Hana Milanov

Going Abroad to Win at Home: New Venture Internationalization as a Legitimation Strategy

While recent research stressed the importance of examining domestic circumstances for new venture internationalization, our understanding of early internationalization for venture outcomes in domestic markets is more limited. In this paper we propose that early internationalization can importantly contribute to new venture’s legitimacy with domestic audiences. Building on the literatures in organizational legitimacy, we argue that early internationalization is a plausible signal for domestic audiences in evaluating the legitimacy of a new venture. The effectiveness of this signal is contingent on the context of the internationalization. We employ propensity score matching to construct a matched sample of new ventures. Our findings provide support for a positive impact of internationalization on legitimacy gains with three distinct domestic audiences: investors, partner firms, and customers and confirm the importance of the foreign market attractiveness as an important amplifier of such gains for some audi...