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The Internationalization Of New Ventures In A Post Liberalization Era: The Shifting Role Of Industry Concentration

Abrar Ali Saiyed
AMSOM-WP-2017-02-004
abrarali.saiyed@ahduni.edu.in AMRUT MODY SCHOOL OF MANAGEMENT

Abstract

Despite the conscious shift in the last decade towards researching new venture internationalization in the context of emerging economies, little is known regarding the role of external factors such as industry structure. In this paper, we focus in on the relationship between industry concentration and new venture internationalization.  We consider two competing arguments, based on whether emerging economy ventures are driven by opportunistic or necessity-based motives in responding to industry concentration through internationalization. Acknowledging that economic transitions take time, we then argue that the motives, and subsequently the role of industry concentration on new venture internationalization, shift over time following liberalization. Drawing on a panel dataset of new ventures from 67 industries founded in India post-liberalization between 1994 and 2014, our results confirm that the relationship between industry concentration and new venture internationalization shifts gradually from a U-shaped relationship to an inverted U-shaped relationship over this time period.
 

Keywords

International New Ventures, Emerging Markets, Transitional Economy