Hostname: page-component-8448b6f56d-wq2xx Total loading time: 0 Render date: 2024-04-19T00:08:35.369Z Has data issue: false hasContentIssue false
  • English
  • Français

International New Ventures from Emerging Economies: Network Connectivity and Legitimacy Building

Published online by Cambridge University Press:  19 August 2019

Shameen Prashantham ,
K Kumar  and
Sumelika Bhattacharyya
Shameen Prashantham*
Affiliation:
China Europe International Business School (CEIBS), China
K Kumar
Affiliation:
Indian Institute of Management Bangalore, India
Sumelika Bhattacharyya
Affiliation:
IESE Business School, Spain
*
Corresponding author: Shameen Prashantham (sprashantham@ceibs.edu)
Get access Rights & Permissions [Opens in a new window]

Abstract

We develop an integrative perspective on the role of coethnic ties and ties with foreign multinational enterprises (MNEs) – normally studied in isolation of each other – on the perceived legitimacy of international new ventures (INVs) from emerging economies. Building on the notions of people (interpersonal diaspora ties) and pipelines (interorganizational MNE ties) in Lorenzen and Mudambi's connectivity theory of clusters, we argue that these could contribute to the focal INV's internal and external legitimacy, respectively, as it seeks to upgrade its capabilities. We go a step further by highlighting people within pipelines – coethnic managers working in foreign MNEs – as a potentially important catalyst of the focal INV's cross-border legitimacy. Using an illustration of an INV from Bangalore, we note that India offers a fruitful setting – and one that is distinct from China – for future INV research into the role of people, pipelines and, in particular, people within pipelines.

摘要

我们发展了一个整合的观点，解释同种族联结和与海外跨国公司的联结—在已有研究中普遍被分开考察的两种联结—对于来自新兴经济的国际新企业的合法性的作用。我们认为，Lorenzen和Mudambi的集群连接理论中的人（人际的侨民联结）和管道（组织间的跨国公司联结）的理念，可以分别有助于国际新企业在寻求提升能力过程中的内部和外部合法性。我们进一步说明管道中的人—在外国跨国公司中工作的同种族经理人—可以成为促进国际新企业跨境合法性的潜在重要人物。我们以班加罗尔的一家国际新企业为例，说明印度为未来国际新企业研究中探讨人、管道、尤其是管道中的人，提供了一种不同于中国的丰富场景。

Аннотация

В рамках комплексного подхода, мы изучаем общее влияние этнических связей и связей с иностранными многонациональными предприятиями (МНП), которые обычно изучаются по отдельности, на воспринимаемую легитимность интернациональных новых предприятий (ИНП) из стран с развивающейся экономикой. На основании представления о людях (межличностные связи внутри диаспоры) и системах коммуникаций (межорганизационные связи между МНП) в теории соединения кластеров Лоренцена и Мудамби, мы утверждаем, что эти связи могут способствовать соответственно внутренней и внешней легитимности ИНП, по мере того, как ИНП стремится к модернизации своих возможностей. Мы делаем еще один шаг вперед, подчеркивая роль людей в системах коммуникаций – менеджеров из одной этнической группы, которые работают в иностранных МНП, – в качестве потенциально важного катализатора трансграничной легитимности ИНП. На примере ИНП из Бангалора, мы отмечаем, что Индия представляет богатый материал, отличный от Китая, для будущих исследований по ИНП в отношении роли людей, систем коммуникаций и, в особенности, людей внутри систем коммуникаций.

Resumen

Desarrollamos una perspectiva integral del rol de los lazos co-étnicos y los lazos con las empresas multinacionales (EMN) -normalmente estudiados de forma aislada – en la legitimidad percibida de las nuevas empresas internacionales (INV) de las economías emergentes. Sobre la base de las nociones de gente (los lazos interpersonales de la diáspora) y conductos (los lazos inter-organizacionales de las EMN) en la teoría de conectividad de clústeres de Lorenzen y Mudambi, discutimos que estos pueden contribuir a la legitimidad interna y externa de la INV central, respectivamente, dado que busca mejorar sus capacidades. Vamos un paso más allá resaltando la gente en los conductos -gerentes de la misma etnia trabajando en EMN extranjeras- como un catalizador importante de la legitimidad transfronteriza de la INV central. Usando una ilustración de una INV de Bangalore, notamos que India ofrece un entorno fructífero -y uno que es distinto de China- para futuras investigaciones sobre el papel de la gente, los conductos, y en particular, la gente en los conductos.

Keywords

business strategyentrepreneurshipIndiainternational entrepreneurshipinternational new venturelegitimacyorganizational theorysocial networks商务策略创业印度国际创业国际新企业合法性组织理论社会网络стратегия ведения бизнесапредпринимательствоИндиямеждународное предпринимательствоинтернациональное новое предприятиелегитимностьорганизационная теориясоциальные связиestrategia empresarialemprendimientoIndiaemprendimiento internacionalnuevas empresas multinacionaleslegitimidadteoría organizacionalredes sociales
Type
Special Issue: The Innovation and Entrepreneurship Ecosystem in India
Information
Management and Organization Review , Volume 15 , Special Issue 3: The Innovation and Entrepreneurship Ecosystem in India , September 2019 , pp. 615 - 641
Copyright
Copyright © The International Association for Chinese Management Research 2019 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Accepted by: Guest Editors Suresh Bhagavatula and Ram Mudambi, and Deputy Editor Johann Peter Murmann

References

REFERENCES

Alvarez, S. A., & Barney, J. B. 2001. How entrepreneurial firms can benefit from alliances with large partners. Academy of Management Executive, 15(1): 139–148.Google Scholar
Arora, A., Arunachalam, V. S., Asundi, J., & Fernandes, R. 2001. The Indian software services industry. Research Policy, 30(8): 1267–1287.Google Scholar
Armanios, D. E., Eesley, C. E., Li, J., & Eisenhardt, K. M. 2017. How entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources. Strategic Management Journal, 38(7): 1373–1390.Google Scholar
Ashforth, B. E., & Gibbs, B. W. 1990. The double-edge of organizational legitimation. Organization Science, 1(2): 177–194.Google Scholar
Athreye, S. S. 2005. The Indian software industry and its evolving service capability. Industrial and Corporate Change, 14(3): 393–418.Google Scholar
Baum, J. A. C., Calabrese, T., & Silverman, B. S. 2000. Don't go it alone: Alliance network composition and startups' performance in Canadian biotechnology. Strategic Management Journal, 21(3): 267–294.Google Scholar
Bitektine, A. 2011. Toward a theory of social judgments of organizations: The case of legitimacy, reputation, and status. Academy of Management Review, 36(1): 151–179.Google Scholar
Cano-Kollmann, M., Cantwell, J., Hannigan, T. J., Mudambi, R., & Song, J. 2016. Knowledge connectivity: An agenda for innovation research in international business. Journal of International Business Studies, 47(3): 255–262.Google Scholar
Cantwell, J. A., & Mudambi, R. 2011. Physical attraction and the geography of knowledge sourcing in multinational enterprises. Global Strategy Journal, 1(3–4): 206–232.Google Scholar
Ciravegna, L., Lopez, L., & Kundu, S. 2014. Country of origin and network effects on internationalization: A comparative study of SMEs from an emerging and developed economy. Journal of Business Research, 67(5): 916–923.Google Scholar
Choudhury, P. 2016. Return migration and geography of innovation in MNEs: A natural experiment of knowledge production by local workers reporting to return migrants. Journal of Economic Geography, 16(3): 585–610.Google Scholar
Contractor, F. J., Hsu, C.-C., & Kundu, S. K. 2005. Explaining export performance: A comparative study of international new ventures in Indian and Taiwanese software industry. MIR: Management International Review, 45(3): 83–110.Google Scholar
Coviello, N. E. 2006. The network dynamics of international new ventures. Journal of International Business Studies, 37(5): 713–731.Google Scholar
Deng, Z., Jean, R.-J. B., & Sinkovics, R. R. 2018. Rapid expansion of international new ventures across institutional distance. Journal of International Business Studies, 49(8): 1010–1032.Google Scholar
Dirks, K. T., & Ferrin, D. L. 2002. Trust in leadership: Meta-analytic findings and implications for research and practice. Journal of Applied Psychology, 87(4): 611–628.Google Scholar
Doz, Y. L., Santos, J., & Williamson, P. 2001. From global to metanational: How companies win in the knowledge economy. Boston, MA: Harvard Business Press.Google Scholar
Drori, I., & Honig, B. 2013. A process model of internal and external legitimacy. Organization Studies, 34(3): 345–376.Google Scholar
Filatotchev, I., Liu, X., Buck, T., & Wright, M. 2009. The export orientation and export performance of high-technology SMEs in emerging markets: The effects of knowledge transfer by returnee entrepreneurs. Journal of International Business Studies, 40(6): 1005–1021.Google Scholar
Fisher, G., Kuratko, D. F., Bloodgood, J. M., & Hornsby, J. S. 2017. Legitimate to whom? The challenge of audience diversity and new venture legitimacy. Journal of Business Venturing, 32(1): 52–71.Google Scholar
Gawer, A. 2014. Bridging differing perspectives on technological platforms: Toward an integrative framework. Research Policy, 43(7): 1239–1249.Google Scholar
Ghemawat, P., & Vantrappen, H. 2014. Are CEOs really India's leading export? Harvard Business Review. Available from URL: https://hbr.org/2014/03/are-ceos-really-indias-leading-exportGoogle Scholar
Goerzen, A. 2017. Small firm boundary-spanning via bridging ties: Achieving international connectivity via cross-border inter-cluster alliances. Journal of International Management, 24(2): 153–164.Google Scholar
Hitt, M. A., Lee, H.-U., & Yucel, E. 2002. The importance of social capital to the management of multinational enterprises: Relational networks among Asian and Western firms. Asia Pacific Journal of Management, 19(2–3): 353–372.Google Scholar
Johanson, J., & Vahlne, J. E. 2009. The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership. Journal of International Business Studies, 40(9): 1411–1431.Google Scholar
Kane, A. A., & Levina, N. 2017. ‘Am I still one of them?’: Bicultural immigrant managers navigating social identity threats when spanning global boundaries. Journal of Management Studies, 54(4): 540–577.Google Scholar
Katila, R., Rosenberger, J. D., & Eisenhardt, K. M. 2008. Swimming with sharks: Technology ventures, defense mechanisms and corporate relationships. Administrative Science Quarterly, 53(2): 295–332.Google Scholar
Khoury, T. A., Junkunc, M., & Deeds, D. L. 2013. The social construction of legitimacy through signaling social capital: Exploring the conditional value of alliances and underwriters at IPO. Entrepreneurship Theory and Practice, 37(3): 569–601.Google Scholar
Kiss, A. N., Danis, W. M., & Cavusgil, S. T. 2012. International entrepreneurship research in emerging economies: A critical review and research agenda. Journal of Business Venturing, 27(2): 266–290.Google Scholar
Klepper, S., & Sleeper, S. 2005. Entry by spinoffs. Management Science, 51(8): 1291–1306.Google Scholar
Krishnan, R. T., & Prashantham, S. 2018. Innovation in and from India: The who, where, what, and when. Global Strategy Journal, in press.Google Scholar
Kumaraswamy, A., Mudambi, R., Saranga, H., & Tripathy, A. 2012. Catch-up strategies in the Indian auto components industry: Domestic firms’ responses to market liberalization. Journal of International Business Studies, 43(4): 368–395.Google Scholar
Kundu, S. K., & Katz, J. A. 2003. Born-international SMEs: BI-level impacts of resources and intentions. Small Business Economics, 20(1): 25–47.Google Scholar
Lee, K., Park, T. Y., & Krishnan, R. T. 2014. Catching-up or leapfrogging in the Indian IT service sector: Windows of opportunity, path-creating, and moving up the value chain. Development Policy Review, 32(4): 495–518.Google Scholar
Lin, Z., Yang, H., & Arya, B. 2009. Alliance partners and firm performance: Resource complementarity and status association. Strategic Management Journal, 30(9): 921–940.Google Scholar
Lorenzen, M., & Mudambi, R. 2013. Clusters, connectivity and catch-up: Bollywood and Bangalore in the global economy. Journal of Economic Geography, 13(3): 501–534.Google Scholar
Lorenzen, M., & Mudambi, R. 2015. Clusters and global innovation: The role of connectedness and connectivity. In Archibugi, D. & Fillpetti, A. (Eds.), The handbook of global science, technology, and innovation: 212–227. Toronto: Wiley-Blackwell.Google Scholar
Madhok, A., & Keyhani, M. 2012. Acquisitions as entrepreneurship: Asymmetries, opportunities, and the internationalization of multinationals from emerging economies. Global Strategy Journal, 2(1): 26–40.Google Scholar
Manolova, T. S., Manev, I. M., & Gyoshev, B. S. 2010. In good company: The role of personal and inter-firm networks for new-venture internationalization in a transition economy. Journal of World Business, 45(3): 257–265.Google Scholar
Meyer, J. W., & Rowan, B. 1977. Institutionalized organizations: Formal structure as myth and ceremony. American Journal of Sociology, 83(2): 340–363.Google Scholar
Mudambi, R. 2008. Location, control and innovation in knowledge-intensive industries. Journal of Economic Geography, 8(5): 699–725.Google Scholar
Mudambi, R., & Zahra, S. A. 2007. The survival of international new ventures. Journal of International Business Studies, 38(2): 333–352.Google Scholar
Musteen, M., Datta, D. K., & Francis, J. 2014. Early internationalization by firms in transition economies into developed markets: The role of international networks. Global Strategy Journal, 4(3): 221–237.Google Scholar
Nanda, R., & Khanna, T. 2010. Diasporas and domestic entrepreneurs: Evidence from the Indian software industry. Journal of Economics & Management Strategy, 19(4): 991–1012.Google Scholar
Pant, A., & Ramachandran, J. 2012. Legitimacy beyond borders: Indian software services firms in the United States, 1984 to 2004. Global Strategy Journal, 2(3): 224–243.Google Scholar
Patibandla, M., & Petersen, B. 2002. Role of transnational corporations in the evolution of a high-tech industry: The case of India's software industry. World Development, 30(9): 1561–1577.Google Scholar
Podolny, J. M. 2001. Networks as the pipes and prisms of the market. American Journal of Sociology, 107(1): 33–60.Google Scholar
Portes, A. 1998. Social capital: Its origins and applications in modern sociology. Annual Review of Sociology, 24(1): 1–24.Google Scholar
Prashantham, S. 2015. Born globals, networks, and the large multinational enterprise: Insights from Bangalore and beyond. London, UK: Routledge.Google Scholar
Prashantham, S., & Birkinshaw, J. 2008. Dancing with gorillas: How small companies can partner effectively with MNCs. California Management Review, 51(1): 6–23.Google Scholar
Prashantham, S., & Dhanaraj, C. 2015. MNE ties and new venture internationalization: Exploratory insights from India. Asia Pacific Journal of Management, 32(4): 901–924.Google Scholar
Prashantham, S., Dhanaraj, C., & Kumar, K. 2015. Ties that bind: Ethnic ties and new venture internationalization. Long Range Planning, 48(5): 317–333.Google Scholar
Pruthi, S. 2014. Social ties and venture creation by returnee entrepreneurs. International Business Review, 23(6): 1139–1152.Google Scholar
Puthusserry, P. N., Child, J., & Rodrigues, S. B. 2014. Psychic distance, its business impact and modes of coping: A study of British and Indian partner SMEs. Management International Review, 54(1): 1–29.Google Scholar
Putnam, R. D., & Goss, K. 2002. Introduction. In Putnam, R. D. (Ed.), Democracies in flux: The evolution of social capital in contemporary society: 3–19. New York: Oxford University Press.Google Scholar
Ramamurti, R. 2012. What is really different about emerging market multinationals? Global Strategy Journal, 2(1): 41–47.Google Scholar
Rao, R. S., Chandy, R. K., & Prabhu, J. C. 2008. The fruits of legitimacy: Why some new ventures gain more from innovation than others. Journal of Marketing, 72(4): 58–75.Google Scholar
Roberts, M. J., & Beamish, P. W. 2017. The scaffolding activities of international returnee executives: A learning based perspective of global boundary spanning. Journal of Management Studies, 54(4): 511–539.Google Scholar
Saxenian, A. 2005. From brain drain to brain circulation: Transnational communities and regional upgrading in India and China. Studies in Comparative International Development (SCID), 40(2): 35–61.Google Scholar
Saxenian, A. 2006. The new argonauts: Regional advantage in a global economy, Boston, MA: Harvard University Press.Google Scholar
Schotter, A. P., Mudambi, R., Doz, Y. L., & Gaur, A. 2017. Boundary spanning in global organizations. Journal of Management Studies, 54(4): 403–421.Google Scholar
Shane, S., & Cable, D. 2002. Network ties, reputation, and the financing of new ventures. Management Science, 48(3): 364–381.Google Scholar
Sonderegger, P., & Täube, F. 2010. Cluster life cycle and diaspora effects: Evidence from the Indian IT cluster in Bangalore. Journal of International Management, 16(4): 383–397.Google Scholar
Stuart, T. E. 1998. Network positions and propensities to collaborate: An investigation of strategic alliance formation in a high-technology industry. Administrative Science Quarterly, 43(3): 668–698.Google Scholar
Stuart, T. E., Hoang, H., & Hybels, R. C. 1999. Interorganizational endorsements and the performance of entrepreneurial ventures. Administrative Science Quarterly, 44(2): 315–349.Google Scholar
Suchman, M. C. 1995. Managing legitimacy: Strategic and institutional approaches. Academy of Management Review, 20(3): 571–610.Google Scholar
Suddaby, R., Bitektine, A., & Haack, P. 2017. Legitimacy. Academy of Management Annals, 11(1): 451–478.Google Scholar
Suddaby, R., & Greenwood, R. 2005. Rhetorical strategies of legitimacy. Administrative Science Quarterly, 50(1): 35–67.Google Scholar
Terjesen, S., O'Gorman, C., & Acs, Z. 2008. Intermediated mode of internationalization: New software ventures in Ireland and India. Entrepreneurship and Regional Development, 20(1): 89–109.Google Scholar
Uzzi, B. 1997. Social structure and competition in interfirm networks: The paradox of embeddedness. Administrative Science Quarterly, 42(2): 35–67.Google Scholar
Vandaie, R., & Zaheer, A. 2014. Surviving bear hugs: Firm capability, large partner alliances, and growth. Strategic Management Journal, 35(4): 566–577.Google Scholar
Varma, S., Nayyar, R., & Bansal, V. 2016. What drives precocity? A study of Indian technology-intensive firms. Journal of East-West Business, 22(4): 242–269.Google Scholar
Yamakawa, Y., Peng, M. W., & Deeds, D. L. 2008. What drives new ventures to internationalize from emerging to developed economies? Entrepreneurship Theory and Practice, 32(1): 59–82.Google Scholar
Zhang, X., Ma, X., Wang, Y., Li, X., & Huo, D. 2016. What drives the internationalization of Chinese SMEs? The joint effects of international entrepreneurship characteristics, network ties, and firm ownership. International Business Review, 25(2): 522–534.Google Scholar
Zhou, L., Barnes, B. R., & Lu, Y. 2010. Entrepreneurial proclivity, capability upgrading and performance advantage of newness among international new ventures. Journal of International Business Studies, 41(5): 882–905.Google Scholar
Zimmerman, M. A., & Zeitz, G. J. 2002. Beyond survival: Achieving new venture growth by building legitimacy. Academy of Management Review, 27(3): 414–431.Google Scholar