Polarizing Effects of Early Exporting on Exit

Abstract

Extant research offers limited and inconclusive findings on the effects of early exporting by new ventures. This longitudinal study examines such effects, taking into consideration the roles of competition and adaptation in international venturing and exiting. The findings alert us to the potentially negative impact of early exporting on exit. Despite the deterrent effect of exporter competition, those new ventures that engage in early international venturing are impelled to keep strategically alert and expedite their learning process, therefore prospering in the highly competitive environment. By attracting foreign investors, new ventures will be able to start exporting early, and endorsed by the knowledge advantages associated with foreign partners the rapid entrants have better continuation chances. At the same time, early exporting in a relatively less competitive environment or without foreign ownership will lead to higher exit likelihood. By highlighting the polarizing effects of early exporting in the life cycle of new ventures, this study reconciles the difference between the process model and theories on international entrepreneurship to some extent.