Global Online Entrepreneurship Past Research and Future Directions

Transcription

1 Global Online Entrepreneurship Past Research and Future Directions Anna Morgan-Thomas & Rebecca Reuber Working Papers m 2013:04

2 Adam Smith Research Foundation Working Papers Series 2013:04 The Working Papers series is intended to reflect the diverse range of interdisciplinary research interests of staff in the College of Social Sciences at the University of Glasgow. By publishing papers as works in progress, it aims to encourage and promote the interdisciplinary research work of members of the College, and to provide a forum in which to share innovative ideas and approaches on interdisciplinary topics, and elicit feedback from peers before submitting to more formal refereed peer review in the form of conference papers or journal articles. To this end, the author s contact details for correspondence are normally provided in each paper. Submissions: Papers authored by one or more members of College staff can be submitted to the ASRF (via the address below) to be considered for publication. Texts should normally be no longer than 8,000 words, and should be submitted in a Microsoft Word-compatible (.doc or.rtf) file format. Authors are advised to keep in mind the generalist audience of the Working Papers series and avoid technical language and extensive footnotes as much as possible. m The Adam Smith Research Foundation (ASRF) is based within the College of Social Sciences at the University of Glasgow, and aims to promote and sustain research within the UK, European and international arenas. The Foundation promotes the engagement of staff in key policy debates and in shaping policy for the future. It provides the environment in which to foster further links between the College s disciplines and supports the development of interdisciplinary research both within and beyond the University. The Foundation seeks to honour the Enlightenment legacy of Adam Smith ( ) with independent, original research that impartially advances knowledge in the Information Age. It aims to support and encourage interdisciplinary research and collaboration within seven cross-college Research Themes:. Globalisation, Competitiveness and Sustainability. Governance, Policy, Accountability and Risk Management. Health and Wellbeing. Inequalities, Inclusion, Identities and Social Change. Justice, Rights, Security and Conflict. People, Places, Engagement and Change. Learning Across the Professions Adam Smith Research Foundation College of Social Sciences University of Glasgow 66 Oakfield Avenue Glasgow G12 8LS Tel: +44 (0) / adamsmith-asrf@glasgow.ac.uk University of Glasgow 2013 The University of Glasgow, charity number SC004401

3 Working Papers m 2013:04 Global Online Entrepreneurship Past Research and Future Directions Anna Morgan-Thomas & Rebecca Reuber March 2013

4 Adam Smith Research Foundation. Working Papers Series Abstract: Advances in information and communication technologies (ICTs) are reshaping international business (IB). By accelerating the reach, depth and intensity of information flows and connections between firms and individuals, ICT developments give rise to new forms of IB activity. In this paper we identify, synthesise and evaluate empirical evidence concerning the effects of e-business on the internationalisation of firms. We use the term global online entrepreneurship (GOE) to capture the entrepreneurial nature of global e-opportunity and to position the review at the intersection of international business, e-business and entrepreneurship research. We analyse and compare 73 empirical studies in relation to their research themes, theoretical frameworks, research methodology and findings and conclusions. By integrating the evidence, the paper contributes to our understanding of GOE, its antecedents and its outcomes. The analysis reveals the most relevant contributions, major research gaps and limitations in existing research, and it concludes with suggestions for further research. About the authors Dr Anna Morgan-Thomas, is Senior Lecturer in Management in the Adam Smith Business School, University of Glasgow Dr. A. Rebecca Reuber, is Professor of Strategic Management in the Rotman School of Management, University of Toronto Address for correspondence

5 Introduction Advances in information and communication technologies (ICTs) are reshaping international business (IB). By accelerating the reach, depth and intensity of information flows and connections between firms and individuals, ICT developments have fundamental effects on the participants and operation of the global economy (Jean et al. 2010b; Loane & Bell 2010; Rangan & Sengul 2009). One visible outcome is the emergence of a new breed of multinational enterprises (MNEs) new ventures that operate online from the outset (Singh & Kundu 2002). Amazon, Google, ebay and Facebook are well-known examples of the accelerated internationalisation that can accompany a dominant online firm. Their spectacular rise from obscurity to the top of global rankings with market valuations in billions (Financial Times 2009) rescales what is normally meant by international entrepreneurship or born global. Collectivley, they highlight both the entrepreneurial opportunities afforded by ICTs and the continuing importance of internationalisation in facilitating business growth. In addition to these widely recognized examples, ICT is also facilitating the internationalisation of more representative companies. Established MNEs are using such technologies to develop governance and organisational structures so that they can use arm s length market exchanges to outsource activities (Rangan & Sengul 2009). In smaller firms, ICT is being leveraged to alleviate resource constraints and this is altering the speed and patterns of foreign market entry (Moen et al. 2003; Morgan-Thomas 2009). The emergence of consumers as active players in the IB arena (Chandra & Coviello 2010) and the ongoing blurring of the boundaries between firms and their customers in Web 2.0 contexts (Bell & Loane 2010) show that participation in global online business is not limited to firms. A number of conceptual papers explore the potential of ICTs for international business theory, focusing on internationalisation theories (Petersen et al. 2002; Pezderka & Sinkovics 2011), entry modes (Singh & Kundu 2002), intermediaries (Andersen 2005, Sharma 2005) and international relationships (Jean et al. 2008). However, despite (a) the pervasive adoption of e-business by firms (OECD 2010), (b) the emergence of new businesses and business models (Gabrielsson & Pelkonen 2008; Loane et al. 2004); and (c) the corresponding shifts in firm architecture (Rangan & Sengul 2009) and internationalisation processes (Arenius et al. 2005; Morgan-Thomas & Jones 2008), a review of top journals shows there is limited research which investigates empirically the relationship between ICT and the internationalisation of business. The nascent nature of the field and lack of consensus over concepts to describe the phenomenon, key definitions or research questions may be hampering research efforts (Edmondson & McManus 2007). More integration and convergence is urgently needed to assist both the scholarly development of the field and its legitimisation. The current paper addresses these needs by providing an evidence-based state-of-the-art review, identifying, integrating and assessing the empirical research on global online entrepreneurship (GOE). We use the term GOE to capture the positioning of the field at the intersection of IB, e-business and entrepreneurship research. The definition purposely recognizes the entrepreneurial nature of GOE and its close association with technological innovation, opportunity and growth (Jones et al. 2011). By rephrasing McDougall and 3

6 Adam Smith Research Foundation. Working Papers Series Oviatt s definition (2000, p. 903), we define GOE as a combination of innovative, proactive and risk-seeking behaviour that involves using e-business technologies to cross national boundaries and create value in organizations. The definition encompasses e-business initiatives of existing international businesses as well as the internationalisation of firms that we internetbased at birth. We label these firms e-business new ventures (EBNVs). The specific objectives of the review are to identify and evaluate the most current empirical research in order to (1) inventory the theoretical and methodological approaches, research findings and key research gaps; (2) identify the key contributions; and (3) discuss the implications for future development of the field. The ultimate objective of this study is to situate the topic of global online business firmly within the domain of international business research. By integrating the literature to show patterns, connections and commonalities, we hope to assist the development of a strong research agenda to move the field towards further convergence and legitimisation. The focus on empirical articles ensures that the results capture actual phenomena and avoid unrealistic speculations (Morgan-Thomas & Bridgewater 2004). By highlighting the theoretical and methodological approaches to empirical research, our study provides practical guidance for researchers in this area. Methodology Finding articles. Following other field reviews (e.g. Jones at al., 2011), the initial search included peer reviewed journal articles, but excluded book chapters, reports and conference papers due to the lack of quality assurance (variability in their review processes). We used a three-phase search process. First, we conducted a systematic keyword search, in the Ebsco, Web of Science, and Science Direct databases, of titles and abstracts in articles published in scholarly (refereed) journals. This ensured that we were searching all peer-reviewed journals and were not limiting the scope of the search to top tier journals only. We used keywords covering e-business (e-business, online, Internet, virtual, cyberspace, marketspace, net, web, information superhighway, communications network, world wide web, WWW, electronic, networked, connected, wired, digital, digitization, web site, home page, website, e-marketing, e-entrepreneurship, e-commerce, web page, e-strategy, computer technology, information technology, IT, ICT); and international business (global, international, world, foreign, multinational, export, cross-cultural). This process generated 113 potentially relevant articles after excluding duplicates. Second, we manually searched the top tier journals in the field of entrepreneurship, IB, information management and marketing to ensure that we collected all the relevant articles that might have been missed with our search terms. Third, we used a snowball technique to check the references in articles previously identified to determine if we had missed any missing contributions. The manual search of the top journals and reference lists generated a further 19 articles, bringing the total to 132. Given our research objective, we collected only papers reporting empirical results. However, we acknowledge the contributions of conceptual papers in shaping empirical research and delineating major research themes, and we drew on the following articles in examining our results. Quelch and Klein s (1996) seminal article, on the internet and its effect on the international marketing of firms, marks the emergence of the field. The assertion that online environments provide varied opportunities for existing multinationals and internet start-ups marks the development of two research themes: the online internationalisation of non-internet firms and the internationalisation of EBNVs. Within the context of conventional enterprises, Hamill (1997) initiates the discussion of the possible outcomes of engagement in online marketing for small and medium sized exporters, emphasizing the technology-assisted reduction in barriers to exporting and speedier internationalisation. Samiee (1998) and Petersen et al. (2002) further elaborate on this notion by discussing a range of possible moderators to rapid internationalisation and the subsequent enquiry into the relationship between online internationalisation, information, knowledge and performance can be traced to these discussions. Within the new venture context, Singh and Kundu (2002) explore the foreign market entry choices of e-commerce corporations building on ownership, location, and internalisation theory and initiating an enquiry into the foreign market entry choices by EBNV. International entrepreneurship scholars including Bell et al. (2001), Coviello and Chandra (2009) and Reuber and Fischer (2011) contribute to the literature by conceptualizing engagement in online business as entrepreneurial activity. Screening Articles. Each of the 132 papers was read and evaluated to confirm its eligibility using the following criteria. Criteria for inclusion are: (a) the paper is published in English in an academic, peer reviewed journal; (b) the results are based on qualitative or quantitative empirical data; (c) the unit of analysis of 4

7 Global Online Entrepreneurship. Morgan-Thomas & Reuber the study is the firm and not the consumer (Caruana & Ewing 2006; Cyr et al. 2008; Sia et al. 2009) or the industry (Javalgi et al. 2005); (d) the paper explicitly integrates IB theory and online business. Criteria for exclusion are: (a) single country studies and noninternational contributions (e.g. Bollen et al. 2006; Chung et al. 2004; Hsieh et al. 2006); (b) studies where online activities do not represent the focal construct of investigation are also excluded (Gabrielsson et al. 2004); and (c) studies which examine the general effects of ICTs on internationalisation but not internetrelated technologies (Chari et al. 2007; Lal 2004; Nahar et al. 2006; Rangan & Sengul 2009; Santangelo 2001). In total, 73 articles met these inclusion criteria. Coding procedure. We closely followed coding and analytical procedures established in other studies (see Jones at al., 2011; Thorpe et al. 2005). Two researchers coded each article independently following a coding scheme that included elements of the conceptual domain (key objectives of the study, theory, principal concepts, key findings) and aspects of the research design (study location, research sample, data collection method). The two coders almost perfectly agreed on items that could be unambiguously assessed such as the study location or the sample size. However, it was relatively more difficult to assess what the key concepts or theories or the key findings were (Braun & Clarke 2006). The average interrater agreement was initially 96% (LeBreton et al. 2008) and after discussion, all discrepancies were resolved. Results Main research themes Table 1 displays the main themes and subthemes within the reviewed literature. As can be seen from the table, Table 1: Thematic areas within empirical research on global online entrepreneurship (GOE) Thematic area Second order theme Theme description Studies GOE in new venture firms Internationalisation of e-business new ventures (EBNVs) Examines speed, entry modes and international performance of EBNVs Bell & Loane 2010; Chen 2006; Colton et al. 2010; Gefen & Carmel 2008; Kim 2003; Kotha et al. 2001; Loane 2006; Loane et al. 2004; Loane et al. 2006; Lou et al. 2005; Murphy & Scharl 2007; Rothaermel et al GOE assisted internationalisation of new venture firms Explores supporting role of GOE in internationalisation Arenius et al. 2006; Berry & Brock 2004; Fortune & Aldrich 2003; Gabrielsson & Pelkonen 2008; Ramsey & Ibbotson International performance Examines effects of GOE on firm performance, export perfromance and internationalisation Bennett 1997; Carpano & Rahman 1998; Clarke 2008; Farhoomand et al. 2000; Hamill & Gregory 1997; Hinson & Adjasi 2009; Hinson & Sorensen 2006; Hsu et al. 2008; Kraemer et al. 2005; Moenet al. 2002; Moodley 2003; Moodley & Morris 2004; Mostafa et al. 2006; Morgan-Thomas 2009; Morgan-Thomas & Bridgewater 2004; Morgan-Thomas & Jones 2009; Nguyen & Barrett 2006; Prasad et al. 2001; Raymond et al. 2005; Wang et al. 2011; Yip & Dempster GOE in established firms Adoption Focuses on antecedents and aspects of GOE adoption including levels of adoption and website optimization Chen 2006; Eid et al. 2006; Gregory et al. 2007; Haugh & Robson 2005; Hinson & Abor 2005; Jaw & Kaynak et al. 2005; Lewis & Cockrill 2002; Lituchy & Rail 2000; Lohrke et al. 2006; Moini & Tesar 2005; Moon & Jain 2007; Nieto & Fernandez 2006; Pitis & Vloksy 2000; Saban & Rau 2005; Servais et al. 2007; Sincovics et al. 2007; Singh et al. 2005; Tiessen et al. 2001; Winklhofer et al Relationships, learning and knowledge Considers interactions between GOE adoption and external partners and their implications for performance and learning Axinn et al. 2006; Burgers et al. 2010; Chang & Wang 2008; Ching & Ellis 2006; Houghton & Winklhofer 2004; Jean et al. 2010a; Jean et al. 2010b; Johnston & Wright 2000; Mathews et al. forthcoming; Nguyen & Barrett 2006; Yamin & Sinkovics 2006; Jean et al. 2010; Piscitello & Sgobbi 2004; Yamin & Sinkovics,

8 Adam Smith Research Foundation. Working Papers Series there are two distinct strands of research on GOE. The first strand focuses on the internationalisation of recently established firms and is further subdivided into EBNV and other new ventures. This distinction captures the significance of e-business activities to the existence of the firm. In EBNVs, ICTs play an enabling role where the existence of the business and its key functions evolve around the exploitation of ICTs (Quelch & Klein 1996). In other new ventures, e-business plays a supportive role and is subsidiary to the core business model. The second theme within GOE research is the online internationalisation of existing international ventures. This theme is subdivided into studies focusing on performance outcomes of GOE, issues of adoption and the effects of GOE and relationships and external partners. E-business new venture (EBNV) research is a key thematic area to emerge in the GOE literature. The EBNV signifies a new type of entrepreneurial firm: a new venture that derives its existence from opportunities created by a subset of ICTs (Bell & Loane, 2010; Kim 2003; Kotha et al. 2001; Rothaermel et al. 2006). The empirical research within this theme examines the internationalisation of EBNVs and addresses several objectives. For example, there is an interest in the speed, patterns and internationalisation strategies of EBNVs (Fortune & Aldrich 2003; Kim 2003; Loane et al. 2004; Luo et al. 2005), the degree of internationalisation and its antecedents (Kotha et al. 2001) and foreign market entry decisions (Kim 2003; Luo et al. 2005; Rothaermel et al. 2006). A second theme within the new venture context focuses on the supportive role of ICTs in the internationalisation of new venture firms (Gabrielsson & Pelkonen 2008; Ramsey & Ibbotson 2006). Originating in international entrepreneurship research and the notion of barriers to internationalisation, these studies typically explore the outcomes of e-business for the internationalisation of a knowledge intensive firm (Arenius et al. 2005; Berry & Brock 2004). Interestingly, the paucity of contributions here highlights a stark contrast between the practical importance of ICTs in internationalisation and the marginalization of e-business technology within IE research (Jones et al. 2011). The main thrust of empirical research on GOE concerns existing international ventures and their exploitation of e-business opportunities. Initial enquiries within this theme focused on the implications of e-business adoption for the perception of barriers to internationalisation in SMEs (Bennett 1997; Hamill & Gregory 1997; Litchy & Rail 2001; Moen et al. 2003). More recent contributions reflect distinctive themes focusing on the adoption of e-business, its outcomes and antecedents. Considering e-business adoption, research efforts address the delineation and capture of different forms of e-business (Eid et al. 2006; Houghton & Winklhofer 2004; Mathews et al. forthcoming; Servais et al. 2006; Wang et al. 2011). The concepts of assimilation (Raymond et al. 2005; Saban & Rau 2005), website sophistication (Winklhofer et al. 2006), integration (Lohrke et al. 2006; Gregory et al. 2007) and e-business model (Morgan- Thomas & Bridgewater, 2004) depict these efforts. Several studies explicitly explore the antecedents of e-business adoption in internationalizing firms (Farhoomand et al. 2000; Moini & Tesar 2005; Moon & Jain 2007). There is also significant interest in the outcomes of e-business for the internationalizing firm (Gregory et al. 2007; Moon & Jain 2007) and some progress had been made in quantifying the contribution of e-business to firm performance (Colton et al. 2010; Morgan-Thomas 2009). Theoretical frameworks The ontological roots of GOE are diverse and include several scholarly disciplines. Not surprisingly, IB theories feature prominently and internationalisation theory (Johnansson & Vahne 1997) has received significant attention. Internationalisation theory informs research examining barriers to international growth (Bennett 1997; Gabrielsson & Pelkonen 2008; Hamill & Gregory 1997), the speed of online internationalisation (Kim 2003), and the patterns of international growth of EBNVs (Loane et al. 2004; Kotha et al. 2001) including the question of whether these patterns are global or regional (Chen 2006). In terms of specific theoretical constructs, the liability of foreignness (Arenius et al. 2006) and the concept of psychic distance (Kim 2003; Yamin & Sincovics 2006) have been examined. In addition to internationalisation theory, the entry mode perspective within IB is applied either explicitly (Rothaermel et al. 2006) or implicitly (Luo et al. 2005) to explain internationalisation patterns of e-commerce corporations (Kotha et al. 2001; Rothaermel et al. 2006). Finally, the exporting literature has received some attention and several studies build on export performance-based models to examine the antecedents of e-commerce integration and its outcomes for the exporting firm (Prasad et al. 2001; Gregory et al. 2007; Moini & Jain 2007). Entrepreneurial theories are also evident in several studies (Arenius et al. 2006; Bell & Loane 2010; 6

9 Global Online Entrepreneurship. Morgan-Thomas & Reuber Loane et al. 2004). For example, the concepts of entrepreneurial orientation, risk taking, the identification of opportunities, market orientation, networks and social capital feature in analyses addressing the antecedents of GOE (Colton et al. 2010; Houghton & Winklhofer 2004; Mostafa et al. 2006). In addition, the importance of open innovation and consumer relationships has been recognized recently (Bell & Loane 2010). Indeed, the relationship paradigm has given rise to a growing number of contributions (Burgers et al. 2010; Colton et al. 2010; Ching & Ellis 2006). For example, the explorative study by Houghton and Winklhofer (2004) frames the problem of channel conflict within the authoritative control and relationship paradigms. Recent studies by Jean and Sinkovics (2010) and Jean et al. (2010a) explore the relationship between technological innovation, relationship learning and performance. Finally, general management theories are also evident in GOE research. For example, studies examining the question of adoption of e-commerce and levels of adoption (Eid et al. 2006; Haugh & Robson 2005; Johnston & Wright 2004; Raymond et al. 2005) draw on the innovation diffusion theory and Rogers (1983). The resource-based view and capability perspective has received some attention (Gregory et al. 2007) as has the knowledge perspective (Nguyen & Barrett, 2006). Transaction cost analysis has also been applied (Lohrke et al. 2006; Niento & Fernandez 2006), which is not surprising given the widely discussed effects of online internationalisation on the cost of transactions. Methodological approaches in GOE Research designs. We organize contributions into three categories of methodological approaches: descriptive, theory building and theory testing. Our sample includes 12 descriptive papers, 20 theory building papers and 39 theory testing studies papers. In addition, there are 2 papers which include both case studies and hypothesis testing (Chang & Wang 2008; Jaw & Chen 2006). Given the emergent nature of GOE as a field of study and the urgent need for better understanding of the phenomenon in its institutional context (Edmondson & Mcmanus 2007), it is surprising that qualitative studies, theory-building studies are few in number. collected through web-content analysis and searches of secondary information from firms reports, press etc. (Kim 2003; Luo et al. 2005). In addition, some authors relied on secondary data from panel surveys of industry and used proxy measures from data collected for other purposes (Clarke 2008; Haugh & Robson 2005; Niento & Fernandez 2006). Primary quantitative data, either in the form of survey questions or interviews, is typically collected from key groups of individuals (e.g., managing directors, export managers), usually those in charge of internationalisation/export processes. The use of multiple respondents represents an encouraging development (Colton et al. 2010). Research samples vary in size ranging from 1 to 1,347 firms in quantitative studies based on primary data. There is evidence of progress in sampling from cross-sectional designs to purposeful samples (Burgers 2010; Jean et al. 2010b) and probability samples (Colton et al. 2010). Reuber and Fischer (2009) use archival online data collected from an e-market website. In qualitative studies, interviews and case studies predominant: multiple cases are used (Houghton & Winklhofer 2004, Loane et al. 2004), as are longitudinal case studies (Gabrielsson & Pelkonen, 2008). A study by Loane et al. (2006) using the multi-stage method is worth noting for its protocols of case selection and reliance on secondary data. In terms of the coverage of different industries, empirical evidence is derived from either crosssectional studies of many industries (Gregory et al. 2007; Moon & Jain 2007; Morgan-Thomas & Bridgewater 2004) or from knowledge-intensive or high-tech sectors (Jean et al. 2010a; Kim 2003; Loane 2004). With few exceptions (Burgers et al. 2010; Chung et al. 2004), there has been little interest in sectoral studies beyond high-tech firms and the evidence seems biased towards high-tech industries. Data collection. Most quantitative studies use primary data collected via surveys or interview. Exceptions to this general pattern are studies where the data were 7

10 Adam Smith Research Foundation. Working Papers Series Turning to the geographical locus of research, empirical research on GOE has been conducted in a number of diverse country environments and within a broad spectrum of cultures and languages. Although the majority of studies examine North American, UK or other English-speaking countries (notably Australia, Ireland and New Zealand), there is some representation of continental Europe (Italy, Germany, Spain) and other parts of the world including Asia (Jaw & Chen 2006; Nguyen & Barrett 2006), Latin America (Johnston & Wright 2000) and Africa (Hinson & Sorensen 2005; Moodley 2003). A closer inspection of the studies reveals, however, that when EBNVs are the subjects of analysis (Kotha et al. 2001; Loane et al. 2004; Luo et al. 2005), the geographical focus narrows to reflect only the English-speaking world with a significant bias towards US firms. To an extent, this bias might reflect the digital divide, with a disproportionately large representation of US-based enterprises in global e-commerce and having firstmover advantages. However, this focus on the USA could obscure possible sources of advantage related to the country of origin (e.g., the use of the English language) and reflect cultural biases. Measurement and data analysis. There is evidence of growing sophistication in empirical measurement. There is also a growing trend towards the use of multiple indicators (Gregory et al. 2007; Moon and Jain. 2007; Nguyen & Barrett 2006), and single indicator measures evident in earlier studies are being replaced by tightly defined scaled responses often validated by previous research (Colton et al. 2010; Jean et al. 2010a; Moen et al. 2008). Techniques for data analysis provide further evidence of the ongoing development of the field with a clear progression from descriptive approaches based on frequency analysis (Bennett 1997, Lituchy and Rail 2001), to comparative approaches using t-tests or ANOVA (Servais et al. 2007). More recently, multivariate techniques and SEM are increasingly being deployed on larger research samples (Colton et al. 2010; Jean et al. 2010b). Key findings The following section highlights the key empirical findings on GOE research. The structure of the discussion reflects the latest thinking on entrepreneurial business models (George & Bock 2011; Teece, 2010) and includes GOE outcomes, antecedents, e-business models. GOE outcomes The association between ICTs and firm performance have received much attention in the empirical literature. In fact, GOE research is largely driven by the assumption of a strong positive link between ICT and performance and the expectations of performance gains resulting from e-business adoption (Hamill 1997). In broad terms, the studied outcomes of GOE comprise the consequences of the adoption (or non-adoption) of a particular online tool, i.e. the website, for the internationalisation of a firm. Much of the current empirical effort to capture the effects of GOE revolves around static cross-sectional designs and empirical tests of association between adoption and performance (Gregory et al. 2007; Moon & Jain 2007). To measure performance, studies tend to employ subjective indicators and perceptual measures of satisfaction with performance (Morgan-Thomas 2009) and objective measures, such as growth in international sales (Clarke 2008; Raymond et al. 2005), are rarely used. The most compelling performance-related evidence concerns the positive relationship between GOE and international growth. For example, the research on EBNVs reports an internationalisation process that is faster and more condensed in terms of multiple foreign entries into multiple markets in a very short time, with entries separated by months rather than years (Chen 2006; Kim 2003; Kotha et al. 2001). GOE seems conducive to rapid internationalisation strategies, specifically those associated with international entrepreneurship and the born global phenomenon (Gabrielsson & Pelkonen 2008; Loane et al. 2004). These effects are not limited to EBNVs: the evidence of faster and more widespread ICT-assisted internationalisation is also found within the context of other new ventures (Loane et al. 2007) and established exporting firms (Morgan-Thomas & Jones 2009). Several mechanisms explain the international growth associated with GOE. The evidence points to lower resource requirements for online internationalisation resulting from a decreased cost of international communications, international promotions, transactions and market research (Arenius et al. 2006; Moon & Jain 2007; Yamin & Sinkovics 2006). The associations between GOE and relational trust, knowledge and learning have also received some attention (Jean et al. 2010a; Moen et al. 2008; Nguyen & Barrett 2006), as well as implications for relationships, trust and relationship performance (Chang & Wang, 2008; Houghton & Winklhofer, 2004; Jean & Sinkovics 2010). 8

11 Global Online Entrepreneurship. Morgan-Thomas & Reuber Beyond international growth, conclusive evidence on GOE s association with firm performance is more difficult to find, although some tentative evidence based on secondary data from African countries shows a positive relationship between internet adoption and exports (Hinson & Adjasi 2009). This positive relationship is confirmed in other studies (Moon & Jain 2007; Morgan-Thomas & Bridgewater 2004) but these findings are based on cross-sectional designs and subjective measures of performance, and so causality is yet to be confirmed. Some authors argue that the relationship between GOE and performance is more likely to be indirect than direct, and moderated by other factors such as learning (Jean et al. 2010a; Moen et al. 2008). channels and the concepts of commitment, conflict, opportunistic behaviours and closeness (Ching & Ellis 2006; Houghton & Winklhofer 2004). The evidence shows that business partners within supply channels (Burgers et al. 2010) or sales channels (Wang et al. 2011) represent important facilitators of GOE adoption and play an important role in the formation of other resources, namely knowledge (Jean et al. 2010a). In fact, external demands for e-commerce seem to be a significant moderator of the adoption and effectiveness of GOE (Gregory et al. 2007; Hinson & Sorensen 2006). Within the broader environment, the implications of competitive intensity and environmental turbulence have been acknowledged (Gregory et al. 2007; Moon & Jain 2007). Antecedents of a firm s participation in GOE This body of research suggests variations in the range and the nature of benefits associated with online internationalisation (Moen et al. 2008; Morgan-Thomas & Bridgewater 2004) and significant progress has been made in explaining these differences. Initially this research concerned barriers to the adoption of GOE (Bennett 1997; Moini & Tesar 2005). More recently, the inquiry has moved towards more theoretically grounded explanations based on the theoretical notions of resources, capabilities, learning or relationships. Several GOE antecedents concern the firm itself. For example, ICT capabilities and resources, including staff and management commitment, seem to represent important antecedents of GOE (Moini & Tesar 2005; Morgan-Thomas 2009; Winklhofer et al. 2006). GOE coincides with entrepreneurial capabilities including innovativeness (Lou etal. 2005; Loane et al Moon & Jain 2007) entrepreneurial orientation (Colton et al. 2010; Mostafa et al. 2006) marketing orientation (Prasad et al. 2001) or learning innovation (Moen et al. 2008; Nguyen & Barrett 2006). Intangible resources such as brand strength and reputation (Colton et al. 2010; Reuber & Fischer 2009) or trust (Burgers et al. 2010; Jean et al. 2010a) are also associated with online success. Moreover, research shows that international capabilities including international orientation (Colton et al. 2010) and experience (Morgan-Thomas & Bridgewater 2004; Wang et al. 2011) shape GOE adoption and outcomes. Forms of GOE Past research recognizes differences in the levels and forms of a firm s participation in GOE. These variations, or e-business models, capture the online activities in which a firm engages and its technological platform as the foundation of GOE (Teece, 2010). Initially, empirical enquiries captured these variations in terms of the adoption or non-adoption of or a website (Bennett 1997). Later, the differences between websites were recognized and captured typically in terms of transactional/non-transactional websites (Lohrke et al. 2006). In fact, the thrust of research in this area concerns websites and the problem of their optimization for internationalisation (Wang et la. 2011; Houghton & Winklhofer 2004) including the accommodation of national culture (Sinkovics et al. 2007). Recent developments show refinement in the treatment of models, with studies focusing on specific subsets that are tightly defined by business function and technological platform. For example, several studies focus on inter-organizational-systems within supply relationships (Axinn et al. 2006; Burgers et al. 2010; Jean et al. 2010b). Independently, transactional A number of factors external to the firm influence GOE adoption. Within the immediate environment, attention has been paid to existing marketing 9

12 Adam Smith Research Foundation. Working Papers Series e-commerce within the sales function has also received some attention (Colton et al. 2010). Implications and avenues for future research Although significant progress has been made in incorporating GOE into IB theory, further research is urgently needed. Firstly, there is a need for more research into the internationalisation of EBNVs. Limited enquiries have begun to focus on patterns of internationalisation including spread, speed and entry modes (Kotha et al.2001; Loane et al. 2004; Rothaermel et al. 2006). The results demonstrate rapid patterns of internationalisation that seem to be facilitated by intangible resources and capabilities including entrepreneurial and technological capabilities (Arenius et al. 2005; Ramsey & Ibbotson 2005). Given their phenomenal global emergence, EBNVs potentially offer important lessons on rapid internationalisation and an interesting context for testing IB theory, e.g., our understanding of foreign entry choices (Kotha et al. 2001) or the internalization debate (Chen 2006; Kim 2003; Luo et al. 2005). More research is needed to explain why, how and when rapid online internationalisation is possible. Considering the paucity of academic enquiries in this area, the importance of context and the complexity of the phenomenon, more qualitative studies are needed. Given the US-bias in existing studies (Kim 2003; Kotha et al. 2001; Chen 2006) research efforts could be devoted to identifying cases outside the USA and beyond the English speaking world. If ENBVs are to enrich our understanding of rapid internationalisation, then more research is needed to show how online and conventional internationalisation differ and where the similarities lay. For example, existing evidence tentatively indicates that certain lessons from IB theory do apply to the online context, for example, cultural or psychic distance seem to matter in foreign entry choices of e-commerce corporations (Rothaermel et al. 2006) or online marketplaces (Gefen & Carmel 2008), and the regionalization thesis seems valid (Chen 2006). Other aspects of IB theory seem less relevant, for example, there is little support for the progressive accumulation of international experience or the link between firm resources and the speed of internationalisation (Kim 2003). However, anecdotal evidence suggests that the spectacular growth of the EBNV is underpinned by equally unprecedented resources (see Forbes 2010). The ability to acquire the necessary resources might explain how ENBVs overcome the conventional barriers to internationalisation suggesting that the relationship between firm resources and internationalisation still holds for the online context. Unfortunately, given the very limited number of studies, firm conclusions cannot be drawn as yet. The extant evidence identifies a number of resources and capabilities that comprise antecedents and moderators of online internationalisation within and beyond the EBNV context. This research is still in its infancy and the relationship between intangible assets and online internationalisation is worthy of further examination. An empirical test of the conceptual model proposed by Singh and Kundu (2002) represents one possible direction for future research. Enquiry into the role of entrepreneurial capabilities and other intangibles, e.g. brand and the role of online reputation, represents another promising avenue (Reuber & Fisher 2009). The role of learning and the complex interactions between information, knowledge and internationalisation also provide an alternative direction (Jean et al. 2010a, Moen et al. 2008) and the question of relational resources and capabilities and their role in GOE adoption and implementation deserves closer examination (Ching & Ellis 2006; Jean et al. 2010a). Finally, inconclusive findings concerning the relationship between a firm s international capabilities and GOE require further explanation. Whilst some studies show that international capabilities and e-business adoption go hand-in-hand (Clarke 2008; Jaw & Chen 2008; Kraemer et al. 2005) others find no such association (Hinson & Sorensen 2006; Niento & Fernandez 2006). There is an interesting open question as to whether international capabilities represent an important precondition for online internationalisation as suggested by some (Morgan-Thomas & Bridgewater 2004; Yamin & Sinkovics 2006) or whether the online context accelerates learning and diminishes the requirement for prior knowledge (Quelch & Kline 1996). The relationship between GOE and firm performance clearly requires more attention. Although progress has been made in capturing GOE and its effects on growth, important gaps remain. The link between successful GOE and international performance has only partially been explored and extant evidence concerns association between GOE and subjective measures of performance (Moon & Jain 2007; Moen et al. 2008). Objective measures of performance are needed and causation is yet to be confirmed. Thus, longitudinal studies based on objective data are required to provide conclusive evidence of 10

13 Global Online Entrepreneurship. Morgan-Thomas & Reuber the link between GOE and performance, including international performance. Although research shows a growing recognition of different forms of GOE, with their underlying technological platforms and business functions, more effort could be devoted to defining and capturing e-business models. A more detailed representation of practical business models is needed and recent discussions of models in strategic management and entrepreneurship literature might provide some guidance in that respect (Casadesus-Masanell and Ricart 2010; George & Bock 2011; Teece 2010). Concurrently and in parallel with the business model, technological platforms other than the internet might be examined: there has been only very limited interest in other subsets of ICT that might form the technological backbone of business activity. Websites represent the key focus and other platforms, such as mobile applications, remain absent from the empirical research. How to best accommodate GOE within IB theory continues to pose a challenge (Karavdic & Gregory, 2005). Compared to the successful efforts to adapt general management theories to GOE context, finding a well-grounded theoretical framework within IB theory seems less straightforward. One reason for the difficulty is that it is not straightforward to reconcile the IB focus on existing transactions and the static notions of firm structure, architecture and governance (Rangan & Sengul 2009) with the dynamic nature of GOE and its emphasis on new business opportunity, new/potential transactions and the entrepreneurial growth (Loane et al. 2004). While the implications of GOE for firm governance can be relatively easily accommodated within IB theory and its focus on MNE governance (Rangan & Sengul 2009), it remains to be seen whether the equally relevant issue of capturing opportunities, change and dynamic growth can be addressed within IB theory. New theories might be needed to resolve this conundrum and such theory building represents an urgent priority. Two emerging research streams might offer some guidance in this respect: the developing research on business models (Casadesus-Masanell & Ricart 2010; George & Bock 2011; Teece 2010) and international entrepreneurship theory (Jones et al. 2011). and firm internationalisation. Building on international entrepreneurship research, we delineated and defined a new field of academic enquiry, global online entrepreneurship (GOE) and positioned this research agenda at the intersection of the IB, e-business and entrepreneurship research. We searched the literature for empirical contributions that met strict inclusion criteria and analysed 74 papers to provide a critical assessment of empirical evidence to date. The results demonstrate a rich and varied research domain that builds on a number of theoretical approaches to address a set of problems related to the adoption and implications of GOE for the internationalisation and performance of firms. The field shows clear signs of progress as evidenced by increasing conceptual and methodological development. The empirical results reveal important findings concerning GOE antecedents, moderators and outcomes. This review identifies possible avenues for future enquiry which include further research on the exploration and explanation of online internationalisation, the role of firm resources in the adoption of GOE, the relationship between GOE and performance and the forms and implications of e-business models in firms internationalisation. Given the importance of GOE phenomenon for business, the overarching intention behind our efforts to show patterns, connections and commonalities among the empirical evidence was to assist the development of a strong research agenda within the domain of international business. By highlighting and integrating theoretical and methodological approaches to empirical research, this study provides practical guidance for future research efforts. We acknowledge that our analysis is subject to limitations. The review is a reflection of the literature analysed. We recognise that the search criteria adopted here introduce bias by excluding Conclusion The purpose of this paper was to identify, integrate and assess current empirical research on e-business 11

14 Adam Smith Research Foundation. Working Papers Series contributions that have not been published in peer reviewed journals or that were not deemed to integrate e-business and IB theory. By changing the search parameters, future studies may refine our results. Although strict coding procedures were adopted, it is possible that other codes would produce different coding schemes and interpret the papers differently, providing a somewhat different map of this emerging field. The overall conclusion of this study is that the collective quality of GOE research needs to improve to make a powerful contribution to the IB field. It is always the case that analyses of cutting-edge business practices such as GOE can only be expected to appear in top academic journals after a fairly long process of assimilation, as the new subject finds its niche within existing established academic disciplines and theories. 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