Antecedents and outcomes of changes in international strategy: A longitudinal analysis of new ventures

Recent research has shown that the strategic profiles of international and domestic new ventures are significantly different. This growing area of research now challenges the long held belief that firms internationalize in stages as they gain more experience operating in international environments.; Factors such as increasing homogeneity in international markets, increasing efficiency in the areas of international communications and transportation and the near requirement of internationalization in some industries support the internationalization of new firms. The U.S. government has also placed pressure on new and small firms to think globally.; Managers, entrepreneurs and researchers would like to know what firm-level factors support the internationalization of new firms and particularly what factors are associated with the direction of change in firm international strategy. This is important because changes in international strategy are associated with changes in resource commitments to the firm's international operations. As firms change international strategy and increase resource commitments, the risks associated with these operations increases. Thus, having knowledge of which firm level factors are positively associated with the direction of these strategic changes is very valuable.; This study, using the resource-based theory of the firm, presents a model of international strategic change which argues that firm level variables are positively associated with the firm's direction of international strategic change. It is further argued that these variables are positively associated with overall levels of firm internationalization. Finally, a model is presented which argues that changes in international strategy and corresponding organizational changes are positively associated with firm value.; Results from the study suggest that the firm level variables included in this study are not significantly associated with the direction of changes in firms' international strategies. Top management team international experience, R&D intensity and firm location are positively associated with overall firm internationalization, however. Finally, changes in firm international strategy and structure and changes in international strategy, structure and systems are significantly associated with firm market value two years following the last structural or systems change.; Implications for managers, entrepreneurs and researchers are presented. Future research directions are also discussed.