Empirical investigation of international opportunity identification by Australian entrepreneurs.

Abstract

This thesis addresses the broad research problem “How do entrepreneurs identify business opportunities internationally?” The study conceptualised a theoretical framework for explaining the international opportunity identification (IOI) behaviour of entrepreneurs and explored this behaviour empirically in the Australian context. This study has advanced the existing body of knowledge in international entrepreneurship. This is a relatively new field of study that emerged in the mid 1990’s in response to the appearance of new patterns in the internationalisation behaviour of entrepreneurial new ventures and the growing importance to the survival, growth and sustainability of small and medium-sized enterprises of integration into international markets. The literature acknowledges the defining role of an individual entrepreneur in the overall strategic direction and internationalisation efforts of these enterprises (e.g., Andersson, 2000; Madsen & Servais, 1997). However, little is known about the behaviour of individual entrepreneurs that leads to internationalisation of a firm. The mainstream entrepreneurship literature advocates that it is the ability to identify business opportunities that distinguishes entrepreneurs from non-entrepreneurs (Shane & Venkataraman, 2000). By extension, it is the ability to identify international business opportunities that distinguishes entrepreneurs who venture their businesses across national borders. Despite the centrality of the opportunity theme to international entrepreneurship research (Oviatt & McDougall, 2005a), this phenomenon is still under-researched and requires theory-building. To address this gap, the current study adopted a multidisciplinary perspective, an approach recommended by scholars that uses existing theories from more mature disciplines in order to advance a relatively new field of academic inquiry (Buckley, 2002; Jones & Coviello, 2005; Ireland & Webb, 2007; Zahra et al. 2005). The study is grounded in the theory of planned behaviour (Ajzen, 1991) and social cognitive theory (Bandura, 1997). It also leverages mainstream entrepreneurship research on opportunity identification, international business studies of personal variables relevant to the process of internationalisation of a firm and cross-cultural psychology studies of individual responses to cultural differences. The literature review identified a number of gaps in our understanding of how individual entrepreneurs identify international opportunities. To address these gaps, five research questions were formulated for this thesis. The limited understanding of IOI in the extant literature required an exploratory in-depth investigation. Therefore, the study adopted a qualitative research method and a case study technique. The research is based on seven case studies of Australian entrepreneurs. In contributing to the theory of international entrepreneurship, this study has improved our understanding of the process of IOI; established the role of cognitive properties, cognitive activities, networking capability and social capital as determinants of IOI; revealed the existence of the effect of cultural differences at all stages of the process of IOI; and explored what constitutes cross-cultural competence in IOI and explained its role in IOI. The study has presented a model of IOI competence and a framework explaining the IOI behaviour of entrepreneurs. The practical value of this study is in informing policy-makers, educators and business development services practitioners who are involved in stimulating international entrepreneurship.