Enhancing factors of business internationalization survey: Structural validation procedures

Abstract

A growing flow of research into new international ventures has sought to understand the causes, processes, and outcomes of the decision to early enter in foreign markets. A common thread in these research concerns to the role of learning and knowledge. Concerning the importance of learning and knowledge for companies with no great international experience, theories prior to the mid-1990s offered limited ability to explain how and for what reasons some companies began to operate successfully across national boundaries very early in its life cycle. Organizational knowledge, or lack thereof, was a central explanation for internationalization in original, stage-based models, but some current authors have recognized that individual factors, such as international experience, can also influence the pace and the beginning of internationalization. Thus, knowledge plays a key role both for the stages approach and for the international new ventures approach, but it does so in a significantly different way. This perspective on international new ventures emphasizes the role of individual knowledge to argue that international ventures do not need organizational experiences, routines or capabilities to enter earlier in their first foreign market. On the contrary, the past experiences of founders and other key managers can replace such shortcomings. Individual knowledge of business managers about foreign markets can thus help the company to skip the incremental processes suggested by the stages perspective. The increasing popularity of this new strategic perspective on international new ventures has created a body of literature on the problem of the beginning of internationalization. Also, according to the Network Theory, network relations undoubtedly favor the competitiveness of enterprises and have become an important tool to support the internationalization of SMEs. Some authors states that potentially conflictive relationships and divergent interests are seen by the parties as collaborative partnerships around a common goal.

This paper is a report on the findings of a survey validation, applied to 320 internationalized companies. The relational structure of the Enhancing Factors of Business Internationalization Survey was evaluated by exploratory factor analysis. The objective is to estimate the common factors and structural relationships that link factors, latent variables, to the variables considered as possible inducers of Business Internationalization, manifest variables.

To evaluate exploratory factor analysis validity, Bartlett's sphericity test was used, and also KMO adequacy coefficient, which presented a value of 0.619. Measure of Sampling Adequacy values are greater than 0.5 for all variables, suggesting that all can be used. The results obtained are discussed and refer to a theoretical positioning of career education, through three latent factors: "Psychological distance"; "Knowledge", and "Company Characteristics".