Industry Structure Characteristics and International Entrepreneurship in India’s Software Industry

Abstract

Drawing upon research in international entrepreneurship regarding born global firms as well as strategy and economics research on industry structure and March’s (1991) exploration-exploitation framework, we examine how domestic market structure influences international entrepreneurship in India’s software industry. We suggest that the domestic industry structure aspect of industry concentration influences which global industry segments these born global firms are involved in. Analysis of our sample comprising 876 of the major Indian software firms in existence in 2002–2003 shows high industry concentration with a few dominant firms and a number of firms with little market presence. Consistent with our hypotheses, we found that dominant firms tend to engage in the high revenue per employee industry segment of business process outsourcing (BPO), while less powerful firms tend to engage in the low revenue per employee segment of high technology. Implications of our research as well as areas for future research are discussed.