Understanding International Entrepreneurship Challenges & Opportunities
Three Rawls College researchers explore why it is harder to internationalize new ventures in and between some countries than others.
Jacob Gordon | November 18, 2022
- International entrepreneurship research focuses on “international frictions” that impact ventures that operate across national borders
- The friction-based model explores the difficulties of international entrepreneurship in and between some countries than others.
With the continued globalization of business, the relationships within and between nations impact an entrepreneur's ability to create an international venture. However, in the field of international entrepreneurship (IE) research, there has been a lack of explanation for the way international relations shape entrepreneurship.
These gaps are addressed in “Momentum for Entrepreneurial Internationalization: Friction at the Interface between International and Domestic Institutions,” which was published in a recent issue of Journal of Business Venturing, a premier journal in the field of entrepreneurship.
The article was written by a group of researchers, including three from the Jerry S. Rawls College of Business: Wei Hua, a doctoral student in the Area of Management; Ronald Mitchell, professor of entrepreneurship and Jean Austin Bagley Regents Chair in Management; and Benjamin Mitchell, assistant professor of practice of ISQS.
“Since 2017, politicians, businesspeople and scholars have all been talking about the ongoing ‘trade war' and the decoupling that is happening between some major countries, economies and organizations due to international frictions,” said Hua.
For the authors, what sets IE research apart from other forms of entrepreneurial research is the focus on the international frictions that result from differences among institutions and policies across borders.
“This framing of international entrepreneurship is noteworthy,” wrote the authors, “especially the focus on friction between institutions that arises from both crossing borders and relations that are international in nature.”
Creating a Friction-Based Model
The authors created a friction-based model to explore how international frictions impact the momentum entrepreneurs need to set up ventures in other countries.
The model identified four distinct ways a country's ability to cooperate with an entrepreneur's home country and the country's affinity for entrepreneurship affect entrepreneurial internationalization:
- Institutionalized Drag: a country is less cooperative and less entrepreneurial, and this friction hinders entrepreneurship momentum
- Institutionalized Traction: a country is less cooperative but more entrepreneurial, and this friction helps entrepreneurship momentum
- Institutionalized Slippage: a country is more cooperative but less entrepreneurial, and this lack of friction hinders entrepreneurship momentum
- Institutionalized Glide: a country is more cooperative and more entrepreneurial, and this lack of friction helps entrepreneurship momentum
The model then identifies strategies as to how countries can maintain, create, or transform the institutions and policies that can enable momentum for entrepreneurial internationalization.
Impacts for Entrepreneurs and Researchers
The model has significant meaning for entrepreneurs looking to create ventures in other countries and for the IE research community itself.
“Recent escalations of economic and even military conflicts among states point to the critical need to understand the challenges and opportunities behind international entrepreneurship,” wrote the authors.
The research is just as important for informing decision-making by entrepreneurs and policymakers as it is for researchers.
“We hope more entrepreneurship researchers consider the global geo-political context in their research,” said Hua.
The authors see four primary contributions to future research of the friction-based model: friction as an entrepreneurial enable and impediment; entrepreneurial internationalization; institutions and entrepreneurship; entrepreneurial action and transformation.
“We also hope that the effects of frictions in cross-border entrepreneurship can be better identified and managed,” said Hua. “Entrepreneurship scholars may better inform practitioners and the public through our research, which has the potential to improve the prosperity of people all around the world and also has the possibility to help prevent unnecessary international conflicts as cross-border frictions are better managed.”Read the full article
The full article will be available at Science Direct through November 30, 2022.