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Business Group Affiliation and Export Propensity in New Ventures

Jonas Eduardsen (Aalborg University, Denmark)

Svetla Marinova (Aalborg University, Denmark)

Božidar Vlačić (Universidade Católica Portuguesa, Portugal)

Miguel González-Loureiro (University of Vigo, Spain and Politécnico do Porto, Portugal)

The Multiple Dimensions of Institutional Complexity in International Business Research

ISBN: 978-1-80043-245-1, eISBN: 978-1-80043-244-4

Publication date: 4 March 2021

Abstract

The purpose of this study is to examine how business group (BG) affiliation influences the export propensity of new ventures (NVs). To help address the inconsistency of past research on the value of BG affiliation for firms seeking to expand their business abroad, the authors provide a contingency perspective by exploring how organizational characteristics and BG characteristics condition the value of BG affiliation. The authors analyze the impact of BG affiliation on the export propensity of NVs, including the factors that condition this impact, by using a sample of 2,874 European NVs. The primary contribution of this study is to determine the impact of BG affiliation on the export propensity of NVs, including the moderating effects of firm size on the BG affiliation–export propensity relationship. The findings show that the export propensity of NVs affiliated with BGs is significantly higher than for stand-alone NVs. However, the findings demonstrate that the impact of BG affiliation on export propensity depends on the network characteristics of the BG in terms of the geographical dispersion of network ties. Consequently, the findings suggest that BG affiliation provides advantages for NV exporting only if it provides access to international inter-firm networks thus acting as a compensatory mechanism for liability of outsidership and liability of newness in foreign markets. In such cases, BG affiliation is a major resource capital that equipoises the somewhat limited financial resource provision for NV internationalization.

Keywords

Acknowledgements

Acknowledgments

Prof. Miguel González-Loureiro acknowledges financial support from national funds PID2019-106677GB-I00 of the Ministry of Science and Innovation of Spain and from the Portuguese national funds of FCT – Fundação para a Ciência e Tecnologia through the project UIDB/04728/202.

Assistant Prof. Božidar Vlačić acknowledges the financial support received from CEGE – Research Centre in Management and Economics, funded by the Multiannual Funding Programme of R&D Centres of FCT – Fundação para a Ciência e a Tecnologia, under the project UIDB/00731/2020 and Spanish national funds PID2019-106677GB-I00 of the Ministry of Science and Innovation of Spain.

Citation

Eduardsen, J., Marinova, S., Vlačić, B. and González-Loureiro, M. (2021), "Business Group Affiliation and Export Propensity in New Ventures", Verbeke, A., van Tulder, R., Rose, E.L. and Wei, Y. (Ed.) The Multiple Dimensions of Institutional Complexity in International Business Research (Progress in International Business Research, Vol. 15), Emerald Publishing Limited, Leeds, pp. 129-153. https://doi.org/10.1108/S1745-886220210000015009

Publisher

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Emerald Publishing Limited