Abstract

The decision for a young firm to initiate internationalization activities early in its life cycle has many potential advantages and pitfalls (Zahra & George, 2002). Two principal theoretical frameworks provide perspectives regarding this internationalization decision. On the one hand, a process theory approach outlined by Johanson and Vahlne (1977, 1990) suggests that the decision to internationalize is a function of firm-level characteristics and experience. In contrast, the new venture internationalization viewpoint suggests that the decision by young firms to enter foreign markets is a proactive function of that firm’s desire for growth (Oviatt & McDougall, 1994).

A recent theoretical model has suggested that the process and new venture internationalization views are complementary, and that young firm survival and growth outcomes related to foreign market entry can be examined from a capabilities standpoint (Sapienza, Autio, George, & Zahra, 2006). This paper seeks to test four hypotheses proposed by Sapienza et al. (2006) in their model. We hypothesize that the initiation of international entry is negatively related to a firm’s survival but positively related to growth. Additionally, we hypothesize these main effects are moderated by firm age.

Share

COinS