The role of networks in the internationalisation decisions of start-ups

This study examines ‘how’ networks can influence start-ups’ internationalisation decisions in the context of emerging markets, and ‘what’ are the characteristics of such networks. In particular, the paper explores to what extent institutional antecedents, the entrepreneurs’ social networks and inter-organizational networks determined the decisions to internationalize made by the firms. We adopt a framework of analysis based on ‘pull’ and ‘push’ factors to analyse the influence of networks and institutions on the outcome.
Case study methodology was adopted to examine ten Brazilian start-up technological companies. A typology of networks was established and its impact on the internationalisation decisions was assessed. The influence of institutional determinants and entrepreneurial characteristics were controlled by selecting start-ups that are spin-offs of one university.
Our findings suggest that social and inter-organisational networks have played a central role on the firms’ decisions to internationalise to the extent that they helped to identify opportunities in foreign markets. In the cases in which ‘pull’ factors such as customer demand prevail, the typology of networks was predominantly Knowledge and Tactical. On the other hand in the cases in which ‘push’ factors such as entrepreneurs’ networks, cognisance and familiarity with the foreign market acted as a catalyst to internationalise, the typology of networks was mostly of the Knowledge and Strategic types.
This study contributes to the theories on international business in the context of emerging economies, adopting a multidisciplinary perspective that captures the interplay of institutions, organizational and social networks. Second, it contributes to the literature in the field of international entrepreneurship by exploring how different ‘pull’ and ‘push’ factors influence the firms’ strategy towards internationalisation, specifically incorporating the impact of the entrepreneurs’ knowledge, social and organisational ties. Third, it defines a typology of networks through which it assesses the determinants of internationalisation of the firms.