Date of Award

Summer 8-18-2010

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Managerial Sciences

First Advisor

Denis A. Gregoire

Second Advisor

Pamela S. Barr

Third Advisor

S. Tamer Cavusgil

Fourth Advisor

Lisa Schurer Lambert

Abstract

What makes entrepreneurs select one international opportunity while rejecting or ignoring others? Furthermore, what makes entrepreneurs decide to exploit an international opportunity earlier or later? Two theories of internationalization provide answers to these questions: the Uppsala Model and International Entrepreneurship theory. However, these two theories provide competing answers to these questions, and empirical research offers inconsistent evidence about what influences entrepreneurs to select an international opportunity – and when to exploit the opportunity. To address these issues, I develop a cognitive model that explains when and why the predictions of these theories do (and do not) explain entrepreneurs’ behavior regarding new venture internationalization. More specifically, I propose that entrepreneurs’ internationalization decision making rests, in part, on cognitive processes of similarity comparison and structural alignment.

I use a multi-method / multi-study approach to answer the above questions. In the first study, I use verbal protocol techniques to analyze the cognitive processes of entrepreneurs as they ‘think out loud’ while making decisions on international opportunity selection and age at entry. In the second study, I use a survey plus secondary data to test if the actual decisions made by entrepreneurs on international opportunity selection and age at entry correspond to the dissertation’s predictions.

Results show that cognitive processes of similarity comparison and structural alignment underpin entrepreneurs’ internationalization decisions. Entrepreneurs rely heavily on commonalities and look for high levels of similarity between the home and host country when deciding when to internationalize their firms. Regarding entrepreneurs’ decisions on international opportunity selection, their decisions reflect the influence of both comparable and noncomparable opportunity features. Interestingly, I observe that prior international knowledge directly impacts entrepreneurs’ internationalization decisions, but also moderates the relationship between similarity considerations and entrepreneurs’ decisions on international opportunity selection.

Ultimately, I reconcile and integrate two competing internationalization theories by resolving tensions between them. I demonstrate that the different predictions of the two internationalization theories can be explained by the differential focus that entrepreneurs place on comparable and noncomparable attributes of their opportunity set. I also show the importance of taking an individual-level and cognitive view to understanding these decisions.

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