International Market Entry by U.S. Internet Firms: An Empirical Analysis of Country Risk, National Culture, and Market Size (original) (raw)
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2015
Internet firms face somewhat unique challenges when expanding abroad. On what basis do U.S. Internet firms choose the international markets they enter? The authors posit that international market entry decisions are based on balancing perceived risks and returns inherent in a foreign target market. Drawing on a sample of almost 7,000 country entry decisions by 179 U.S. Internet firms, they find that country risk, cultural distance, and uncertainty avoidance reduce the likeli-hood of international market entry, whereas individualism and masculinity increase it. Interna-tional market size, however, moderates these relationships by weakening the negative effects, while strengthening the positive effects.
Assets and Actions: Firm-Specific Factors in the Internationalization of U.S. Internet Firms
Journal of International Business Studies, 2001
By providing a nearly instant connection among parties at opposite corners of the world and enabling a variety of commercial exchanges, the Internet emerged as the technology expected to create a truly global market space. Internet firms faced the challenge of capitalizing on this development. In this paper we examine what firm-specific factors are associated with the propensity of pure U.S.-based Internet firms to enhance their international presence on the Internet by developing country-specific websites. Despite the assertion that all Internet firms are born global, our findings show that the pursuit of internationalization by Internet firms is related to the levels of their intangible assets and strategic activity. Two types of intangible assets-reputation and website traffic-are positively related to the degree of internationalization; so are the levels of competitive and cooperative activity, and the interaction effects between reputation and competitive and cooperative activity. These findings suggest that ideas from both resource-based theory and research on competitive dynamics can contribute to understanding the internationalization of Internet firms.
The Internet and foreign market expansion by firms
MIR: Management International Review, 2002
The Internet has the potential to improve the efficiency of market transactions. By use of the Internet companies can reduce their search costs significantly and increase their ability to respond flexible to new market opportunities as a result of reduced sunk costs. On the basis of internationalization theory and agency/transaction cost theory the paper examines the effects of the Internet on foreign market expansion by firms.
Influences of culture, geography and infrastructure on website localization decisions
Cross Cultural Management: An International Journal, 2012
Purposethe paper examines the role played by culture, geography and infrastructure on European airline's decision to launch market-specific websites. Design/ methodology/ approach-Logistic regression analysis based on 440 observations of home-target country dyads collected from websites of nine European airlines, and supplemented by additional sources of macro level indicators. The unit of analysis is the country dyad. Findingscultural distance between home and target country, geographical distance between home and target country, website traffic volumes originating from target country, demand conditions in target country, and competition intensity in target country all influence the decision to launch local sites. The cultural dimensions of individualism, masculinity, power distance, and uncertainty avoidance, as well as the legal, commercial and IT infrastructures in target countries don't impact the same decision. Research limitations/ implications-the study's findings are limited contextually to B2C eservice models, the airline industry and the European origin. Other industries, business models or regional origin of firms may exhibit different patterns. Originality/valuethe study shifts the research focus from what constitutes website localization into what dictates localization efforts' implementation. Surprising findings suggest that counter to earlier suggestions infrastructural conditions and cultural dimensions' levels in target markets do not predict the launch of local sites, and that geographical distance impact decisions related to the geography neutral medium of the Internet.
An emerging theme in the literature is the role of the Internet and related technologies on small firm internationalisation. Much of the focus of this line of enquiry is on how Internet adoption enables SMEs to enter new overseas markets or improves their international activities and performance by reducing the problems associated with distance, size and scale. However there is also growing evidence that many new firms are embracing Internet technologies from the outset and adopting an e-business format to be global from inception. This paper describes a cross-national study that is currently being conducted in a number of locations including Australia, Europe and New Zealand, using case study methodology. A number of cases from these locations are used to illustrate the emerging findings and more detailed results will also be presented once further analysis has been undertaken.
Canadian Journal of Administrative Sciences / Revue Canadienne des Sciences de l'Administration, 2009
Much of the extant literature focuses on how Internet's potential to enable smaller firms to improve their international activities and performance by reducing problems associated with distance, size and scale. However, there is also growing evidence that many new firms are embracing Internet technologies from the outset and adopting an e-business format to be "global" from inception. This suggests that the Internet can be employed not simply as a tool to improve international performance, but, in many cases, as a core capability that underpins the firms overall international strategy. The main focus of this contribution is on the internationalization strategies of Internet start-ups. Empirical research, involving a case study methodology and thematic analyses, investigates a cross-national sample of Internet start-ups and identifies their chosen internationalization pathways firms. It explores the patterns, pace and drivers of internationalization and the processes involved in order to determine the extent to which the Internet has influenced the firms' international activities, behaviour and overall strategy.
The Internet has the potential to generate international market expansion and future international growth for the firm. However, internationalisation is a complex high-risk decision for the firm, especially for the resource scarce SME. The Internet can assist to reduce the perceived risk associated with strategic decisions in the internationalisation of the firm. However, it is yet to be determined what impact the Internet has on reducing the perceived risk and uncertainty associated with internationalisation. The findings indicate that the Internet's ability to generate valued international market information through the Internet's enhanced communication interaction gives SME's rational analysis in international market growth decisions. In conclusion, the Internet reduces the asymmetry of information that would traditionally exist for SME's in the internationalisation process, which in turn, reduces the perceived risk associated with the internationalisation process of the firm.
2000
Large pure internet firms challenge key assumptions in international business theories. This paper considers the relevance of the eclectic paradigm and 'born global' theories to large purely internet based multinationals. By researching four case studies of firms operating in the Australian market, evidence is found for a need to update the theory. Specifically, there is a need to consider the elevated importance of the consumer as a critical resource. Secondly, these firms operate in a market that is borderless and where market entry is a spectrum. Third, complex networking relationships break down boundaries between internal and external. Theory must be developed to analyse the post-born global firm.
International entrepreneurship in internet-enabled markets
Despite the increasing numbers of businesses that are already using the internet to pursue international opportunities, and the latent potential for such activity from rising internet adoption levels, the international entrepreneurship literature has paid limited attention to the phenomenon. To address this gap, we review past research in international entrepreneurship, as well as the broader fields of entrepreneurship, international business, marketing, management and management information systems, to identify firm-level resources that are associated with the successful pursuit of international opportunities in internet-enabled markets. We identify three such internet-related firm-level resources: online reputation, online technological capabilities, and online brand communities. We develop a propositional inventory of the expected relationships, identify measures expected to be useful to future scholars in this area, and present the implications of our review for future international entrepreneurship research.