Born Globals or Born Regionals? A Study of 32 Early Internationalizing SMEs

Abstract

Is a born-global strategy reflective of high performance or are there merits in a regional strategy? In studying a sample of 32 internationalizing small-and medium-sized enterprises (SMEs), we find that many of the early internationalizing firms that formally meet the accepted “born-global criteria” are actually regional. With this concept as a starting point, this study aims to contribute to the literature on early internationalizing firms by comparing how born globals (BGs) and born regionals (BRs) differ in terms of the liability of foreignness, networking activities and performance. Our results indicate that both liability of foreignness and knowledge development in networks is more challenging for BGs than for BRs, and for this reason, BRs are likely to perform better than BGs. Hence, we identify a “born global disadvantage” stemming from a lack in the capacity of acquiring relevant foreign-market knowledge and tackling foreign-market institutions. The implications of the study highlight the need for researchers and practitioners to be more careful when using the concept of BG and to acknowledge that differences do exist between regional and global business strategies.

Citation

Melén Hånell, S., Nordman, E.R. and Tolstoy, D. (2019), "Born Globals or Born Regionals? A Study of 32 Early Internationalizing SMEs", Tulder, R.V., Verbeke, A. and Jankowska, B. (Ed.) International Business in a VUCA World: The Changing Role of States and Firms (Progress in International Business Research, Vol. 14), Emerald Publishing Limited, Leeds, pp. 289-308. https://doi.org/10.1108/S1745-886220190000014016