Founder’s human capital effect on firms’ early internationalisation

What is it about?

This study addresses the impact of the principal founder’s general and specific human capital factors on the extent of the internationalisation of early internationalising firms originating from a relatively low-tech and labour-intensive industry in a least-developed country. We engage in quantitative analysis using data drawn from the Bangladeshi apparel industry. Our results reveal direct and indirect effects of specific human capital factors on the extent of a firm’s early internationalisation. However, contrary to the extant findings for developed and advanced-emerging economies, general human capital factors, namely the founder’s higher educational qualifications and international experience, are not found to be significant determinants of early internationalisation. Although human capital theory is used as a key theoretical framework, our study also draws on several other schools of thought, including the resource-based view, social networking theory and the learning perspective.

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Why is it important?

The findings of our study provide evidence of the synergistic effects originating from the founder’s specific human capital factors. In particular, we find that resources, learning and social network ties derived from specific human capital factors influence the extent of a firm’s early internationalisation. Our findings are also consistent with the revisited Uppsala model in so far as they relate to the importance of knowledge and relationships prior to the establishment of focal firms. The implications of our findings for national and enterprise development policies are also considered.