Exploring the determinants of born-global firms in Chile

Abstract

Purpose – Although much has been studied about the characteristics of born-global firms in developed countries, studies about developing economies are far and few between and most tend to be exploratory. The paper aims to discuss these issues. Design/methodology/approach – This paper studies how Chilean born-global firms behave and examine five distinct factors as compared to enterprises that gradually internationalize. A logistic regression model was applied to a sample of 115 small- and mid-sized enterprises (SMEs) that presented a growing and non-occasional internationalization to study the change in the probability that a young Chilean exporter will be classified as born-global. Findings – The results show that a foreign capital network, an economic development agencies (EDAs) network, the cultural distance from the countries receiving the exports, the localization of the SME in the capital city, and the company’s size are factors that significantly increase the probability that a young Chilean exporter will be classified as born-global. In contrast with the high technology content of the born-global companies that has been reported in developed countries, the technology level was not relevant in how quickly the Chilean SMEs internationalized. Originality/value – New public policy proposals may be inferred from the results of this paper. For example, the EDAs may increase their effort in promoting internationalization, particularly in geographical regions by taking into account the characteristics of each city and its entrepreneurs. This could help diminish the positive effect of location (i.e. perverse effect of centralization) presented in this study