International new ventures (INVs) are a popular mode of entry into foreign markets. INVs, those companies that enter foreign markets at inception, often suffer the two liabilities of newness and foreignness, which may increase the odds of their failure. This paper empirically examines the survival of INVs by comparing them with other sequential modes of international operations (e.g., acquisitions). Data from 275 British firms show that INVs have lower unconditional survival probabilities than other modes of foreign market entry. Our analyses also show that differences in survival probabilities disappear when the firms' competitive strategies are considered.
Bibliographical noteFunding Information:
We acknowledge the financial support of the School of Business at the University of Buckingham and the project support of the UK Department of Trade and Industry (DTI). We thank David Audretsch, Bo Carlsson, Mark Casson, Tom Kniesner, Eric Rasmusen and seminar participants at the DTI, Case Western Reserve University and Indiana University for helpful comments. We also thank three anonymous JIBS reviewers, as well as Arie Y. Lewin, who is instrumental in significantly improving the paper. The usual disclaimer applies.
- Firm survival
- International new ventures
- Multinational firms