KOZMINSKI UNIVERSITY

Kozminski Working Papers Series

NO. 7-2009

MEASURING GROWTH AND INTERNATIONALIZATION OF SMES: TOWARD AN

INTEGRATED ANALYTICAL FRAMEWORK

JERZY CIESLIK EUGENE KACIAK

Warsaw 2009

The working papers are produced by the Kozminski University in Warsaw and are to be circulated for discussion purposes only. Their contents should be considered to be preliminary. The papers are expected to be published in due course, in a revised form and should not be quoted without the author’s permission.

Measuring growth and internationalization of SMEs: Toward an integrated analytical framework

Working Paper Jerzy Cieslik

Kozminski University, Warsaw, Poland

Eugene Kaciak Brock University in St. Catharines, Ontario, Canada

Professor Jerzy Cieślik cieslik@kozminski.edu.pl http://www.cieslik.edu.pl Phone: (48 22) 519-21-00 Fax: (48 22) 814 11 56 Kozminski University Chair of Management Jagiellonska 57/59 Street 03-301 Warsaw Poland

Eugene Kaciak, Associate Professor ekaciak@brocku.ca http://spartan.ac.brocku.ca/~ekaciak Phone: (905) 688-5550 ext. 3902 Fax. (905) 984-4188 Brock University Faculty of Business Department of Finance, Operations, and Information Systems (F.O.I.S.) St. Catharines, Ontario, Canada, L2S 3A1 Canada

Copyright © by Jerzy Cieślik & Eugene Kaciak Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author.

3

AABBSSTTRRAACCTT The paper proposes a methodological framework for analyzing and measuring the

growth and internationalization of SMEs in an integrated way. The proposed framework

addresses certain shortcomings in the international entrepreneurship research: inadequate

conceptualization of key dimensions of growth-oriented internationalization process,

incomplete integration of internationalization and entrepreneurship, and inadequate data for

advancing quality research. The framework is tested with a large dataset based on census data

covering all firms in the Polish manufacturing sector that employed 10 or more people

(15,355 firms) during 2002-2007. Implementing the proposed analytical framework can

improve the quality of research on the internationalization of SMEs in two ways. First, it will

enable the compilation of comprehensive, reliable, and internationally comparable data that

can be used to discern general patterns and trends in the internationalization of SMEs.

Second, it will broaden the combined analysis of growth and internationalization, a promising

avenue of research. An indirect but important benefit will also be the increased relevance of

the international entrepreneurship research to policy-making.

JEL Classifications L26

Keywords: High-growth firms; Gazelles; Internationalization; Born global

We thank the Ministry of Science and Higher Education of Poland for a financial support of

this research (Scientific Grant N N115 2566 33 - "International Entrepreneurship in Poland")

4

11 IINNTTRROODDUUCCTTIIOONN

The growing body of research in the

emerging field of international

entrepreneurship has identified key

characteristics of firms that have been

quick to become international. However,

the two streams of research,

internationalization and entrepreneurship,

have not been fully integrated despite

some attempts to do so (e.g., Jones and

Coviello 2005). Specifically, the well

researched category of “born global” has

not been incorporated into the research on

entrepreneurial, growth-oriented firms. As

a result, the international entrepreneurship

research has not taken advantage of the

methodological constructs and

measurement tools developed within the

specialized field of entrepreneurship

research that focuses on high-growth

firms.

In addition, researchers in the field of

international entrepreneurship have been

confronted with an inadequate supply of

reliable data as a result of a number of

factors:

- reluctance of owners of smaller and

younger firms to release information

about their firms, compared to the

relative openness of large corporations,

whose executives are usually familiar

with the academic community and

recognize the long-term benefits of

participation in mail surveys,

interviews, etc.

- stressful environment, lack of

established routines, workload during a

start-up period, and so on that make it

difficult for owners-managers to

allocate time for researchers

- lack of awareness among some leaders

of newly established firms of the

incompatibility of their ambitious plans

with the harsh realities of the business

formation phase, resulting in often

unintentional optimistic depictions of

their businesses, including international

operations, during interviews

- inaccessibility of data on international

transactions for managers, even if they

would like to respond to a survey,

because of the effort required to, for

example, requesting relevant data from

the accounting unit in advance.

As a result, research designs in

international entrepreneurship, as well as

constructs and measures used by

researchers, are largely “obtainability-

driven” (Coviello and Jones 2004).

Kuivalainen et al. (2007) pointed out that

the ambiguity and contradiction of results

5

related to the impact of early

internationalization on various aspects of

company performance largely stems from

conceptual confusion and the lack of

methodological rigor. Moreover, the

companies that have been studied differ in

size and age, so findings from different

research projects are difficult to generalize

and integrate within a body of knowledge.

Thus far, other than recognizing broad

diversity, the research community has

failed to determine the overall magnitude

of the born-global phenomenon and its

role in various sectors of the economy,

making it difficult to formulate meaningful

recommendations for managers and

policymakers.

The integration of research

perspectives that relate to

internationalization and the growth of

SMEs, is gradually making its way into the

international entrepreneurship literature.

Kuivalainen et al. (2006) argued that

internationalization and growth are often

interwoven, particularly in knowledge-

intensive industries, although there are

specific challenges to growth in the

context of international expansion.

This paper proposes a methodological

framework to measure internationalization

and high-growth phenomenon in an

integrated way and, in so doing, makes

several important benefits achievable:

a) Integration The proposed framework

will facilitate integration of born-global

research with the increasingly important

field of entrepreneurship and

management research in high-growth

firms and gazelles.

b) Generalizability and comparability The

proposed unified measures and

constructs will facilitate the

generalizability and comparability of

the results from individual research

projects and will help reveal general

characteristics and patterns. Here, we

refer specifically to a recommendation

by Coviello and Jones (2004) for use of

multiple data sources in the

international entrepreneurship research.

The proposed framework will primarily

address the demand for coarse-grained

methods that result in generalizable and

statistically significant data.

c) Triangulation Results obtained through

fine-grained methods such as interviews

and case studies that have focused on

various nuances and contexts can be

related to general patterns and trends

derived from alternative data sources,

particularly from census data compiled

by national statistical offices or

international organizations like the

OECD or Eurostat. Here, there is an

opportunity for a triangulation, which is

6

particularly important in view of the

shortage of data discussed above.

d) Prospective access to the anonimised

company data Incorporation of the

proposed concepts and measurement

tools within a framework of national

and international statistical systems will

augment the body of reliable empirical

data suitable for policy-making and

quality research. The resulting benefits

could be substantial once access to

anonimised individual company data is

granted for research purposes.

Regulations to facilitate such access are

already in place in a number of

countries. Recent experiences with the

use of anonimised census data by the

“neighbouring” discipline of

international economics have proven to

be a promising avenue for quality

research (Bernard et al. 2007; ISGEP

2008). We can build on the experiences

of a group of researchers and

statisticians, forming the International

Consortium for Entrepreneurship (ICE),

who have collaborated with the OECD

and Eurostat. As a result of their efforts,

new concepts and measurement

principles for high-growth firms and

gazelles have recently been

incorporated within the OECD/Eurostat

statistical system and will gradually be

adopted by national statistical offices

(OECD 2008). In fact, our proposed

framework has been designed as an

extension of these measurement

principles and concepts to capture the

segment of internationalizing high-

growth firms.

The proposed integrated framework

focuses primarily on the

internationalization of SMEs. Since SMEs

rarely engage in advanced forms of

international involvement, like FDI or

licensing, the analysis has been limited to

exports as the primary internationalization

mode. This limitation is particularly

justified in the context of Poland since, of

over 50,000 Polish firms currently

engaged in exporting, only a handful have

established foreign subsidiaries, and most

of these perform predominantly marketing

and sales activities. In 2006, involvement

in FDI was reported by only 214 Polish

firms (GUS 2007).

The rest of this paper is organized as

follows. First, we address the conceptual

links between the fields of

internationalization and entrepreneurship,

focusing particularly on areas where the

integration of conceptual and measurement

approaches, has not yet been

accomplished. Next, we present the

methodological framework for measuring

internationalization and growth at the firm

level in an integrated way. The

7

applicability of this framework is verified

with a large data set of 15,355 firms that

were in the Polish manufacturing sector

during 2002–2007. Results of the

empirical test, together with some

recommendations, are discussed in the

concluding section.

22 IINNTTEERRNNAATTIIOONNAALLIIZZAATTIIOONN,, BBOORRNN--GGLLOOBBAALL,, AANNDD EENNTTRREEPPRREENNEEUURRSSHHIIPP

RREESSEEAARRCCHH:: AANN UUNNFFIINNIISSHHEEDD IINNTTEEGGRRAATTIIOONN

Despite some attempts to integrate the

conceptual frameworks of

internationalization and entrepreneurship

(Jones and Coviello 2005; Kuivalainen et

al. 2006), this task remains incomplete as

some fundamental issues have not been

properly addressed, yet. Below we focus

on four areas that have been subject of

substantial debate in the entrepreneurship

literature for many years:

a) the distinction between the

entrepreneurial and small business

firms

b) new ventures versus established firms

c) the unit of analysis used in the

investigation of growth trajectories

d) ways of reflecting the impact of

alternative governance structures in the

growth analysis.

Addressing these fundamental issues

will facilitate defining key dimensions of

international entrepreneurship and

developing relevant measurement

methods.

2.1 Entrepreneurship versus small business

The distinction between entrepreneurs

and small-business owners has been

widely debated in the entrepreneurship

literature (Carland et al. 1984). There is

little doubt that born-global firms should

be positioned on the entrepreneurial, rather

than the small-business side, of the debate

since growth ambitions are clearly

reflected in the early definitions of

entrepreneurial firms. As Oviatt and

McDougal (1995) stated, born-global firms

“seem to have aggressive growth

objectives in that they rapidly exploit

technological advantages, acquire foreign

technologies, and follow clients into

foreign lands. When those facts are

combined with the observation that small

business creates a significant portion of

new jobs in America, then the collective

potential of global start-ups as powerful

economic engine begins to emerge” (p.

31). Similarly, Bloodgood et al. (1996)

pointed out the high aspirations and

potential for growth of new entrepreneurial

8

ventures. On the other hand, there is a

longstanding tradition in the

entrepreneurship research of attributing

growth ambitions to the entrepreneurial

activities of small businesses (Wiklund et

al. 2009). Here, again, there is a direct

reference in the extant literature to

entrepreneurial orientation

(innovativeness, proactiveness, and risk-

taking behavior), thus differentiating

international entrepreneurship from

internationalization at the firm level in

general (McDougall and Oviatt 2000).

Therefore, we may conclude that

growth orientation needs to be considered

as the key characteristic of born-global

firms and that constructs and measurement

tools used in research on the born-global

phenomenon should capture the dynamic

orientation of such ventures in general, and

their international expansion in particular.

Thus far, key measurement tools have not

been developed to reflect the growth

orientation of born-global entrepreneurial

firms.

2.2 New ventures versus established firms

Another conceptual issue that has

been a source of confusion in the

international entrepreneurship research is

the distinction between new ventures and

established firms. Following Lumpkin and

Dess (1996), an essential act of

entrepreneurship is a new entry (a new

economic activity), which can be

accomplished either through a new

business or within an existing organization

(corporate entrepreneurship) (Davidson et

al. 2002). These two types of

entrepreneurship require different research

tools and measurements.

The born-global phenomenon seems

to fall predominantly within the “new

venture” category of entrepreneurship, but

the current literature is inconsistent on the

subject, as some studies have focused on

new ventures (Zahra et al. 2000; Cabrol

and Nlemvo 2009; Anderssen and Wictor

2003), whereas others have included in

their analysis both new and established

organizations, applying some additional

criteria in the sample selection process to

eliminate organizations that may not fit the

research design because they are “too old”

(Knight and Cavusgil 2004).

The key methodological and

measurement issue in the entrepreneurship

research relates to determining a time

frame during which a new venture reaches

an initial level of maturity and becomes an

established organization. The period of six

years is most often used in the

entrepreneurship literature (Zahra et al.

2000; Short et al. 2009) since six years

reflect increased chances for new ventures

to reach initial maturity or “business

9

platform” (Davidsson and Klofsten 2003).

Such a delimitation is also relevant for

designing various assistance measures

addressed specifically to young firms

(Cabrol and Nlemvo 2009).

Surprisingly, the new venture

delimitation adopted in the

entrepreneurship literature is seldom

followed in the born-global research

(Zahra et al. 2000; Cabrol and Nlemvo

2009 are among the few exceptions here).

At the same time, a key criterion for

defining the born-global firm – time to

internationalization – also refers to a

specific time frame (typically three years,

but sometimes less) that reflects the time

between the company foundation and the

first export sale. What becomes a source of

confusion is that the two time frames—

new venture vs. established company and

born-global vs. not born-global—are based

on entirely different concepts. The time to

internationalization does not intend to

capture the initial maturity level in

international operations but the impact of

the “early international imprinting” on the

competitive advantage, future growth, and

subsequent success of the new venture

(Autio 2005). The key argument here is

that the early international exposure

enhances development of new knowledge

(learning from exporting), which

stimulates future growth. Firms that

internationalize early accumulate

knowledge on international markets more

efficiently than do those that enter

international markets after a longer delay

(learning advantage of newness) because

the former were not hampered by existing

operational routines that may be geared

more toward the domestic market (Autio et

al. 2000).

However, the overall impact of the

early internationalization on the future

growth of new ventures can be seriously

challenged. Recent study by Cieslik and

Kaciak (2009) revealed a large segment of

small-scale “lifestyle” exporters who,

having survived an initial unstable period,

later stagnated with very low and often

sporadic export sales. While entering

international markets they could benefit

from the improved flow of information

through the Internet, and the ICT

revolution in general, as well as decreasing

costs of international travel and

communication. Later stagnation occurred

because of the inadequate managerial and

financial resources as well as the lack of

expansion drive.

Gabrielsson et al. (2008) pointed out

that the timeframe in which exporting is

initiated should be used with caution

because, in many circumstances,

acquisition of the necessary experience

and adequate preparation for launching

10

exports in an organized manner may take a

while. Thus, early initiation of exports

may not properly reflect the international

commitment and organizational maturity

required to succeed. Just the opposite may

be true. A longer time between company

foundation and the first export sale may, in

some circumstances, reflect a more

determined, well planned strategy of

internationalization in a young firm.

From the methodological perspective,

what is of particular concern in the born-

global research is that the two most

important measures of being born global

are being applied to different points in the

companies’ histories. The time from

founding to internationalization (typically

three years or less for born-global firms)

relates to the company’s foundation

period, whereas the data on the

internationalization intensity (share of

foreign sales to total sales, or the FSTS) is

typically collected for the period closest to

when the research is carried out. In some

cases, the FSTS ratio is assessed at a time

when the companies under investigation

are 20 years old (e.g., Knight and Cavusgil

2004).

This inconsistent approach is not

intentional, but it reflects the harsh

realities of data availability. While

management in established firms that are,

say, 10 years old may recall when

exporting was initiated, getting access to

data on the FSTS ratio in the third year of

operations is likely to be difficult, if not

impossible. An attempt to follow strictly

the definition of a born-global firm (i.e.,

exceeding the 25% FSTS ratio by the end

of the third year of operation), followed by

Anderssen and Wictor (2003) resulted in

identification of just one such firm among

Swedish high-tech industries.

To illustrate the serious

methodological risks involved in such dual

approaches, assume that company X

initiated exports in the second year of

operations. In the fourth year, it secured

sizeable financing from a strategic

investor, which financing facilitated rapid

expansion into both domestic and

international markets. In the tenth year,

export sales generated over 50% of sales

revenues. What was the impact of the

“early international imprinting” on the

future growth of company X, compared to

the impact of securing sizeable financing

to facilitate such growth? Were there other

crucial events in the intervening years that

prompted/facilitated the international

expansion?

We argue that the distinction between

new ventures and established

organizations that has been adopted in the

entrepreneurship field has merit and

should be followed in the international

11

entrepreneurship research in a consistent

manner, including the use of the early-

maturity criterion (5-6 years). As a

consequence, in research focused on new

ventures, any measure of the depth or

intensity of internationalization should be

preferably applied towards the end of the

early-maturity period. At the same, one

should not confuse the latter time frame

with the internationalization time frame

(time to internationalization), which

depicts the “early international

imprinting.” The latter should be seen as

an additional characteristic of the

international growth process.

2.3 Unit of analysis

Longitudinal studies on firm growth

within the field of entrepreneurship

research have demonstrated the

complexity of unit of analysis issue. For

example, one should distinguish between

organic growth and acquisition growth

(Delmar et al. 2003) but, in the real world,

such a dichotomous approach may not be

enough. Several kinds of events in this

dynamic segment of the population of

firms may distort the picture and make it

difficult to compare the unit of analysis at

the beginning and the end of a period,

particularly when the legal entity is used as

the defining category. Such entities may

not only acquire other firms, but may

themselves be acquired and fully

integrated within another legal entity, or

they may be spun-off or closed. This

complexity raises a number of

methodological issues, such as the need for

an adequate definition of the firm as the

unit of analysis and the need to separate

the organic component of growth from that

which reflects changes in the ownership

and governance structures in general.

What aggravates the problem is an absence

of the comprehensive data necessary for

investigating the impact on firm growth of

evolving governance structures.

A longitudinal study on growth

trajectories of 8,652 Swedish companies

with 20 or more employees during 1987-

1996 identified the incidences of changes

in the ownership (governance) structure in

the majority (56%) of the firms

(Davidsson and Wiklund 2000).

The characteristics of accelerated

growth at the firm level that have been

recognized in the entrepreneurship field

pose serious challenges to researchers of

international new ventures. Particularly

when the impact of “early international

imprinting” on the international growth of

the established ventures is being

investigated, important events in the

company’s history may be neglected,

resulting in false conclusions. In our view,

the issues of the evolving unit of analysis

12

and the risks involved in the course of the

research process have not been adequately

dealt with in the international

entrepreneurship literature. In the

integrated framework for measuring

internationalization and growth outlined in

the next section, we recommend separating

firms with no incidents of acquisitions,

spin-off, divestment, restructuring, etc.,

from those in which such incidents have

taken place during the period of growth

analysis. In so doing, researchers can

assume that the growth of companies with

no such changes in governance is organic,

while they will need a more sophisticated

analytical apparatus and more detailed

information to arrive at meaningful

conclusions about the other group of

companies.

2.4 Corporate (group) membership

Closely related to the unit of analysis

and the evolving firm issues is the level of

independence of firms under investigation.

A longstanding tradition in research on the

internationalization of SMEs and born-

global firms is to ensure that firms selected

for a study are independent in terms of

ownership and management. However,

focus on the independent status is not

always specifically mentioned in the

research; often, procedures undertaken to

assess such status are not addressed at all;

considering recent trends in the global

economy, this shortcoming leaves open the

possibility that a firm under analysis may

be considered independent when, in fact, it

is a part of a bigger corporate (group)

structure.

Although large multinational firms

play an important role in international

trade and foreign investment, they

represent a small percentage (in terms of

the number of entities) of the parent

organizations and foreign subsidiaries that

are operating on the global scene. At

present, there are over 78,000 parent

corporations, with approximately 800,000

foreign affiliates, originating from various

parts of the world (UNCTAD 2008). These

smaller organizations should not be

viewed as truncated replicas of large

global firms; in fact, one may expect a

great diversity in the governance structures

within this group.

Alternatively, firms under

investigation may belong to domestic

corporate structures and may rely on the

resources and capabilities of their parents

and other units in the group, including

those that can facilitate access to

international markets. A recent study by

Koster (2006) of the Dutch software

industry demonstrated the importance of

local corporate spin-offs and spin-outs

which, although they operate

13

independently, can rely on the resources of

their founding organizations during their

initial periods.

Also business groups and diversified

conglomerates with loose operational links

may affect the performance of the smaller

firms, including export performance.

While these groups’ presence in the

emerging economies is typically seen as a

substitution for poorly performing or non-

existent economic institutions (e.g.,

banks), recent research has indicated that

such groups can also play an important

role in developed countries by enabling,

realizing, and managing growth of smaller

entrepreneurial firms (Lechner and

Leyronas 2009). As to the impact of the

group membership on internationalization,

the results of cursory research on this

subject are ambiguous. Gaur and Kumar

(2009) found that, as the degree of

internationalization increases, affiliation to

a business group becomes detrimental to

firm performance. Singh (2009) identified

a positive impact of group membership on

export sales in the Indian manufacturing

sector, whereas Chittoor et al. (2008)

found that group membership has a

negative impact on engagement in

exporting but a positive impact on

advanced forms of international

involvement, such as direct foreign

investment.

We argue, then, that the research on

international entrepreneurship should

cover not only purely independent firms

but also entities that belong to corporate

structures and other loosely coordinated

business groups. In fact, the integration of

corporate entrepreneurship and

internationalization within the field of

international corporate entrepreneurship

appears to be a promising avenue of

expanding research (Dess et al. 2003). In

the vast array of foreign affiliates,

particularly among those launched by

smaller parents, will be many examples

that reflect an entrepreneurial orientation

(proactivity, innovation, risk-taking),

rather than pursuit of a global strategy.

Once established, such firms often

undertake internationalization initiatives

independently from their parents, and this

kind of occurrence opens the ways to

including foreign subsidiaries as a unit of

analysis of the internationalization process

in general, and the internationalization of

new ventures in particular. Holm et al.

(2008) pointed out that the independent

internationalization of foreign subsidiaries

has not yet been adequately researched.

The internationalization process of

truly independent firms and those

belonging to larger corporate structures or

business groups differ in several ways that

call for different research methods and

14

analytical tools. For example, there are

serious fundamental issues in defining for

affiliated firms such key characteristics as

the size of the company (measured by

employment and/or sales revenues) and its

age or time to internationalization. In the

case of corporate spin-offs, there is a

serious question concerning whether to

take into consideration only features of the

newly established unit or to reflect

somehow the past and

resources/experiences of the parent and the

network as a whole.

One shall point out to the risk, that the

links within larger domestic and

international structures will be overlooked

by researchers who conduct empirical

studies, particularly those based on mail

surveys. Even if relevant questions on

independence are raised, they may not be

answered properly, particularly in the case

of diversified groups, where the

engagement of the parent company in day-

to-day management of the affiliated

company is relatively weak and results in

the perception of autonomy by the local

management.

Surprisingly, researchers that focus on

truly independent ventures may, at least in

some countries, face difficulties in

identifying such firms because they are

underrepresented among exporters,

particularly in terms of their contribution

to the overall export volume. An example

of Swedish manufacturing exporters may

well illustrate this issue. According to a

study conducted by Andersson et al.

(2007), over 92% of Swedish

manufacturing exports were generated

either by subsidiaries of foreign

multinationals or by domestic parents and

subsidiaries of the Swedish multinationals.

An additional 5% of export volume

originated from Swedish domestic

corporations, and less than 3% was

generated by truly independent local firms,

even though they represented 33% of the

total population of firms with 10 or more

employees.

Although all of these issues have been

recognized in the extant literature, no

conclusive methodological

recommendations have been offered.

Having assessed the state of the art in

international entrepreneurship after a

decade of research, Zahra (2005) noted

that, among born-global firms, at least

some had been initiated by established

businesses. Zahra identified this as a

thorny problem but did not suggest what

level of relationship with a founding

organization would qualify or disqualify a

newly established company as born global.

In an earlier study aimed at identifying the

early internationalizing ventures, Zahra et

al. (2000) included in their initial sample

15

independent firms as well as corporate

ventures, arguing that corporate ventures

compete in the same markets as

independent ventures, but excluded

business units that had been acquired,

spun-off, or divested, as well as joint

ventures of established companies because

of the difficulty in discerning what

resources had been transferred from the

corporation to its ventures. In another

study, George et al. (2005) investigated the

impact of institutional ownership by

banks, investment firms and pension funds

and by venture capitalists on the scale and

scope of the internationalization of

Swedish SMEs. The authors demonstrated

that the ownership links with the parent

venture organization helped in the

internationalization process, which finding

again suggests that such equity links

justifies the treatment of the new venture

as the unit of analysis in

internationalization research.

The issue of internationalized new

ventures’ level of independence has rarely

been taken into consideration in the

empirical studies regarding SMEs. In a

recent major Pan-European survey

covering over 17,000 firms, 5% of the

sample were subsidiaries of other firms

(Gallup Organization 2007), but there was

no attempt to distinguish between

domestic and foreign parents nor to assess

the impact of the corporate affiliation on

export performance. In research based on a

major panel study of German

establishments that employed 5 or more

people, Wagner (2001) included in the

analysis whether the establishment was a

branch of a larger entity and pointed that

such branches can use certain resources of

their larger parents. One promising

approach would be to use the population of

foreign subsidiaries as a basis for

comparison with the internationalization

process of independent domestic firms, as

was done by Salomon and Shaver (2005)

in an analysis of the Spanish

manufacturing sector during 1990 – 1997.

These methodological concerns have

significant consequences with respect to

the analytical constructs and measurement

tools adopted in the field of international

entrepreneurship. These tools and

constructs must be flexible enough to

capture the differences in the dimensions

of the internationalization process of truly

independent ventures and of ventures that

fall within the domain of international

corporate entrepreneurship. At the same

time, the tools and constructs should

facilitate efficient segmentation of the

firms under study with respect to their

independent versus corporate (group)

membership status.

33 PPRROOPPOOSSEEDD FFRRAAMMEEWWOORRKK FFOORR IINNTTEEGGRRAATTIINNGG MMEEAASSUURREEMMEENNTTSS OOFF GGRROOWWTTHH

AANNDD IINNTTEERRNNAATTIIOONNAALLIIZZAATTIIOONN AATT TTHHEE FFIIRRMM LLEEVVEELL

In order to remedy the shortcomings

in the international entrepreneurship

research outlined in the previous section,

we propose an integrated framework for

measuring internationalization and growth.

The impulse for designing such an

integrated framework came from the

recent adoption of certain conventions and

definitions for measuring a high-growth

segment of SMEs (high-growth firms and

gazelles) by researchers under the auspices

of the OECD and Eurostat (OECD 2008).

Once the new conventions are

incorporated into national statistical

systems of the member countries,

comprehensive, internationally comparable

datasets that can be used for quality

research are likely to result. The integrated

framework put forward in this paper shall

be seen as an extension of the recently

adopted OECD/Eurostat conventions with

the specific aim to capture the

international dimension of the growth

process. An earlier pilot empirical study

(Cieslik 2007) confirmed strong linkages

between growth and internationalization,

thus providing an additional argument for

the integrated approach.

In the proposed integrated

measurement format, we follow the

standard categorization of firms by size

bands, as defined by the level of

employment (<49, 50–249, and >250

employees), but we divide the middle

category into two (50–99 and 100–249

employees) because, in less developed

countries, firms with 100 or more

employees qualify as fairly large and need

to be studied separately from traditional

medium-sized firms that employ fewer

than 100 people. The sub-categorization

also allows for comparisons with statistical

data from countries like the U.S., where

100 employees is the widely used

threshold. Measuring growth in line with

the OECD/Eurostat format effectively

eliminates microenterprises (<10

employees) from the analysis as, by

definition, both high-growth firms and

gazelles must have a minimum of 10

employees in the base year (t–3).

In order to assess the impact of

alternative ownership structures on the

growth and internationalization of firms,

we follow, in principle, the categorization

put forward by Andersson et al. (2007):

(i) independent domestic firms (ii) firms that belong to domestic

corporations (groups) (iii) firms that belong to home-based

multinational corporations (iv) subsidiaries of foreign-based

multinational corporations.

17

Firms are categorized here on the basis of

their equity-ownership structure.

3.1 Level of internationalization (export intensity)

The proposed framework for

measuring growth and internationalization

in an integrated way is presented

graphically in Figure 1. The first column

depicts the “internationalization grid,”

which measures the export intensity of the

entire population of firms under study,

may serve as a starting point of the

internationalization analysis. Using the

FSTS ratio, we recommend the following

categorization:

i) non-exporters ii) marginal exporters (FSTS ≤ 10%) iii) moderate exporters (10% < FSTS ≤

25%) iv) advanced exporters (25% < FSTS ≤

50%) v) intensive exporters (FSTS > 50%).

Figure 1 goes about here

The proposed thresholds reflect some

of the conventions followed in the

internationalization literature and the

stipulations identified in the

internationalization research. It seems

clear that the binary categorization into

exporters and non-exporters is not

sufficient for carrying out in-depth

analyses of the internationalization

process. On one hand, some researchers

have indicated that the performance of

firms is largely affected by the level of

export intensity (e.g., Fryges and Wagner

2008). Others (Samiee and Walters 1991;

Alvarez 2004; Cieslik and Kaciak 2009)

have identified a category of marginal (and

often sporadic) exporters who, in terms of

their international orientation, could be

grouped with the non-exporters. Although

25% is the threshold that has been used

most frequently in the extant literature to

categorize born-global firms, for smaller

countries, this threshold seems low as an

indicator of a significant involvement in

international operations. Some authors

have suggested higher thresholds, such as

50% (e.g., Luostarinen and Gabrielsson

2004), but those recommendations have

not been based on a sound empirical

background that identifies general patterns

in the export intensity based on categories

of firms in a given country, industry or

region.

Thus, the proposed

“internationalization grid” is intended to

provide a flexible framework that will

facilitate various research needs and allow

for generalization of research results. The

grid helps to capture the level of

internationalization for all firms under

study at a given point in time (year t). In

addition, we propose to study the export

18

intensity of two cohorts as subsets of the

total population of firms under study:

a) those established in year t–5; b) those established in year t–2.

We choose the five-year period in

order to be consistent with how new

ventures have been most often categorized

in the entrepreneurship literature. We

follow the OECD/Eurostat statistical

principle that the year of establishment is

Year 0; thus, firms covered by the analysis

are between five and six years old. The

two-year period relates to a convention

that categorizes born globals as companies

that initiate exports within three years of

founding (a year of establishment plus two

full years of operation).

The data on the internationalization

patterns of young ventures should permit a

comparative analysis of young ventures

and the whole population of firms under

study, facilitating the identification of

distinctive features of the

internationalization process in those two

groups of firms. At the same time, a better

understanding of general patterns within

the new-venture category may also

enhance the born-global research. For

example, we do not know whether

reaching the 25% FSTS ratio within the

initial three years represents an

extraordinary achievement or reflects a

more widespread tendency among young

firms that embark on the

internationalization route.

3.2 High-growth firms, gazelles, and antelopes

The core of the proposed format for

measuring the high-growth phenomenon

(the right column of Figure 1) is the

recently adopted definitions of a high-

growth firm and a gazelle. (For a detailed

presentation, see Eurostat OECD 2007.)

However, we propose that these

definitions be extended to include export

sales in the core data on each company in

the sample.

High-growth firms are those that

enjoy an average annual growth rate of

employment or sales greater than 20%

over three years. An additional

requirement is that, in the base year (t–3),

the company must employ 10 or more

people; firms that do not reach the

minimum employment threshold are

usually excluded from the growth analysis.

This condition eliminates very small firms

that have marginal economic impact since

including them in the analysis would

distort the overall picture. This limitation

also reflects the reality that the reliable

data necessary for measuring growth are

rarely available for micro-firms (those that

employ fewer than 10 people).

Gazelles are the subset of the high-

growth population that achieves high-

19

growth status within five years of

beginning operations. In practical terms,

the proposed definition is too restrictive

and may not capture the growth scenarios

of some truly dynamic firms during the

initial five-year period. To qualify as a

gazelle, the company must reach the

threshold of 10 employees not later than

the second year of operation; if the

threshold is reached in the third year or

later, the company does not qualify as a

high-growth firm because the growth ratio

cannot be calculated properly for the last

(fifth) year of the observations. However,

the growth trajectories of many new firms

are highly diverse in the initial years and

are dependent on a variety of conditions

and factors. For example, high-tech start-

ups that are founded by broad-based

entrepreneurial teams with a clear,

dynamic vision do not employ large

numbers of people during the initial phase,

partly because their founders are not just

managers but also perform other functions,

reducing the need for additional

employees.

The gazelle construct, as a sub-set of a

high-growth category, is highly practical

in terms of collecting and processing

statistical data. However, at the same time,

the construct’s formal rigidity is in

contrast with the subject it measures: a

young, dynamic firm during the turbulent

take-off stage. Therefore, we suggest using

as a research tool an alternative construct

proposed by Cieslik (2007): the antelope

firm, which is an enterprise that reaches

the threshold of 20 employees during its

first five years of operation, irrespective of

the growth trajectory leading to that effect.

Unlike gazelles, antelopes are not a subset

of high-growth firms.

To illustrate the arguments raised

here, consider the six hypothetical growth

trajectories of new ventures that launch

their operations in the Year t0 and employ

20 people in Year t5 (Table 1). All six

ventures would qualify as antelopes, but

only one would meet the conditions for a

gazelle. There is no merit in eliminating

the five remaining ventures simply

because of the rigidity of the gazelle

concept.

Table 1 goes about here

3.3 High-growth, export-driven firms, export-intensive gazelles and antelopes

As the first step in combining the

growth and internationalization

perspectives (see the middle column of

Figure 1), we propose the concept of

a “high-growth export-driven firm” as

a company that meets the high-growth

criteria (a subset of high-growth firms) but

also:

20

- was an exporter in the base year t–3 and in year t, and;

- had an export growth rate higher than the growth rate of total sales during the period under analysis.

The concept of an export-driven high-

growth firm is aimed at identifying those

high-growth firms for which international

sales are the key driving force of the

accelerated growth. This approach reflects

the tendency identified in the high-growth

research that the incidences of accelerated

growth are not restricted to smaller and

younger firms but can also be found

among larger, more established ones.

Cieslik’s pilot study (Cieslik 2007)

demonstrated that exports contribute

strongly to the accelerated growth of firms

of various sizes. The definition of export-

driven high-growth firm incorporates the

“international commitment” concept

introduced by Oviatt and McDougall

(2005), which reflects changes in the FSTS

ratio over time. The higher the growth rate

of international sales compared to total

sales, the higher the FSTS ratio during the

period of analysis.

As a second step, we put forward the

concept of export-intensive gazelles, a

subset of gazelles that had an FSTS

exceeding 25% in the last year of

observation. By introducing this concept,

we propose redefining the born-global firm

in terms of how it equates to the export-

intensive gazelle (born-global gazelle).

This new definition has several

advantages. First, it clearly positions born-

global firms among high-growth firms.

Second, it eliminates the confusion and

contradiction between general definitions

of the born-global firms by pointing to

their entrepreneurial orientation and the

measurement tools used for categorization

of such firms. Here, we have particularly

in mind the most widely used FSTS ratio.

A high FSTS ratio and/or its increase may

not always reflect adequately a truly

dynamic and international orientation. At a

very low level of international and

domestic sales, which is not unusual

during the initial period, a high FSTS ratio

may be the result of a just a few incidental

export transactions. Alternatively, a radical

increase in the ratio may also reflect a

decline in domestic sales, rather than

accelerated growth of export sales.

The FSTS measure can be particularly

confusing when it is applied to high-tech

born-global firms that initiate sales in

foreign markets early because of limited

opportunities in their domestic markets

(Kudina et al. 2008). For these firms, later

expansion into the domestic market

actually decreases the FSTS ratio, even

though exports may be increasing as well.

Even more important is that only a few of

these early internationalizing high-tech

21

firms demonstrate subsequent growth

capabilities (Mustar et al. 2006). The new

definition of export-intensive gazelles

excludes the small-scale “life-style”

exporters that represent a significant

proportion of exporting SMEs and meet

born-global criteria of internationalization

within three years and FSTS ratio

exceeding 25% (Cieslik and Kaciak 2009).

Under the proposed definition of the

born-global gazelle, we adopt, for now, the

25% FSTS threshold because it is the

criterion most often used in the born-

global literature. However, we will verify

its rationale on the basis of the Polish data

presented in the following section. We

measure the ratio toward the end of the

five-year period, delimiting the new

venture in line with the standards adopted

in the entrepreneurship literature.

Finally, to capture the international

dimension of antelopes, we define a subset

of antelopes, export-intensive antelopes, as

antelopes that have an FSTS ratio that

exceeds 50% at the end of the initial five-

year period.

44 VVEERRIIFFYYIINNGG TTHHEE FFEEAASSIIBBIILLIITTYY OOFF TTHHEE PPRROOPPOOSSEEDD FFRRAAMMEEWWOORRKK AANNDD TTHHEE

MMEEAASSUURREEMMEENNTT TTOOOOLLSS WWIITTHH DDAATTAA FFRROOMM TTHHEE PPOOLLIISSHH MMAANNUUFFAACCTTUURRIINNGG

SSEECCTTOORR 22000044--22000077

The verification is important because

fine measures and constructs used in the

management and entrepreneurship

research are often difficult to apply

because of the shortage of data, concerns

regarding their reliability, and the high

cost of compiling relevant information.

The source of statistical information

for this study is census data from the

Annual Enterprise Survey of the Central

Statistical Office (CSO) of Poland.

Submission of data to the Annual

Enterprise Survey is obligatory for Polish

enterprises that employ ten or more people

in a given calendar year. In 2007, there

were 66,432 such enterprises; of those,

48,165 kept full accounting records and

were subsequently requested to provide a

wide range of economic and financial data

(GUS 2008). These enterprises constitute

the core dataset for our broader research

project, which envisages tracing company

records back to 2002, the first year that

export sales were reported separately from

total sales revenues in the Annual

Enterprise Survey. The project is being

carried out in cooperation with the CSO.

Unlike a number of countries that have

specific provisions granting access to

anonimized company data for scientific

purposes, such access is not yet allowed

under Polish law, so we used the data

22

processed by the CSO to meet the

requirements of this particular project.

Following the recommendations of

experts from the CSO, for the purpose of

testing the proposed integrated

measurement framework, we limited the

empirical analysis to the 15,355 firms in

the manufacturing sector that had 10 or

more employees – 32% of all firms

covered by the Annual Enterprise Survey.

The key argument is related to the quality

of the census data provided by the

companies, which is much better in the

manufacturing sector than in the services

sector.

The methodology of the Polish

Annual Enterprise Survey identifies eight

incidents of economic restructuring that

companies are obliged to report. To ensure

the comparability of the unit of analysis

(see Section 2) in the growth analysis, we

removed from the sample those firms

whose economic restructuring was

reported after 2004.

The analysis presented in this section

is confined to methodological and

measurement issues only. For the purpose

of testing the measurement tools, we used

only core company data: age, total sales

revenues, export sales and employment. A

more comprehensive investigation of links

between internationalization and growth

will be conducted during subsequent

stages of this research project using a

comprehensive set of longitudinal data.

4.1 Export intensity

The “internationalization grid” of the

Polish manufacturing sector shown in

Table 2 demonstrates the diversity of

manufacturing firms in terms of their

export intensity and shows the importance

of categorizing the firms, according to

ownership control, into foreign

subsidiaries, domestic subsidiaries and

independent local firms. Although

Andersson et al. (2007) categorized

domestic multinational firms separately in

their study of the internationalization of

the Swedish manufacturing sector, we did

not do so because of the limited number of

foreign subsidiaries established by Polish

firms thus far. Our categorization was

accomplished in two steps. First, we

determined the equity structure of firms as

of 2007 and assigned them to one of the

three categories: foreign subsidiaries, local

subsidiaries and independent local firms

based on their majority control. The few

firms with balanced equity structures were

assigned to the local subsidiaries category.

For the approximately 20% of the firms

that did not provide data about their equity

structure in 2007, we used corresponding

data from the Polish statistical register of

economic entities.

23

Table 2 goes about here

The overall contribution and export

intensity of the foreign-controlled sector

deserve particular attention. Foreign

subsidiaries account for only about 18% of

all firms in the manufacturing sector that

employ 10 or more people, but they

contribute 34% of the employment, 47%

of the total sales, and 69% of the export

sales in the manufacturing sector. In terms

of export intensity, data in Table 3 depicts

foreign subsidiaries as a category distinct

from local subsidiaries and independent

domestic firms. The key differentiating

factor lies in the stratification of firms

within a given category in terms of their

export intensity. Foreign subsidiaries are

predominantly intensive exporters that

generate over 50% of their revenues from

abroad, whereas local subsidiaries and

independent domestic firms are

predominantly non-exporters or marginal

exporters.

Table 3 goes about here

4.2 High-growth firms, gazelles, and

their international orientation

Based on employment, 8.2% of

manufacturing firms with 10 or more

employees are high-growth firms, and

14.9% are high-growth firms based on

sales (Table 4 and 5). These figures are

among the highest among the OECD

countries where comparable data are

available (OECD 2008 p. 19). Similar to

those in other countries, the high-growth

manufacturing firms in Poland contributed

more than proportionally to employment,

sales and exports of the Polish

manufacturing sector in 2007. It is

interesting to note the significant

contribution to total sales and exports

within the group of high-growth firms in

the independent domestic firm segment.

Table 3 provides data on sales-based

growth.

Tables 4 and 5 go about here

We also identified a group of

approximately 4,000 manufacturing firms

(almost 25% of the manufacturing

population) that were not included in the

growth analysis because they did not

participate in the Annual Enterprise

Survey in the base year of 2004, possibly

either because they did not meet the

required number of employees or because

they were too young. It is also possible

that they simply failed to meet their

obligation to file. As a result, there may be

many “hidden” high-growth firms.

The export-driven subset of high-

growth firms accounts for 28% of the

24

high-growth population but contributes

37% of employment, 56% of total sales,

and 62% of export sales of the high-

growth firms. Since it signals the

important role of international orientation

in pursuing a high-growth strategy, the

export-driven high-growth firm category is

highly relevant to research on international

entrepreneurship.

The share of gazelles in the total

number of firms in the Polish

manufacturing sector is among the highest

of the OECD countries (OECD 2008 p.

21); 2.0% of all firms in the sector are

gazelles, based on employment, and 2.7%

are gazelles based on sales (Table 3).

However, a more detailed analysis reveals

that 42% of the gazelle firms employed

more than 99 people, which seems difficult

to achieve within the defined period of five

years. Therefore, it is likely that many of

these gazelles were actually new corporate

ventures that were not reported as

incidents of economic restructuring, but

whether this conjecture holds true should

be verified through more thorough

examination. Here we shall refer to the

earlier discussion regarding the difficulty

of dealing with the issue of comparable

units of analysis in longitudinal studies,

even when the period under study is

relatively short (e.g., four years). The

Polish statistical system identifies eight

incidences of economic restructuring, but

these do not seem to capture the full range

of events. For example, a company that

was set up by an existing parent but

acquires assets, employs people, etc., on

the basis of commercial transactions

formally reports its status as a new entity,

but in reality should be categorized as

economic restructuring . Tables 4 and 5

provide separate data for firms that

employed up to 99 people because this

band may do a better job of reflecting the

size of a gazelle population.

At 28%, the share of export-intensive

firms among the gazelles is the same as

that of export-driven firms among the

high-growth firms. Export-driven (born-

global) firms dominate the export

operations of gazelles, but the fact that

approximately 60% of the export-intensive

gazelles employ more than 99 people

suggests that these firms may be incidents

of corporate restructuring. From the

research perspective, export-driven

gazelles (born-globals) are a “rare species”

among the manufacturing firms; our study

revealed just 45 such entities that

employed up to 99 people. Their overall

contribution to the employment, domestic

and export sales, at the early stage, is

relatively small.

Under the definition adopted in this

study, export-intensive gazelles must have

25

an FSTS ratio over 25%, which ratio is in

line with the threshold most often used in

the born-global literature. However, the

average FSTS ratio among export-

intensive gazelles exceeds 60%, and an

additional sensitivity analysis reveals that

even a 50% threshold would have only a

marginal effect on the number of firms

within this category. This finding sets an

argument for moving the export-intensity

threshold for categorizing born-global

firms to 50%.

Unlike gazelles, the number of

antelopes is sizeable—even bigger than the

number of high-growth firms with

comparable contributions to sales, exports

and employment. The high-growth firms

and antelopes are clearly two separate

cohorts, with gazelles, in principle, as an

overlapping component. Since the growth

analysis is based on sales, some gazelles

that employ 10 employees in year t-3 but

stay below 20 employees in year t would

not qualify as antelopes. However, one

might expect such cases to be rare,

particularly in the manufacturing sector.

The empirical analysis demonstrates the

negative effect of the formal rigidity of the

gazelle construct, thus reinforcing the

argument for the use of antelope as a more

useful construct for researching the

dynamics of new ventures.

With regard to export orientation, the

empirical analysis points to the

heterogeneity of the antelope category.

The majority of export-intensive antelopes

are foreign subsidiaries, whereas the

domestic antelopes are only marginally

engaged in exporting.

4.3 Export intensity of young firms

We also examined the patterns of

export intensity in the cohort of young

firms by looking at their export intensity

status two full years after establishment

(with reference to the “early

internationalization imprinting”) and five

full years after establishment (consistent

with the principles adopted in the high-

growth analysis). We did not include the

growth analysis in this examination

because our core data set includes only

firms with 10 or more employees.

However, reaching this level within 2-3

years indicates growth orientation in itself.

We also compared the trends in export

intensity among young firms to that of the

entire population of manufacturing firms

in 2007. To eliminate incidences of

corporate restructuring, we confined our

comparison to firms that employed less

than 100 people (Table 6). The cohort of

young manufacturing firms established in

a given year represents approximately 5%

of the total number of manufacturing

26

firms, and a similar percentage of sales

(including exports). The key differentiator

between foreign subsidiaries and domestic

firms (both subsidiaries and independent

firms) lies in the composition of firms

within a given category of export intensity.

Young, foreign subsidiaries are, from the

beginning, largely intensive exporters,

whereas most domestic Polish firms are

predominantly non-exporters and marginal

exporters. Thus, the internationalization

patterns of young firms do not differ from

that identified earlier in the entire

population of manufacturing firms.

Table 6 goes about here

The export-intensity analysis of young

firms facilitates a comparison of the cohort

of five-year-old firms whose export

intensity exceeded 25% with export-

intensive gazelles (born global).

Comparing the data in Tables 3 and 4

indicates that, although export-intensive

gazelles represented only 25% of five-

year-old firms with export intensity

exceeding 25%, their contribution to total

sales revenues and exports was, at 55%

and 75%, respectively, disproportionately

high.

A comparison of export-intensive

antelopes with export-intensive young

firms, particularly those 5 years old, shows

that the number of export-intensive

antelopes is four times that of 5-year-old

export-intensive firms and that antelopes’

contribution to total and export sales is

more than 5 times higher. The source of

this striking difference is that antelopes are

firms established in 2002 and later and

many firms established this recently have a

strong export orientation and also meet the

minimum requirement of 10 employees in

2007, thus falling within the scope of the

export-intensive antelope category.

55 SSUUMMMMAARRYY AANNDD CCOONNCCLLUUSSIIOONN

The international entrepreneurship

research has not taken advantage of the

methodological constructs and

measurement tools developed within the

specialized field of entrepreneurship

research that focuses on high-growth

firms. To do so was the purpose of this

paper.

The empirical verification has proved

the applicability and usefulness of the

proposed framework for measuring growth

and internationalization in an integrated

way. It has also demonstrated the

feasibility of putting together a set of

generalizable, statistically significant data,

as advocated by Coviello and Jones

27

(2004), which also may serve as a

“research springboard” for more detailed

analyses with the use of fine-grained

methods.

Our analysis leads to some important

conclusions with respect to measurement

tools. It demonstrates the usefulness of the

high-growth export-driven definition in

categorizing, within the population of

existing firms, those that are both dynamic

and expand predominantly in international

markets in pursuit of their growth

strategies.

As to the use of the export-intensive

gazelle concept as an alternative definition

for a born-global firm, the empirical

analysis indicates that the 50% threshold

may be more appropriate for categorizing

such firms than the 25% threshold.

However, our study points to the serious

weaknesses of the gazelle construct in

general because it leads, inter alia, to the

elimination of truly dynamic,

internationally oriented new ventures.

Comparing gazelles to antelopes

seems more useful in researching growth-

oriented new ventures. Since it is more

flexible, the antelope construct can be

easily adapted to the specific conditions

prevailing in a given industry. High-tech

start-ups, particularly in the ICT sector,

often achieve impressive track records

with respect to sales, growth and

profitability, despite modest employment

levels. For this sector, as an example, the

proposed threshold of 20 employees by the

end of the initial five-year period could be

lowered to, say, 10 employees. Another

argument in favor of the antelope concept

is that it is compatible with the “high-

expectation entrepreneur” definition used

in the Global Entrepreneurship Monitor

Project (Autio 2007).

Our empirical analysis demonstrates

the usefulness of and need for tracking

firms’ equity composition and other links

within larger corporate structures and

business groups, categorizing firms by

different governance structures, and

applying different methods in the follow-

up research. In the contemporary world,

which is characterized by a great diversity

of governance structures, there is a

significant risk that such links can be

overlooked and/or not properly addressed

by researchers in the international

entrepreneurship field.

Our analysis clearly demonstrates that

by integrating the internationalization and

entrepreneurship research streams, the IB

community will be increasingly confronted

with the most serious challenge identified

in the high-growth analysis: the evolving

concept of a high-growth firm that can

grow either organically or by acquisitions

and that undergoes governance structure

28

changes over time. This issue becomes

particularly relevant for longitudinal

studies, which are strongly advocated but

rarely applied in IB research or in the

management field in general.

Finally, J. J. Heckman, the Nobel

Prize Winner in Economics in 2000,

observed that the most important discovery

of economic research based on micro-data

was the pervasiveness of heterogeneity and

diversity in economic life (Heckman

2001), thus making the concept of the

“average person” as a unit of analysis

largely obsolete. Coping with such

heterogeneity and diversity of international

operations, while at the same time

exploiting the full potential of micro-data

analysis, represents a major challenge for

international entrepreneurship research.

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Table 1 Gazelles and antelopes under alternative growth scenarios

*) To achieve the average growth rate of 20% over a three-year period, the ratio must be equal to or higher than 1.728.

Source: Cieslik 2007

Growth scenario

Employment Minimum employment in the base year

Gazelle Antelope Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Ratio 4/1*

Ratio 5/2*

A 1 2 5 9 12 20 6.000 4.000 NO NO YES

B 1 2 10 12 16 20 8.000 2.000 YES YES YES

C 8 10 12 14 17 20 1.700 1.667 YES NO YES

D 2 9 13 14 15 20 1.667 1.538 YES NO YES

E 3 7 9 15 18 20 2.571 2.222 NO NO YES

F 10 12 15 17 19 20 1.583 1.333 YES NO YES

32

33

34

Table 4High-growth, gazelles, antelopes and their international orientation in the Polish manufacturing sector in 2007

(growth rate calculation based on sales)

Unit All firms Subs foreignSubs local

Indep. local All firms

Subs foreign

Subs local

Indep. local

Number of firms number 15 355 2 814 2 795 9 746 10 862 1 550 1 613 7 699Total sales million 809 635 383 659 168 694 257 282 121 777 29 702 17 280 74 796Export sales million 284 977 197 014 35 289 52 674 22 504 11 368 1 797 9 338Employment thousand 1 939 655 499 785 432 64 70 298

Number of firms number 2 289 508 339 1 442 1 385 213 175 997Total sales million 218 965 84 443 25 536 108 986 26 643 7 166 3 269 16 208Export sales million 82 038 50 679 5 499 25 860 5 005 2 309 299 2 398Employment thousand 358 138 60 160 64 10 8 46

Number of firms number 639 246 74 319 276 92 20 164Total sales million 130 544 41 412 11 329 77 803 7 629 3 153 724 3 753Export sales million 50 961 24 721 3 885 22 354 2 514 964 173 1 377Employment thousand 132 58 20 55 15 5 1 9

Number of firms number 411 90 73 248 238 42 39 157Total sales million 24 616 11 603 5 567 7 446 4 459 1 646 492 2 322Export sales million 10 136 7 054 1 770 1 312 940 685 16 238Employment thousand 62 19 13 29 11 2 2 7

Number of firms number 114 61 8 45 45 25 1 19Total sales million 14 840 10 131 2 962 1 746 1 181 875 11 295Export sales million 9 554 6 927 1 673 955 810 618 7 185Employment thousand 26 16 3 7 2 1 0 1

Number of firms number 2 423 570 376 1 477 1 643 352 205 1 086Total sales million 109 109 56 279 22 265 30 566 22 488 7 920 2 785 11 783Export sales million 40 114 30 293 4 480 5 340 5 456 3 696 336 1 424Employment thousand 310 106 68 136 79 18 11 51

Number of firms number 555 334 43 178 336 206 17 113Total sales million 36 710 28 626 4 407 3 676 5 097 3 861 186 1 050Export sales million 28 553 23 111 2 744 2 697 4 248 3 263 150 835Employment thousand 91 61 10 20 17 10 1 6Source: Own calculations based on the census data provided by the Central Statistical Office of Poland

Firms up to 99 employees

High-growth firms

Total

High-growth export-driven

Gazelles

Export intensive gazelles (born global)

Antelopes

Export intensive Antelopes (born global 2)

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Table 5 High-growth, gazelles, antelopes in the Polish manufacturing sector in 2007 (as % of all firms)

Total Firms up to 99 employees

All

firms Subs

foreign Subs local

Indep. local

All firms

Subs foreign

Subs local

Indep. local

High-growth firms Number of firms 14.9 18.1 12.1 14.8 12.8 13.7 10.8 12.9 Total sales 27.0 22.0 15.1 42.4 21.9 24.1 18.9 21.7 Export sales 28.8 25.7 15.6 49.1 22.2 20.3 16.6 25.7 Employment 18.4 21.0 12.1 20.3 14.9 15.8 11.4 15.6

High-growth export-driven Number of firms 4.2 8.7 2.6 3.3 2.5 5.9 1.2 2.1 Total sales 16.1 10.8 6.7 30.2 6.3 10.6 4.2 5.0 Export sales 17.9 12.5 11.0 42.4 11.2 8.5 9.6 14.7 Employment 6.8 8.9 4.0 7.0 3.5 7.3 1.5 3.1

Gazelles Number of firms 2.7 3.2 2.6 2.5 2.2 2.7 2.4 2.0 Total sales 3.0 3.0 3.3 2.9 3.7 5.5 2.8 3.1 Export sales 3.6 3.6 5.0 2.5 4.2 6.0 0.9 2.6 Employment 3.2 2.9 2.7 3.8 2.6 3.0 2.5 2.5

Export intensive gazelles (born global) Number of firms 0.7 2.2 0.3 0.5 0.4 1.6 0.1 0.2 Total sales 1.8 2.6 1.8 0.7 1.0 2.9 0.1 0.4 Export sales 3.4 3.5 4.7 1.8 3.6 5.4 0.4 2.0 Employment 1.4 2.5 0.7 0.9 0.6 2.0 0.0 0.4

Antelopes Number of firms 15.8 20.3 13.5 15.2 15.1 22.7 12.7 14.1 Total sales 13.5 14.7 13.2 11.9 18.5 26.7 16.1 15.8 Export sales 14.1 15.4 12.7 10.1 24.2 32.5 18.7 15.3 Employment 16.0 16.2 13.6 17.3 18.3 27.5 15.2 17.1

Export intensive antelopes (born global 2) Number of firms 3.6 11.9 1.5 1.8 3.1 13.3 1.1 1.5 Total sales 4.5 7.5 2.6 1.4 4.2 13.0 1.1 1.4 Export sales 10.0 11.7 7.8 5.1 18.9 28.7 8.3 8.9 Employment 4.7 9.3 2.0 2.6 4.0 16.4 1.1 2.0

36

Table 6Export intensity of the Polish manufacturing firms employing up to 99 people in 2007: All firms compared with 5-years old and 2 years old

2007 Data Unit TotalSubs

foreignSubs local

Indep. local Total

Subs foreign

Subs local

Indep. Local Total

Subs foreign

Subs local

Indep. Local

Number of firms number 10 862 1 550 1 613 7 699 583 98 81 404 518 96 81 341

Total sales million 121 777 29 702 17 280 74 796 5 902 1 584 807 3 511 4 832 1 329 779 2 725

Export sales million 22 504 11 368 1 797 9 338 1 117 609 81 426 936 547 91 298Employment thousand 432 64 70 298 23 4 4 15 19 4 4 12

Number of firms number 1 598 791 106 701 95 47 5 42 91 54 5 32Total sales million 19 914 11 696 1 066 7 153 986 587 46 353 835 571 34 230Export sales million 15 389 9 244 828 5 317 763 469 33 262 670 465 27 178Employment thousand 72 34 5 33 4 2 0 2 4 2 0 1

Number of firms number 781 166 89 526 37 10 5 22 33 8 5 19Total sales million 11 186 3 391 1 377 6 418 575 248 93 233 451 131 119 201Export sales million 4 032 1 218 512 2 302 210 93 31 86 166 50 42 74Employment thousand 38 8 5 25 2 0 0 1 1 0 0 1

Number of firms number 875 135 109 631 43 9 6 28 36 7 6 23Total sales million 12 996 3 906 1 692 7 398 577 214 55 308 424 134 99 191Export sales million 2 161 666 286 1 208 99 37 9 53 67 21 17 29Employment thousand 40 6 6 28 2 0 0 1 2 0 0 1

Number of firms number 1 871 218 276 1 377 102 16 14 72 80 13 15 52Total sales million 29 630 7 771 5 284 16 575 1 354 352 220 782 1 052 325 188 539Export sales million 923 240 172 512 44 11 9 25 32 11 5 17Employment thousand 84 9 14 61 5 1 1 3 3 1 1 2

Number of firms number 5 737 240 1 033 4 464 306 16 52 239 279 14 51 214Total sales million 48 050 2 938 7 860 37 252 2 411 184 394 1 834 2 071 168 339 1 565Export sales million 0 0 0 0 0 0 0 0 0 0 0 0Employment thousand 198 7 40 151 10 0 2 8 9 0 2 7

Source: Own calculations based on the census data provided by the Central Statistical Office of Poland

Non-exporters

Marginal exporters

All firms 5 years old firms 2 years old firms

Intensive exporters

Export intensity classes - all firms up to 99 emp.

Advanced exporters

Moderate exporters

37

Figure 1. Integrating internationalization and high-growth measures

Source: Own presentation

Export-intensive

Antelopes (born global 2) Antelopes

Export intensity

(All firms)

High-growth firms

(subset of all firms)

High-growth, export-driven

(subset of high-growth firms)

Gazelles as subset of

high-growth firms

Export-intensive Gazelles

(born global) Export intensity of young

firms

Integrated measures

High growth measures

Internationalization measures