Born Global Companies as the Future for Economy of Latvia

Abstract

Purpose of the article Small number of export-capable sectors is a factor that renders the Latvian economy sensitive to any changes in the external environment, at the same time it is an incentive to look for growth patterns. Internationalisation is a factor that brings growth. International operations can have various advantages for enterprises, particularly for high-growing companies. The born global companies will experience stronger performance in markets that are more attractive and more internationalised. It is important to start with the understanding of the ’'born global’ phenomenon, hence understanding should be based on proper definition of born global companies.  

Methodology/methods Research can be conducted through literature reviews, case studies, survey studies, modeling. Research examines born global firms through various units of analysis, including the manager, firm, industry, and nation, as well as the ‘opportunity’, events, or processes. Developing standard definitions and measures helps increase research clarity.

Scientific aimThe newly created definition of born global companies requires scientific justification for all the features it contains. The author would like to base justification on the causation and effectuation theories which include all the features associated with orientation to revenues and international market capacity. These theories could be the basis for further investigation of the relationship between effectual conditions (harmonious passion, obsessive passion, entrepreneurial self-efficacy, and risk perception) and the outcome (potential to be born global company).

Findings Doing this research, author highlights the role of defining and predicting of the opportunities for a company to become born global. Need to justify the truthfulness of the information included in definition has led the author to getting to know the theories of causation and effectuation. Mentioned above theories help to justify an inclusion of all the corresponding components in the definition and associated with orientation to revenues and international market capacity. These theoretical justification could be the basis for the further investigation of the relationship between effectual conditions (harmonious passion, obsessive passion, entrepreneurial self-efficacy, and risk perception) and the outcome (potential to be born global company).

Conclusions When the author got familiar with attempts of many researchers to combine different qualities, principles, features in definitions of born global firms (about 28 definitions are created during the period from 1993 to 2012) an idea to create a new one emerged. The author justified the new definition with the causation and effectuation theories which include all the features associated with orientation to revenues and international market capacity. As the next step was the development of the basis for further investigation of the relationship between effectual conditions (passion, entrepreneurial self-efficacy, and risk perception) and the outcome (potential to be born global company). All this is done based on the fact that emergence of born global companies is a factor that brings country's economic growth.