this study. There tends to be a lack of studies addressing the
entrepreneurship component of IE with research focus primarily placed on the I
part in terms of internationalisation (Keupp & Gassmann, 2009; Kraus, 2011). For
example, in an extensive review of the IE literature, Keupp and Gassmann (2009)
concluded that it thus seems all the more important to develop the entrepreneurship
component of IE (p. 611-612). As outlined in Chapters 6 and 7, the concept of
perseverance emerged from the study suggesting that born global firms place strong
importance on the big picture which generally manifests itself in better
international performance. In addition, BGs tended to have significantly higher levels
of proactiveness and innovativeness compared to Non-BGs with these two concepts
being significant performance drivers solely for BGs, and not for Non-BGs. The
characteristics of proactiveness and innovativeness may also be linked to the role of
international trade shows for BGs as emerged from this study. More specifically, it
suggests that BGs are highly aware of their markets and products/services, do their
homework in terms of market research and, thus, know which international trade
shows to target, whereas Non-BGs tend to use trade shows to a significantly lesser
amount as networking platforms compared to BGs (see Table 6.18). It could be
argued that the concepts of market orientation and customer engagement may also be
rooted in the entrepreneurial nature of BG managers. Also, BGs tend to significantly
prepare more for their first internationalisation in comparison to Non-BGs which
may be a function of their entrepreneurial spirit (see Table 6.43). Evidence from
291
the qualitative interviews suggests that BGs tend to actively look for and exploit
entrepreneurial opportunities (Shane & Venkataraman, 2000, p. 220) in form of,
for example, blue ocean strategies. Gartner (1990) found that entrepreneurship can
have different meanings attached to it and identified eight areas, including the
entrepreneur, innovation, organisation creation, creating value, profit or nonprofit,
growth, uniqueness, and the owner-manager. It could be an interesting angle for
future studies in the IE literature by examining these different facets of
entrepreneurship. This study implies that the theoretical conceptualisation of the
RBV in terms of international entrepreneurial orientation could be further developed
in the context of born global firms. Overall, the conclusion from the thesis suggests
that the E part of IE is critical in our knowledge and understanding of international
performance drivers of BGs.
Incorporation of additional entry modes of born global firms besides exporting

The consideration of other entry modes besides exporting represents another valuable
contribution of the study. As noted in Chapter 2, the vast majority of born global
studies have focussed exclusively on exporters without specifically examining other
entry modes these firms may adopt in international markets (Fan & Phan, 2007). This
study employed a more holistic approach in line with Jones (1999), and incorporated
the following foreign market entry modes in addition to exporting: licensing,
franchising, strategic alliance, joint venture, wholly-owned sales subsidiary and
wholly-owned manufacturing subsidiary. The empirical results indicate that born
globals are not necessarily pure exporters, but may adopt different modes of entry.
The results also suggest that entry mode does play a role in explaining variations in
international performance for born global firms. Firms that used exporting to their
first overseas market tended to have higher financial and operational performance
than those that employed other entry modes (e.g., licensing, strategic alliance,
wholly-owned sales subsidiary). These findings have key ramifications in that entry
mode may be an important variable to examine in future born global performance
studies. This is consistent with Jones & Young (2009) who concluded in an extensive
review of the IE entry mode literature that entry mode does indeed matter (p. 18).
292
Inclusion of multiple industry sectors of born global firms

The thesis also contributes to the literature by including multiple industries in the
sampling frame, in order to improve the generalisability of the findings, and to obtain
a more complete picture of born global firms and their performance outcomes. As
indicated earlier, many quantitative born global studies have focussed on a single
industry sector, such as manufacturing or software (e.g., Knight & Kim, 2009;
Frishammar & Andersson, 2009; Kundu & Katz, 2003). This study found industry-
related differences in terms of performance drivers and measurement. For example,
manufacturing born global firms tended to consider financial performance measures
as significantly more important than service born globals. Therefore, it appears that
the role of industry is relevant in better understanding the dynamics and measures of
international performance for born global firms.
Adoption of mixed methods research design

The study offers a contribution to the literature through its methodological approach.
In this thesis, a mixed methods approach was adopted with a sequential research
design of exploratory, qualitative interviews and a subsequent quantitative survey
instrument (Tashakkori & Teddlie, 1998). The majority of born global studies have
adopted either a purely quantitative (e.g., Jantunen et al., 2008; Frishammar &
Andersson, 2009; Kuivalainen et al., 2007) or qualitative approach (e.g., Mort &
Weerawardena, 2006; Bell et al., 2004; Chetty & Campbell-Hunt, 2004; Liesch et al.,
2007; Freeman et al., 2006). There is a scarcity of studies in the born global literature
that have adopted mixed methods. This manifested itself in the form of a
combination of case studies and quantitative survey instruments (Knight & Cavusgil,
2004; Knight & Kim, 2009), or survey followed by qualitative face-to-face
interviews (Loane & Bell, 2006). In the wider context of the international business
literature, mixed methods also tend to be in minority as compared to single-method
studies (Andersen & Skaates, 2004). For example, in a review of 484 articles
published in four major international business journals, Hurmerinta-Peltomaki and
Nummela (2006) identified 68 mixed methods studies (14%). However, the adoption
of mixed methods is gaining popularity in the literature, especially in the health and
medicine and education areas. Analysing the developments in mixed methods
293
designs in social, behavioural and health sciences, Ivankova and Kawamura (2010)
found that the number of mixed methods studies steadily increased in the years from
2000 to 2008. In total, they identified 689 mixed methods studies out of which the
majority were in health and science and education (around 70%). In general, scholars
have emphasised the suitability of mixed methods for management and international
entrepreneurship research and have called for wider adoption of mixed methods in
these areas (e.g., Bazeley, 2008; Hohenthal, 2006; Hurmerinta-Peltomaki &
Nummela, 2006; Rialp et al., 2005a). The application of mixed methods in this thesis
increased the robustness and rigour of the study, thus enhancing the validity of the
study, and leading to a richer examination of the determinants and measurement of
international performance for born global firms.
Comparative perspective of born global and non-born global firms

Finally, a contribution to the literature refers to the comparative perspective of born
globals and non-born global firms in terms of performance determinants and
measurement. Studies in the extant literature tend to have focussed exclusively on
born global samples (e.g., Knight & Cavusgil, 2004; Knight & Kim, 2009; Mort &
Weerawardena, 2006) with few studies that examined born globals and traditional
exporters, primarily in qualitative studies (e.g., Bell et al., 2004; Crick & Spence,
2005; Chetty & Campbell-Hunt, 2004). The lack of comparative studies seems
particularly apparent in the field of performance drivers and measures for born global
and non-born global firms (Schwens & Kabst, 2008). The thesis contributed to the
literature by endeavouring to fill this research gap. The study showed that born
globals generally differ in terms of the determinants and measurement of
international performance as compared to non-born global firms. For example,
unique performance antecedents, such as proactiveness and innovativeness and
competitor orientation were observed for the BG sample. In terms of performance
measurement, born globals reported, on average, higher levels of importance of and
satisfaction with international performance measures compared to non-born globals.
Overall, these findings support the view that born globals are a distinct type of firm
in line with several authors (e.g., Rennie, 1993), and suggests that there are different
294
international performance drivers and measures for born global firms than for non-
born globals.
8.2 Managerial Contributions

In addition to theoretical advances, the study also offers key managerial
contributions. The empirical results from the survey highlighted the importance of a
global mindset for better financial and operational performance. This was also a key
theme in the interviews where all managers displayed a strong global mindset. It
implies that it is critical for born global managers to establish a global vision and
perceive the world rather than the domestic market as their marketplace, in order to
achieve superior international performance. In this regard, positioning the firm as a
global company rather than an exporter may be an important strategic tool as
evidenced in the qualitative portion of this thesis. According to the interviews, it is
likely to send different signals to potential customers if the firm is perceived as a
global company as compared to an exporter. In addition, perseverance played an
important role for the sample firms performance in international markets. In
particular, the concepts of positioning as a global company and perseverance have
received little attention in the born global literature. The practical advice from the
interviews is summed up in the metaphor of dont sprint a marathon, which
indicates that success may not come overnight, but may require hard work, effective
preparation, perseverance and a long-term perspective.
In addition, the concepts of proactiveness and innovativeness were found to be key

drivers of international performance for born global firms. Thus, it suggests that it
may be beneficial for managers to adopt a proactive posture toward international
markets and place importance on being innovative and creative, and developing a
corporate culture of improvements and innovations.
The study also found strong support in that a focus on product/service quality is
generally related to superior international performance for born global firms. This
underscores the importance for born globals to compete on quality, in order to be
successful in international markets. Evidence from the qualitative interviews also
295
suggests that born global firms mainly competed on quality rather than on price. As a
result, born globals may be well advised to develop high quality products or services
when doing business internationally.
Another contribution is the role of competitor orientation for engendering better

international performance. It implies for born global managers that it is essential to
carefully analyse competitors strengths and weaknesses, and evaluate competitors
strategies on a regular basis as a means to improve their companies international
performance. Given that previous born global studies tend to have not examined
specifically the role of competitor orientation, the empirical evidence from this study
presents a relevant finding in advancing our knowledge of the international
performance drivers for born globals.
Customer orientation and international trade shows were also important performance
antecedents that emerged in particular from the qualitative interviews. Specifically,
visiting international customers, being there in markets, and attending international
trade shows were mentioned as key ingredients for the international success of born
globals. This indicates that it is recommended for born global managers to focus on a
strong market presence by regularly visiting and communicating with international
customers, and increasing their global exposure by leveraging from international
trade shows. Considering that the role of trade shows appears to have received scant
attention in the born global field (Evers & Knight, 2008), the findings of the study
are distinctive and warrant examination in future research.
The study also suggests that leveraging of managements personal networks and
external factors, such as foreign market attractiveness were not necessarily drivers of
superior international performance for born global firms. It implies for born global
managers that a firm may achieve success in international markets without
necessarily having extensive personal networks. The study also indicates that Board
of Directors/Advisory Board did not marginally contribute to explain variations in
international performance of born global firms. It suggests that the establishment of a
Board of Directors may not be as critical for born global firms as a driver of
296
international performance compared to other factors, such as the provision of a high

quality product/service.
The advice for new internationalising firms obtained from the interviews has a strong
practical focus and is outlined below:
Dont sprint a marathon! As mentioned above, this advice suggests that
there may be no overnight success, and perseverance tends to be crucial to
achieve superior international performance.
Go out in markets and understand the markets! This emphasises the
importance of visiting and engaging with international customers, and being
there in the overseas markets and be seen.
Grow within capacity and dont put the company at risk! This advice
suggests that a too risky approach may not be suitable to be successful
overseas. It is linked to the advice of not sprinting a marathon, and
advocates a strategic and rational approach to internationalisation.
Partner with a local! This piece of advice highlights the important role of
partnering with a suitable local partner to obtain knowledge about the foreign
market, and to adapt to the different nature and characteristics of international
markets.
Be tight about payment terms! This advice refers to maintaining a healthy
cash-flow for the firm by regularly following up with customers and ensuring
that payments are obtained on time.
Have a decent product to sell! It starts with a high quality product/service
and the product has to stick, according to the interviews.
Think of yourself as a global company and execute across the board! This
emphasises the importance of positioning the firm as a global company
rather than an exporter.
These practical contributions are useful and relevant for managers of

internationalising firms in that they cover different aspects and facets of
internationalisation. In conclusion, the findings of the study indicate that born global
managers are well advised to put emphasis on fostering an international
297
entrepreneurial orientation that values innovativeness and is conducive to exploiting

opportunities abroad as well as developing high quality products or services,
attending international trade shows, and being there in markets. Other important
practical advice from the interviews suggests growing within capacity and not
putting the company at risk, partnering with a local, being tight about payment terms,
and positioning as a global company rather than an exporter.
8.3 Policy Contributions

SMEs often form the backbone of a countrys economy and contribute a significant
amount to a countrys GDP and employment. For example, in the European Union
(EU), 99.8% of all enterprises in 2007 were classified as SMEs and comprised 67.2%
of total employment (European Commission, 2008), while in Australia 99.6% of all
businesses were small and medium-sized enterprises as at June 2009 (Australian
Bureau of Statistics, 2009). In New Zealand, 97.2% of all businesses in 2009 were
SMEs and accounted for 41.9% of the economys total output. In addition, 18% of all
businesses in New Zealand had export sales (Ministry of Economic Development
New Zealand, 2010). The importance of exporting for New Zealand is also mirrored
in recent trade statistics. For example, merchandise exports from the country
increased by 47%, from NZ$ 29 billion in 2000 to NZ$ 42 billion in 2008 (Statistics
New Zealand, 2009). The situation is similar in Australia, where exports of goods
and services have grown by 46% from A$ 150 billion in 2000 to A$ 278 billion in
2008 (Australian Government Department of Foreign Affairs and Trade, 2009).
As relatively small and geographically isolated countries, exporting has important

implications for New Zealands and Australias economic development. This is
demonstrated by recent government initiatives, such as Export Year 2007 in New
Zealand, or the Export Market Development Grants scheme and Getting into Export
programme in Australia, aimed at enhancing the countries international
competitiveness (Ministry of Foreign Affairs and Trade, New Zealand 2007;
Australian Government Austrade, 2010). Overall, export promotion tends to be of
great interest to policy-makers in Australia and New Zealand, and also in many other
countries around the world (e.g., EU) (European Commission, 2003).
298
This study offers several contributions to policy-makers. The empirical results from
the study indicate that international trade shows represented an important mechanism
for the firms to increase their international exposure, thereby improving their
performance internationally. International trade shows enabled the firms to establish
important networks for internationalisation, improve their company learning, and
evaluate international competitors. Policy-makers may build on this finding by
encouraging and supporting current and prospective internationalising firms to attend
international trade shows. Another avenue for government to assist companies may
be to actively engage in organising international trade fairs.
Moreover, the study highlighted the role of international entrepreneurial orientation

for engendering superior international performance. Government assistance
programmes may be advised to focus on these attributes by increasing firms
awareness of the importance of global mindset, innovativeness and managerial
commitment to internationalisation. Policy-makers may also be able to provide more
effective trade assistance by using the international entrepreneurial orientation of
firms as an important criterion to guide the decision process of awarding grants or
other support.
Visits to foreign markets and engaging with customers were important themes that
emerged from the qualitative interviews. Government may assist firms by providing
market intelligence, logistical support, and other services, such as translation that
may function as door-openers to international markets. The usefulness of these
activities was highlighted by the manager from ICT1 during the interviews. The role
of funding also appeared in the qualitative portion of the study. While this was not
assessed quantitatively, the qualitative evidence in the thesis suggests that some
firms used export grants to develop their international business and performance. It
should be noted that grants may not always represent the most effective solution. For
example, research by the European Commission indicates that for better long-term
effects, governments are advised to focus on improving and building internal
capabilities of SMEs rather than providing financial support/grants (European
Commission, 2007).
299
On a general note, it should be mentioned that policy-makers may be advised to use

tailored, customised support for different types of firms. For example, this study
provided empirical evidence that born globals and non-born globals differ in terms of
their general characteristics and performance determinants. Policy-makers should
take these differences into account by targeting the specific needs of the firms when
providing trade assistance. Individualised support to SMEs has also been advocated
by the European Commission (2003). This may entail assisting firms in finding
appropriate partners (e.g., distributors, joint-venture partners), and focussing on the
experience of entrepreneurs. When assisting non-exporters, it may also be critical to
differentiate between different types of non-exporters and their underlying intentions
and motivations to do exporting. For example, Crick (2004) identified two types of
non-exporters that had exported in the past, but discontinued their export ventures:
the disinterested and disappointed firms. Crick (2004) concluded that
disinterested companies may not be receptive to any government advice, whereas
trade assistance to disappointed firms might be more effective and better placed
due to their willingness to do exporting as compared to the disinterested firms.
Overall, the empirical evidence from this study implies that assistance of policy-
makers in the areas of international trade shows, promotion of a global mindset and
innovative corporate culture, and funding through grants are well suited to born
global firms, in order to support their international endeavours.
8.4 Limitations of the Study

As every empirical study, this thesis has some limitations. The study is cross-
sectional in nature, and, thus, provides only a snapshot of the phenomena, rather than
being a longitudinal investigation. Using a longitudinal research design may provide
additional and rich insights into the complexities and dynamics of international
In addition, memory bias of managers may have affected the survey responses.
Managers were asked to answer questions related to their companies first
internationalisation and early international performance. As a result, the responses
300
were based on past events, and dependent on the accurate recollection of the
managers. In addition, the current performance and environmental situation may
have shaped the survey responses leading to cognitive biases (March & Sutton, 1997).
The sampling frame included young firms (established between 1999 and 2009), in
order to minimise potential memory and retrospective biases.
Another limitation of the study relates to the geographic location of the sample firms.
This thesis examined companies in Australia and New Zealand, which represent the
two largest economies in the Oceania region. Both countries are relatively small in
terms of population, are characterised by their openness to international trade, and
are relatively isolated with regard to their physical location. The findings of the study
may not be applicable to countries in geographical contexts that differ in size and
proximity to other countries, e.g., USA or Europe. Replication of the study in
different countries and cross-country comparisons represent useful means to advance
the generalisability of the findings.
Moreover, it is acknowledged that the list of proposed performance determinants in

this study may not be exhaustive and absolute. This thesis adopted the resource-
based view of the firm (RBV) and network perspective on internationalisation as the
key theoretical frameworks guiding the thesis. The rationale for incorporating the
constructs in the study evolved through an extensive examination of the extant
literature and was further supported and developed through the exploratory
interviews (please refer to Chapter 5). However, it is acknowledged that there are
other determinants that may play a role in explaining variations in international
performance for born global firms. For example, the role of knowledge and
absorptive capacity, consistent with the knowledge-based view of the firm (e.g.,
Kogut & Zander, 1992), or the role of institutions, based on institutional theory
(North, 1990) may provide additional insights into the performance drivers of born
globals. Future research may attempt to shed light on this dynamic topic.
In addition, the sampling frame contains an inherent survival bias. This means that
only firms that survived and are still operating internationally were examined in this
301
study. Companies that started up with global exporting or internationalisation, but

failed subsequently (dead globals) were not considered. Also, non-
internationalised firms were not incorporated in the sampling frame. It may provide
interesting scope and unique perspectives to include dead globals and non-
internationalised firms, and examine how these types of companies perceive
international performance antecedents and measurement. Given the potential
problems to identify and obtain reliable data from these firms (particularly for the
dead globals), it may be a challenging task, but is likely to lead to a fruitful
comparative perspective.
Finally, a limitation of the study relates to the lack of any interviews with non-born
global firms. This may have been useful in order to strengthen the empirical results
and discussion of the study. However, it should be noted that the main purpose of the
interviews was to validate the BG-specific conceptual model. It should also be
emphasised that the focus of this study was on born global firms which is one of the
reasons why non-born globals were not incorporated in the interviews.
8.5 Directions for Future Research

As outlined in Chapters 1 and 2, the born global performance field is relatively recent
and not fully developed. Therefore, there tends to be a lot of research scope and
potential for future studies.
One worthy area of future research relates to the issue of survival for born global
firms. This thesis revealed empirical evidence that highlighted the importance of
staying in business (The first rule of business is to stay in business). Studies could
examine the critical factors that enable born global firms to survive and contrast
those with firms that fail. There seems to be a lack of studies that investigate the
variables associated with the survival of born global firms (an exception is the work
of Mudambi & Zahra (2007)); yet, it is an interesting and relevant area to incorporate
in future studies what becomes of born global firms (Zettinig & Benson-Rea, 2008;
Zahra, 2005). In this respect, it may be also interesting to examine the growth paths
of born global firms, and investigate questions, such as How do born globals
302
grow? and What happens to born globals once they grow bigger and become more
established and successful internationally?. For example, it might be interesting to
study the factors that lead born global managers to sell their companies to larger
firms as compared to growing on their own.
In addition, the investigation of entry modes in the context of born globals is a

promising area for future research. As outlined earlier, the vast majority of born
global studies have focussed solely on exporting. Given the likelihood of born
globals to use various entry modes to international markets and the potential
performance implications of entry mode as evidenced in this study and suggested by
several scholars (e.g., Zahra et al., 2000; Brouthers & Nakos, 2004), it seems
pertinent to adopt a holistic approach in future research.
Another potential future research area relates to examining the inter-relationships of

the constructs in the conceptual model. For example, it might be interesting to
investigate the relationship between networks and international entrepreneurial
orientation. The role of potential mediating and moderating variables for
international performance may also present an interesting avenue for future studies.
This study examined the role of corporate governance structure in born global firms
by investigating the service function of Board of Directors/Advisory Board. It may
be a fruitful area for further research to look at additional factors of Board of
Directors that may be related to international performance of born global firms. For
example, the composition of Board of Directors (e.g., internal versus external
members), and personal attributes of Board of Directors (e.g., international
experience) may further shed light on the performance implications for born global
firms (Gleason et al., 2006).
It should also be noted that one direction of relationship was considered in the
conceptual model of this study. It is certainly reasonable to assume that there are
regular feedback loops from international performance (the dependent variable for
this study) to some of the constructs (i.e., explanatory variables). For example, high
303
international performance is likely to feed back to the provision of a high quality

product/service. The notion of feedback loops between performance and explanatory
variables has been raised by March and Sutton (1997). While the study anticipates
the existence of feedback between international performance and some of the
explanatory variables, investigating such bidirectional relationships was not the focus
of this thesis and could represent an area for future research.
Another potential future research area relates to the concept of internationalisation

readiness (Liesch & Knight, 1999; Tan, Brewer, & Liesch, 2007). This has been
defined as a firms preparedness and propensity to commence internationalisation
(Tan et al., 2007, p. 302). It may be interesting to examine to what extent born global
firms were ready to start internationalising and how this may have influenced their
international performance. In this respect, a comparative approach with non-born
globals could be adopted to analyse potential differences between the types of firms
in terms of being ready for internationalisation.
This study was grounded in the resource-based view of the firm and network-based
perspective on internationalisation as they were deemed suitable in the context of
born global firms and have been widely employed in born global research (e.g.,
Knight & Cavusgil, 2004; Loane & Bell, 2006; Mort & Weerawardena, 2006;
Freeman & Cavusgil, 2007). Future research may also adopt other theoretical
frameworks. An interesting angle may be provided by institutional theory (North,
1990). Under the view that institutions are the rules of the game in a society (North,
1990, p. 3), role of government, regulations and laws (e.g., protection of IP rights),
and informal institutions (e.g., culture, social norms) may provide relevant scope to
examine in future studies, thus advancing our understanding of born global
performance drivers and measures.
8.6 Concluding Remarks

Born global firms seem to emerge in growing numbers, worldwide (e.g., Knight &
Cavusgil, 2004). They represent a fascinating type of firm due to their unique
304
features which manifest in early and rapid internationalisation. This study examined
the determinants and measurement of international performance for born global firms.
The key findings from this study relate to the importance of an international
entrepreneurial orientation for achieving superior international performance for born
globals. In addition, a strong focus on product/service quality and adopting a
competitor orientation were found to be antecedents of better international
performance for born global firms. Firm size and entry mode tend to also play a
critical role in explaining variations in international performance. The importance of
customer engagement skills, positioning as a global company rather than an
exporter, being there in the markets, and attending international trade were key
features of the qualitative interviews.
In terms of international performance measures, born global firms placed generally

more importance on financial-based measures as compared to operational or other
indicators. The study also found empirical evidence that born globals tended to have
better international performance as compared to non-born global firms.
Overall, the study suggests that there are different determinants and measures of
international performance between born global and non-born global firms. The thesis
highlights the suitability of an integrated, holistic approach to studying born global
firms. This implies that an integrated approach with a mixed methods design and
incorporation of additional factors (e.g., born global entry modes, industry sector)
can be efficient mechanisms to obtain rigorous and comprehensive findings.
As indicated in Chapter 1, the study of international performance drivers and

measurements for born global firms is in its relative infancy. Given the developments
in the global business environment in terms of decline in trade barriers, growing
numbers of free trade agreements, and technological advances in communications
and logistics, born global firms are likely to increase in number and importance. The
field of born global firms and international performance is, by its very nature, a
dynamic topic. This should present an exciting research area for academics, and
should be of great interest to policymakers and managers alike.
305
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Zou, S., Taylor, C. R., & Osland, G. E. (1998). The EXPERF scale: A cross-national
generalized export performance measure. Journal of International Marketing,
6(3), 37-58.
326
Zucchella, A., & Palamara, G. (2006). Niche strategy and export performance. In S.
Zou (Ed.), Advances in International Marketing (Vol. 17): Emerald.
327
Appendix
APPENDIX A: Cover Letter for Interview3
3
Victoria University of Wellington Human Ethics approval obtained in June 2009, Ref: RM 16734
328
Appendix
APPENDIX B: Consent Form for Interview
329
Appendix
APPENDIX C: Interview Questions
330
Appendix
331
Appendix
APPENDIX D: Postal Cover Letter for Survey4
4
Victoria University of Wellington Human Ethics approval obtained in April 2010, Ref: RM 17732
332
Appendix
APPENDIX E: Web-based Survey Instrument5
5
This is the survey for New Zealand firms. The Australian version is essentially the same, but has
been adapted where necessary (e.g., reference to Australian domestic market).
333
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349
Appendix
APPENDIX F: First Email Reminder for Survey
350
Appendix
APPENDIX G: Second Email Reminder for Survey
351
Appendix
APPENDIX H: Factor Analysis
International entrepreneurial orientation: Complete dataset (n=295)
Cumulative variance explained by retained factors: 65.2%
352
Appendix
Product/Service Quality: Complete dataset (n=307)

Cumulative variance explained by retained factor: 77.7%
Board of Directors/Advisory Boards Service Function: Complete dataset (n=170)

353
Appendix
Market orientation: Complete dataset (n=293)

Cumulative variance explained by retained factors: 52.6%
354
Appendix
Learning Orientation: Complete dataset (n=301)

355
Appendix
Leveraging of managements personal networks: Complete dataset (n=309)

International trade shows as networking platform: Complete dataset (n=221)

356
Appendix
Niche strategy: Complete dataset (n=300)

357
Appendix
Foreign market attractiveness: Complete dataset (n=304)

Internationalisation of the market: Complete dataset (n=304)

358
Appendix
International Performance: Complete dataset (n=270)

359
Appendix
Perceived Success: Complete dataset (n=309)

-THE END-
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BORN GLOBAL FIRMS:

AN INTEGRATED ANALYSIS OF THE DETERMINANTS AND

Victoria University of Wellington

The results show that international entrepreneurial orientation and a focus on

My thanks go to the Research Committee at the School of Marketing and

Esther this is for you.

CHAPTER 1: INTRODUCTION ................................................................................. 1

CHAPTER 2: LITERATURE REVIEW ....................................................................... 12

CHAPTER 3: CONCEPTUAL MODEL AND HYPOTHESIS DEVELOPMENT .................. 79

CHAPTER 4: RESEARCH METHODOLOGY ........................................................... 110

CHAPTER 5: QUALITATIVE ANALYSIS................................................................. 136

CHAPTER 6: QUANTITATIVE ANALYSIS .............................................................. 170

CHAPTER 7: DISCUSSION .................................................................................. 247

CHAPTER 8: CONCLUSION ................................................................................ 283

REFERENCES ................................................................................................................................. 306

1.1 Background and Rationale of Study

A comprehensive understanding of the international performance mechanisms of

1.2 Research Objectives and Research Questions

Traditionally, research focus has been placed on studying the internationalisation of

Similarly, the literature on the measurement of international performance for born

1.3 Research Contribution

In addition, the study contributes to the literature in terms of the measurement of

The study also intends to contribute to advancing the entrepreneurship (E)

exploratory interviews and a web-based survey instrument (Tashakkori & Teddlie,

To conclude, the key contributions of the thesis are as follows:

1.4 Research Methodology

1.5 Outline of the Thesis

Chapter 2: Literature Review

Chapter 3: Conceptual Model and Hypothesis Development

Chapter 4: Research Methodology

Chapter 5: Qualitative Analysis

Chapter 6: Quantitative Analysis

Figure 1.1 provides a graphical presentation of the thesis outline.

Figure 1.1: Outline of the Study

Chapter 1: Chapter 2: Chapter 3: Chapter 4:

Chapter 8: Chapter 7: Chapter 6: Chapter 5:

2.1 Definition and Features of Born Globals

Table 2.1: Definitions and Features of Born Globals

Oviatt & At inception Not specified Not specified Not specified

Knight & Within three At least 25%

McAuley Within one Not specified Not supported Not specified

Table 2.1: Definitions and Features of Born Globals Contd

Luostarinen Not specified Over 50% of Partly

Table 2.1: Definitions and Features of Born Globals Contd

internationalisation. In their definition of INVs, Oviatt and McDougall (1994)

Some scholars incorporated the location of the overseas markets in their

In a review of theoretical issues associated with international new ventures, Zahra

features of time/speed and extent/scale of internationalisation. For a detailed

2.1.1 Managerial Global Vision and Management Commitment

The second feature refers to managements commitment to internationalisation. The

Managerial global vision and international orientation provide a contrast between

2.1.2 Niche Strategy

strong dependence of SMEs on large firms towards more interdependence between

2.1.3 Low Commitment Entry Modes

2.1.4 Limited Applicability of Stages Internationalisation Model

psychically distant countries as their international markets (Aspelund et al., 2007;

2.1.5 Usage of Networks and Flexible Organisational Attributes

In comparison, traditional internationalising SMEs tend to rely more on

2.2 Drivers for the Emergence of Born Globals

based technology and developments of new manufacturing technologies, it can be

In addition, there have been vast improvements in communications technology over

Finally, the increasingly elaborate capabilities of people, including the

communicating and understanding foreign languages and cultures is rising. Related

2.3 Born Global Studies