The International Market Entry Choices of Start-Up Companies in High-Technology Industries

Abstract

For a young, resource-constrained, technology-based start-up embarking on international sales, the choice of entry mode is a strategic decision of major importance. Yet within the emerging research stream of international entrepreneurship, curiously little attention has been devoted to the empirical analysis of foreign market entry forms. The authors address this important issue by analyzing the determinants of 398 export decisions taken from a U.K. survey of 246 technology-based start-ups with international activities. The findings show that the entry mode decision is necessarily a trade-off between the resources available and the support requirements of the customer. Issues of the innovativeness of the technology and the historic channel experience of the firm in its domestic market are particularly strong determinants of mode choice. The authors suggest that an organizational capability perspective on these firms’ behavior offers a better explanation of their entry decisions than either transaction cost or stage theory.