Information diversity and innovation for born-globals
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Information diversity and innovation for born-globals Clyde Eiríkur Hull 1 & Zhi Tang 1 & Jintong Tang 2
& Jun
Yang 3
# Springer Science+Business Media, LLC, part of Springer Nature 2019
Abstract Does being a born-global make a startup more or less likely to quit before launch, and how do innovativeness and information diversity affect the decision to start or stop a born-global venture? Born-globals, new ventures that are global from the start, simultaneously create new businesses and enter new markets, whereas firms that do not choose to start as born-globals face only the challenges of creating a new business. We examine how new ventures, both born-globals and non-born-globals, address these challenges in the earliest stages, when the idea of the company is still being formed. We predict that information diversity (i.e., using many sources of information) and pursuing an innovative venture make a born-global strategy more likely, and that being bornglobal reduces the likelihood of early failure in an emerging economy. Further, we propose that information diversity and innovativeness moderate the relationship between born-globals and new venture disengagement. Using data from 321 Chinese nascent startups, we find general support for these hypotheses. Keywords Born-global . Information diversity . Innovation . China
* Jun Yang [email protected] Clyde Eiríkur Hull [email protected] Zhi Tang [email protected] Jintong Tang [email protected]
1
Saunders College of Business, Rochester Institute of Technology, Rochester, NY 14623-5608, USA
2
Chaifetz School of Business, Saint Louis University, St. Louis, MO 63108, USA
3
Nankai University Business School, 94 Weijin Road, Tianjin, China
C. Hull et al.
Does being a born-global make a startup more or less likely to quit before launch (i.e., Bthe cessation of efforts to develop the new venture;^ Delmar & Shane, 2003: 1165), and how do innovativeness and information diversity affect the decision to start or stop a born-global venture? Doing many new things at once, such as starting a new business in an emerging economy, entering a new market, and creating a new product, is difficult (Yamakawa, Peng, & Deeds, 2008; Yamakawa, Khavul, Peng, & Deeds, 2013). Despite this, China and other emerging economies continue to shift toward business practices that compete globally with home-grown technology (Jiang, Branzei, & Xia, 2016). Research on born-globals – new ventures that are global from the start – in emerging economies is thus growing in importance (Ahlstrom & Ding, 2014; Ma, Ding, & Yuan, 2016). However, two gaps in our understanding of how born-globals survive the pre-launch process have yet to be addressed: (1) what factors contribute to the nascent venture’s decision to start as a born-global; and (2) whether born-global startups are more or less likely to quit the new venture creation process, and what factors influence that decision. Knowledge resources and competencies arguably affect both these decisions because born-globals typically have few c
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