An international ambidexterity model to understand new venture internationalization and growth

Abstract

Research in the international management literature has traditionally studied internationalization processes from an exploitation perspective. This exploitation-focused argument demonstrates an incremental process of international expansion with the internationalization of mature multinational corporations (MNCs). However, the situation is different for international new ventures, which may not have sufficient resources and economies of scale in their domestic countries before starting operations in other countries. After initial internationalization at a young age, international new ventures might choose to go to similar foreign markets to leverage and exploit existing knowledge for growth or they might continue experimenting with less related foreign markets. In this study, I propose that international new ventures benefit from using an ambidextrous strategy for long-term performance employing both exploitation and exploration.

I use both traditional international management literature and international entrepreneur studies to develop the concept of international ambidexterity. I argue that new ventures are able to develop such a capability, defined as the capability to successfully balance international exploitation and exploration activities. This capability is founded on new ventures' initial activities but needs to be further developed and refined through international operations with both incremental and radical approaches. I also propose that the relationship between international ambidexterity and new venture growth is positively moderated by these firms' subsequent activities to explore technological knowledge. In order to theoretically develop and empirically test the concept of the international ambidexterity, I introduce arguments that support certain antecedents to developing this capability.

Results from my analyses show that the benefits associated with international exploration through early internationalization are realized when a firm continues further commitment to exploitation capabilities so they can accomplish ambidexterity learning from narrower scope of international expansion. Additionally, domestic alliances and foreign alliances show significant relationships with new venture's international exploration. Therefore, inter-organizational learning can link to the social capital and network perspectives in international entrepreneurship research; mimetic learning can help investigating the social aspects of international entrepreneurship studies. Further, new ventures should be encouraged to build inter-organizational networks, domestically and internationally to pursue their growth.