Resource diﬀerences between Born Global and Born Regional ﬁrms: Evidence from Canadian Small and Medium-Sized Manufacturers 1997-2004
While international business research has intensively observed the determinants and outcomes of International New Ventures (INV), we only have a limited understanding on why some INVs pursue regional focused internationalization (so called Born Regional Firms), while others decide for a globally dispersed approach (so called Born Global firms). This study draws on resource-based theory and applies logistic regression on a longitudinal sample of 604 Canadian small and medium-sized exporting manufactures to investigate how initial internal resources differ between Born Global and Born Regional firms. We find that, compared to Born Regionals, Born Globals have significantly greater foreign market knowledge, and have significantly higher initial performance. We advance research about the internationalization-performance link by means of a reverse causality regarding this relation in which initial performance influences the internationalization approach of INVs. This provides additional support for the regionalization hypothesis and the assumption that a global expansion does not necessarily lead to higher performance, but demands a greater amount of resource input.