The role of home country demand in the internationalization of new ventures

Item Type Journal paper
Abstract

International new ventures (INVs) have been documented to exist all around the world, but the literature is silent on the frequency of such companies in different countries. We contend that the propensity of new ventures to internationalize by forming international partnerships is higher in small-domestic demand countries because they have a greater motivation given their limited local demand. After discussing the methodological challenges in testing this hypothesis, we do such a test by studying alliances in the health segment of the biotech industry in relatively small-domestic demand countries (Australia, Israel, and Taiwan) and by comparing the results with five large-domestic demand countries (UK, Germany, France, US, and Japan). We find that young firms in the countries with smaller domestic demand are at least 3 times more likely to enter into international partnerships than their counterparts in countries with larger domestic demand. We further demonstrate that this difference can primarily be explained by the difference in the size of domestic healthcare markets rather than other underlying opportunity structure related factors.

Authors Murmann, Johann P.; Zeki Ozdemir, Salih & Sardana, Deepak
Journal or Publication Title Research Policy
Language English
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date July 2015
Volume 44
Number 6
Page Range 1207-1225
Number of Pages 18
Publisher DOI 10.1016/j.respol.2015.03.002
Official URL https://www.sciencedirect.com/science/article/pii/...
Contact Email Address peter.murmann@unisg.ch
Depositing User Michele K├Âlbener
Date Deposited 17 Oct 2018 11:58
Last Modified 24 Oct 2018 06:25
URI: https://www.alexandria.unisg.ch/publications/255359

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Citation

Murmann, Johann P.; Zeki Ozdemir, Salih & Sardana, Deepak (2015) The role of home country demand in the internationalization of new ventures. Research Policy, 44 (6). 1207-1225.

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https://www.alexandria.unisg.ch/id/eprint/255359
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