Born 'Exporting' in Regional Clusters: Preliminary empirical Evidence

Only in the last decade did International Business research start to address a long ignored issue: why a growing number of firms are international from the moment of birth or in the very first years of activity (Ray, 1989; Mc Dougall, Shane and Oviatt, 1994; McDougall and Oviatt, 1996; Oviatt and McDougall, 1997; Westhead, Wright and Ucbasaran, 1998; Burgel and Murray, 1998). In the case of International New Venturesii (INV) from small countries the major research question is how is early internationalisation possible rather than why. Even the less sophisticated mode of entry into foreign markets, exports, usually requires a minimal knowledge of foreign languages and external trade techniques. Plus, exporting firms will generally be in a disadvantageous position in relation to local competitors that benefit from better information about buyers’ tastes and preferences and potentially enjoy higher credibility near local customers. These are likely to be especially important advantages when products sold are customised, technically complex, and require frequent contacts between the buyer and the supplier. Another emerging issue in international business research has to do with the role of location (namely location within regional clusters) in internationalisation strategies (Dunning, 1997; Oviatt and MacDougall, 1997; Enright, 1998; Anderson, 1999). Therefore, this paper focus on INV located within a cluster, that is, on ‘interdependent’ INVsiii. As far as internationalisation 2 modes of entry are concerned exports and Exporting New Ventures (ENVs) are analysed. More specifically research is based on case studies of companies located in the plastic moulds cluster of Marinha Grande, Portugal. While collecting information about this cluster a series of short articles about member firms of Cefamol - Portuguese Association for the Mould Industry - published in its quarterly magazine ‘O Molde’ between 1988 and 1999 were gathered (Cefamol, 1988-99). Geographic concentration around the area of Marinha Grande, a pattern of start-up through spin–offs, strong and early export orientation and the supporting role of relations with customers (including several large MNCs from different industries and countries), suppliers and peers seem to be common features of these 37 reports. A series of question on the role of location within clusters in early export strategies emerged from a thorough review and analysis of these reports: How do mould makers from Marinha Grande manage to start exporting so early after foundation?; How does location within a cluster influence early exports?; What is the role played by customers, suppliers and other firms in the process?; How does location within a cluster influence relations with other local firms and relations with customer firms located outside the cluster? This paper presents the preliminary results from an on-going research project and is organized as follows. In the first section a short review of the existing literature on INVs is presented. Since ‘interdependent’ ENVs introduce the concept of location into the research on international entrepreneurship, a brief survey of cluster theory and its potential contribution to the explanation of INVs is also made. The main goal of this summary of literature is to guide the design of the research project (Eisenhardt, 1989, Yin, 1994). Therefore, the research design and the method for information collection and analysis are presented in the methodological section that follows. After a short introduction of the basic characteristics of 3 mould production, preliminary findings are disclosed. In the concluding section implications of major findings are discussed and questions for future research are identified