How do domestic factors influence some small Norwegian entrepreneurial firms’ choice to primarily operate in international markets, rather than their domestic market from inception?

Abstract

The emergence of born globals (BGs), defined as firms that from, or near founding obtain a substantial portion of total revenue from sales in international markets, has increased during the past three decades. The phenomenon of such firms that are heavily involved in exporting short time after establishment has consequently received increased attention from scholars. We identified a gap in the literature around how domestic factors influence BGs’ internationalization choices; previous research mainly focused on factors of the foreign markets, and the firm’s internal factors. Based on this, we designed a research question that reads as follows: How do domestic factors influence some small Norwegian entrepreneurial firms’ choice to primarily operate in international markets, rather than their domestic market from inception? Initially, the thesis will present relevant literature for the topic of BGs. This includes traditional internationalization theory, as well as a review of the existing BG literature. Furthermore, the relevant research method and design are presented. In the thesis, we used an exploratory design to gain a deeper knowledge of how domestic factors influenced the BGs’ internationalization choices. The method used in the thesis is a qualitative research method where we obtained data through individual in-depth interviews. Two case studies were selected: Platina Seafood Market, a firm in the seafood industry, and EpiGuard, a firm in the medical technology industry. Both firms were established in the same year and considered to be Norwegian BGs. Prior to the in-depth interviews, an interview guide was designed to ensure structure in the conduct of the interviews. The data obtained through the interviews further formed the basis for the analysis. Finally, relevant findings are discussed in the light of theory presented earlier in the thesis, followed by a conclusion and recommendation section. We presented three domestic factors which are argued to influence the BGs’ internationalization choices. These were a lack of innovation adoption, large incumbents with market power, and a small market size. Based on our analysis, we developed a model as an attempt to fill the gap in the previous BG literature. This model illustrated how factors of the domestic market could make it difficult for small Norwegian entrepreneurial firms to grow domestically, which consequently could lead them to explore opportunities internationally. It is put an emphasis on the fact that such factors should be seen in context with other external and internal factors, as the choice to internationalize is characterized by complexity.