Hungarian International New Ventures – Market Selection and the Role of Networks in Early Internationalisation

In this article we rely on the concept of “international new ventures” (INV), and concentrate on the analysis of two research propositions in the case of selected Hungarian INVs, based on company interviews in two selected industries, biotechnology and information technology. First, we analyse the criteria of the selection of foreign markets in the internationalisation of these firms and second, the role of networks in the internationalisation process of selected Hungarian INVs. Our results highlight the typical internationalisation pattern of targeting the largest developed foreign markets globally. In terms of the role of networks in internationalisation, we found evidence of the decisive role of networks in all cases examined. The personal network of the founder(s) was emphasised, especially in winning early clients. The scalability of the personal network-based business model was, however, questioned. The management implications of our findings suggest Hungarian INVs need to intensify their involvement in international communities supporting the growth of such companies. Areas for potential future research include comparing our findings with empirical results from other countries in Central-Eastern Europe.