Learning to choose: Strategic direction and survival of international new ventures.

This paper aims to further the understanding of how and why international new ventures (INVs) go about acquiring their legitimacy by exploring rapid internationalization of five small software companies during the dot.com bubble. INVs are seen as one of the most critical engines of economic growth, trying to derive their profits from international activities right from their inception. Legitimacy is viewed as playing a key role in overcoming the liability of newness and liability of foreignness. Legitimacy is viewed as a process of collective construction of social reality, mediated by the perceptions and behaviors of individuals. With few exceptions, however, the research on INVs from the legitimacy theory viewpoint is somehow scarce. The present study is trying to fill in this gap. It is also in response to the call for further longitudinal, qualitative research in order to explore the legitimation process of new ventures, as well as the call for exploring the survivability among INVs. Directions for future research are provided and implications for practitioners discussed.