Determinants Of International New Ventures Performance

With the rise of entrepreneurial economy and the deepening of economic globalization,in the late 1980 s,a new form of enterprise organization called International New Ventures(INVs)which is different from the traditional ones started to be active in the market of western countries.In the 1990 s,the International New Ventures appeared in the domestic market.Unlike traditional international enterprises these companies never thought that borders are obstacles of their development.The company began to operate in international market from the beginning of the establishment.Through effective integration of global resources they got rapid growth and began to compete with some mature enterprises in the international market.From this perspective,the enterprise did not follow the traditional gradual internationalization.This phenomenon puts forward the strong challenge to the traditional theory of internationalization.Although the rise of International New Ventures is not for a long time,but through the literature review,this paper found that development trend of this field has attracted the attention of many scholars.The scholars used different theoretical perspectives in the research of this phenomenon,the driving force for growth,international market entry mode and the determinants of performance of INVs.But from the perspective of the theoretical framework of research,the current academic research in the field is still not mature enough,theory perspective are scattered.Existing literatures are research and analysis based only on one theoretical perspective instead of integrated theoretical framework.This can not reflect interdisciplinary characteristics of international business.Second,from the point of the research methods,the existing literature mostly adopted the qualitative analysis,even if there is the emergency of a small amount of quantitative analysis,they are all empirical test of a research subject and the content based on a single view.The literature utilizing both qualitative and quantitative analysis is very rare.Finally,the research about international market entry mode and the performance of INVs is still a blank:in the domestic academic field,related research is urgently needed.This paper focuses on the evaluation of INVs' performance,namely discussing the measurement of INVs' performance.We specially analyses the determinants of performance.Note that this paper brings performance of INVs into the framework of organizational effectiveness model presented by Venkatraman and Ramanujam(1986),make exploratory analysis of INVs performance determinants by three levels(financial performance,operation performance,and organizational effectiveness performance).The research is based on theoretical research and literature analysis,indicating a problem that the traditional internationalization theory couldn't offer a complete explanation in the research field of INVs.We explore the development and research direction in this field and then conclude the research point according to shortcomings of the theory.What's more,we form a basic theoretical framework and processed elementary experience by case study.Then the theoretical framework and specific assumptions of this paper are determined.Eventually,we make the hypothesis test of questionnaire from 206 INVs of China and drew the conclusions.In a financial performance model,corporate determination on internationalization,consumer-driven,industrial competition driven,promotion-driven of trade fairs and foreign market's attraction share a positive relationship with financial performance,while learning-driven shares a negative relationship with financial performance;in operation performance model,consumer-driven,industrial competition driven and foreign market's attraction share a positive relationship with financial performance,while information-driven of trade fairs shares a negative relationship with financial performance;in organizational performance model,managers' experience and vision,corporate determination on internationalization,consumer-driven,industrial competition driven,quality of products and service,and social network share a positive relationship with organizational performance,while information-driven of trade fairs shares a negative relationship with organizational performance.It should be pointed out that,through the comparison of three kinds of performance model,we found that the niche market strategy has no significant influence on the performance of INVs which is in consistent with the research conclusion drew by Chen et al.(2011).Due to the particularity of the China market,INVs still mainly serve the mass consumer market,rather than a niche market.In addition,a set of elements show positive influence on both three kinds of performance.That is the market competition orientation,including consumer-driven,industrial competition driven,and their influence in three kinds of performance is the biggest of all.It also illustrates the market-driven have decisive effects on the promotion of INVs' performance.Through the theoretical and empirical research we can come to some innovations and contributions in the paper.First,theoretical system is quite complicated.This paper creatively forms firm growth theory,industrial organization theory,international entrepreneurship theory,resource based internationalization theory and internationalization theory of network perspective into an integrated theoretical framework.Then make a theoretical and empirical research on the performance of INVs.We believe that this method expanding the explaining range of current theory,and is more comprehensive,abundant and powerful than before.Secondly,the segmentation of the research objects is much more detailed than before.In existing literature about the performance of INVs there is no segmentation of international performance.This paper innovatively adopted organizational effectiveness model by Venkatraman&Ramanujam(1986)as the basic framework of our research.We divide performance into three groups,financial performance,operation performance and organizational effectiveness performances,discuss and verify the determinates of three performances respectively,finally we obtained three basic concept model.This is the first case in the domestic research.This study through the analysis of refined international startup performance level,further expand the internationalization of international new ventures performance theory and empirical research.By refining the analysis levels of international new ventures'performances,this paper further expand the research scope of INVs' performance.Thirdly,they are the expansion of research goals and thoughts.Current literatures about firm's internationalization performance focused on determinants of export performance.However,economic globalization promoted new ventures rapid internationalization,international market entry mode also gradually diversified,not limited to the export model.This article found that,in addition to low commitment(such as export)international market entry mode,there have been some joint ventures and strategic alliances mode of high commitment in the market.Therefore,only analyzing the determinants of export performance actually fails to reflect the true level of firm's internationalization performance.This article innovatively brings diversified international market entry modes of IN Vs into the analysis framework.We make exploratory analysis on determinants of multi-level international performance of international new ventures.We believe this method extend the research objectives and broaden the ideas in this field.