Industry risk taking and risk-taking strategy of born-global firms

Abstract

Purpose The purpose of this paper is to study the relationship between industry risk taking and risk-taking strategy of born-global firms (BGs), and how industry-related variety moderates that relationship. Design/methodology/approach The authors apply fixed effect model to analyze 26,499 observations on 10,508 BGs in 276 Chinese cities. Findings The authors find that industry risk taking positively influences risk-taking strategy of BGs, and industry-related variety positively moderates such relationship. Originality/value The findings reveal how BGs formulate their risk-taking strategy given the dilemma of risk nature and hurdles in firm establishment and rapid internationalization. This paper extends understanding on BGs’ strategy making, supplements the theoretical framework on BGs with an integrated viewpoint containing “regional–industry–firm” levels and contributes to the industry variety argument.