Do international new ventures have attraction advantages? A recruitment perspective on international entrepreneurship

• Applicant: Professor Dr. Matthias Baum
• Subject Area: Accounting and Finance
• Term: from 2019 to 2022
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 430115182

International new ventures (INVs), business organizations that, from inception, seek to derive significant competitive advantage from the use of resources and the sale of outputs in multiple countries are an intriguing phenomenon that has puzzled international business researchers for decades. When it comes to explain why INVs may enjoy competitive advantages in the international arena, prior research has predominantly focused on the experience of the top-management team but omitted to explore the role of human resources beyond those of the top-management team. The lack of research is problematic given the pivotal impact employees from all levels have on the performance of small- and medium sized enterprises (SMEs) which most INVs are. We seek to address this void by developing and testing theory for an alternative explanation of how INVs master the challenges of internationalization: an organizational attraction mechanism. Based on signaling theory we argue that the proactive internationalization approach of INVs acts as a positive signal for jobseekers to work in an internationally expanding firm with resulting career options. This way, proactive internationalization is likely to provide new ventures an edge when it comes to recruiting employees resulting in human resource-based competitive advantages. We expect the attractiveness of INVs, however, not to be uniform for all applicants. Based on the demand-abilities perspective in person-environment (PE) fit theory, we argue that, among other factors that could possibly impact the perceived attractiveness of proactive internationalization, individuals’ personal initiative, networking ability, and international experience play a major role in this context.With this project we aim to contribute to the international entrepreneurship literature by theorizing and empirically showing, with both quantitative and qualitative research methods, that the internationalization approach of INVs impacts job pursuit intentions. This offers a new perspective on why INVs might outperform other – more reactively internationalizing – new ventures. In addition, we seek to provide insight on how INVs can effectively recruit applicants and, particularly, if new ventures can apply their internationalization approach to this end since research on this question is wanting at best. This way our study will contribute to the burgeoning literature on recruitment strategies for new ventures and small firms. Moreover, with this research project we respond to recent critics that a comprehensive understanding of INVs demands an examination of international activities not merely in terms of output gained, but also in terms of capacity allocated. Finally, we seek to stimulate new discussion within INV research, encourage scholars to shift their attention in further research towards HR and recruitment, and establish a foundation for a new stream of research in international entrepreneurship.

• DFG Programme: Research Grants
• International Connection: Canada
• Cooperation Partner: Professorin Nicole Coviello, Ph.D.