Internationalization of Entrepreneurial Firms

Overview

This paper examines how entrepreneurial firms navigate the uncertainty of internationalization by combining two distinct reasoning logics: real options (maintaining flexibility through staged investments) and affordable loss (limiting downside exposure). The combination creates a reasoning framework that is more powerful than either logic alone for navigating the deep uncertainty of international expansion.

Contribution to the Research Program

This work bridges the Resource Mobilization stream with the Knowledge Problems stream by demonstrating how entrepreneurs deploy non-probabilistic reasoning strategies (affordable loss) alongside more traditional analytical frameworks (real options) when facing international uncertainty.