The Formation, Consolidation, and Transition of International Brokerage Networks: The Case of an International New Venture in an Emerging Market

Brokerage has been considered an important source of opportunity in international entrepreneurship. While extant research focuses on pre-existing social capital that underlies the brokerage position, little attention has been paid to the evolutionary process and the contextual conditions of becoming a broker and its transition over time. This study addresses these issues through a single case study of an international new venture (INV) founded in the emerging electric vehicle industry in China, an emerging market. The findings show that by reducing transaction costs, INVs can build initial brokerage positions by integrating technological capabilities with marketing capabilities, consolidate the brokerage network by leveraging a diverse customer base and supplier networks, and transition from a bridging focus to a coordination focus through trust-building and knowledge diffusion as structural holes close over time. This path is more effective in international business, emerging markets, and emerging industries, as these contexts have high transaction costs arising from unclear labor division, fragmentation, ambiguous standards, information asymmetry, and potential opportunistic behaviors. This study contributes to the international entrepreneurship and brokerage literature by examining the process of formation, consolidation, and transition of international brokerage networks through the evolutionary and the contextual lens.