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Liabilities, Advantages and Buffers of Newness: How Young Age Makes Internationalization Possible

Group & Organization Management, 41 (6), 786-822

40 Pages Posted: 13 Dec 2016  

Maija Renko

University of Illinois at Chicago

Sumit Kundu

Florida International University (FIU)

Rod Shrader

University of Illinois at Chicago - Department of Managerial Studies

Alan Carsrud

Åbo Akademi University

Annaleena Parhankangas

University of Illinois at Chicago

Date Written: August 25, 2016

Abstract

This paper presents a conceptual discussion and a theoretical framework explaining how the liabilities of newness, which are traditionally thought of as disadvantages that young companies face, contribute to early firm internationalization. Through a systematic analysis of the liabilities that international new ventures face, as well as the liabilities and the advantages that a young age provides, we are able to integrate findings from the existing body of diffuse research on newness and internationalization, and develop propositions for future empirical research. Based on previous liabilities of newness and foreignness research, our study provides a novel theoretical model that explains early internationalization over and beyond existing internationalization models.

Keywords: Liability of newness, Liability of foreignness, International new ventures

JEL Classification: L26, F23

Suggested Citation

Renko, Maija and Kundu, Sumit and Shrader, Rod and Carsrud, Alan and Parhankangas, Annaleena, Liabilities, Advantages and Buffers of Newness: How Young Age Makes Internationalization Possible (August 25, 2016). Group & Organization Management, 41 (6), 786-822. Available at SSRN: https://ssrn.com/abstract=2884402

Maija Renko (Contact Author)

University of Illinois at Chicago ( email )

601 S. Morgan St. (M/C 243)
University Hall 2203
Chicago, IL 60607-7122
United States

Sumit Kundu

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Rodney Shrader

University of Illinois at Chicago - Department of Managerial Studies ( email )

601 S. Morgan St. (M/C 243)
University Hall 2203
Chicago, IL 60607-7122
United States

Alan Carsrud

Åbo Akademi University ( email )

Piispankatu 16
Abo, Turku FIN-20500
Finland

Annaleena Parhankangas

University of Illinois at Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

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