International Entrepreneurship:

Its Ancestors and Its Future

Patricia McDougall-Covin, Ph.D. William L. Haeberle Professor of Entrepreneurship

Director, Institute for International Business

15th Annual McGill International Entrepreneurship Conference

University of Pavia, Italy

How and when did the study of

IE evolve?

What were the evolutions of its ancestors –

International Business and Entrepreneurship?

What are some high potential areas of study

in IE today?

International

Business Entrepreneurship IE

Entrepreneurship - The Early Days

• Primarily within business schools

• Lacked legitimacy

• Difficult to earn tenure with an entrepreneurship

research record

• Authors debated whether to use the “E” word in

papers submitted to top journals

When Were the “Early Days?” 1947 – Harvard offers first course in entrepreneurship

1957 – International Council for Small Business (ICSB) formed, became

USASBE in 1985

1963 – Launch of Journal of Small Business Management

1966 – Kauffman Foundation established

1970 – First entrepreneurship research conference held at Purdue

University

1973 – First international conference on entrepreneurship research held

in Toronto

1974 – Creation of Academy of Management interest group

1975 – Launch of American Journal of Small Business

1981 – First Babson Research Conference

Sources: Cooper , Markman & Niss (2000) and Meyer (2009).

Journey Toward Achieving Legitimacy

Myths are debunked in 1980s

Exposing the Myths of Entrepreneurship

“Entrepreneurs have a certain profile” myth

Exposing the Myths of Entrepreneurship

“All you need is luck” myth

Exposing the Myths of Entrepreneurship

“All you need is money” myth

Exposing the Myths of Entrepreneurship

“Big risk takers ~ gamblers” myth

Journey Toward Achieving Legitimacy

• Division status in AOM – 1987

• Launch of key entrepreneurship journals: – 1985 Journal of Business Venturing

– 1988 AJSB renamed Entrepreneurship Theory and Practice

– 1989 Small Business Economics

• Special issues on entrepreneurship by premiere

journals: – SMJ (1990) on corporate entrepreneurship

– SRF in AMJ (2000) on international entrepreneurship; Zahra, Ireland

& Hitt article awarded AMJ Best Paper

• Doctoral programs emerging in 1990s

Entrepreneurship – Amazing Growth

35 Years Ago

Only 6 universities conducting entrepreneurship programs

Today

> 3,000 U.S. universities offer programs in entrepreneurship

> 1600 universities worldwide with at least one

entrepreneurship course

> 400 endowed chairs/professorships

> 40 refereed journals

Entrepreneurship - As a Field of Research

• Has achieved legitimacy within mainstream academia

• Journal of Business Venturing

– 2011 Impact Factor: 3.062

– JCR Sciences Edition Rank: 13/113 Business

• Several other highly respected academic journals

• Scholars being tenured at top research schools

• Junior scholars may not even recognize the

challenges of the past

Entrepreneurial Revolution

• Entrepreneurship has revolutionized the way we think

and the way business is conducted in every country

– Economic engine driving countries

– Source of job creation

– Source of innovation

– Solution for reducing poverty

We are in the

Golden Age of Entrepreneurship!

Study of International Business

• Similarities and Differences to Entrepreneurship

– Amazing rate of growth

– Many pioneers still active in discipline

– Growth began around one decade earlier

– Less struggle with academic legitimacy

– Concentrated almost solely within business schools

Study of International Business

1956 - Columbia University offers IB course

1959 – AEIB (Association for Education in International

Business) established; later renamed AIB

1963 - Indiana University hosts first conference on

education for IB in U.S.

Significant growth in IB begins in the 1960s

IB - University Education

• Early book was John Fayerwather’s

Management of International Operations (1960),

Fayerwather noted,

– “The book was ahead of its time

commercially. The market was thin and the

book did not go beyond its first printing.”

• Several other books follow but do not go beyond

1st printings

• Late 1960s - IB books began to be reprinted

IB - University Education

• Terpstra(1969) led AEIB study of U.S. business

schools which identified:

– 95 schools offering IB courses or programs

– Total of 510 courses

Study conclusion: “…great increase in number of international

business courses available in American business schools.”

Source: Terpstra, Vern, (1970), University Education for International Business, Journal of International Business, 1 (1), pp. 89-96.

IB - Research

1965 - Columbia Journal of World Business, directed

toward a business audience, not considered

at that time to be receptive to scholarly

articles, not refereed

1970 - Journal of International Business (JIBS)

established by the ADIB, published by

Georgia State University

IB – Research

• Study by Wright (1970, JIBS)

– Defined IB

– Identified # of IB research projects in each year:

• Only 16 IB research projects prior to 1960

• Early 1960s—ranged from 15 to 30 per year

• 1965, 1966, and 1967—accelerated pace with number

approaching 50 per year

• 1968—111 projects known to be underway

• Conclusion: major growth began mid-1960s

– Noted the growing amount of research being done

by European scholars

Source: Wright, R.W., (1970), Trends in International Business Research, Journal of International Business Studies, 1(1), pp. 109-123.

IB – Clearly Successful Discipline

• AIB has 3,186 members in 75 different countries

• Journal of International Business Studies

– 2011 Impact Factor: 3.557

– 5 year Impact Factor: 5.245

– Rank:

• JCR Social Sciences Edition

– 11/113 Business

– 16/166 Management

However …

Peter J. Buckley (2002) asks the question:

“Is the International Business Research

Agenda Running out of Steam?”

Buckley, P. J., (2002) Is the International Business Research Agenda Running Out of Steam? Journal of

International Business Studies, 33(2), pp. 365-373.

Answering Professor Buckley’s Question

• Liesch et al. (Scientometrics, 2011)

answer by a scientometric investigation

of articles published in JIBS

– Observe that IB is “participating

actively in the interdisciplinary

exchange of idea”

IE researchers would agree

First Mentions of IE

• Tomas Otto Kohn – 1988

– Harvard Dissertation

– International Entrepreneurship: Foreign Direct

Investment by Small U.S.-based Manufacturing

Firms

– 1982 data

– Professor at Boston University

First Mentions of IE (cont.)

• Patricia McDougall

– Journal of Business Venturing (1989)

– Defined IE as

…the development of international new ventures or start-

ups that, from their inception, engage in international

business, thus viewing their operating domain as

international from the initial stages of the firm’s operation.

– Narrow definition, excluded established firms

Evolution of IE – Early 1990s

• Giamartino, McDougall & Bird, 1993

(ETP, “IE: The State of the Field”)

- AoM Entrep. Division Internationalization Taskforce-

member survey

- AoM IE Symposium

-Recommended that IE be defined broadly

-Shared consensus--narrowing the scope of IE was

not the right thing to do, at least at the present time

Evolution of IE – Mid 1990s

• Zahra (1993) – broadened the definition of IE

“the study of the nature and consequences of a firm’s

risk-taking and the approaches (including

international start-ups) they follow in the international

arena.”

• Wright & Ricks (1994) – highlighted IE as an emerging

theme for IB researchers

Evolution of IE – Mid 1990s

Focus mainly on INVs

• Oviatt & McDougall (JIBS,1994)

Define INVs as “…a business organization

that, from inception, seeks to derive

significant competitive advantage from the

use of resources and sale of outputs in

multiple countries.”

Focus Is Primarily on INVs

Terminology for INVs

• International New Ventures (INVs)

• Global Start-ups

• Infant Multinationals

• Born Globals -- (Rennie introduced the term,

The McKinsey Quarterly, 1993)

IE Research Honored by AIB

• 2004 JIBS Decade Award for 1994 article

• Award gave legitimacy to IE, especially

among IB scholars

• IB researchers became interested in

entrepreneurial firms

International Business Focus – Up to mid 1990s

Source: Adapted from Shaker Zahra presentation, AIB Conference, Sweden, 2005.

Stage Theory

Dominated

The

Literature

Source: Shaker Zahra’s presentation slide, AIB Conference, Sweden, 2005.

The New World of International New Ventures

Source: Adapted from Shaker Zahra’s presentation

slide, AIB Conference, Sweden, 2005.

International Entrepreneurship Research

• Integrated IB & entrepreneurship research

• Impact on IB research

– Questioned internationalization theories

– Changed the conversation from just

elephants to elephants & gazelles

• Impact on entrepreneurship research

– Definitional shift from research in a non-

U.S. setting to cross-border activity

IE Research Today

• Jones, Coviello & Tang (2011) identified 357 IE

journal articles published 1989-2009; they excluded

SMEs, single case studies, literature reviews,

commentaries, introductions to special issues

• Likely >500 IE peer-reviewed journal articles and

many book chapters & conference papers

• Since 2005, at least 10 different journals have

published special issues or forums on IE

IE is more than just study of INVs/Born Globals

Evolution of IE

• From a Narrow Definition

– “…the development of international new ventures or start-

ups that, from their inception, engage in international

business, thus viewing their operating domain as

international from the initial stages of the firm’s operation.” – (McDougall,1989)

• To a Big Tent

– “The discovery, enactment, evaluation, and exploitation of

opportunities—across national borders—to create future

goods and services.” – (Oviatt & McDougall, 1995)

Opportunity – International Corporate

Entrepreneurship (IEO)

• Does “being entrepreneurial” in an IE context

imply the presence of entrepreneurial

dimensions not currently emphasized in the

EO conversation?

• What is the relationship between EO and the

dimensions of national culture?

Opportunity - Effectuation

• As an entrepreneur gains experience and knowledge in the

international marketplace, does his/her effectual logic change, and

if so, how?

• An overarching principle of effectuation is to control the future so

that one does not have to predict it. Internationalization provides

an additional layer of complexity, uncertainty, and unpredictability

to business.

– What are these complexities and uncertainties?

– How are these similar or different from the domestic context?

– How do effectual entrepreneurs deal with these uncertainties

and complexities?

Inspiration source : Manuel Serapio

Opportunity - Effectuation

• Comparative studies

– How are effectual entrepreneurs similar or different in

different countries and national cultural contexts?

– Are people from national cultures or subcultures that are

high in Hofstede's uncertainty avoidance dimension likely to

exhibit a greater propensity for causal entrepreneurial

behavior or effectual entrepreneurial behavior?

– Are people from national cultures or subcultures that are

high in Hofstede's collectivistic dimension more likely to

embrace effectual principles, such as the crazy quilt

principle?

Inspiration source: Manuel Serapio

Opportunity: Interfacing with MNCs

Gridsum

HQ: China

Founded: 2005

Employees:

<150

Microsoft

HQ: USA

Founded: 1975

Employees:

>90,000

Gridsum joins the Microsoft Partner Network

Slide adapted from and courtesy of Shameen Prashantham, AIB 2012 Conference, Global Entrepreneurial

Ecosystems: The Interface between Multinationals and New Ventures.

Opportunity: Interfacing with MNCs

• How can the entrepreneurial firm retain its innovative

spirit when dancing with a gorilla?

• How to choose a MNC partner?

• What structure of investment best protects the

entrepreneurial firm from becoming a captive?

• How do network ties between an INV and a MNC

influence the relationship?

• How can the entrepreneur manage the risks of an

asymmetric relationship?

Inspiration Source: AIB 2012 Conference, Global Entrepreneurial Ecosystems: The Interface

between Multinationals and New Ventures, (Shameen Prashantham and Charles Dhanaraj

organizers).

Opportunity: Knowledge and Learning

• Are there more “learning advantages of

newness” in emerging markets than

developed markets?

• As entrepreneurial firms grow are there

ways for them to avoid learning stagnation

and myopia?

Opportunity: Diaspora and Returnee

Entrepreneurs

• What cognitive processes do returnee entrepreneurs

use to identify opportunities when returning to their

home countries?

• How do diaspora assemble resources in their pursuit

of an entrepreneurial opportunity?

• Does a mass wave of diaspora influence

entrepreneurial activity in a country?

• How do diaspora/returnee entrepreneurs assemble

their founding teams?

Opportunity: Comparative

Entrepreneurial Internationalization

• Identified by Jones, Coviello & Tang, JBV, 2011 as

promising area of study

• Accounts for 23 articles (7.1%) in their literature review

• Focuses on comparing cross-border entrepreneurship

across countries or cultures

• Potential research questions:

– Does the importance of networks for entrepreneurial firms in

emerging economies vs. developing economies vary for

entrepreneurial firms engaged in cross-border activity?

– How does institutional theory influence the differences in

cross-border entrepreneurial activity across different

countries?

Opportunities – Social Entrepreneurship

Muhammad Yunus Nobel Prize Winner, 2006

Opportunity: Social Entrepreneurship

Caveat: Does it meet the definition of IB or is it

domestic social entrepreneurship?

• How do governance structures social ventures

differ from for-profit entrepreneurial organizations?

• What prior work experiences of the entrepreneur

influence the success of the social venture?

• Are there differences in how males and females

identify opportunities for social ventures? In their

motivations? In their success?

Opportunity – Cross-disciplinary Teams

• Studies tend to be IB- or entrepreneurship-centric

– IB & entrepreneurship scholars

– Other business disciplines, e.g., finance,

marketing, HR

– Disciplines outside business school, e.g.,

geography, economics, sociology, etc.

Questions?

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