Paper 1

Journal of International Business Studies (2023) 54, 1193–1221
ª 2023 The Author(s) All rights reserved 0047-2506/23

www.jibs.net
The born global and international new

venture revisited: An alternative explanation
for early and rapid internationalization
Maria Rumyantseva1 and Abstract

We revisit the empirical origins of a popular research topic: the phenomenon of
Catherine Welch2 early and rapid internationalization. By means of a qualitative case study, we re-
1
examine the samples of firms used in two of the seminal studies on ‘born
Discipline of Strategy, Innovation and
globals’ and ‘international new ventures’. A dominant pattern characterizing
Entrepreneurship, The University of Sydney
Business School, The University of Sydney, Sydney,
both samples, but not reported by the original authors, was that incumbent
NSW 2006, Australia; 2 Trinity Business School, organizations were involved in the founding of the new ventures. Given this
Trinity College Dublin, University of Dublin, unexpected finding, we empirically investigate how being reproduced from
Dublin 2, Ireland pre-existing organizations affected the internationalization pathways of the
new ventures, collecting data that extend beyond the scope and time period
Correspondence: examined in the original studies. Our analysis shows how the evolution of the
C Welch, Trinity Business School, Trinity relationship between old and new generations of organizations is critical to
College Dublin, University of Dublin,
explaining how new venture internationalization proceeded. Although the
Dublin 2, Ireland
e-mail: [email protected]
incumbent’s presence prior to foundation enabled early and possibly even rapid
internationalization, it was also the source of discontinuity and instability. Based
on these findings, we offer a relational perspective on the incumbent’s
involvement in founding and internationalizing new ventures. Our study
illustrates how applying the methodology of a case study revisit can generate
new theoretical insights in existing research fields.
Journal of International Business Studies (2023) 54, 1193–1221.
https://doi.org/10.1057/s41267-023-00613-2
Keywords: internationalization theory; relational view; case study revisit; born global;
international new venture
The online version of this article is available Open Access
INTRODUCTION
The venture that internationalizes soon after foundation – most
often referred to as the international new venture (INV) or born
global (BG) – has attracted considerable attention from interna-
Supplementary Information The on- tional entrepreneurship (IE) and international business (IB) schol-
line version contains supplementary material
available at https://doi.org/10.1057/s41267-
ars (Jones, Coviello, & Tang, 2011; Knight & Liesch, 2016; Verbeke
023-00613-2. & Ciravegna, 2018; Verbeke, Zargarzadeh, & Osiyevskyy, 2014).
Received: 9 January 2020 This research interest was popularized by a number of seminal
Revised: 18 December 2022 studies whose conclusions were derived from two data sources: a
Accepted: 26 December 2022
survey of Australian manufacturing firms undertaken by the
Online publication date: 12 May 2023
The born global and international new venture revisited Maria Rumyantseva and Catherine Welch
1194
McKinsey consultants who coined the born global reproduction affect the internationalization of the
term (used by Knight & Cavusgil, 1996); and a new venture? Addressing this question required the
cross-national pool of case studies used as empirical collection of additional data on the cases included
evidence for the INV by McDougall, Shane, and in both original studies. The data covered the pre-
Oviatt (1994c) and Oviatt and McDougall (1994). foundation period and beyond, tracing the devel-
These studies profiled a seemingly novel phe- opment of the ventures for as long as they survived.
nomenon: a firm that, despite its ‘liability of This is a longer timespan than was possible at the
newness’, competes internationally soon after its time of the original studies, but was necessary to
establishment. Early and rapid internationalization identify all the organizations involved in founding
seemed to contradict the established wisdom that the new venture, as well as their impact over time.
firms internationalize incrementally. The key focus In developing an explanation for the impact of
for these studies, and many that followed, was to the incumbent’s involvement, we take a relational
understand the antecedents for this behavior view of organizational reproduction. That is, we
(Keupp & Gassmann, 2009). conceptualize organizational reproduction as an
We returned to investigate the same firms used in evolving relationship between two generations of
these seminal studies, and found a dominant organizations: the incumbent and the new venture
pattern that had not been noted by the original it reproduces. The characteristics and dynamics of
researchers: most of the firms had been reproduced this inter-generational relationship are consequen-
from pre-existing organizations and this was the tial to new venture internationalization – not just
reason for the early timing of their international- the timing of its first international step, but also its
ization. By organizational reproduction, we mean subsequent pathway. While the support of a pre-
that for a period of time a pre-existing organization existing organization might provide a promising
(or organizations) supports the foundation of a new beginning and a secure basis for rapid growth – as
business venture through the transfer of resources, in the Cochlear case – we also show how the
contacts, and knowledge. Governance arrange- evolving relationship creates potential vulnerabili-
ments are set up for the transfer that may, but do ties, pressure points and discontinuities in the
not necessarily, include partial or full ownership of internationalization trajectory of the new venture.
the venture (e.g., Chesbrough, 2002; Wang, 2021; Destabilizing actions of the incumbent may lead to
Woolley, 2017). failure during the period when the new venture is
For example, Cochlear, the exemplary case of the still in the process of commercializing its product.
born global from the McKinsey study (Rennie, The contributions of our paper are severalfold.
1993), was a subsidiary company of a well-estab- Our first contribution lies in identifying an ante-
lished multinational. Cochlear’s early and rapid cedent of early and rapid internationalization
internationalization following establishment was omitted from previous accounts – reproduction
possible only because of support from its corporate from a pre-existing organization – and delineating
parent, as well as a 5-year national interest project the types of roles that incumbents may play in
prior to foundation that brought together the founding new ventures. Our second contribution is
parent, government and university researchers to to develop a theoretical framing of organizational
prepare the technology for commercialization reproduction as an evolving inter-generational
(Hewerdine & Welch, 2008). As this example relationship, which allows us to explain how these
illustrates, early and rapid internationalization relational dynamics then impact on new venture
was not so much a straightforward indicator of a internationalization. Our third contribution is
founding team’s entrepreneurial orientation as an methodological in nature. We utilize the potential
indicator of the extent of support received from of a hitherto little used research design in IB – the
pre-existing organizations. Nor does the involve- case study revisit – to reenergize a research stream
ment of incumbent organizations necessarily cease by offering an alternative interpretation of the
upon foundation – Cochlear was not spun out from same empirical cases.
its parent company until 12 years following We commence our paper by providing an over-
establishment. view of the original explanation for early and rapid
As a result of this unexpected finding, our internationalization, and its ongoing influence on
empirical restudy of the original BG and INV subsequent research. We then outline our concep-
samples was guided by the following question: tual grounding and research process: our method-
how does the process of organizational ology for the case study revisit and the analytical
Journal of International Business Studies

1195
steps we took. In the following section, we present external parties. We will consider these advantages
our case findings on the inter-generational rela- – founder, organization and networks – in turn,
tionships we found in the dataset. In the discussion showing how they have remained the focus of the
section, we present a typology delineating how the subsequent research agenda (for a recent example,
characteristics and evolution of inter-generational see Zucchella, 2021).
relationships impacts on new venture internation-
alization. We complete our revisit by contrasting Founder attributes and resources
the inter-generational explanation we develop to Knight and Cavusgil (1996: 12) characterize BC
that provided by the original studies. We conclude founders as ‘entrepreneurial visionaries who view
by elaborating on the contribution of our revisit the world as a single, borderless marketplace from
and the agenda for future research it provides. the time of the firm’s founding.’ Oviatt and
McDougall (1995: 34–35) similarly point to the
ability of the founder ‘to communicate com-
THEORETICAL FRAMING pellingly a global vision’. They emphasize the role
In this section, we commence by tracing how the of the founder’s previous international experience
explanation for early and rapid internationalization (be it through their previous employment and
proposed in the original studies on the phe- contacts with international customers, overseas
nomenon (e.g., Knight & Cavusgil, 1996; McDou- trips, education abroad or ethnic background) and
gall, Oviatt, Shrader, & Simon, 1994a, 1994b; ability to accumulate competencies in the form of
McDougall et al., 1994c) has become entrenched networks and knowledge (McDougall et al., 1994c).
over time, determining the subsequent trajectory of It is this experience that enables the founder to
IE research. This stream of research is mostly silent identify international opportunities not yet visible
on the process that our pilot case study of Cochlear to others and employ related competencies to
uncovered: the role of existing organizations in pursue them.
bringing about the establishment and internation- In subsequent research, these personal character-
alization of a new venture. In contrast, the origins istics and assets of the founder – and also of the top
of new firms in existing organizations have been management team (e.g., Zahra & George, 2002) –
the subject of considerable interest in other areas of have continued to dominate findings. The entre-
management. In the second part of this section, we preneurial attributes highlighted in the original
turn to this literature to develop a conceptual studies have been supplemented and expanded
framing for the current study. This takes the form upon (Jiang, Kotabe, Zhang, Hao, Paul, & Wang,
of a relational view of how new organizations are 2020); for example, decision-makers’ entrepreneur-
reproduced from pre-existing ones. ial proclivity (i.e., proactiveness, risk-taking and
innovativeness; Zhou, Barnes, & Lu, 2010), posses-
Explaining the BG/INV Phenomenon sion of personal social capital (Lindstrand & Hånell,
The explanation offered for the BG/INV in the 2017) and knowledge (e.g., Bruneel, Clarysse, &
original studies can be summarized as follows: Autio, 2018; Karra, Phillips, & Tracey, 2008).
Although typically resource constrained (Cavusgil Nonetheless, these subsequent findings are broadly
& Knight, 2015), early internationalizing ventures consistent with the original studies.
possess other advantages that compensate for their
lack of financial capacity and domestic track record. Firm-level capabilities and resources
Some advantages are exogenous – notably a favor- The authors of the original studies emphasize the
able environment of increasing global intercon- possession by the firm of particular resources that
nectedness that makes internationalization feasible may provide the basis for competitive advantage.
even for small firms (Knight & Cavusgil, 1996). This Oviatt and McDougall (1995: 37) draw on the
is seen as a recent phenomenon explained by resource-based view of the firm when emphasizing
technological progress (such as customized manu- the importance of ‘intangible assets’, notably the
facturing capabilities and improvements in infor- uniqueness and innovativeness of the new ven-
mation and communication technologies) and ture’s proprietary knowledge and products (often
maturation of developed markets (Knight & Cavus- associated with high-technology industries).
gil, 1996; Oviatt & McDougall, 1995). The other Knight and Cavusgil’s (1996) study does not have
advantages all relate to characteristics of the
founder and the venture, and their linkages with

1196
an explicit theoretical framing, but in later work network partners, has rarely been addressed in this
they draw explicitly on the resource-based view research. Yet, as Child, Karmowska and Shenkar
(Knight & Cavusgil, 2004). (2022: 14) caution, the starting point for any
A more diverse range of theories has been utilized research on small firms should be to acknowledge
in subsequent research (Jiang et al., 2020). The the ‘asymmetric power and dependence’ that they
most influential of these include dynamic capabil- face.
ities (e.g., Sapienza, Autio, George, & Zahra, 2006; In sum, these personal, firm-level and inter-firm
Weerawardena & Mort, 2006), organizational learn- resources and capabilities overturn the assumption
ing theories of different kinds (de Clercq, Sapienza, that newness necessarily constitutes a liability.
Yavuz, & Zhou, 2012) and social capital theory Oviatt and McDougall point to the inertia that
(e.g., Prashantham & Dhanaraj, 2010; Yli-Renko, established firms may face if they internationalize
Autio, & Sapienza, 2001). Importantly, these theo- after an extensive period of operating solely in the
retical perspectives are complementary to the domestic market. In contrast, firms that are inter-
resource-based view, in that they are focused on national from inception are able to form organiza-
identifying the superior capabilities that make early tional structures and routines that are globally
and rapid internationalization possible (e.g., Rialp, oriented. Knight and Cavusgil (1996) similarly
Rialp, & Knight, 2005). argue for the benefits of a global vision from the
time of foundation. The advantages of newness
Inter-organizational relationships and networks have continued to resonate in subsequent studies
As Oviatt and McDougall (1994) note in their (e.g., Autio et al., 2000’s well-cited term, ‘the
seminal paper, the INV is able to compensate for learning advantages of newness’). That studies find
its own lack of resources by leveraging those of advantages and superior capabilities to be so
others through the use of alternative governance significant is perhaps not a surprise, given the
structures. These can take various forms, including survivor bias inherent to the samples on which
contractual alliances such as licensing (i.e., formal- they are based. One-shot study designs predomi-
ized inter-organizational relationships) and trust- nate, with research concentrating on the earliest
based, social networks (i.e., informal inter-personal phase of internationalization. This means an
relationships). Knight and Cavusgil (1996) explain under-representation of studies following the
the role of long-term international alliances as dynamics of firm evolution (Reuber, 2018), includ-
critical to the emergence of BG firms. While they ing their post-entry phase (for exceptions, see Ibeh,
expose new ventures to opportunism by partners, Jones, & Kuivalainen, 2018; Johanson & Kalinic,
the advantage of such governance structures is that 2016).
they enable complementarity of assets ‘for mutual There are a few exceptions to the consensus in
benefit’ (Oviatt & McDougall, 1994: 54; Knight & the literature (e.g., Argyrous, 2000). A notable ex-
Cavusgil, 1996: 22). ception is Hennart (2014; Hennart, Majocchi, &
The role of inter-organizational collaborations Forlani, 2021), who not only critiques the domi-
between independent parties has remained a pop- nant explanation but also provides an alternative.
ular topic, with a recent review (Sedziniauskiene, He advances the argument that early and rapid
Sekliuckiene, & Zucchella, 2019) identifying 73 internationalization can be attributed to a venture’s
papers on the effects of networks on early interna- business model targeting a global niche market,
tionalization (see also Bembom & Schwens, 2018). rather than its distinctive resources and capabili-
Most of these studies have examined formal (i.e., ties. He illustrates this with the example of Log-
contractual) ties, such as with suppliers, customers itech, a firm also included in McDougall et al.
and distributors. Only a minority of studies exam- (1994c) study. This new venture was successful so
ines informal, social ties or relationships with long as it adhered to its initial niche strategy of
intermediary organizations such as government selling to OEMs; its internationalization faltered
trade agencies (Sedziniauskiene et al., 2019). Con- when it tried to expand into the retail market
sistent with the seminal work, relationships and 5 years after foundation. However, as we shall
networks are regarded as ‘unique organizational detail later in the paper, Hennart’s reanalysis of
assets’ (Zahra & George, 2002: 265) and ‘social the Logitech case misses other details crucial to
capital’ in possession of the firm. As Sedzini- early internationalization – details that were
auskiene et al. (2019) observe, the ‘dark side’ of equally overlooked by McDougall, Shane and Ovi-
networks, including the exercise of power by att (1994c). The founding, product development

1197
and early OEM sales of Logitech were only possible Sarkar, 2004). There is evidence that in some
due to the involvement of three incumbent orga- industries, particularly high-tech ones, the involve-
nizations. These were two prior ventures of the ment of incumbents in new firm founding may be
founders, and the Japanese multinational firm, the norm due to the complexity of bringing
Ricoh, which they were able to attract because of innovations to market – making it an undertaking
this track record. that is often beyond the resources available to
Research on the impact of the role of pre-existing young ventures (Lindholm-Dahlstrand, 1997;
organizations has, however, received little attention Wallin & Dahlstrand, 2006). As research into the
from scholars studying the early internationaliza- origins of new ventures has advanced, there is
tion of new ventures. Few researchers mention increasing recognition of the diversity of incum-
whether or not the firms they investigated were bents that can be involved in organizational repro-
independent when founded, and how this indepen- duction (Drori et al., 2013), including corporate
dence is defined. Welch, Nummela and Liesch parents (Bergh & Sharp, 2015; Seward & Walsh,
(2016) find that only 18% of international 1996); universities or public research institutes
entrepreneurship studies use independence as a (Grimaldi, Kenney, Siegel, & Wright, 2011; Lockett,
sampling criterion to select BGs/INVs (for examples, Siegel, Wright, & Ensley, 2005; Rothaermel, Agung,
see Fernhaber & Li, 2013; Gabrielsson, Kirpalani, & Jiang, 2007); governments and state-owned
Dimitratos, Solberg, & Zucchella, 2008). This sug- enterprises (Cuervo-Cazurra, Grosman, & Meggin-
gests that many samples used in IE studies may well son, 2022); and start-ups whose founding is backed
include firms with a mix of origins. Yet the commit- by venture capital (Baum & Silverman, 2004;
ment of existing organizations to founding a venture Chesbrough, 2003; De Bettignies & Brander,
is rarely considered explicitly as a factor when 2007). Firms founded by habitual (i.e., portfolio
explaining early and rapid internationalization and serial) entrepreneurs may also benefit from
(Zahra, Ireland, & Hitt, 2000). In contrast, in other resource transfers and reputation spillovers from
areas of management there has been sustained other firms previously founded by the same
interest in ‘organization-producing organizations’ entrepreneur (e.g., McGaughey, 2007).
(Stinchcombe, 1965), providing us with a concep- Despite the frequent use of biological metaphors
tual starting point for the current study. in this literature (e.g., Klepper, 2016; Uzunca,
2018), there is recognition that organizational
A Relational View of Organizational Reproduction reproduction is not analogous to a process of
Organizational reproduction1 occurs when a new genetic inheritance, in which there is a replication
entity is formed from a pre-existing organization of features from one generation to the next. Rather,
(Drori, Ellis, & Shapira, 2013; Stinchcombe, 1965; it consists of a path dependent and evolving
Woolley, 2017). That is, the pre-existing or incum- interaction between the two organizations, with
bent organization supports the establishment of a the nature of the relationship then shaping the
new legal entity.2 For this reason, the relationship future of the new venture (e.g., Bolzani, Rasmussen,
between incumbent and new firm goes beyond & Fini, 2021; Treibich, Konrad, & Truffer, 2013).
market-based exchange relationships such as those Accordingly, we will adopt a relational approach in
between supplier and customer, or between a bank our study. In doing so, we avoid determinism by
and its borrower. This makes them distinct from allowing for the impact of managerial choices, firm-
the industrial relationships between independent level strategies and environmental dynamism on
firms that, as we have seen, are studied in existing the evolution of the relationship over time. Inter-
BG/INV literature. There is considerable evidence generational relationships can be analyzed using
in management research that incumbents are deci- relational concepts familiar to the study of other
sive for the prospects of the firms that they inter-organizational relationships (e.g., Dyer &
establish (Wang, 2021; Woolley, 2017). The impact Singh, 1998; Ford, 1990; Håkansson, 1982). That
of the incumbent organization is not confined to is, the parties to the relationship are connected for
the pre-founding period, but continues to affect the a period of time through exchange activities –
evolution of the new venture following foundation involving resource transfers and knowledge sharing
(Eriksson & Kuhn, 2006; Klepper, 2016). – and arrangements for governing these activities.
Increased scholarly interest in the origins of new However, inter-generational relationships are dis-
ventures has revealed organizational reproduction tinct from other relationships between organiza-
to be ubiquitous (Agarwal, Echambadi, Franco, & tions, as one party (the incumbent organization)

1198
gives rise to the other (the new venture), meaning the Tavory, 2012); and this was the trigger for the
two are interrelated from the outset rather than present study. In the course of a pilot case study
entering into the relationship as independent enti- (Hewerdine & Welch, 2008) we uncovered the
ties. Moreover, the resource exchange between the complex reproductive origins of the Australian
two parties is largely unidirectional, with the incum- firm, Cochlear, as introduced above (see also
bent resourcing the new venture. A variety of assets Appendix 1 in Supplementary Material for details).
can be transferred, ranging from IP, technology, We also came across a study by an Australian public
management and technical expertise, capital and policy expert that uncovered serious methodolog-
industry connections. The new venture is highly ical concerns about the McKinsey study (Argyrous,
exposed to the power differentials that are inherent 1993). Sparked by these discoveries, we decided to
to inter-generational relationships. The incumbent’s re-examine all 39 born global firms included in the
relationship with the new firm may range from McKinsey study (relied on by Knight & Cavusgil,
highly committed to hostile (Cusmano, Morrison, & 1996), as well as the 24 international new ventures
Pandolfo, 2015; Walter, Heinrichs, & Walter, 2014), used as empirical evidence by McDougall et al.
meaning that the benefits of a well-resourced incum- (1994c). Given that the original studies contained
bent do not inevitably transfer to the new venture. few details on the foundation process of these 63
Incumbents transfer resources to support the firms, and did not follow their subsequent interna-
establishment of a new venture, but they differ in tionalization pathways, additional data collection
terms of how they do so (i.e., relationship gover- was required.
nance) and for how long (relationship duration). To do so, we made use of the methodology of a
Resourcing the venture provides the incumbent qualitative ‘revisit’ (a term popularized by Burawoy,
with some degree of control, which it exercises by 2003). Qualitative revisits have an established place
selecting governance mechanisms to oversee its in anthropology, business history and sociology
interests in the new venture. For example, gover- (Heaton, 2004; for examples, see Kipping & Usdi-
nance may be hierarchical and ownership based ken, 2014) but to date have rarely been used in the
(e.g, establishing a subsidiary or a joint venture); or IB field.3 A revisit is a distinct research design: it
contractual (e.g., technology development and does not aim to reproduce an original study, or
commercialization partnerships) (Chesbrough, simply to reanalyze the data from a previous study.
2003; Clarysse, Wright, & Van de Velde, 2011). If Instead, the researcher returns to the same sample
the incumbent continues its involvement, these as in the original study, collecting and analyzing
governance arrangements may endure beyond the additional data. The goal is to use these additional
establishment of the new entity. data to generate new research questions and theo-
Existing literature therefore sensitizes us to the retical insights. The additional data we collected in
distinctiveness and variety of inter-generational our revisit established the prevalence of inter-
relationships between incumbent organizations generational relationships in the original samples.
and the firms they reproduce. We will use this At this point our theoretical purpose became
relational view to distinguish the ways in which explaining how they affected the case firms’
incumbents resourced the BGs and INVs in the internationalization.
seminal studies – both in terms of relationship A revisit offers numerous empirical and theoret-
governance and duration – and how this impacted ical strengths that we make use of in the current
on the internationalization of these new ventures. study. Its first advantage lies in the potential for
Factoring in inter-generational relationships theoretical novelty, by making visible what was
prompts a reassessment of how and why new obscured or omitted in the original study (Savage,
ventures may internationalize early and rapidly. 2005). In our study, we were seeking information
In the next section, we explain how we went about about events and organizations not systematically
doing so in a revisit of the original studies. included in the original studies. Second, we were
able to enrich the empirical base by collecting
additional data, as the original studies relied heav-
METHODOLOGY ily on second-hand reports rather than data col-
lected by the authors themselves (for a comparison
Research Process
of the original and our approaches to data collec-
An unexpected finding from fieldwork can be the
tion and analysis, see Table 1).4 A third advantage
foundation for reworking theory (Timmermans &
of a revisit is that it allows the researcher to trace

1199
changes over time – an important consideration for their implications for new venture international-
our study given that investigating the internation- ization, we selected a smaller group of cases from
alization process requires data from a more these 44 cases to investigate in greater depth. As
extended time period than was possible to include befits a qualitative study, our selection of these in-
in the original studies.5 As Jones and Khanna depth cases was theoretically driven: the aim was to
(2006) note, ‘longer-run’ studies of this kind allow provide richer material for our analytical (not
researchers to understand processes and impacts statistical) generalizations. This means we selected
not discernible using research designs with more cases for in-depth study that, as a set, covered the
restricted timeframes. main internationalization pathways and outcomes
that we had found in our main sample, so that we
Case Selection could trace in more detail the implications of
On the basis of an initial round of secondary data different incumbent origins and industry condi-
collection, we eliminated 16 out of the 63 firms tions. As our study proceeded, we expanded the
used in the original studies: two because they had number of cases in order to probe our emerging
seemingly been mistakenly classified (ANCA, theoretical categories (Figure 1).8 We ultimately
Camarao Brasiliensis);6 four on the grounds they selected nine firms, including our original case of
were traditional trading companies,7 a distinct type Cochlear, for the in-depth analysis presented in this
of firm (i.e., intermediaries) well known to IB paper.
scholars; and ten for which very scant information
was available, either because they had remained Data Collection
very small and/or had a short lifespan. For the The secondary data collection with which our
remaining 47 firms, we were able to establish when empirical revisit commenced consisted of assem-
they were founded and if an incumbent was bling all relevant and available secondary data on
involved. This was the case for 44 of the 47 firms. the founding and internationalization of each firm.
The three exceptions were a specialized food ingre- The 1800+ sources comprised items in newspapers,
dients company that was a regional (not global) press releases, trade publications, prospectuses and
exporter, a software firm that only ever had one annual reports (if the firm was listed), published
multinational customer, and a producer and case studies, company histories, analysts’ reports,
exporter of natural oils (Appendix 3 in Supplemen- PhD theses and video or oral history recordings of
tary Material). company founders (for more details on the primary
In order to obtain a richer understanding of the and secondary sources for each case, see Appendix
dynamics of inter-generational relationships and 2 in Supplementary Material). We also had the
Table 1 Comparison of data collection and analysis strategies
Original BG/INV studies Revisit study
Original sample McDougall et al. (1994c) and Oviatt and McDougall (1994) – 24 companies;
of companies McKinsey (1993) and Knight and Cavusgil (1996) – 39 companies
Data collection 1988–1993 2014–2021
Methodology Mixed – case study, survey Historically informed methodology – case study revisit
Sample 63 empirical cases 63 empirical cases
39 cases not analyzed by academic 63 cases analyzed by the authors
scholars 17 in-depth case studiesa
12 cases studied by at least one 20 interviews
author (McDougall et al., 1994c) Newspaper articles, books, recordings and other secondary sources
12 cases sourced from third parties
(academic publications)
Data analysis Not available Written case histories of 47 companies (16 companies eliminated from the
sample)
17 in-depth case histories with chronology of firm’s origins and analysis of
its development in the local and international contexts
a
The 9 in-depth case studies featured in this paper were selected from this sample

1200
Figure 1 Analytical process for the revisit.
advantage of being able to access detailed retro- While the problem of memory loss is a well-
spective accounts that some participants had known downside of retrospective interviews, this
placed on the public record subsequent to the type of data source also has potential strengths. At
original studies, as well as business histories.9 the time of our study, the informants were well
For each of the cases we studied in depth, we established in their careers or (semi-)retired. They
approached the founder(s) and/or a former manag- had the time, inclination and emotional distance
ing director if available, as well as other knowl- to reflect on and share their experiences and
edgeable informants. Given the passage of time, the learnings. They were also more open than would
20 interviews we conducted could best be charac- have been possible while the events were still
terized as a form of oral history (see Appendix 2 in ongoing. They were prepared to discuss sensitive
Supplementary Material for a list of informants). As issues, such as failure, and to share with us selected
recommended by oral historians (e.g., Ritchie, contents of their personal files, allowing us to
2015) we encouraged better recall by providing triangulate this material with the other documen-
memory aids for the interviewee ahead of the tary sources we had collected. Hindsight provided
interview, in the form of a chronology we had additional insights not possible at the time the
constructed of the firm from secondary data. We events were occurring. In particular, the ability to
also conducted follow-up correspondence with key compare the industry environment of today with
informants to expand on and clarify key issues the conditions which prevailed when their firms
raised in the interviews, including instances in were founded enabled them to provide holistic
which further information was needed to supple- accounts. As Burawoy (2009) points out, context is
ment inadequate recall. Informants also read and easily taken for granted so its impact may be
commented on the case histories we prepared, overlooked by both informants and researchers at
providing an additional verification check. As oral the time events are taking place. The retrospective
historians would lead us to expect (Ritchie, 2015; nature of the interviews overcame this limitation.
Yow, 2015), interviewees had strong recollections
of the key events associated with the case firms, as Analytical Process
this had been a pivotal time in their careers, but Building our alternative explanation for early and
they were less sure about exact dates and figures, or rapid internationalization entailed a series of iter-
issues in which they had not been directly ative cycles of data collection and analysis. The key
involved. analytical stages for the current study are depicted

1201
in Figure 1. As is appropriate for a process-based FINDINGS

and theory-building study, analysis consisted of In this section, we report the inter-generational
mapping out sequences of events, probing key relationships that we found in the featured cases.
themes, identifying an appropriate theoretical Our cross-case comparisons revealed different types
framing and refining the emerging theoretical of relationships, which – guided by our conceptual
categories (Langley, Smallman, Tsoukas, & Ven framing – we classified on the basis of how the
Van de, 2013). incumbent resourced the new venture, namely: (1)
Triggered by the unexpected findings in the whether the incumbent injected equity as part of
Cochlear case (Appendix 1 in Supplementary Mate- the venture founding process (i.e., relationship
rial), we started our analysis by preparing chronolo- governance) and (2) whether the incumbent’s
gies for other firms in the McKinsey and INV commitment was intended to cease upon founda-
samples, also tracing the role of the incumbents tion, or envisaged to be ongoing (i.e., expected
that were directly involved in founding the cases relationship duration). This categorization results
(stage 1). As already discussed, the chronologies in four types of relationships: parent–subsidiary,
informed our first round of interviews (stage 2). The sibling, alliance, and foster relationships (see
next analytical move was to develop an initial Figure 2).
typology to compare firms on the basis of their We now present our case findings for each type of
inter-generational relationships (stage 3; see inter-generational relationship. We show that the
Appendix 3 in Supplementary Material for the impact of these relationships was systematically
results of all 47 ventures). To do so, we iterated downplayed in the original BG/INV accounts, or
between coding of the full sample and categories in even not mentioned at all. We contrast this with
the existing literature on organizational reproduc- our findings, which show their role to be decisive.
tion. We used this to inform our selection of We trace the relationships from their pre-founda-
additional in-depth cases that could enrich our tion origins and detail how they were consequen-
understanding of each type and to guide cross-case tial to each case firm’s internationalization
analysis (stage 4). pathway. The relationships with incumbents might
The next analytical challenge was to develop an have made early internationalization possible, but
explanation for how inter-generational relation- this does not mean they provided a solid basis for
ships affected new venture internationalization expansion.
over time. Although a cross-case analysis of the
in-depth cases was the main focus in this phase Parent–Subsidiary Relationships: Ownership,
(stage 5), we also compared these cases to the Ongoing Commitment
pathways of the other firms in the sample for which This type consists of the relationship between
we had sufficient data. As is appropriate for a corporate parents and the subsidiaries or joint
process-based analysis, the focus was on the ventures they establish. Two out of the three cases
sequence of events. Our next analytical step (stage we use to illustrate this type from the original
6) was to return to the literature one more time as studies are wholly owned subsidiaries: Cochlear,
we searched for the conceptual resources to assist us founded as part of a multinational corporation,
in explaining the linkages we found between Nucleus, and AC Rochester, an Australian firm
organizational reproduction and internationaliza- established by GM. The third case is a joint venture,
tion. It was at this point we identified the relational Fact International, co-founded by existing New
view of organizational reproduction as the most Zealand company Trigon Plastics.
promising basis for explaining the empirical pat-
terns in our data. The last step was to articulate the BG/INV account
contrasts between the established explanation and The two examples of subsidiaries that we feature –
our alternative, thereby completing our revisit Cochlear and AC Rochester – are taken from the
(stage 7). We now turn to the findings from the McKinsey BG sample. As we have already discussed,
in-depth cases on which our inter-generational Cochlear became the prototypical case of the born
explanation is based. global, portrayed as the swift ascent of a young,
small company to a position of global niche
leadership (Cavusgil & Knight, 2009; Nguyen &
Mort, 2021; Rennie, 1993). AC Rochester also fits
the definition of the born global to the extent that

1202
Figure 2 Types of inter-generational relationships found.
its internationalization commenced within a year R&D collaboration – bringing together Nucleus, the
of foundation. Fact International, our example of a university where the inventor was employed and
joint venture, is taken from the INV sample (see the basic research conducted, and the government
also Coviello & Munro, 1997). It too began selling which funded and steered the project – to prepare
to international customers soon following the scientific prototype for full-scale commercial-
foundation. ization. The commitment to the collaboration
shown by the CEO and founder of Nucleus,
Inter-generational account entrepreneur Paul Trainor, was critical to the
Cochlear When Cochlear was established as a successful delivery of a market-ready product and
wholly owned subsidiary of the Australian-based strategic plan for internationalization. Trainor and
multinational corporation Nucleus, the ‘bionic ear’ his Nucleus team had already amassed a track
it was set up to commercialize was the outcome of record of developing and commercializing novel
16 years of R&D (Figure 3). The last 4 years of this medical devices.
pre-foundation process consisted of an extensive
Figure 3 Parent–subsidiary relationships.

1203
Once regulatory approvals, including by the US structure. Over time, AC Rochester faced an increas-
Food and Drug Administration, were obtained ing number of challenges to its survival, including a
under the guidance of Nucleus, Cochlear’s interna- series of corporate restructurings of the group,
tional growth was fast and sustained. Its US declining competitiveness and therefore reduced
subsidiary was opened a year after foundation, attractiveness of its location, and constraints in
and subsidiaries in Europe and Asia established expanding its customer base beyond GM’s internal
within 5 years. But even after becoming a signifi- market. Although some constraints were removed
cant international player, backed by its experienced in 1999 when AC Rochester became independent of
parent, Cochlear’s position in the global market GM by being spun off as part of a larger group,
remained uncertain for many years, given it faced Delphi Automotive, it continued to face the chal-
better-resourced competitors (e.g., 3M). Nucleus lenges of being a subsidiary.
continued to nurture its Cochlear subsidiary until,
12 years subsequent to foundation, it was spun off Fact International When the founder of Trigon
and listed on the Australian stock exchange. The Plastics made an investment unrelated to the
experience of its parent, Nucleus, in creating global company’s main business by co-founding Fact
markets for medical devices was critical to International – a software joint venture with two
Cochlear’s formative period prior to spinoff. Trai- former employees of the company that supplied
nor was able to staff the subsidiary with experi- Trigon’s software – his motivation was to become
enced managers who were backed by the parent’s the new venture’s first customer. Beyond this,
existing network of offshore subsidiaries. Trigon was also able to act as a reference site,
opening doors to other prospective customers; give
AC Rochester At its foundation in 1985, AC access to its mainframes for product development
Rochester obtained an established management and provide office space; and offer mentoring to
team, a product innovation that was already being the other two founders, neither of whom had prior
sold in key international markets, and finance from entrepreneurial experience (interview with co-
its corporate parent, GM. GM’s decision to locate founders of Fact International, 2016). But Trigon
AC Rochester in Australia was a response to favor- had no experience in the software industry and was
able regulatory changes by the government at the itself a relatively young firm with limited resources
time. Government grants and export subsidies to to spare. As a result, it was restricted in its capacity
support greater international competitiveness to open up global markets for the new venture.
increased the attractiveness of the location. This Fact needed to expand geographically because its
was coupled with the presence of a local automo- potential domestic market of mainframe users in
tive cluster, enabling AC Rochester to access a New Zealand was too small. But Fact’s constrained
contract manufacturer. The integration of AC resources and limited support from Trigon meant
Rochester into the global internal market of GM that its internationalization was mostly confined to
subsidiaries allowed for accelerated international opportunistic sales to neighboring Australia in the
growth at the same time as expanding in the first 5 years of its existence. In order to grow
domestic market. As the former managing director further, Fact worked to enter into a close cooper-
of AC Rochester recalled in an interview for this ation with Wang Laboratories, one of the world’s
study, the first international customers of the leading computer manufacturers at the time.10
company were Opel/GM in Germany, Daewoo/ Wang saw the potential of Fact’s software to offer
GM in Korea and Suzuki/GM in Japan. Within more functionality to its mainframe customers.
2 years from foundation AC Rochester expanded its Two years into its collaboration with Wang, Fact
exports to USA and France, selling almost exclu- parted ways with Trigon to focus exclusively on the
sively to other GM subsidiaries. new partnership. It was only by upgrading its
But for the 15 years it was a GM subsidiary relationships in this way that Fact was able to
(Figure 3), AC Rochester was subordinated to its move beyond sporadic sales to the Australian
powerful multinational parent and outside contacts market. The remaining co-founders skillfully grew
with GM’s competitors had to be approved. Within the venture’s international sales by investing con-
these constraints, its managerial team exhibited siderable effort to deepen Fact’s integration into
entrepreneurial acumen in exploiting what flexi- Wang’s global value chain. Seven years after the
bility it had to pursue local opportunities and initial product development agreement between
leverage its position within GM’s complex the two companies, this process culminated in

1204
Wang acquiring a 17.9% shareholding in Fact ventures are linked either because they are founded
(Figure 3). But the global niche in which Fact by the same habitual entrepreneur(s), or because
operated – software programs for mainframe com- they are different legal structures for what is
puters – was rapidly closing. Both Wang and Fact substantially the same entity.11 In these scenarios,
were on the wrong side of the industry-wide the upfront transfer of core assets from the pre-
technological shift from mainframes to PCs. Soon existing organization enables the founding of the
after increasing its investment stake in Fact, Wang new venture. In the two cases we profile – Betatene
filed for bankruptcy protection and Fact never and Austal – the commercial opportunity they were
recovered from the lock-in effect of its relationship founded to pursue had been identified and enabled
choice. by an older sibling venture owned by the same
The common feature shared across three cases is entrepreneur. In Betatene’s case, the older sibling
the defining role parent companies played through- was dissolved when Betatene was established; in
out their development. These incumbents varied in Austal’s case, the older sibling was sold. In both
terms of the resourcing they provided and the cases, the serial entrepreneur was the driving force
mandates they assigned to the new ventures. But behind the new entity, but in Betatene’s case his
even generous resourcing could be problematic, as ownership was diluted through a stock market
the incumbents’ interests were not necessarily listing as part of the establishment process.
aligned with those of the new ventures. AC
Rochester was well resourced, enabling rapid inter- BG/INV account
national growth. But its membership of the GM Both Betatene and Austal belong to the original
group later constrained its development by making born global sample in the McKinsey report. Their
it more difficult to attract external customers. In international expansion post-foundation is aligned
contrast, Fact International did not obtain suffi- with the BG narrative, to the extent that both
cient resourcing from its parent, so sought another companies were able to start international sales
arrangement to enable it to grow internationally. In within less than 2 years following incorporation.
the process, it tied its future to a declining industry. This narrative excludes events before the compa-
Only Cochlear avoided the downsides of depen- nies were founded as this period is not included.
dence on its parent. This is because Nucleus’s This leads to the impression that they started
business model was to incubate and globalize new around a new technological opportunity and were
technologies to the point where they could be able to organize their commercialization
profitably spun out. Accordingly, it nurtured independently.
Cochlear until the firm was able to compete
internationally on its own. Inter-generational account
Our case findings form a distinct contrast to Betatene The foundation and critical early years of
those found in the original BG and INV sources that the company were defined by two people: the
leave out the role of incumbents, including MNC scientist who generated the intellectual property,
parents and joint-venture partners. The well-publi- and the serial entrepreneur to whom he reached
cized BG narrative of the Cochlear case does not out as a last resort after failing to interest an
include its parent Nucleus, nor does the classifica- established multinational corporation in becoming
tion of AC Rochester factor in its position as a GM a development partner. Both have shared their
subsidiary. The INV explanation of Fact Interna- accounts of events with us. The scientist remained
tional does not include any references to its co- in his position at the research institute, while the
founder and joint-venture partner Trigon, even entrepreneur saw the potential of the IP and agreed
though the latter made Fact’s establishment and to commercialize it. But the process of commer-
early internationalization possible – as well as cialization was long and resource consuming even
placing constraints on its ability to expand beyond before Betatene was founded. The underlying tech-
the neighboring market of Australia. nological innovation spent 9 years in the R&D
phase, first within the research institute where the
Sibling Relationships: Ownership, Time-Bound scientist made the original discovery, and then
Commitment within another corporate entity (Cockajemmy Pro-
Sibling relationships were the result of consecutive, prietary Limited) set up by the same founding team
related foundings, enabling the later venture to as Betatene (Figure 4). This first ‘sibling’ venture
benefit from the legacy of the previous one. The was dissolved and Betatene was set up as a

1205
Figure 4 Sibling relationships.
‘cleanskin’ entity to attract investors in the lead-up multinational, Henkel, initially as its marketing
to an IPO that provided additional funding for alliance partner, then minority investor with a 20%
manufacturing scale-up.12 stake in the company, before a full acquisition
Founded 4 years after Cockajemmy, Betatene was 2 years later. Henkel’s international distribution
established with global markets specifically in network was a suitable platform for an acceleration
mind. Within months, it started exporting to of Betatene’s international expansion. These rela-
Japan, playing on the strengths of its sibling, tionship upgrades allowed Betatene to develop its
including the latter’s track record and product global niche market and realize the opportunity
development efforts. Yet Betatene faced the com- that the original founding team had started to
bination of an immature product and immature commercialize 14 years earlier – but at the cost of
niche market, and was not able to go beyond being absorbed by a larger corporation.
sporadic international sales. Despite the time its
scientific innovation had been nurtured by its older Austal Austal benefited from the endowments of
sibling, Betatene experienced unstable production the founder’s previous venture, Star Boats, that
throughout its first 6 years, while it struggled to included not just proceeds from the sale of the
perfect its manufacturing processes. Demand for its older sibling company, but also relevant networks,
product was also nascent as customers were exper- a team of experienced shipbuilders and a promising
imenting with applications, resulting in modest business idea focused on international opportuni-
sales to its initial markets of Japan and the USA. In ties for the new, light and fast aluminum vessels.
this period, the survival of the startup was in doubt, The benefits Austal obtained from these endow-
as the development costs proved much higher than ments from its predecessor were coupled with the
anticipated, and beyond the financial capacity of favorable timing of its first export sales, that
the serial entrepreneur. coincided with a market opening for high-speed
To survive, Betatene had to go through successive ferries in Asian markets (interview with Austal
relationship upgrades. Its first upgrade came in the founder, 2018). Although the traditional Australian
form of investment from another small Australian shipbuilding cluster was in decline, the location
company, Denehurst, founded by the same entre- retained high levels of relevant expertise, which
preneur as Betatene. But the costs involved in was further reinforced by attractive government
developing efficient production methods far incentives for building vessels for export. This was
exceeded the new venture’s revenue, and in time fertile ground for Austal’s formation.
also exceeded the resources of Denehurst. However, Less than 2 years following foundation, Austal
by then Betatene was able to demonstrate substan- made its first sale of a $7 million high-speed
tial progress towards solving its production prob- passenger catamaran to China. The founder
lems. On this basis it was able to attract a large obtained a bank loan to finance the construction

1206
of this first vessel thanks to the success of his prior Alliance Relationships: Non-Ownership, Time-
venture. Rapid growth followed, resulting in the Bound Commitment
next 30 export contracts (valued at $150m), orig- The alliance relationships in our dataset took the
inating from the same customer: a regional gov- form of contractual arrangements with incumbent
ernment in China. Austal’s subsequent growth and organizations that enabled the foundation of the
international expansion were organic. By 1993 (4 new venture. These alliances had the goal of
years after international sales commenced), its sales progressing commercialization of a technology or
to the original customer in China helped to estab- product. They included licensing, research collab-
lish the company as the leading manufacturer of orations and development partnerships – all of
40-m vessels in Asia. Nine years after foundation, which represented limited and time-bound com-
Austal started to expand beyond the region to mitments on the part of the incumbent. Alliances
Europe and Japan. Like Betatene, it needed addi- of this kind often accompanied other types of inter-
tional capital injections to grow internationally. generational relationships. This was the case with
Once listed on the Australian Stock Exchange in both Logitech and Femcare, the new ventures we
1998, it was able to expand into the North America, profile (as well as Cochlear, as already discussed).
building an attractive network with presence in key Both firms were founded with alliance relationships
international markets (Figure 4). in place that were only made possible by the prior
The BG explanation of these cases emphasizes activities of earlier ventures owned by individuals
the role of the ‘inherent advantages of small closely associated with the new entity.
companies’ (Knight & Cavusgil, 1996: 22), leading
to the conclusion that these are a unique type of BG/INV account
firm that can reap the benefits of technological According to INV scholars, Logitech ‘challenges
advancements and market interconnectedness in a traditional beliefs about how firms internationalize’
way superior to traditional firms. The fact that (Oviatt & McDougall, 1995: 30) and epitomizes the
years, and sometimes decades, of research and new breed of companies (Jolly & Bechler, 1992;
commercialization attempts prior to company Jolly, Alahuhta, & Jeannet, 1992). The INV expla-
foundation are not mentioned risks producing a nation is that Logitech got its global positioning
simplified interpretation of the underlying pro- right from the outset: It had a global vision thanks
cesses, including internationalization. For Beta- to its internationally oriented founders, built up
tene, the process started 9 years prior to its production volumes quickly, and made focused
foundation, including 4 years of direct commer- foreign investments boosting its international con-
cialization efforts by the predecessor sibling ven- nections (McDougall et al., 1994c). This enabled
ture. Betatene remained dependent on regular the company to build a strong position against
injections of resources for the next 10 years, until competition from incumbent firms, redefining the
it was fully acquired by Henkel. Austal too required entire industry in the process. McDougall et al.
additional capital injections, but its R&D effort was (1994c) provide fewer details on Femcare, but they
not as costly so it was able to cover these upfront do mention that its ‘internationally oriented
costs without being acquired. founders’ were instrumental in enabling the new
Thus, although the venture might be new, the venture to ‘leapfrog the normally expected stages of
opportunity it was pursuing and the resources it internationalization’ (McDougall et al., 1994c:
exploited to do so were not. Once this history and 473). Indeed, Femcare recorded its first interna-
the legacy of earlier ‘sibling’ ventures are consid- tional sales immediately upon foundation.
ered, each case company’s commercialization jour-
ney to global sales becomes much more protracted. Inter-generational account
The journey is also more problematic, given that Logitech The Swiss and Italian co-founders of Log-
the endowments that the ventures obtained from itech started collaborating on a word processing
their older siblings were not a sufficient basis for system while studying for their master’s degrees at
their subsequent internationalization. Although Stanford. In the 5-year period in between graduat-
these firms were founded with the intention of ing and founding Logitech, they straddled Silicon
having an independent future – in contrast to Valley and Switzerland, accumulating expertise in
subsidiaries – this independence was difficult to integrating hardware and software in two ventures
sustain. they founded: BeZy and Polytech. Neither of these
ventures was successful, but their brief existence

1207
helped the founders to showcase their technolog- would not have been possible. The Silicon Valley
ical skills and gain commercial experience in the office became a fertile base for the launch and rapid
form of a large contract with their first client, Swiss international expansion of its computer mouse,
company Bobst Graphic. The contract was termi- soon to be established as a standard complemen-
nated when Bobst was acquired, but it earned the tary product to personal computers.
founders a sufficient track record to attract the
interest of the large Japanese corporation, Ricoh. Femcare Femcare was formed in 1982 to commer-
On the strength of securing a feasibility study with cialize an invention, a female sterilization device,
Ricoh, they established Logitech – their third whose development over the previous 10 years –
startup in a row. At that point, they had no other entailing the construction of a succession of proto-
prospects than the alliance with Ricoh (Figure 5). types (six in total) and extensive clinical trials not
But in their favor was that, unlike Fact, they were just in the UK, but also Europe, Asia, South America
on the right side of the technological shift to PCs. and Africa – had been managed and financed by a
Because of the timing of its founding – 1 year before charitable foundation, the Simon Population Trust
IBM commenced sales of its personal computer and (Figure 5). Additional investment was provided by
3 years prior to Apple’s introduction of the Macin- one of the trustees, Donn Casey, to manufacture
tosh, the first successful mouse-driven computer – and sell the device once it was ready to be
Logitech was able to exploit this market opening. commercialized. This organizational arrangement
In the Logitech case, this pre-foundation alliance might well have continued, had the trust not
between alliance partner and new venture was received legal advice that it created a conflict of
subsequently extended by a follow-on contract. interest for Casey. This dilemma was resolved by
Satisfactory delivery of the feasibility study to Ricoh establishing Femcare as a new corporate structure
led to the two companies signing another, much along with new ownership. Casey, who was the
larger contract that funded the 4-year-long devel- driving force and a social entrepreneur in today’s
opment of the software solution for what became terminology, had to relinquish any direct involve-
Logitech’s first product and one of the first com- ment. The trust became the licensor of the medical
mercially successful computer mouse designs on device, distancing itself from the newly formed
the market. The alliance was also the catalyst for company with the only remaining connection
Logitech to expand its office in Silicon Valley, being the collection of royalties. All but one of
which it inherited from BeZy, in order to be close to the Femcare founders were new and had not been
Ricoh’s development facilities. Without this con- involved in developing the medical device. The
tract with Ricoh and the funds it secured, develop- exception was the scientist who had invented the
ing and internationalizing Logitech’s first product device and overseen its clinical trials.
Figure 5 Alliance relationships.

1208
According to this scientist (interview, 2017), when the new venture was founded, whereas
international sales of what became Femcare’s pro- Logitech’s product development commenced upon
duct started prior to its incorporation, when a founding.
dedicated marketing manager was employed. Inter-
nationalization was rapid because the product had Foster Relationships: Non-Ownership, Ongoing
already been tested in 12 countries, with more than Commitment
9000 patients participating in the pre-foundation Fostering took place when an incumbent provided
trials. A year before Femcare’s foundation, the trust ongoing support to bring a new venture’s products
received international orders for nearly 18,000 of to market. Support was based on trust-based mech-
its medical devices, far exceeding the production anisms at the inter-personal level, rather than
capacity of Casey’s small manufacturing facility. equity or contracts. In the two cases we feature,
Although Femcare did not receive additional this type of informal support for venture formation
resources from the trust after foundation, it was was motivated by the personal commitment of
able to benefit from its license to a commercially individuals in the incumbent organization. They
proven product that was already selling in global were driven by genuine enthusiasm for the inno-
markets, and that gave it the basis for developing a vation and willingness to back the vision for the
leadership position in its market niche. For Fem- new venture. Their expectation that the newly
care, just as for Logitech, reliance on an incumbent established firm would in time be able to function
organization had a positive outcome. as an independent entity, with no ongoing obliga-
Once these additional events are taken into tions to the fostering organization. In the case of
consideration, internationalization is no longer as Oxford Instruments, the champion was the head of
rapid as it first appears. Contrary to INV claims the prestigious Clarendon Laboratory of the
(McDougall et al. 1994a, b, c), Logitech did not University of Oxford; in the case of Heartware,
redefine the industry from the outset. In fact, there they were the inventors of the technology which
was a long history, not just of the software devel- their employer, a Dutch university, licensed to the
opment that took place in its sibling ventures, but new venture.
also of the R&D to produce the hardware. Logitech
licensed the hardware for the mouse from a Swiss BG/INV account
university, which had developed and prototyped it Both Oxford Instruments and Heartware are fea-
well before Logitech’s foundation. Logitech’s main tured extensively in the original INV studies
achievement was the development of the software (McDougall et al., 1994a; Oviatt & McDougall,
that provided a functional interface between the 1995; Oviatt, McDougall, Simon, & Shrader, 1994).
mouse and the PC. This was financed by Ricoh, at a Oxford Instruments is presented as one of ‘the most
scale that was beyond the resources of a resource- successful global start-ups’ (Oviatt & McDougall,
poor startup. Yet Ricoh’s role is not mentioned in 1995: 38). This success is explained by its posses-
the INV account of the Logitech case (McDougall sion of every advantage of an INV,14 particularly its
et al., 1994c; Oviatt & McDougall, 1995). Nor are ‘unique intangible [technological] asset’ that ‘be-
the sibling ventures that made it possible for the came an ever-increasing and unbeatable competi-
founders to secure such a major industry partner.13 tive advantage’ (ibid: 37). Heartware, on the
The role of the alliance partner was equally contrary, lacked these success characteristics. In
decisive in the case of Femcare. The incumbent particular, its failure is attributed to an inadequate
organization that licensed its technology to Fem- global vision which was not ‘shared by a supportive
care was responsible for 10 years of intense product network of business relationships extending across
development, international medical trials, and the national borders’ (Oviatt & McDougall, 1995: 36).
gradual building of a global customer base – yet its
role is not mentioned by McDougall et al. Inter-generational account
(1994a, b, c). In the cases of both Logitech and Oxford Instruments The Clarendon Laboratory of
Femcare, their alliance was the reason why early the University of Oxford actively supported the
internationalization of the technological invention foundation of Oxford Instruments. The Laboratory
was achievable. The difference between the two not only consented to the establishment of the
ventures is that Femcare’s product was already firm, but continued to employ the founder, Martin
commercialized and selling on global markets Wood, for a decade after the company was founded

1209
Figure 6 Foster relationships.
(Wood, 2001) (Figure 6). Originally, the company gradually and at a time when the venture had been
specialized in technical consulting services. The able to establish itself in international markets and
idea for its first product, materials for product was on the path to global niche leadership.
development, initial publicity via conferences,
network of customers and marketing were all Heartware Heartware’s founder – like Wood, a
obtained from the Clarendon Laboratory. The first committed but inexperienced entrepreneur – left
product, the foundation for the company’s success, his employment and started the venture on the
was a highly specialized piece of laboratory equip- understanding that it would receive from a Dutch
ment (i.e., magnets), modelled on equipment university not just a technology license (for instru-
already being used in the Lab. Wood later recalled: ments measuring and treating cardiac arrhyth-
‘We made money from year 1 because all the mias), but also ongoing support, technology
technology came out of the university’ (Wood, updates and market leads from the university
2012: 18). Once the product was ready to sell, the researchers who invented the technology. This
Laboratory served as the manufacturing subcon- support was crucial given the technology was an
tractor, and its reputation and research networks ‘engineering’ rather than ‘commercial’ product:
provided the company access to an international that is, too early to be commercially viable. Heart-
customer base. The leading scientific laboratories ware was also dependent on the inventors’ inter-
worldwide that formed Oxford Instruments’ cus- national network of professional contacts to recruit
tomer base would not have purchased equipment hospitals that were prepared to act as early adopters
from unverified sources. (interview with Heartware founder, 2017).
The technological leadership of the company was However, the firm’s prospects were gravely ham-
nurtured and co-shaped by the Laboratory without pered by the breakdown of its relationship with the
the university ever formalizing this relationship or Dutch university within the first year of its opera-
claiming an equity stake. This arrangement can be tions (Figure 6). The informal fostering arrange-
explained by the timing of the startup. When it was ment with the inventors did not survive their
founded in 1959, Oxford University had no prior sudden exit from the university, leaving the firm
experience of spinning out ventures and no formal without technical support and further market
process of supporting them. However, it was able to leads. On its own, the technology license that the
provide valuable inputs and experience at the Dutch university had granted was not enough. In
points at which they were needed, allowing the his interview with us, the founder estimated that
technology to reach the stage of commercial transforming the technology into a product that
viability. This allowed Oxford Instruments to grow could be commercialized would cost $US1 million,
organically. Withdrawal of support occurred but despite considerable effort he was unable to
attract a development partner that would make

1210
such an investment given the uncertain payoff. explanation found in the original BG/INV studies,
Located far from relevant industry clusters and that treats these new ventures as though they were
without a replacement partner, Heartware was independent.
forced to close. Its internationalization never went
beyond a proactive but ultimately futile worldwide Alternative Explanation: How and Why Inter-
search for finance, technology partners and cus- generational Relationships Matter
tomers that would be prepared to act as trial sites. Although they might facilitate early international
Both Oxford Instruments and Heartware were expansion, we have found that incumbents were
startups without market-ready products upon not necessarily advantageous to the international-
founding and whose founders had no prior entre- ization of the new ventures whose founding they
preneurial experience. But crucially, they differed supported. Synthesizing these findings from our
in the nature of the fostering they received. With- revisit, we now delineate how each type of inter-
out the comprehensive, long-term support of the generational relationship affected the internation-
Clarendon Laboratory, Oxford Instruments would alization pathways of new ventures: not just the
not have built and internationalized its ‘unique timing and speed of entry into international mar-
intangible asset’ (Oviatt & McDougall, 1995: 37). kets, but also the possible pressure points and
And no global vision would have saved Heartware destabilization produced by the interactions over
from stalling once the Dutch university researchers time between the parties to the relationship. In this
stopped sharing technological updates, making the conceptual treatment of the relationship types, we
product unattractive to investors. The internation- specify how the characteristics of each one gener-
alization and the very viability of each company ated distinct advantages and disadvantages for new
was affected by its foster relationship. venture internationalization (Figure 7).
In Oviatt and McDougall’s version, Oxford
Instruments’ ‘unique intangible asset’ (1995: 37) Quadrant 1: Parent–subsidiary relationships
is attributed solely to the company. The omnipre- In this kind of relationship, the venture’s depen-
sent role of Oxford University in building this asset dence on its parent was high, but if the resources it
is not considered. In fact, Oxford University and received in return were munificent and aligned
the Clarendon Laboratory are not mentioned by with the requirements of the market it was servic-
Oviatt and McDougall (1995) at all. In the case of ing, its internationalization could be both early and
Heartware, they acknowledge that the company rapid. Of particular value were a commercial-ready
‘failed because its relationship with its Dutch product, thanks to the incumbent’s investment in
suppliers was insecure’ (1995: 36) but do not product development process prior to establish-
explain how dependent it was on the Dutch ment of the subsidiary, and extended support after
university for more than the technology license. foundation as well (e.g., Cochlear). If the parent
The premature termination of this relationship was company was a large multinational (e.g., AC
the reason for the company’s attempts at interna- Rochester), the subsidiary’s internationalization
tionalization, and its ultimate failure. might also benefit from a high level of external
legitimacy and an internal market in the form of
other business units of the group. These were cases
DISCUSSION: EARLY AND RAPID of what has been termed ‘internationalization of
INTERNATIONALIZATION REVISITED the second degree’ (Forsgren, Holm, & Johanson,
Our empirical revisit has uncovered a phenomenon 1992); that is, internationalization of the subsidiary
that has been systematically omitted, or at least organization.
downplayed, in existing research: the presence of However, parents did not necessarily make a
an incumbent organization in the founding of a substantial resource commitment to the venture if
new venture. In this section, we provide our they regarded it as a side bet rather than a strategic
alternative explanation for the early international- one. In such cases (e.g., Fact), the resourcing they
ization of such incumbent-backed ventures. In the provided typically fell short of what would be
first part of this section, we specify how each needed to sustain the new venture into the future –
relationship type may facilitate, but also potentially with this shortfall particularly acute for those new
hinder, internationalization. We then complete our ventures without a market-ready offering upon
revisit by contrasting our explanation, that factors founding. The parent might also have little prior
in organizational reproduction, with the exposure to the industry in which the new venture

1211
EXPECTED RELATIONSHIP DURATION

ongoing time-bound
(1) (2)
Parent-subsidiary relationships Sibling relationships
fulfilling subsidiary mandate pursuing an existing opportunity within a new legal entity
Potential benefits for internationalization Potential benefits for internationalization
early, rapid internationalization due to: strong basis for internationalization due to:
- munificence and complementarity of parental support, - superior resources,
- availability of an internal market, - experiential knowledge inherited from sibling firm,
- external legitimacy due to industry position of the parent - external legitimacy due to credibility of serial entrepreneur
ownership
RELATIONSHIP GOVERNANCE
Potential disadvantages for internationalization Potential disadvantages for internationalization

pressure points: mandate changes, reduction in commitment, ownership pressure points: resource shortfalls, loss of independence, leading to
changes, leading to - need for relationship upgrades,
- high level of dependence on corporate parent to enable and sustain - risk of ineffective transfer between sibling ventures of entrepreneur’s
internationalization, experience
- if a side bet by parent, limited resource commitment and lack of
complementarities,
- limited international expansion due to restrictions of subsidiary
mandate
(4) (3)
Foster relationships Alliance relationships
jointly bringing an innovative solution to market advancing a collaborative project
Potential benefits for internationalization Potential benefits for internationalization
continuity of formal and informal support of internationalization, high level of complementarity of alliance partners, including:
including: - international experience of the alliance partner,
- flexible and targeted resourcing that bridges the high upfront costs of - high level of external legitimacy,
non-
internationalization, - provision of reference site
ownership
- external legitimacy due to reputation and industry contacts of
fostering organization
Potential disadvantages for internationalization Potential disadvantages for internationalization
pressure point: withdrawal of organizational permission for fostering, pressure points: cessation of alliance prior to commercialization of
limited funding leading to product, limited funding, leading to
- lack of contractual safeguards and redress - joint project remaining unproven and incomplete
- insufficient funding for product development and marketing - need to source additional partnerships for resourcing
Figure 7 How inter-generational relationships affect new venture internationalization.
was seeking to establish itself, with this lack of changes or new ownership arrangements, includ-
complementary experience limiting its capacity to ing an independent future for which (unlike
provide the resources and global market access that Cochlear) it may have been poorly equipped. The
were required. In such a scenario, the subsidiary second-degree internationalization that com-
suffered from the twin disadvantages of high menced within one firm might continue inside
dependence and a high level of resource con- another legal entity. These developments repre-
straints. This means rapid growth in international sented pressure points on the subsidiary’s interna-
markets was beyond the venture’s reach. The tionalization trajectory over time.
subsidiary or joint venture could face closure or
sale if its growth and internationalization did not Quadrant 2: Sibling relationships
meet the objectives set by its parent. The accumulated assets, reputation and experience
No matter the munificence of the resourcing, of the older sibling firm could provide a promising
ongoing dependence on the parent had the poten- legacy for the new venture and its international-
tial to constrain second-degree internationaliza- ization. This inheritance from the previous venture
tion. Although a proactive management team might be sufficient to enable the new one to
might find ways to expand its mandate, the internationalize early. In this scenario (e.g., Austal),
subsidiary’s growth in the longer term could be the venture was able to benefit from the transfer of
hindered by its association with the parent. Even a assets from its predecessors, even though the
well-resourced and profitable subsidiary might not resourcing may not have been as extensive as in
have a secure future in the multinational group the case of subsidiaries and joint ventures. The
from which it originated, but could be sold or spun resource transfers could take the form of techno-
out if the parent’s strategic priorities changed. The logical and industry expertise, skilled and experi-
subsidiary’s position within the parent group was enced staff, and even international experience and
not assured, and it had to adjust to mandate relevant contacts. Given its association with its

1212
predecessor, the new venture might commence future of the new venture remained precarious,
with a degree of external legitimacy, enabling it to jeopardizing any chance of growth in international
obtain support from external parties such as banks, markets. Given these limitations, other inter-gen-
distributors and customers. If a habitual entrepre- erational relationships might be needed (e.g.,
neur remained involved, this potentially ensured Cochlear had a parent, not just alliance relation-
that valuable experiential knowledge was not lost ship), so that the new venture could access the
in the resource transfer from one sibling firm to additional resources not available from its alliance
another. partner.
However, the inheritance from the older sibling
might not be so strong, providing a mixed or even Quadrant 4: Foster relationships
problematic legacy for the new venture. This was Although these relationships were based on infor-
particularly the case if the new venture inherited a mal arrangements and in-kind contributions, they
product that was not at the point of being com- could play a critical role in enabling early interna-
mercially viable (e.g., Betatene). Because the older tionalization. Incumbents were not able to provide
sibling did not provide ongoing support, there was equity due to the informality of the arrangements,
insufficient resourcing available for international- but a wide range of resource transfers was nonethe-
ization of the new venture. The resourcing shortfall less possible: e.g., technical expertise, industry
might be exacerbated by barriers to a smooth knowledge, access to equipment, introductions to
transfer of assets between sibling firms – for exam- potential customers and networks, and even pay-
ple, the failure to secure key personnel. In response ments for services. Critical to early international-
to these pressure points, the venture might be able ization was the incumbent’s provision of initial
to secure a relationship upgrade, attracting addi- contacts with potential customers and in-kind
tional investors who provided resources that were support to develop the first product, given that
beyond the capacity of the sibling firm. However, the costs would otherwise have been prohibitive. In
this diluted the control of the founder and eroded this way, support from the incumbent could bridge
the venture’s independence. the gap between the deficient resources of a startup
and the upfront costs of international expansion
Quadrant 3: Alliance relationships (e.g., Oxford Instruments). Because of the infor-
Although the incumbent’s commitment to alliance mality of the relationship, there was considerable
relationships was bounded in its scope and dura- flexibility to provide well-targeted and timely sup-
tion, its willingness to strike an alliance, prior to port, responding to needs as they arose.
the existence of a legal entity, provided the new However, the lack of contractual obligations
venture with considerable credibility. The reputa- meant that the new venture was exposed to
tional benefits of being associated with the incum- changes in the priorities and policies of the incum-
bent firm could lead to additional opportunities, bent firm. The viability of the foster relationship
partnerships and resources. In this way, pre-found- was also highly dependent on the champions in the
ing contractual relationships could fast-track the incumbent continuing to have organizational per-
development of the venture’s product and interna- mission to support the new venture. The profes-
tional markets (e.g., Femcare), providing the new sional standing, seniority and decision-making
firm with a track record, external legitimacy and, in autonomy of the champion or champions in the
the case of R&D partnerships, a reference site. incumbent firm were critical in this regard. Sudden
While alliances were critical in providing access withdrawal of this support (e.g., Heartware) was the
to the resources – such as IP and funds for R&D – main pressure point on the new venture’s interna-
necessary to found the new venture (e.g., Logitech), tionalization, pushing the company to scale up its
they did not amount to long-term commitments or international search for resources to compensate
the promise of ongoing investment. Yet despite this for a precarious position at home. In addition, the
low level of commitment on the part of the informal nature of the relationship restricted the
incumbent, the venture’s dependence on its alli- extent of the resource transfers that were possible.
ance partner was high: without this support, The lack of direct financial support by the incum-
development and commercialization of the inno- bent means that internationalization of the new
vation would not be viable. Conclusion or early venture depended on organic growth so necessarily
withdrawal of the alliance partner was therefore a proceeded slowly.
critical pressure point. In such circumstances, the

1213
To sum up, inter-generational relationships did 2021), but in this section we will contrast it with
not just make founding of the new ventures the alternative that our revisit has uncovered
possible, potentially becoming involved years prior (Table 2): that early, and possibly rapid, interna-
to the formation of the legal entity; they also tionalization, may be the result of organizational
motivated early internationalization. However, the reproduction. Having conceptualized this repro-
presence of the incumbent does not mean that ductive process as a dynamic inter-generational
internationalization would be rapid, or that it could relationship, we now demonstrate how and in what
be sustained over time. Instead, the actions of ways this provides a different explanation of the
incumbents were a source of tensions and instabil- internationalization pathways of new ventures.
ity, not just beneficial resourcing. Whether the
inter-generational relationship generated momen- Founder attributes and resources
tum for internationalization, or else restricted and Turning first to the entrepreneurial proclivities of
even destabilized it, the impact on the new venture individuals, the evidence from our revisit does not
extended beyond the pre-foundation period. The negate the importance of an entrepreneurial orien-
growth bursts or pressure points produced by the tation on the part of the founder or founding team.
incumbent were related to the characteristics of the As our case analysis has shown, the focal new
relationship itself: its purpose, governance, depen- ventures we studied were led by capable and
dence and duration. For these reasons, internation- committed individuals. They varied in their level
alization could not be understood without of experience (i.e., habitual entrepreneurs versus
reference to the incumbent and the evolution of first-timers) and motives (e.g., social entrepreneurs
its relationship with the new venture. In the next versus inventors), but they exhibited the entrepre-
section, we contrast this inter-generational expla- neurial attributes that have been identified in
nation for the BG/INV phenomenon with that of existing research (e.g., Hennart et al., 2021; Jiang
the original studies. et al., 2020).
However, a focus on the human capital found in
Contrasting the Two Explanations the new venture is insufficient. Decision-makers
As we have already discussed in our review of and venture champions in incumbent organiza-
existing literature, the dominant explanation in IE tions were also decisive actors. In some cases,
identifies three features of new ventures that decision-makers in the incumbent organizations
explain their early and rapid internationalization: were even the ones who identified and pursued the
the entrepreneurial attributes of the founding initial opportunity, and recruited the founding
entrepreneurs, the superior resources and capabil- team. Managing a positive relationship with these
ities of the new ventures, and the networks that decision-makers was a priority for the management
they are able to access. This has remained the of the new venture, requiring considerable time
favored explanation for new venture internation- and energy. Relationship management was a crit-
alization (e.g., Jones et al., 2011; Keupp & Gass- ical skill for the new venture’s leadership team in
mann, 2009; Zahra & George, 2002; Zucchella, maximizing the benefits that could be gained from
Table 2 BG/INV versus inter-generational explanation
Key dimensions Original explanation (BG/INV) Inter-generational explanation
Founder Entrepreneurial attributes of founders and founding teams Role played by subsidiary/joint venture managers
attributes and venture champions in incumbent organizations
Firm-level Superior resources and capabilities e.g., intangible assets of Dependence of new venture on resources
resources and new venture; unique product transferred by incumbent organization, particularly
capabilities to progress product development
Relationships Industrial networks (comprising suppliers, customers, Destabilizing effects of inter-generational

and networks intermediaries, etc.) and social networks (personal contacts) relationships on internationalization
constituting the venture’s social capital Self-interest of incumbent
Power and dependence
Pressure points: resourcing shortfalls, reduced
commitment, withdrawal from relationship

1214
the incumbent, and mitigate the problems that These ventures were able to commence their inter-
arose in the relationship – including the negotia- nationalization with sales, exploiting the resources
tion of relationship upgrades if they became that had been transferred to them.
necessary.
Inter-organizational relationships and networks
Firm-level capabilities and resources The third advantage of new ventures proposed by
The second factor highlighted in existing literature existing literature – the networks with industrial
– the resources and capabilities of the new venture partners they can use to access resources (e.g.,
(e.g., Jiang et al., 2020; Rialp et al., 2005) – also Bembom & Schwens, 2018; Sedziniauskiene et al.,
needs to be rethought due to the presence of 2019) – also requires reassessment in light of the
incumbent firms. In the cases we revisited, many of findings from our revisit. Relationships with
the critical resources and capabilities that enabled incumbent organizations were not a straightfor-
early and even rapid internationalization were ward advantage for the new venture. They made
developed and provided by incumbent organiza- early internationalization possible, but the depen-
tions over an extended period of up to two decades dence that they entailed was problematic.
prior to, and more than a decade after, foundation Although support from the incumbent organiza-
(i.e., Cochlear, see Appendix 1 in Supplementary tion was necessary during the often-extended
Material). Because of the complexities of bringing period when the new entity was not able to survive
an innovation to market, product development on its own, the power lay with the incumbent
activities were often the first step, not international organization. This means that decisions were being
sales, and were the reason why incumbents were made in the interests of the incumbent, not the
necessary to the founding of the new ventures. newly formed venture. The dominance of self-
Even the ventures founded by experienced habitual interest over benevolence on the part of the
entrepreneurs only internationalized early because incumbent – notwithstanding some notable excep-
they were able to exploit the legacy assets inherited tions, including that of Cochlear’s parent – explains
from, and opportunities nurtured by, an older the struggle that new ventures often had to obtain
sibling. sufficient resourcing to secure their futures. Even if
Dependence on the incumbent did not necessar- incumbents were benevolent, they were not neces-
ily cease upon foundation. Following its establish- sarily well resourced – again, Cochlear’s parent was
ment, the new venture itself often did not have an exception in this regard.
sufficient resources to operate independently, While it might be expected that power would
let alone absorb the costs of international growth. over time be rebalanced, as the new venture grew,
These costs could be substantial, if the new ven- the demands of growth could in fact increase the
ture’s product was still immature and a market for it new venture’s dependence on the incumbent over
yet to be established. The innovation might at time. During this period, the new venture was
some point in the future constitute the basis for vulnerable to decisions by the incumbent that
competitive advantage, as emphasized in BG/INV destabilized its internationalization. Through our
accounts (e.g., Zucchella, 2021), but it was often case analysis we have seen that these pressure
little more than an unrealized promise at this early points included resourcing shortfalls, reduced com-
stage of the venture’s existence. Even with the mitment to or withdrawal from the relationship. In
backing of an incumbent organization, turning this such circumstances, transitioning to a new rela-
promise into a reality typically exhausted the tionship might be the only option to enable
resources available to a startup. In these circum- internationalization to continue – particularly if
stances, early internationalization was not an indi- the new arrangement represented an upgrade in
cator of strong resourcing and a favorable heritage. terms of the commitment and complementarities
On the contrary, the venture was potentially inter- that were on offer. Overall, then, the dynamics of
nationalizing in the attempt to secure the resources inter-generational relationships made it difficult for
and support it had been unable to obtain from the new ventures to sustain their international growth
incumbent. The only new ventures that did not while still dependent on an incumbent organiza-
face these uncertainties and dilemmas surrounding tion that might act as a destabilizing force.
innovation were those that inherited a market- Once the dynamics of inter-generational rela-
ready product from the incumbent organization. tionships are factored in, our interpretation of
specific events changes. Early internationalization

1215
following foundation is only possible because of was available to the pioneering researchers, who
the international activities – product development were not able to track the progress of the case firms.
and even international sales – already undertaken This has allowed us to correct the success bias that
by the incumbent organization. Nor is early inter- was inherent to the designs of the original studies,
nationalization of a new venture necessarily an which observed firms that were (seemingly) in a
indication of superior resources and capabilities; on growth phase of their internationalization.
the contrary, it may be an indication of resource Methodologically, there have been considerable
shortfalls. Rapid internationalization is not a mea- advances in case research since the 1990s, particu-
sure of the superiority of the founder’s entrepre- larly the use of research designs which are more
neurial proclivities or the new venture’s sensitive to process and context (e.g., Langley et al.,
capabilities, but rather indicates the incumbent’s 2013; Welch, Piekkari, Plakoyiannaki, & Paavi-
commitment to providing the new venture with a lainen-Mäntymäki, 2011). Theoretically, there have
sufficient resource base. Rapid internationalization been considerable advances in the understanding
in one time period, far from being the basis for of organizational reproduction and the provision of
competitive advantage, may undermine it by more accurate terminology, work which we have
increasing the venture’s dependence on the incum- used to inform our own study.
bent’s support. By excluding the role of the In the sample of firms we re-examined, the
incumbent, scholars studying new venture interna- quintessential ‘born global’ – the truly independent
tionalization risk causal misattribution. startup which builds a global (not just regional)
Our study has emphasized the value of including market – did not appear. But given that this dataset
a longer time horizon than is typical in studies on was not based on a representative sample of firms,
the BG/INV. In doing so, it contributes to the shift we emphasize that we are not making any claims
underway in IE research from concentrating on the about the population of BGs and INVs. What our
timing of the startup’s first international step in analysis does show is that inter-generational rela-
relation to its establishment, to explaining the tionships, formed as they are prior to foundation,
dynamics of its internationalization over time are explanatory factors that are easy to miss. At the
(Reuber, Dimitratos, & Kuivalainen, 2017). Inter- very least, we recommend that future IE research
generational relationships commence prior to the pay greater attention to the origins of early inter-
foundation of the firm, and their impact continues nationalizing ventures than has occurred to date in
beyond it – even if the incumbent organization is studies on the phenomenon. This should extend to
no longer directly involved. If restricted time scales involuntary forms of organizational reproduction,
are adopted studies risk downplaying or misinter- which we were not able to investigate in our study
preting the internationalization processes they given the composition of the original samples.
investigate. This, then, has implications for the Our study is place- as well as time-bound. Due to
research design and theoretical approaches that the inclusion of the McKinsey dataset, the sample
researchers choose in the future, to which we now we revisited was biased towards Australian firms
turn. (55% of the total). New business models enabled by
technological progress made since the original
samples were collected should be investigated to
CONCLUSION understand inter-generational relationships in dig-
The seminal studies that we have revisited in this ital markets (Monaghan, Tippmann, & Coviello,
paper succeeded in drawing attention to the phe- 2020). Further research will also need to be con-
nomenon of early and rapid internationalization, a ducted to validate and extend the explanation we
phenomenon that had previously received little have developed, linking it to other conversations in
explicit attention from researchers in the field of the literature, including on social, corporate, public
international business. But since these studies were and independent entrepreneurship (e.g., Phan,
conducted, numerous developments have occurred Wright, Ucbasaran, & Tan, 2009; Weerawardena &
– empirical, methodological and theoretical – Mort, 2006). Given the constraints of our dataset, it
which we have shown warrant a revisit. Empiri- was not possible to compare incumbent-backed
cally, more information is now available on the and independent ventures in a meaningful way,
internationalization pathways of the new ventures something that will require a carefully matched
which were examined by the original studies, sample. We would also recommend further study of
allowing us to include a longer time period than ventures seeking to commercialize new-to-the-

1216
world innovations. Our findings suggest that the memory loss, hindsight bias and the loss of relevant
extended timelines involved (see also Rothaermel material – but it also offers numerous strengths for
& Thursby, 2005; Wennberg, Wiklund, & Wright, theory building. In particular, a revisit allows the
2011) make the benevolent support of incumbents collection of additional data not available to the
critical yet difficult to achieve. original researchers, and benefits from the greater
Our study shows how applying a history-sensitive historical distance which applies, bringing longer-
methodology can generate new theoretical insights term processes into sharper relief. Tracing the chain
in existing research fields. Because we extended the of events has allowed us to enhance the internal
time period under investigation to include the validity of our conclusions.
firm’s origins (i.e., the pre-establishment period), Our revisit therefore provides multiple opportu-
and its full internationalization pathway to date nities for future research. It has enabled the devel-
(i.e., the post-entry period), we were able to take opment of an alternative explanation for new
into account antecedents and processes which were venture internationalization that can be further
not systematically included in the original studies – extended and tested. Our relational conceptualiza-
and which still receive little sustained attention in tion of organizational reproduction provides a new
the literature. Our alternative explanation could dimension to the networks formed by small and
not have been developed based on the original young firms. By demonstrating the dynamic nature
evidence as key events took place far beyond the of these relationships, we have contributed to a
temporal scope of the original BG/INV studies. The more process-oriented agenda to entrepreneurial
relational dynamics which our explanation has internationalization. Beyond these contributions to
highlighted can only be detected if the firm is IE research, we have offered a methodology which
analyzed over a lengthier time period. This is can be employed to study other topics in interna-
illustrated by the example of Cochlear, the born tional business. Above all, our study has shown the
global firm that triggered this study: its relation- value of returning to previously studied settings.
ships with incumbent organizations, including its The case of Logitech has now been analyzed in
parent Nucleus, spanned 28 years (Appendix 1 in three separate studies, with three contrasting con-
Supplementary Material). It took this amount of clusions drawn, attesting to the complexity of the
time for the original invention to be turned into IB phenomena we seek to explain and the neces-
the market leader of a rapidly growing global niche. sarily partial and limited nature of any single study.
The implication for future research is that exclusive Re-examining historical evidence and returning to
reliance on snapshot views can potentially be cases we thought we understood can therefore be
misleading, as understanding of a firm’s current the basis for novel and unexpected insights.
activities may be altered once placed in its temporal
context. Studies such as ours that cover a more
extended period of time therefore complement IE
ACKNOWLEDGEMENTS
literature that concentrates on particular phases,
This paper has benefited from feedback at numerous
such as scaling up (Monaghan & Tippmann, 2018;
forums. Alain Verbeke and JT Li provided valuable
Nambisan, Zahra, & Luo, 2019).
comments at a paper development workshop held at
As well as enabling us to identify an overlooked
the University of Sydney in November 2018. Thanks
explanatory factor, a revisit contributes to what has
are also owed to Peter Liesch, Peter Buckley, and other
been recognized as an important goal for a research
participants at a University of Queensland Business
community: to conduct follow-up studies (Hoch-
School research seminar in August 2019; and John
warter, Ferris, & Hanes, 2011). Yet despite recogni-
Child and other participants at a Department of
tion of the importance of replication (Aguinis,
Strategy and International Business seminar held at
Cascio, & Ramani, 2017; Dau, Santangelo, & van
the University of Birmingham in October 2019. We
Witteloostuijn, 2022), international business has
would like to express our gratitude to participants of
been slow to conduct different forms of follow-up
this study for their generosity in sharing their mem-
studies, including qualitative revisits (Hennart’s,
ories. This study would not have been possible without
2014 reanalysis of Logitech being a notable excep-
George Argyrous (University of Technology Sydney),
tion). In particular, it is rare to re-examine the cases
who shared with us the original McKinsey sample of
on which a new theory and research stream are
born global companies which was used in this study.
based. A case study revisit confronts challenges
He was kind enough to provide feedback on our early
faced by any history-sensitive study – notably

1217
interpretations. Eriikka Paavilainen-Mäntymäki was an (1993). Apart from several examples provided in
important discussion partner early on. Special thanks the report, Knight and Cavusgil did not have access
are due to Lisa Hewerdine, who was the one who first to the names of the 39 firms classified as ‘born
discovered the full history of Cochlear, the case that global’ by McKinsey and prepared to be publicly
motivated us to write this paper. We have benefited identified. Similarly, 12 out of the 24 McDougall
from the support David Anstice has provided to our et al. (1994a, b, c) cases were conducted by third
ongoing research into Australian innovations. We are parties and sourced from journal publications or
grateful to Liena Kano for her encouragement and conference proceedings. Even when it comes to the
patience throughout the process and to three anony- 12 cases that the authors conducted themselves,
mous reviewers for challenging us in each round but there is no transparency as to the number of
also seeing potential in our work. Tamer Cavusgil was interviews, or analytical process used by the
very kind in encouraging us to pursue our line of authors.
5
inquiry. For example, one of the promising new ventures
featured in McDougall et al. (1994a, b, c), Tech-
nomed International SA, was founded in 1985 but
went into liquidation the same year the article was
published. This is a very different trajectory to that
projected in the glowing press coverage relied on by
FUNDING
the researchers (e.g., Mamis, 1989).
Open Access funding provided by the IReL 6
Consortium. ANCA was founded in 1974, not in 1980, as was
mistakenly claimed in the McKinsey (1993) report.
This excludes the company from the ‘born global’
category as its exports started 10 years after foun-
NOTES dation. Camarao Brasiliensis (McDougall et al.,
1
1994a, b, c) was based on a teaching case done by
There is inconsistent usage of terminology in the a third party. The original case was about whether
existing management literature to refer to organi- the new venture should commence exporting and
zations that produce other organizations. We use did not record whether any international sales were
the term ‘organizational reproduction’ to denote actually made. We were unable to locate additional
any form of incumbent organization, and restrict data on this company.
‘parenting’ to refer specifically to corporate parents 7
Oviatt and McDougall (1994) included these
of subsidiaries. cases as a type of INV.
2
Organizational reproduction can be voluntary 8
In total, we have completed 17 in-depth case
(i.e., the incumbent makes a deliberate decision to studies: 15 of companies reproduced by incumbent
support a new venture) or involuntary (i.e., an organizations and two of independent firms. The
employee leaves the incumbent organization, using independent firms (Mana, a software firm, and
the knowledge and other resources gained as the Food Spectrum, a specialized food ingredients
basis for a new, often competing venture). Given producer) were studied in-depth to allow for a
these two forms of reproduction are very different comparison with our core sample. The remaining
in nature, and our dataset overwhelmingly com- 15 cases were used for the initial analysis, with 9
prised voluntary reproduction (with the exception cases selected for presentation in the paper (other
of one case featuring both, see Appendix 3 in cases were selected to examine themes not covered
Supplementary Material), we confine the scope of in the current paper, even though they contributed
our paper to this form. to our understanding of inter-generational rela-
3
Håkanson and Kappen (2017) apply modern tionships). More information on all in-depth cases
statistical techniques to the dataset used to con- is provided in Appendix 3 in Supplementary
struct the original Uppsala Model (Johanson & Material.
Vahlne, 1977). As the authors use exactly the same 9
Such sources included, e.g., the biography of the
dataset to suggest a new theoretical explanation of founder of Scitex Efraim Arazi (Milstein, 2004);
the original events, it does not amount to a revisit. numerous video recordings of the reflections of
4
Knight and Cavusgil (1996), the original aca- Momenta’s founder Kamran Elahian (e.g., Elahian,
demic paper introducing ‘born globals’, relied on 2010); the history of Oxford Instruments written by
the survey findings from the McKinsey report one of the founders (Wood, 2001); the book about

1218
the early years of Lonely Planet written by Tony 12

Reincorporations ahead of an IPO are a com-
and Maureen Wheeler, its husband and wife co- mon occurrence. One implication of our revisit is
founders (Wheeler & Wheeler, 2006); the history of that if studies use IPO prospectuses as their data
the American Wang Laboratories, a key sponsor of source, researchers should code for whether the
Fact International (Kenney, 1991); a history of entity is a reincorporation.
Cochlear (Bondarew & Seligman, 2012); etc. 13
Jolly and Bechler (1992) refer to the contract
10
Coviello and Munro (1997: 372) mention Fact’s with Bobst, but they state this was with Logitech.
relationship with Wang in their narrative, describ- However, this is incorrect, and erases Logitech’s
ing Wang as a Japanese multinational. This is pre-foundation history.
incorrect: Wang was headquartered in the USA. 14
According to Oviatt and McDougall (1995: 39),
11
Habitual entrepreneurs include serial and port- the seven characteristics of INV success include
folio entrepreneurs, as well as successful entrepre- global vision, international experience, strong net-
neurs who also become active as angel investors to work, pre-emptive technology or marketing, a
a new generation of ventures. Changes in the legal unique intangible asset, linked product extension,
form of an existing entity include incorporations of and tight coordination.
previously unincorporated entities (e.g., partner-
ships) and reincorporations (due to e.g., an acqui-
sition, management buyout, corporate spinoff or
stock-market listing).
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interactions between academic spin-offs and their parent ABOUT THE AUTHORS
organizations. Technovation, 33(12): 450–462. Maria Rumyantseva is Lecturer and Academic
Uzunca, B. 2018. Biological children versus stepchildren: Fellow in Strategy and Innovation at the University
Interorganizational learning processes of spinoff and non-
spinoff suppliers. Journal of Management, 44(8): 3258–3287. of Sydney Business School, Australia. She has a
Verbeke, A., & Ciravegna, L. 2018. International entrepreneur- longstanding interest in how new technologies are
ship research versus international business research: A false commercialized and the role of internationaliza-
tion in this process. Maria uses process-based

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methodologies to demonstrate how qualitative

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ment at Trinity College Dublin, Ireland, and the Creative Commons licence, and indicate if
Distinguished Visiting Professor at Aalto Univer- changes were made. The images or other third party
sity, Finland. Her research interests lie in the areas material in this article are included in the article’s
of qualitative research methodology and process Creative Commons licence, unless indicated other-
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Accepted by Liena Kano, Guest Editor, 26 December 2022. This article has been with the authors for four revisions.

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Journal of International Business Studies (2023) 54, 1193–1221

ª 2023 The Author(s) All rights reserved 0047-2506/23

The born global and international new

Maria Rumyantseva1 and Abstract

The online version of this article is available Open Access

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Table 1 Comparison of data collection and analysis strategies

Original BG/INV studies Revisit study

Data collection 1988–1993 2014–2021

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Figure 1 Analytical process for the revisit.

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in Figure 1. As is appropriate for a process-based FINDINGS

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Figure 2 Types of inter-generational relationships found.

Figure 3 Parent–subsidiary relationships.

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Figure 4 Sibling relationships.

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Figure 5 Alliance relationships.

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Figure 6 Foster relationships.

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EXPECTED RELATIONSHIP DURATION

Potential disadvantages for internationalization Potential disadvantages for internationalization

Figure 7 How inter-generational relationships affect new venture internationalization.

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Table 2 BG/INV versus inter-generational explanation

Key dimensions Original explanation (BG/INV) Inter-generational explanation

Relationships Industrial networks (comprising suppliers, customers, Destabilizing effects of inter-generational

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the early years of Lonely Planet written by Tony 12

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methodologies to demonstrate how qualitative

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