Entrepreneurship International New Ventures - Thesis Example

Researchers have attempted to understand why new firms which are comparatively small, would assume the additional ‘risk’ of venturing directly into the international market (McDougall, et al., 2003, p. 60).  Traditional international business theories fail to provide a framework for analyzing and understanding why international entrepreneurs venture out into the global marketplace from inception. This is because traditional international business theories assume that MNEs are large and ‘mature’ businesses (McDougall, Shane, & Oviatt, 1994, p. 469). Oviatt and McDougall (1994) developed a theoretical framework for explaining international entrepreneurship new ventures. The framework explains international new ventures in four ways: the formation of an organization via the “internalization of some transactions”; a “strong reliance on alternative governance structures to access resources”; the “establishment of foreign location advantages,” and the “control of unique resources” (p. 45).

      Since Oviatt and McDougall (1994) developed a framework for understanding and explaining international new ventures, several theoretical perspectives have been developed including the resource-based theory, network theory and transaction costs economics among others (Chang, Jaw & Chiu, 2012). Since the 1990s, entrepreneurial international new ventures have increasingly emerged as among the most significant elements of the global marketplace.  However, understanding why and how entrepreneurial international new ventures are formed is blurred by a lack of harmony in that numerous theoretical frameworks have been used (Zahra & George, 2002).

      This research will contribute to current knowledge by attempting to identify common factors in the literature that help to explain how and why entrepreneurial international new ventures are formed.  In this regard, previous research studies and their theoretical underpinnings will be analyzed for discovering a synthesis of the major elements behind the formation of international entrepreneurship or international new ventures.  Two case studies on international new ventures will also be examined.  The theories espoused in the literature review in previous research studies and the case studies conducted in this paper will be analyzed for identifying linkages between the types of international entrepreneurship and their outcomes.