The Interrelated Impact of Social Networks and Knowledge Acquisition on Internationalisation Process of High-Tech Small Firms

Abstract

The foreign development of high-tech start-ups is an important issue, since international activity requires specific knowledge that new firms may find it difficult to locate and acquire. It has been found that the pattern of foreign development in high-tech start-ups differs from that of conventional companies, starting to act in foreign markets soon after their establishment. This study utilizes a social capital approach, based on embeddedness prospective, to identify the possible resources useful to realize abroad both the knowledge acquisition and the knowledge exploitation, reinforcing the internationalization propensity of start-ups. We seek to articulate, by drawing on social capital theory and its link to knowledge concept, how social network ties may influence internationalization of start-ups. Basing on research of Yli-Renko, Autio e Sapienza (2001), we argue that different dimensions of social capital embedded in relationships between high-tech start-ups and their foreign customers improve the start-ups’ knowledge acquisition from these relationships and that this acquired knowledge may then be exploited for competitive advantage abroad. The hypotheses are tested with face to face survey data from start-ups in Italy. Our findings confirm the hypothesis that the internationalization propensity of start-ups is conditioned by social relationships, which may either facilitate or bind such a propensity through a direct influence on processes both of knowledge acquisition and of knowledge exploitation abroad. Consequently, by affirming the strategic link between social capital, knowledge acquisition and knowledge exploitation, we seek to contribute to a further convergence between the domains of entrepreneurship and internationalization research.