Venture firms’ internationalization: The case of emerging challengers

Abstract

The contributions of market-seeking and strategic resource-seeking motives to firms’ internationalization have been widely recognized. However, previous studies have paid scant attention to how firms’ strategic behavior regarding capacity-based searches can differ in certain contexts. Thus, little is known about the effect of the relationship between ownership and capacity-based searches on venture firms’ internationalization. Drawing on the behavioral theory of the firm, we identify the relationship between innovation performance feedback and the internationalization of specific venture firm types (i.e., emerging challengers) that are motivated to adopt both slack search and problemistic search. We then further explore the moderating effect of two ownership types (i.e., internal principal and international outsidership) on this relationship. Using a sample of 300 venture firms, our results show that innovation performance feedback is vital in encouraging firms’ internationalization. This relationship is further strengthened by firms’ internal and external ownership competence. The results are verified using a qualitative method, providing triangulation of findings.