Born to be Global and the Globalisation Process

Authors


  • We have benefitted from useful comments from Markus Andersson and participants in seminars at the ISGEP WORKSHOP 2012 in Stockholm, Universidade Católica Portuguesa, and Stockholm School of Economics. Financial support from the Marianne and Marcus Wallenberg Foundation and the Swedish Competition Authority is gratefully acknowledged.

Abstract

During the last decades, we have witnessed a large number of entrepreneurial firms that reach the world market at a fast pace (‘born global firms’). Our analysis suggests that the ongoing globalisation process indeed implies that born to be global firms would be more prominent in the world economy due to the reduction in the cost of exploiting good business ideas globally. However, our analysis also suggests that entrepreneurial firms have incentives to sell their business to incumbents. Indeed, we show that ‘born to be sold global firms’ can be even more frequent as a result of trade liberalisation and the international deregulation of the market for corporate control.

Ancillary