Understanding International Entrepreneurship: Looking at the Resource Rich Fashion Industry
Dara Szyliowicz, Texas
Tech University
Teresa Nelson, Suffolk University
Principal Topics:
Internationalization is often seen as the purview of well established firms. The generally assumed approach is a stage model of internationalization where firms first seek to saturate the domestic market and then begin to search for new markets in geographically proximate and/or culturally similar countries (e.g. Vernon, 1971; Hofstede, 1980). This approach would suggest that older, well-established firms are more likely to make the decision to go international.
Nonetheless, there have been a variety of firms that have begun as multinational enterprises. Empirically, scholars have demonstrated that firms become international at founding or soon thereafter (Brush, 1992). Drawing on the work of Oviatt and McDougal, (1994), we would like to suggest that new firms in certain industries are more likely to go international at or near conception. These industries are ones that have unique and valuable resources and capabilities.
One industry that is based on unique and valuable resources that are non-substitutable and inimitable is the fashion industry. This industry is under-represented in work on industries and organizations but it is, in fact, important to study. It is one of the most profitable industries with annual worldwide sales topping three trillion dollars in 1996 (Women’s Wear Daily, 1997). Additionally the industry is characterized by a variety of different actors. They vary in size, capability, scope and geographical domain.
We plan to use the fashion industry as our setting to explore new firm internationalization strategies. We hypothesize that the more rare and unique the resources, the more likely the firm will be to internationalize early. Moreover, the more non-substitutable the resources the more likely the firm will internationalize in its founding moments.
Method
We plan to divide the industry into two strategic groups, high end designers and mass market companies. We will then test each of these hypotheses on firm data from the 1990s. Using data gathered from industry sources, the popular press and Moody’s International Manual we have created a database cataloguing the firms in the industry, when they were started and how and when they began their international activities. We include additional firm level performance data.
Implications
This paper seeks to look at industry wide characteristics that may play a role in the internationalization of new firms. This paper will also focus on an industry that does not usually get attention. We hope that this will also yield a case study of the fashion industry that will reach students and practitioners.
CONTACT: Dara Szyliowicz, Texas Tech University, College of Business Administration, Dept. of Management, Lubbock, TX 79409; (T) 806–742–2147; daras@coba2.ttu.edu
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