MNE ties and new venture internationalization: Exploratory insights from India

Who should a new venture ally with in order to enhance its internationalization capabilities? While peer relationships come easily and naturally for most new ventures, interactions with foreign multinational subsidiaries operating in their local environment are complex to build and to sustain. We co...

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Bibliographic Details
Published in:Asia Pacific journal of management 2015-12, Vol.32 (4), p.901-924
Main Authors: Prashantham, Shameen, Dhanaraj, Charles
Format: Article
Language:English
Subjects:
Business and Management
Business combinations
Case studies
Entrepreneurs
Entrepreneurship
Globalization
International
Management
Multinational corporations
Organizational learning
Social capital
Startups
Studies
Subsidiaries
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Summary:Who should a new venture ally with in order to enhance its internationalization capabilities? While peer relationships come easily and naturally for most new ventures, interactions with foreign multinational subsidiaries operating in their local environment are complex to build and to sustain. We contribute to the relational perspective of new venture internationalization by specifically contrasting the role of new venture ties with multinational enterprises (MNEs), from those with other peer firms. We draw on a multi-method study, integrating a quantitative study based on a survey of 102 software firms in India and a longitudinal case analysis of the relationship between an international new venture (INV) and an MNE (Microsoft). We find a positive relationship between local MNE ties and internationalization capability, and a negative relationship between ties with other small firms and internationalization capability. Our post-hoc analysis of the case study serves to shed further light on this, highlighting an important caveat to the relational capital story: building ties with MNEs is necessary but not sufficient for new ventures to internationalize; they require managerial action to exploit the knowledge acquired.
ISSN:0217-4561
1572-9958
DOI:10.1007/s10490-014-9391-y