COGNITIVE AND DEMOGRAPHIC FACTORS INFLUENCING THE
EXPORT INTENTION OF NASCENT ENTREPRENEURS
Charles H. Matthews, University of Cincinnati, USA
Imane Khayat, University of Versailles Saint-Quentin, FRANCE
Principal Topic
Over the last decade, the phenomenon of “International New Ventures” (McDougall and Oviatt,
2003; Oviatt and McDougall, 1994) or “Born Globals” (Rennie, 1993) has been drawing the
attention of many researchers and practitioners. In contrast to the traditional models of
internationalization (Johanson and Wiedersheim-Paul 1975; Johanson and Vahlne 1977, 1990),
firms no longer have to follow the incremental stages pattern before engaging in international
operations. The psycho-cognitive characteristics of entrepreneurs have been emphasized to be
the driving force for this early internationalization (Maignan and Lukas, 1997; Gupta and
Govindarajan, 2002; Zahra and George, 2002; Nummela et al., 2004; Zahra et al. 2005). Yet, the
number of empirical studies connecting the cognitive characteristics and global orientation of
entrepreneurs is still rather limited and did not examine how cognitive and demographic
characteristics can predict the global orientation of entrepreneurs. Furthermore, studies did not
consider the intentionality of export in the early process of business creation. Drawn from
international entrepreneurship (IE), cognition, and internationalization theories, this study
investigates the impact of cognitive, demographic and new venture characteristics on the export
intentionality of nascent entrepreneurs.
Method
Data are obtained from the National Panel Study of Entrepreneurial Dynamics (PSED) database.
A multiple regression analysis is conducted to explain to what extend the cognitive and
demographic characteristics influence the global orientation of nascent entrepreneurs. New
ventures characteristics are used as control variables.
Results and Implications
Preliminary findings indicate a positive relationship between innovative decision style,
challenging personality, risk taking, and export intentionality. Contrary to other studies, internal
locus of control is found to be negatively related to nascent entrepreneurs’ export intentionality.
Demographic characteristics, age and education attainment of nascent entrepreneurs are also
found to have a significant effect on export intentionality. Overall, findings reveal that the main
determinants of global entrepreneurship are innovative decision style, challenging and risk taking
personality, and orientation toward hi-technology.
CONTACT: Charles H. Matthews; [email protected]; (T) 513-556-7123; (F) 513-5565499; College of Business, University of Cincinnati, OH 45221-0165.
1
Introduction
A quarter of a century ago, very small firms or micro-businesses were thought to be a marginal
phenomenon in developed economies. Nowadays, there is no doubt they have a significant
contribution particularly in the global market. In the U.S, micro-enterprises (those with fewer
than 20 employees) represent 69% of all U.S. exporting firms (U.S. Department of Commerce,
2003). Whereas firms in the late 80s and early 90s proved themselves in the domestic market
before looking abroad, more and more, firms today have a global vision and reach the global
market much sooner after their establishment. Consequently, there is an increasing interest in the
phenomenon of international new ventures (Knight and Cavusgil, 2004, 1996; Oviatt and
McDougall, 1994; Rennie, 1993). International new ventures have been described as the creative
process of discovering and exploiting opportunities outside the domestic market from the firm’s
inception (Zahra and George, 2002; McDougall and Oviatt 2000; Madsen and Servais, 1997).
However, despite this occurrence and the recent progress of research in the field of international
entrepreneurship, factors that drive entrepreneurs to go global in the first place, are still not fully
understood (Zahra, 2005; Grégoire et al. 2008).
Export intension, as an indicator of firms' future international behavior, has being broadly
studied among established firms to understand the difference between exporting and non
exporting firms (Katsikeas and Piercy, 1993; Aaby and Slater, 1989; Cavusgil 1984; Cavusgil,
Bilkey and Tesar, 1979). Moreover, the psycho-cognitive characteristics of entrepreneurs have
been emphasized to play an important role on the early internationalization of new ventures
(Maignan and Lukas, 1997; Gupta and Govindarajan, 2002; Zahra and George, 2002; Nummela
et al., 2004; Zahra et al., 2005). Yet, to our knowledge, no study has focused on the link between
the cognitive, demographic and new ventures’ characteristics and export intension of nascent
entrepreneurs. Therefore, the purpose of this paper is to offer better understanding in term of
antecedents of new ventures internationalization by investigating how selected aspects of
cognition, demographic and new ventures’ characteristics influence the export intension of
nascent entrepreneurs.
To explore this question, the model suggests three levels of analysis with regard to their impact
on the export intension: (1) nascent entrepreneurs’ cognitive characteristics, indicated by the
locus of control, innovative decision style, challenging personality, risk taking and problem
solving skills; (2) demographic characteristics indicated by nascent entrepreneurs’ age and
2
education attainment; (3) and new ventures’ characteristics, represented by sales sources and
high-technology.
After reviewing the literature on the internationalization behavior, hypotheses are advanced and
tested on a sample (N=150) of nascent entrepreneurs with the intension to go global. Method and
results are discussed, and finally, suggestions for future research are provided.
Internationalization of new ventures
Traditional approaches, the Uppsala (Johanson and Vahlne, 1977, 1990; Johanson and Wiedersheim-­‐Paul, 1975) and innovation models (I-­‐model) (Cavusgil, 1980) have been widely recognized as the most influential research stream in the international literature, mainly
in the study of small and medium sized enterprises (SME). These models have two conceptual
foundations. The first is based on the incremental progression of firms in the international
markets. Johanson and Vahlne (1977) describe this process as a gradual acquisition, integration
and use of knowledge about foreign markets. Thus, firms need to increase their knowledge over
time to increase their international commitment. The second is the “psychic distance” which
means that firms will primarily target markets with a similar culture, language, political system,
etc. Empirical studies of stage models have identified a number of different stages firms go
through during this internationalization process. These stages ranged from three to nine
(Cavusgil, 1984; Czincota, 1982; Reid, 1981; Bilkey and Tesar, 1977). Leonidou and Katsikeas
(1996) summarize these studies and conclude to the differences in the nature, number and
content of these stages. The Uppsala and I-models have been criticized, however, for their
inability to delineate boundaries and explain the process between stages (Andersen, 1993).
Moreover, they have been challenged for their inappropriateness for service-intensive industries
(Liesch and Knight, 1999) and for their limited relevance to apply to the rapid
internationalization of ‘knowledge-intensive’ SME (Bell, 1995). A comprehensive view of this
phenomenon has been brought by the international new ventures literature.
Different labels have been attributed to the early and rapid internationalization of some new
ventures: ‘born globals’ (Madsen and Servais, 1997); ‘international new ventures’ (INV) (Oviatt
and McDougall, 1994), and ‘knowledge-intensive’ firms (Jones, 1999; Bell, 1995). INV are
defined as companies, that from or near founding, have a global focus and commit resources to
obtain substantial revenue from international sales (Knight and Cavusgil, 2004; Oviatt and
3
McDougall, 1994). These new ventures are formed by innovative, proactive and risk seeker
entrepreneurs (Oviatt and McDougall, 2000) who are stimulated by the advances in information
and communication technologies, niche markets and global networks (Knight and Cavusgil,
1996). Indeed, the entrepreneurs’ characteristics such as international experience and global
vision have been emphasized to enable the early and rapid internationalization process.
Entrepreneurs’ success in the global arena is explained by the quality of opportunities,
localization, and their creativity in using modes of exploitation (Zahra et al. 2005). The capacity
of entrepreneurs to identify these opportunities and take advantage of localization, technologies,
and niche markets cannot be completely understood without taking into account the antecedental
cognitive dimension. The role of entrepreneurs’ cognitive process has been mostly neglected in
international literature (Liesch et al., 2003).
Researchers in the field of international entrepreneurship, however, have been calling for more
use of cognitive perspective to enrich our understanding of the mental models that guide and
shape internationalization decisions (Zahra et al., 2005; Reuber and Fischer, 1997). In new
ventures, entrepreneurs’ global mindset, or cognitive capabilities is a key factor at the core of
international success (Levy, 2005; Gupta and Govindarajan, 2002). Thus, their beliefs and
perceptions of the environment and international opportunities are likely to influence their
choices and actions. The cognitive characteristics of entrepreneurs can explain the initial
identification and interpretation of opportunities as well as the processes of representing those
opportunities to others and the processes by which representations of opportunity become an
outline for managing international operations. Forbes (1999) points out the critical role played by
cognitive processes in the formation of new ventures. He notes that the effects of managerial
cognition are likely to be more direct and immediate in new venture settings than in the context
of larger, more established organizations.
Nummela et al. (2004) examining the impact of global mindset on the international success,
define it as entrepreneurs’ positive attitude and ability to coordinate international activities and to
take into consideration both attitudinal and behavioral aspects. Gupta and Govindarajan (2002)
explore how the global mindset helps integrate diversity across cultures and markets. Calori,
Johnson and Sarnin (1994) analyze top managers’ cognitive processes in terms of their degree of
complexity, in relation to the breadth of business portfolio as well as geographic scope and links
firms has with foreign partners. They conclude that CEOs need a high cognitive complexity to
4
cope with the dynamic of the international environment. By extension, we offer the following
hypotheses which further explore how selected aspects of cognition, demographic and new
venture characteristics influence the export intentionality of nascent entrepreneurs.
Research hypotheses
The export marketing literature reveals three major research streams on export intention. The
first stream focuses on the non-exporting firms that intend to export (Leonidou, 1995; Jaffe and
Pasternak, 1994). The second concentrates on the exporting firms that intend to expand their
export involvement (Cadogan et al., 2006; Axinn et al. 1995). The third stream of literature
distinguishes between the external (Leonidou, 1995; Diamantopoulos et al., 1990) and internal
(Albaum et al., 1994; Katsikeas and Piercy, 1993) factor stimulating the export intention.
Concerned with the non-exporting firm’s intention to initiate export, this study is mainly driven
by internal factors stimulating the export intention. In this context, a few research investigated
the non-exporting firms’ intention to enter export markets. Lim et al. (1991) identify four phases
in the internationalization process: the awareness, interest, intention and adoption. Entrepreneurs
first recognize the export as an opportunity. Then, as well as their interest increase, they develop
a positive intention toward the internationalization and finally adopt it. Dosoglu-Guner (2001)
studies the export intention of firms with regard to their organizational behavior namely
organizational culture and ownership type. Ellis and Pecotich (2001) exploring the export
initiation process, reveal the importance of social ties on the perception of the entrepreneurial
opportunities. Focusing on the pre-export behavior, Yang, Leone and Dana, (1992) present a
model to identify potential exporters among small and medium sized enterprises. Acedo and
Jones (2007) are one of the few authors to examine the impact of managerial cognition on the
speed of internationalization using ambiguity tolerance, risk perception and international
orientation. They conclude that managers with a greater international orientation achieve rapid
internationalization. In the same line of these studies and to further the analysis on the export
intention, we aim to explain the export intention of nascent entrepreneurs focusing on new
ventures that are still in the process of formation and creation.
5
Demographic characteristics
Oviatt and McDougall, (2000) emphasized the entrepreneurs’ characteristics as a key factors to
the early internationalization. The educational attainment and entrepreneurs’ age have being
widely studied as determinants of export performance and export propensity. Evidence on the
relationship between the entrepreneurs’ age and internationalization is mixed. While Kaynak and
Kuan (1993) report a positive relationship between the entrepreneurs’ age and their international
success, Moini (1995) does not establish any significant relationship between the entrepreneurs’
characteristics (age and education) and the degree of export involvement. However, most studies
find a negative association between the manager’s age and export intention, propensity, and/or
intensity (Suarez-Ortega and Alamo-Vera, 2005; Jaffe et al., 1988; Reid, 1981). Younger
entrepreneurs tend to be more cosmopolitan and global minded than the older ones. Based on
these last studies, we suggest that more mature entrepreneurs will be more reluctant to go global
when starting a business.
H1: Nascent entrepreneurs’ age is likely to have a negative impact on their export intention.
Most studies have reported a positive relationship between the educational level of the manager
and degree of international involvement of the firm (Nakos et al., 1998; Axinn, 1988; Reid,
1981). Reid (1981), for example, argued that college and university degree are important in the
positive attitude toward export. Leonidou et al., (1998), in a literature review of 46 empirical
studies (published between 1960 and 1995) found that the educational level has a positive impact
on the international success. Furthermore, research in entrepreneurship, outlined the importance
of education in the new venture creation (Davidsson and Honig, 2003; Robinson and Sexton, 1994). Thus, we expect that nascent entrepreneurs when they accomplish a high education level,
they have more awareness of the global economy and they can open their minds to many
possibilities specifically to start a business in a global market.
H2: Nascent entrepreneurs’ greater educational attainment is likely to have a positive impact on
their export intention.
Cognitive characteristics
The impact of the cognitive characteristics of entrepreneurs on the export intension has not
received much interest in the literature (Halikias and Panayotopoulou, 2003). However, research
6
on the early-stage entrepreneurship has operationalized several cognitive characteristics of
nascent entrepreneurs (Shaver, 2004), which can be related to export behavior. Of those
characteristics, five were relevant to our purpose: risk attitude, locus of control, personal
realization, problem solving and decision-making style. Considering, the internationalization or
export, as an entrepreneurial process that requires entrepreneurial skills (McDougall and Oviatt,
1994), we could justify the following hypotheses, concerning the relationships between the
nascent entrepreneurs' cognitive characteristics and their export intension.
Risk attitude
Risk attitude of international entrepreneurs has been argued to be an important determinant of
internationalization (Johanson and Vahlne, 1977). The influence of the positive attitude of
entrepreneurs on the initiation of international operations has been strongly supported in the
literature (Axinn, 1988; Gupta and Govindarajan, 1984). Halikias and Panayotopoulou (2003)
found risk attitude to be a distinguishing feature between born global (INV) and traditional firms.
However, other authors do not agree that risk propensity is driving factor to successful
international ventures (Moini, 1995; Jaffe et al. 1988). Based on the fact that export activity
involves a special risk, we support that the positive attitude of nascent entrepreneurs toward risk
will influence their export intention.
H3: Nascent entrepreneurs who have greater risk taking attitude will have stronger export
intention.
Personal realization
Attributes such as personal realization (self-challenge), intern locus of control, and tolerance for
ambiguity have been argued to determine the entrepreneurial orientation of individuals and thus
their international orientation (Zahra et al. 2005). Personal realization is core to the
entrepreneurial activity and it can be posited that it regulates the entrepreneurs’ actions and the
need to be successful as well as achieve excellence over time (Birley and Westhead, 1994). Dana
et al. (2009) use personal achievement as a characteristic and a measure of the proactive
entrepreneurial, opportunity focused exporter. While the need for achievement; or realization,
was not a significant predictor of export involvement in Halikias’s and Panayotopoulou (2003)
study, others have found a positive relationship between the personal realization of entrepreneurs
7
and the new ventures growth (Lee and Tsang, 2001; Davidsson, 1989). In the same line of these
last studies, we suggest that the need for personal realization will be stronger within nascent
entrepreneurs who intend to start a global business since it is even more challenging process than
a domestic business. High achievers are ambitious, competitive, and enjoy the challenge of
difficult tasks.
H4: Nascent entrepreneurs who have greater personal realization (self-challenge) will have
stronger export intention.
Locus of control
The locus of control refers to individuals' perceptions of success, or failure, as contingent on the
control they have over personal events (Rotter, 1966). An entrepreneur with an internal locus of
control, basically, believes that the outcomes are the result of his personal initiatives, while an
entrepreneur with an external locus of control perceives his life or destiny as beyond his control.
Some studies have established a link between the entrepreneurs’ internal locus of control and
their propensity to engage in new ventures creation (Gartner, 1985). Miller and Toulouse (1986)
report that managers with an internal locus of control may be more innovative and thus better
performer than those with an external locus of control. Other research has found a positive
relationship between the CEO's internal locus of control and growth (Lee and Tsang, 2001),
namely with the export involvement of small firms (Halikias and Panayotopoulou, 2003). By
extension, nascent entrepreneurs who believe that they control events are believed to have
greater export intention.
H5: Nascent entrepreneurs with greater internal locus of control will have stronger export
intention.
Problem-solving skills
Internationalization is a complex operation that requires from entrepreneurs to engage in a
heuristic thinking and a careful analysis of situations and events. It parallels the complexity of
international entrepreneurs since they cope with heterogeneous cultural, institutional and
competitive environments and are tasked with greater information-processing (Sanders and
Carpenter, 1998). Problem-solving is the process through which individuals manage and evaluate
the information (Govindarajan, 1989). Some studies found that managers who have intuitive
problem-solving style, in that, they focus on meanings and relationship between items and allow
8
their unconscious to add on creativity and imagination, have better impact on firms performance
(Roth, 1995; Govindarajan, 1989). Calori et al. (1994) found that CEOs of international
geographic scope firms have a more complex cognitive structure, and thus better abilities to
identify and solve problems than CEOs in firms with only a national scope. In the preoperational
environment of nascent entrepreneurs, it is important to identify problem (Ford and Matthews,
2004). Thus, we believe that nascent entrepreneurs with problem-solving skills will have greater
incentives to export, or go global.
H6: Nascent entrepreneurs who have greater problem solving skills will have stronger export
intention.
Decision making style
Kirton (1976) suggests that there are two different styles of decision making, innovators versus
adaptors. Adaptors tend to rely on exciting solution or technologies in their decision-making.
They are characterized by their precision, reliability, prudence and by conforming to the method
and discipline. Adaptors are concerned with resolving problems rather than finding them. By
contrast, innovators break patterns of accepted modes of thought and action and use creative
arrangement and procedures to make a decision. They are problem and solution finders; forwardlooking; and tend to challenge traditional situations. Johnson, Danis and Dollinger (2008) found
that innovators nascent entrepreneurs, in general, have greater growth expectations for their firms
than adaptors. Moreover, several studies have supported the positive relationship between CEOs’
openness to innovation and adoption of innovative practices (Daellenbach et al., 1999; Souitaris,
2001). Cavusgil (1980) argues that export behavior is an innovation adoption process since it
involves a new process of decision making and information gathering. Thus, we expect global
nascent entrepreneurs to have innovative decision-making style.
H7: Nascent entrepreneurs who have innovative decision-making style will have stronger export
intention.
New ventures’ characteristics
High-technology
International entrepreneurship research attributes the internationalization of global entrepreneurs
mainly to the high-tech characteristic of the new ventures (Madsen and Servais, 1997; Knight
9
and Cavusgil, 1996; Bell, 1995). Moreover, several studies pointed out the role of knowledge
and innovation in determining export behavior (Roper and Love, 2002; Wakelin, 1998). Roper
and Love (2002) establish a positive relationship between having an innovative product and the
probability and propensity to export. Bell et al. (2003) argue that knowledge-intensive firms have
more proactive approach and often target difficult markets. Even more, technology has been
found to be a determinant of export performance (Zou and Stan, 1998; Aaby and Slater, 1989).
In consistence with these studies, we expect that new ventures in high-technology business will
influence nascent entrepreneurs’ choice to go global.
H8: Nascent entrepreneurs who expect to have a hi-tech business will have stronger export
intention.
Customer diversity
In this study, customer diversity indicates new ventures that expect to build a relationship with a
large population of customers. In doing so, they are able to leverage the risk of depending on a
few customers. Literature is silent regarding the effect of customer diversity on the export
intentionality. In an attempt to broach this issue, we suggest that nascent entrepreneurs who
expect to have a diversified scope of customer portfolio will have a greater export intension.
Looking for more diversification of their customer base, they may intend to look further than the
domestic market.
H9: Nascent entrepreneurs who expect to have greater customer diversity will have stronger
export intention.
Method
Sample Selection and Data Collection Procedure
This study uses data from the Entrepreneurship Research Consortium Panel Study of
Entrepreneurial Dynamics I (ERC/PSED I), a national panel study of nascent business
entrepreneurs. Data in the ERC/PSED were collected from 830 randomly selected nascent
business entrepreneurs. Both telephone interview and mail surveys methods were used. The
survey took place from 1998 to 2003. Reynolds (2000) provides a detailed description of this
database’s development and content. To identity nascent entrepreneurs, they were asked the
following question during the initial telephone screening interview: “Are you, alone or with
10
others, now trying to start a new business?” Respondents who answered “yes” were then asked if
they were willing to participate in more extensive investigation. Over 780 NEs went on to
complete the phone and mail portions of the survey. Of 559 NEs who completed the question on
export intension, 151 answered as well questions related to cognitive, demographic and new
ventures’ variables.
Variables and Measures
Export intention
Some authors have measured the export intention as a dichotomous (yes/no) single item indicant
asking whether or not firms intend to export (Axinn et al. 1995; 1988). Other authors have used
multiple items to determine whether or not firms intend to export, plan to initiate export in the
next two year and whether they intend to utilize excess resources (Yang et al. 1992). Jaffe and
Pasternak (1994) have used a five-point Likert scale ranging from “no intention” to “very high
intention”. For the purpose of this study, we used percentage of expected international
customers, nascent entrepreneurs were asked: “Within the first three to four years, what
percentage of your customers do you expect to be international, that is, outside the United
States?” We believe that using a quantitative variable to measure the export intention will
provide more information about the intensity of export intention.
Explanatory variables
Explanatory variables and items related to each variable are presented in appendix I. The Sales
source is measured quantitatively through the percentage of sales expected form the three largest
customers. Hi-technology business is coded as dichotomous (1) when the respondent was
considering its new ventures to belong to hi-tech business and (0) when answered “no.” The
Locus of control is operationalized by a three-item five point Likert-scale statements that
investigate respondents’ assessment of the control they have over their friendship, plans and
work.
A high score means that respondents have an internal locus of control. Personal
realization is measured through two-item five-point Likert scale ranging from great extent (5) to
no extent (1). Three-item five-point Likert scale is used to measure the Problem solving. For
decision style variable, one question is asked to determine whether nascent entrepreneurs have an
innovative, adaptive decision style or both. Respondents who answered that they prefer to “do
11
things better” where classified as adaptors, those who answered that they prefer to “do things
differently” where classified as innovators. Regarding risk attitude, one question from the mail
survey was used to capture the nascent entrepreneurs’ degree of risk attitude, “I enjoy the
challenge of situations that many consider ‘risky’.”
The response scale was anchored by
completely true (5) to completely untrue (1). Items in the scale were coded again into
dichotomous variables. Because of the high level of correlation between these variables, we
chose the “Mostly untrue” item to estimate the impact of risk on the model. A negative
coefficient is then expected, in that, high negative score will imply a greater degree of risk
preference.
The demographic variables, age and education attainment, are operationalized as shown in
Appendix I.
Results and discussion
Multiple regression is used to explain to what extent the cognitive, demographic and new
ventures characteristics explain the global orientation of nascent entrepreneurs. Table I provides
the summary statistics for the explanatory variables. The matrix for the independent variables
shows five correlations statistically significant at (p<0.001): a- correlation between the nascent
entrepreneurs’ age and education (r= -0.145); b- correlation between the self-challenge and locus
of control (r=0.216); c- correlation between the decision style and education (r=0.190); dcorrelation between self-realization and high-tech business (r=0.29); correlation between
problem solving and education (r=-0.124). Because of the high degree of correlation, six models
were specified using each of these correlated variables at a time.
Table II reproduces results of the regression analysis in terms of the effect of age, education
attainment, national sale and technological characteristic of the new business, locus of control,
self-challenge, problem solving skills, adaptation/innovation decision styles. The interaction term
is integrated to study the impact of the interaction between the innovative decision-making style
and personal realization of NE on the export intention. All six models are statistically significant
(the probability of F ratio is less than 0.001 in most models) with an R2 ranging from 0.08-0.18.
Table III shows the results of tests of a “no-constant model” with dummy variables, examining
the impact of different levels of education and decision styles on export intention of NE. The R2
for model 7 and 8 are respectively 0.23 and 0.16.
12
13
0.34
0.14
0.33
36.85
7-Risk1
8-Hi-Tech business
9-Customer diversity
2.7
4-Self-challenge
6- Decision style
4
3-Locus of Control
2.59
0.13
2-Education Attainment
5-Problem Solving
39.78
1-Age of NE
Mean
33.42
0.47
0.35
0.47
0.7
1.21
0.58
0.33
10.93
SD
-0.0078
0.8271
0.1397
0.8824
0.5461
-0.0819
0.0056
0.0552
0.3129
-0.0309
0.0643
0.0226
0.0011
0.0405
0.0643*
0.0157
0.8571
-0.1139*
-0.0803*
0.3067
0.0032
0.0072
-0.0342
0.3808
0.05
-0.1172*
-0.0287
2
-0.078
0.0001
0.1454*
1
0.3716
0.0414
0.1751
0.0586
0.0002
-0.1235*
0.755
0.0105
0.0965
0.0554
0.0001
0.2164*
3
0.0663
0.0849
0.0001
0.2906*
0.0001
-0.1357*
0.1587
0.0472
0.1642
-0.0464
4
Correlation of independent variables (N=151)
Table I
0.9535
-0.0027
0.9004
-0.0054
0.2069
0.0423
0.9245
-0.0032
5
0.7722
0.0111
0.4634
0.0261
0.0404
-0.069
6
8
0.7245 0.1301
0.0164 0.0583
0.7407
0.0143
7
The first hypothesis states that nascent entrepreneurs’ age has a negative impact on their export
intention. Hypothesis1 is strongly supported across the six models. NEs’ age is negatively linked
to their export intention. Mature NEs are less likely to export or go global. This finding is
consistent with Luostarinen and Gabrielsson (2002), who reported that born-global founders are
young and active.
Results in Model 4 (Table II) show a significant relationship between NEs’ education attainment
and export intentionality. High-school diploma predicts the export intentionally. Model 7 (Table
III) also confirms the importance of high school diploma in determining the export intentionality
of NE. Yet, Indeed, in both regressions high school diploma appears to affect in great way the
intentionality to go global. Davis and Harveston (2000) argue that the more entrepreneur-founder
are educated, the greater the extensiveness of internationalization. It’s surprising that in our study
NEs with high school diploma are the most likely to have a global orientation. Therefore,
hypothesis 2 is rejected.
Considering the cognitive characteristics, hypothesis 3, stating that nascent entrepreneurs who
have greater risk taking attitude will have stronger export intention, is confirmed in both models
5 and 6 (Table II). Risk taking attitude is a predictor of the export intention of NEs. Hypothesis 4
considering the effect of the personal realization of NEs on the export intention is also
confirmed. Nascent entrepreneurs who have greater personal realization will be more challenging
and will have stronger export intention. However, hypothesis 5, predicting that NEs with internal
locus of control will have greater export intention is not confirmed. Through the six models
(Table II), the coefficient estimate was negative and significant. This result came as a surprise
given the common-sense expectation that NEs who believe they have control over their
outcomes would be more interested in going global. The possible explanation would be that NEs
who expect to go global may be conscious of the institutional, political and economic factors
related to foreign markets that go beyond their control. Furthermore, NEs awareness of the
ambiguity related to their international orientation may reduce their certitude about the control
they can have over the internationalization. According to Acedo and Jones (2007), tolerance to
ambiguity determines the proactivity of international entrepreneurs.
TABLE II
14
Results of Multiple Regression Analysis for Nascent entrepreneurs demographic and
cognitive characteristics
Variables
Model 1
Model 2
Intercept term
9.595*
20.412** 15.764*
1-Age of NE
-0.132*
-0.142*
-2.902*
2-Education Attainment
(high school)
3-Locus of Control
4-Self-challenge
and realization
5-Problem Solving
-1.129
Model 3
Model 4
Model 5
9.27*
20.560*** 19.11***
-0.129*
5.157*
-2.996*
-2.411*
-1.431*
-0.135*
-3.250**
-3.246**
-3.663†
-3.342†
-0.001
-0.001
1.712**
-1.133
6-Adaptation/innovation
Decision style
3.21*
7-Risk1
8-National sale
-0.001
9-Hi-Tech business
4.925***
4.871***
Interaction term 4*6
-0.001
-0.002
5.108*** 5.239***
1.20**
R²
0.10
0.17
F
Mean VIF
5.44***
1.00
4.96***
1.03
0.08
3.57**
1.03
0.16
5.46***
1.01
Model 6
4.750**
0.14
1.144**
4.91***
1.04
5.33***
1.04
0.18
*** Significant at 0.001 **Significant at 0.01 *Significant at 0.05 †Significant at 0.1
15
TABLE III
Results of Multiple Regression with Standardized Coefficients (Education Attainment and
Decision Style)
Variables
Sale
Model 7
0.005
Model 8
0.006
Locus of control
-1.804
-1.98
Education Attainment 4
12.75*
(graduate)
Education Attainment 3
8.589
(college)
Education Attainment2
9.439†
(some college)
Education Attainment 1
15.114**
(High school)
Decision style (innovation)
13.402*
Decision style (adaptation)
9.625†
Decision style (both)
8.493
R²
0.23
6.39***
F
0.16
5.60***
*** Significant at 0.001 **Significant at 0.01 *Significant at 0.05 †Significant at 0.1
Hypothesis 6 examined the impact of NEs’ problem solving skills on the export intention.
Results did not support our argument. This variable is not significant in models 1 and 2. Problem
solving skills are not a determinant of NEs interest in internationalization.
Considering the relationship between the innovative decision style of NEs and their export
intention (hypothesis 7), model 5 confirms our hypothesis. Moreover, model 8 shows a strong
significant (p<0.05) positive coefficient (13.402). It also shows a weak relationship between the
adaptive decision style and export intention. NEs need an innovative decision style to be
interested in the internationalization since it implies a break with the traditional way of doing
business first in the domestic market and then gradually exploring foreign markets. However,
NEs may also need the precision, reliability and prudence of adaptive decision style to manage
16
the international operations. According to Johnson, Danis and Dollinger (2008) innovators and
adaptors may benefit from collaboration or partnership to overcome the disadvantages related to
each of their decision-making style.
With regard to new ventures’ characteristics, the high-technology industry is a determinant factor
in the NEs internalization (hypothesis 8). This variable was positively significant (p<0.001)
through all tested models. This confirms the IE literature claiming the importance of technology
and knowledge as a main explanation of the early internationalization of entrepreneurs (Madsen
and Servais, 1997; Knight and Cavusgil, 1996; Bell, 1995). However, our final hypothesis
(hypothesis 9) predicting that the source sale will influence the export intention of NEs, did not
find any support through all the models. The scope of the customer portfolio does not determine
the internationalization choice of NEs.
As shown in Table II, the impact of the interaction term on the export intention was also tested.
The joint effect for the innovative decision-making style and personal realization of NEs is
strongly significant (p<0.01). Thus NEs with innovative decision style and stronger personal
realization are more likely to go global than those who are adaptors with weak personal
realization.
Conclusion
In this study, we sought to examine the antecedents of NEs’ export intention. Using a broad
sample (N=150) of global nascent entrepreneurs, we focused on understanding what are the
cognitive, demographic and new ventures’ characteristics that determine their intention to go
global. The role of the cognitive characteristics in the explication of the early internationalization
has received little attention in the international entrepreneurship literature. Thus, this paper
contributes to the advancement of our knowledge of the early internationalization phenomenon
in two ways. First, by integrating international marketing and IE theories and by applying
cognitive measure from NEs literature; second, by focusing on two level analysis, the individual
age, education and cognitive characteristics as well as the new ventures’ hi-technology and sales
source. This paper provides a rich explanation of the entrepreneurs’ interest in
internationalization at the early processes of their business formation.
17
Results show that young, risk-taking entrepreneurs with a strong personal realization and
innovative decision-making style who operate in hi-technology business are more likely to go
global. Acedo and Jones (2007), and Acedo and Florin (2006) in their study of the cognitive
characteristics pointed out the role played by positive risk perception in increasing the new
ventures’ international commitment. Interestingly, our findings suggest that NEs with an internal
locus of control are less likely to be interested in internationalization. The ambiguity and
incertitude related to the internationalization may inhibit NEs with strong internal locus of
control. The impact of education attainment in NEs’ export intention was as well unexpected.
The high-school diploma appears to predict the internationalization of NEs. The possible
explanation is that NEs with high-school diploma may look for many possibilities to find a
competitive business idea, in that they may include the alternative of the internationalization.
Overall, these results disagree with previous studies where firms are less likely to be interested in
the internationalization unless they experience and accumulate knowledge in the domestic
markets (Welch and Wiedersheim-Paul, 1980; Johanson and Vahlne, 1977). Indeed,
entrepreneurs can intend to go global from the inception (McDougall, Shane and Oviatt, 1994)
while developing their business plan. Thus, internationalization does not happen by chance, it is
a rather a result of a set of factors that include the new ventures’ domain of activity and
entrepreneurs’ cognitive structure and demography.
This study provides some potential insight for government organizations and agencies focused
on the export promotion in recognizing and training international entrepreneurs. It is apparent
that entrepreneurs with export intentions have certain cognitive and demographic characteristics
and that they may benefit from an appropriate training program. For example, having an
innovative decision-making style may be important to go global but may present some
disadvantage when managing international operations. Having external assistance with an
adaptive style may help balance the decision-making process. Furthermore, helping
entrepreneurs having a positive representation of international opportunities may reduce their
negative risk attitude and enhance their internal locus of control.
The first limitation of this study is that, even though, results of regression analysis were
statistically significant, models explained no more than 19 percent of the variance of the export
intention. The purpose of this study was to determine whether the cognitive, demographic and
new ventures’ characteristic have an influence on the export intention of NEs, rather than
18
identifying the best predictors of export intention. This suggests that other variables (e. g.
international experience of NEs, professional network of NEs) may be important to consider as
well as the cognitive, demographic and new ventures characteristics. We believe, however, that
our model predicts the effect of the most variables involved in the early internationalization of
NEs. Research may extend our finding by considering additional contributing variables to the
model. The second limitation is the cross-sectional design used in this study. Although the PSED
database provides a longitudinal survey, we based our analysis on the first wave of survey. In
order to verify the stability of NEs export intention through the three other waves, we run a test
and the test was positive. Future research may further the analysis by including the other waves
to compare how the cognitive characteristics may change and how this change may influence the
export intention of NEs. In this study, we focused on determining the cognitive, demographic
and new ventures’ characteristics underpinning the export intention of NEs. Although the
intention is an important phase in the achievement of the internationalization process (Lim et al.,
1991), the adoption phase of this process may be considered as a necessary future research line.
19
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APPENDIX I
Definition of explanatory variables
New
ventures’
Characteristics
NE
Demographic
Characteristics
Variables
Sale source
Item
Q296
High-Tech
Q301
(recoded)
SCREENYRQ202
Q343
(recoded)
(00 01 02=1)
(03 04 05=2)
(06 07=3) (08
09=4)
Age
Education
NE
Cognitive
Characteristics
Locus of Control
mean(QL1h
QL1i QL1j)
Personal realization (selfchallenge)
mean(QG1C
QG1M)
24
Description
What percentage of your sales,
income, or fees would you expect
to get from your three largest
customers?
Would you consider this new
business to be hi-tech?
How old are you?
What is the highest level of
education you have completed so
far?
00. Up to eighth grade
01. Some high school
02. High school degree
03. Tech. or voc. degree
04. Some college
05. Comm. college degree
06. College degree
07. Some graduate training
08. MBA, MA, MS degree
09. LLB, MD, PhD, EDD degree
How accurately (untrue/true) these
statements would describe you?
-I have no trouble making and
keeping friends
- When I make plans I am almost
certain to make them work
- When I get what I want, it is
usually because I worked hard for
it
To what extent (no /great) is the
following reason important to you
in establishing this new business?
-To be innovative and in the
forefront of new technology
- To develop an idea for a product
How often (very often/never) does
the following happen?
-I face new, complex, or
unpredictable situations
- I feel overloaded, pushed to my
physical or mental limits
- When confronted with a difficult
problem I tend to delay a decision
so I can collect more information
Problem Solving
mean(QJ2a QJ
2b REQL1r)
Decision Style
Q327
(recoded)
If someone asked you which kind
of person you are, would you say
that you preferred “doing things
better”
or
“doing
things
differently?”
1. Doing things better
2. Doing things differently
3. Both
Risk 1
QL1Q
The following statements can be
used to describe most people. How
accurately would they describe
you?
I enjoy the challenge of situations
that many consider “risky”
1- Completely untrue
2. Mostly untrue
3. It depends
4. Mostly true
5. Completely true
25