Start‐ups' Internationalization: The Impact of Business Owners' Management Experience, Start‐up Experience and Professional Network on Export Intensity

• Author: Jonas Debrulle,Johan Maes
• Published date: 01 September 2015
• Date: 01 September 2015
• DOI: http://doi.org/10.1111/emre.12050

Start-ups’ Internationalization: The Impact

of Business Owners’ Management

Experience, Start-up Experience and

Professional Network on Export Intensity

Jonas Debrulle1and Johan Maes

IÉSEG School of Management (LEM-CNRS), France;

Faculty of Economics and Business (FEB), KU Leuven, Belgium

This study investigates the influence of business owner experience (management/start-up) and professional

networking on start-up export intensity. In addition, we assume networking to mediate the experience – export

intensity relationship. Flemish start-ups form this study’s empirical setting. Our results indicate that start-up

export intensity is directly driven by professional networking. Management experience is a positive antecedent of

networking while start-up experience is negatively related to professional networking. All in all, management and

start-up experience connect only indirectly to export intensity, fully mediated by networking. Implications and

opportunities for future research are suggested.

Keywords: export intensity; business owner; experience; professional network

Introduction

The globalization of business and the need of many

countries to support economic growth through accessing

foreign markets have increased the expectations for

small firms of all ages to become internationally active.

This applies even more to firms in small market econo-

mies such as Norway, Denmark, and Belgium (Julien

and Ramangalahy, 2003). The decision to become inter-

nationally active is important, yet difficult and risky for

firms (Eriksson and Chetty, 2003). Nonetheless, organi-

zations proactively strive to internationalize more

rapidly and at an earlier age (Sapienza et al., 2006). A

question that has been intriguing both practitioners and

researchers for quite some time now is how small new

ventures are able to initiate, maintain, and increase their

international activities. This paper’s focus lies on the

depth or intensity of start-ups’ international activity

through exporting.

As suggested by prior work, being internationally suc-

cessful demands from start-ups an effective and efficient

acquisition and management of resources in general, and

knowledge in particular (Burpitt and Rondinelli, 2000;

Armario et al., 2008). These abilities enable new ven-

tures to cope with the typical challenges associated with

internationalization (Coeurderoy et al., 2012), such as

internal coordination problems (Manolova et al., 2002),

liabilities of foreignness (Hymer, 1976; Lu and

Beamish, 2001), and a lack of foreign market knowledge

(Eriksson and Chetty, 2003; Presutti et al., 2007; Yu et

al., 2011). Irrespective of the theoretical framework

adopted to explore the internationalization of new ven-

tures (e.g., process theory versus the new venture theory

of internationalization) (Autio et al., 2000), knowledge,

and the mechanisms to acquire, transfer, and exploit

knowledge, are considered vital sources of international

success and competitive advantage (Oviatt and

McDougall, 2005; Rialp et al., 2005; Yu et al., 2011). It

is, therefore, of key importance to focus on knowledge

resources that enable start-ups to internationalize suc-

cessfully. Within this study, we consider the manage-

ment experience, start-up experience, and professional

network of the start-ups’ business owner(s) to be such

elements. They represent sources of knowledge and/

or knowledge-enabling capabilities that permit and

reinforce the internationalization of new ventures

(Presutti et al., 2007; Sleuwaegen and Onkelinx, 2014).

Correspondence: Jonas Debrulle, IÉSEG School of Management (LEM-

CNRS), 3 Rue de la Digue, 59000 Lille, France. Email: j.debrulle@

ieseg.fr

1The authors are listed alphabetically. Both authors contributed equally

to the study.

European Management Review, Vol. 12, 171–187 (2015)

DOI: 10.1111/emre.12050

© 2015 European Academy of Management

Start-up internationalization is commonly viewed as a

process of opportunity discovery and exploitation, and

we believe the business owners’ experience and profes-

sional network to be vital for both processes. Specifi-

cally, we argue that start-ups’ export intensity is

determined by (1) the knowledge accumulated by the

business owner(s) through management and start-up

experience, and (2) the information provided through

their network of professional and business partners.

In this study, we make three contributions to existing

literature. First, we address the little-researched topic of

internationalization antecedents (Rialp et al., 2005).

By exploring the impact of owner-related knowledge

resources on start-up export intensity, we add to the

understanding of internationalization drivers within

young ventures. Relatively few studies on export inten-

sity have emphasized entrepreneur-related knowledge

resources so far (Robson et al., 2012). Moreover, it is

important to consider multiple owner-related knowledge

resources. Experience alone has been shown to be inad-

equate for start-ups’ international expansion (Presutti

et al., 2007; Fernhaber and Li, 2013). That is why this

study evaluates the value of business owner experience

for start-up internationalization in the context of the

network of professional contacts available to the firm

through the owner. This allows us to examine the impor-

tance of owners’ experience relative to other owner

elements, which is something prior contributions have

generally overlooked (Wheeler et al., 2008). For

instance, inexperienced owners may try to compensate

their lack of experience by expanding and leveraging

their network (Robson et al., 2012). This single example

shows that experience and networking are likely to be

related. Yet, their connection has been largely ignored in

prior empirical work (Robson et al., 2012). In this study,

we develop and test a mediated model allowing for a

better understanding of the interrelatedness of owners’

experience and professional network in the context of

start-up internationalization.

Second, this paper contributes to social capital litera-

ture. Founding team or owner attributes have been sug-

gested as antecedents to social capital before

(Gedajlovic et al., 2013), yet there exists a lack of under-

standing on the mechanisms governing this relation. By

modeling management experience and start-up experi-

ence as drivers of owners’ professional network, we not

only relate them to one another but we also shed light on

the possible differential impact of these antecedents on

networking. Third and following, the mediated model

developed in this study partially uncovers the black box

through which experience indicators (in)directly affect

export intensity (Ganotakis and Love, 2012).

This paper proceeds as follows. We first address

the concepts of start-up internationalization and the

knowledge-based view of the firm. Next, we review the

importance of business owner knowledge within an

international environment and explore how business

owners’ experience and professional network may add

to start-ups’ export intensity. We identify gaps in exist-

ing research and formulate several hypotheses. Third,

we describe our research methodology with a special

focus on sampling procedures, adopted measures, and

statistical procedures. Finally, we present and discuss

our findings and conclude with some caveats and oppor-

tunities for future research.

Internationalization and the

knowledge-based view of the firm

Before the 1990s, the habitat of start-ups was believed to

be nationally restricted. More recently, it has become

obvious that start-ups can be internationally active and

successful (Yli-Renko et al., 2002; Rialp et al., 2005;

Presutti et al., 2007). Intrigued by this remarkable evo-

lution, Rialp et al. (2005) examined 38 studies on inter-

national new ventures and born-global start-ups. They

concluded that the internationalization success of young

ventures that become international at or soon after

founding is triggered by changed market conditions,

recent technological advancements, a growth in impor-

tance of worldwide networking, and an increase in

owner/manager skills and capabilities. This urged Rialp

et al. (2005) and Presutti et al. (2007) to question the

traditional dimensions of the internationalization

process, which date back to the 1970s and 1980s.

According to these authors, it is no longer advised to use

the original interpretation of the internationalization

process, whereby international activities are initiated

late and incrementally in firms’ evolutionary path as a

reaction to unsolicited export offers while building on a

solid domestic footing (Johanson and Vahlne, 1990).

In search of a new perspective, researchers have

employed various theoretical lenses to identify the

unique resources, skills, and capacities of new ventures

that can explain their early international success. For

instance, Peng (2001) and Zahra et al. (2003) build on

the ’resource-based view’ of the firm (Barney, 1991). In

doing so, they link the internationalization pattern of

new ventures to the presence of valuable, rare, imper-

fectly imitable, and non-substitutable resources, such as

technology. In their study on UK technology-based start-

ups, Burgel and Murray (2000) adopt the ‘organizational

capability perspective’, whereby resources available to

the international start-up are contrasted with (foreign)

customer needs. In an attempt to come up with an all-

embracing explicatory perspective, McDougall et al.

(1994), Eriksson et al. (1997), Barkema and Vermeulen

(1998), Autio et al. (2000), and Zahra et al. (2000) draw

on a knowledge-based framework to explain (new)

venture internationalization decisions. Specifically,

these authors make use of the ‘knowledge-based view’

172 J. Debrulle and J. Maes

© 2015 European Academy of Management