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Article
Publication date: 20 April 2015

Lin Yuan and Nitin Pangarkar

The purpose of this paper is to investigate the performance implications of internationalization strategies for Chinese multinational corporations (MNCs). Specifically…

Abstract

Purpose

The purpose of this paper is to investigate the performance implications of internationalization strategies for Chinese multinational corporations (MNCs). Specifically, the authors examine the individual and joint effects of speed of internationalization in developed and developing countries and age on Chinese MNCs’ performance.

Design/methodology/approach

The authors constructed a unique and comprehensive database on the internationalization strategies of 206 Chinese firms over 14 years and deployed random-effect regressions to assess the effects of age, speed of expansion in terms of number of subsidiaries and countries, and the types of destination (developed vs developing country) on firm performance.

Findings

The analyses show that age is negatively related to performance but rapid expansion of subsidiaries in developing countries and geographic scope in developed countries are positively related to performance. In addition, the impacts of young age and two types of expansion, fast expansion of subsidiaries in developing countries and fast expansion of geographic scope in developed countries, are cumulative.

Originality/value

The authors combine the arguments of the learning advantages of newness and fast movers and model the simultaneous effects of age and speed of two types of international expansion (in terms of number of subsidiaries and countries) in both developed and developing countries on performance. The strong empirical support for the hypotheses based on analyses of a unique data set of Chinese MNCs’ internationalization patterns lends credence to the proposed model.

Details

International Journal of Emerging Markets, vol. 10 no. 2
Type: Research Article
ISSN: 1746-8809

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Book part
Publication date: 23 September 2005

Erkko Autio, Harry J. Sapienza and Pia Arenius

Internationalizing new firms face the dual challenge of overcoming the liabilities of newness and liabilities of foreignness (Stinchcombe, 1965; Dunning, 1981; Zaheer, 1995

Abstract

Internationalizing new firms face the dual challenge of overcoming the liabilities of newness and liabilities of foreignness (Stinchcombe, 1965; Dunning, 1981; Zaheer, 1995). Because of their newness, new firms are constrained in their ability to access external resources required for survival and growth. Because of their foreignness relative to the foreign target market, internationalizing firms are disadvantaged relative to domestic firms when establishing business relationships. These disadvantages are exacerbated by the additional knowledge inputs required by the internationalization process itself: internationalizing firms face the dual challenge of both learning how to do business in a new national and institutional environment while also learning to manage the inherently complex international business organization (Johanson & Vahlne, 1990).

Details

International Entrepreneurship
Type: Book
ISBN: 978-0-76231-227-6

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Article
Publication date: 30 July 2018

Nishant Kumar and Dharam Deo Sharma

The purpose of this paper is to explore how organisational culture affects the internationalisation proclivity of international new ventures (INVs).

Abstract

Purpose

The purpose of this paper is to explore how organisational culture affects the internationalisation proclivity of international new ventures (INVs).

Design/methodology/approach

In this paper, a resource advantage (R-A) framework is adopted to examine how organisational culture can be a resource for INVs to leverage efficiently and/or effectively in order to make up for their challenges in internationalisation and create value for their international customers. In doing so, this study makes use of examples of five INVs from India, which have successfully achieved international business prowess and superior performance immediately after their foundation.

Findings

The findings reveal that an organisational culture including continuous learning, creativity and innovation, collaboration and sharing, and customer-centricity as traits have a positive influence on INV internationalisation proclivity. Most importantly, fostering a culture of collaboration and sharing can help INVs address resource limitations and augment opportunity discovery in the international market. Furthermore, INVs can benefit more from the “learning advantages of newness” by nurturing continuous learning as part of their culture.

Research limitations/implications

A key limitation of this study is that all the firms selected here are from a single country, India, and it may have effects on the way firms leverage these cultural traits.

Practical implications

Founders of INVs should develop organisational arrangements that encourage openness, creativity, and allows employees to contribute freely and fearlessly through new ideas, process innovations, and so on, and firms should recognise such contributions regularly. INVs can adopt policies and develop mechanisms that encourage employees to share knowledge and resources freely with others in the organisation.

Social implications

Growth of INVs is closely linked to job creation and economic progress. Policy makers in emerging economies can benefit from this study by developing infrastructure and creating social conditions that support the survival and growth of INVs. Adopting the findings of this study could possibly help INVs succeed in international markets and avoid failures, and thus save societal resources.

Originality/value

The paper highlights the critical role of organisational culture in INVs’ internationalisation thrust. The paper develops testable propositions that delineate both the main effects as well as the other effects of organisational culture on INV internationalisation.

Details

International Marketing Review, vol. 35 no. 5
Type: Research Article
ISSN: 0265-1335

Keywords

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Book part
Publication date: 23 September 2005

Stephanie A. Fernhaber and Patricia P. McDougall

International new ventures have been argued to seek foreign markets from inception in response to the external environment and/or motivations internal to the firm. For…

Abstract

International new ventures have been argued to seek foreign markets from inception in response to the external environment and/or motivations internal to the firm. For example, a new venture that exists in an industry that is more globally integrated is more likely to have a need to internationalize in order to remain competitive (Shrader, Oviatt, & McDougall, 2000). Similarly, those new ventures that have limited domestic growth due to the size of their home country may look elsewhere in order to gain a sufficient level of sales to survive (Zahra & George, 2002). Some of the many firm-specific motivations to internationalize might include the desire to fully exploit a unique product (Burgel & Murray, 2000; Oviatt & McDougall, 1994, 1995), capitalize on the learning advantage of newness (Autio, Sapienza, & Almeida, 2000) or take advantage of networking opportunities (Reuber & Fischer, 1997).

Details

International Entrepreneurship
Type: Book
ISBN: 978-0-76231-227-6

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Article
Publication date: 4 December 2019

Sheng Huang, Guangyu Ye and Suqin Shen

In the literature concerning international new ventures (INVs), there has been a tension between the learning advantages of newness and absorptive capacity perspectives…

Abstract

Purpose

In the literature concerning international new ventures (INVs), there has been a tension between the learning advantages of newness and absorptive capacity perspectives for explaining the performance influence of initial entry speed. To address this tension, this paper, through integrating both the motivation and ability to acquire foreign knowledge, proposes a theoretical model about the nonlinear relationship between INVs’ initial entry speed and international performance. Drawing upon upper echelons theory and the institution-based view, this study aims to extend the literature by developing two boundary conditions for this relationship: the moderating role of executives’ individual learning orientation and sub-national institutions.

Design/methodology/approach

The authors used the latent moderated structural equations approach specific to Mplus to test the hypotheses with data on 322 Chinese INVs.

Findings

The findings indicate that INVs’ international performance will increase initially and then decrease, as they accelerate initial entry speed (an inverted U-shaped relationship), and that INVs managed by executives with a higher learning orientation and located in better sub-national institutional environments achieve greater international growth gains from moderate initial entry speed.

Originality/value

This study mainly makes contributions to the INV literature by integrating the motivation and ability to acquire foreign knowledge to offer full understanding of the effect of initial entry speed on international performance, and by elaborating on the moderating effects of executives’ individual learning orientation and sub-national institutions on this relationship.

Details

Chinese Management Studies, vol. 14 no. 1
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 28 June 2021

Sheng Huang, Yunxia Zhu, Kun Zhang and Zhenkuo Ding

The purpose of this paper is to critically review and synthesize the articles on determinants of international new venture (INV) performance to identify the research gaps…

Abstract

Purpose

The purpose of this paper is to critically review and synthesize the articles on determinants of international new venture (INV) performance to identify the research gaps in this area and develop a future research agenda.

Design/methodology/approach

Adopting a semi-systematic review approach with a fucus on using a vote-counting technique, this paper reviews 99 journal articles published between 1994 and 2019 to assess the determinants of INV performance.

Findings

The results indicate that the majority of the INV performance articles employ a clearly specified theoretical foundation, focus on INVs in developed economies and non-service sectors, identify numerous firm-level determinants of INV performance and use advanced statistical methods (e.g. structural equation modeling and panel data models). However, the research of INV performance is still limited by a lack of a broader integration of theories at different levels, inconsistent theoretical predictions and empirical results, knowledge gaps, and estimation biases (e.g. endogeneity).

Originality/value

INV performance has received increasing attention over recent decades, but this area is still characterized by fragmentation and inconsistency. This paper provides a comprehensive and nuanced review that synthesizes and clarifies our current knowledge on the determinants of INV performance, provides further discussion with deeper insights from both theoretical and methodological aspects, and points out some directions for future research.

Details

International Marketing Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 8 July 2021

Zhenkuo Ding, Guangyu Ye, Sheng Huang and Man Hu

Despite extensive research into the effect of organizational learning processes on firm performance, it remains unclear how and when learning orientation influences the…

Abstract

Purpose

Despite extensive research into the effect of organizational learning processes on firm performance, it remains unclear how and when learning orientation influences the international performance of international new ventures (INVs). Accordingly, the purpose of this paper is to investigate how learning orientation drives the international performance of INVs.

Design/methodology/approach

Structural equation modeling is used to test the research model with questionnaire data from mainland Chinese INVs.

Findings

Results show that: learning orientation positively influences entrepreneurial bricolage; entrepreneurial bricolage positively influences the international performance of INVs; entrepreneurial bricolage plays a mediating role between learning orientation and international performance; degree of internationalization (DOI) weakens the effect of entrepreneurial bricolage on international performance.

Originality/value

This study makes a useful supplement to the INV literature by revealing that entrepreneurial bricolage plays a mediating role in the relationship between learning orientation and the international performance of INVs. It also contributes to the entrepreneurial bricolage literature by introducing entrepreneurial bricolage into the empirical research of INVs and identifying the learning orientation antecedents and performance consequences of entrepreneurial bricolage. In addition, this paper enriches the understanding of the boundary conditions for how entrepreneurial bricolage affects international performance showing that DOI has a negative moderating effect on the relationship between entrepreneurial bricolage and international performance.

Details

Multinational Business Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1525-383X

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Article
Publication date: 5 June 2017

Ramanjeet Singh and Hima Bindu Kota

To compete and to survive in this era of globalization, organizations, including family businesses, need to have competitive advantage, and innovation and…

Abstract

Purpose

To compete and to survive in this era of globalization, organizations, including family businesses, need to have competitive advantage, and innovation and internationalization are some of the ways to achieve this. This paper aims to analyze whether family businesses innovate and internationalize more than non-family businesses and further analyses the type of family businesses “age-wise” and “size-wise” that innovate and internationalize more.

Design/methodology/approach

The study is empirical in nature. The period of study is 11 years, from 2005 to 2015 (both years inclusive). The sample is chosen from Bombay Stock Exchange (BSE) 500 index, a broad-based index in India, covering about 20 industries of the economy. The present study uses multiple regression models to find the innovativeness and internationalization of family businesses. The dependent variables are R&D (proxy for innovativeness) and FXINC (proxy for internationalization). The independent variables are FB (variable that defines whether a business is family business or non-family business); FBAGE (variable that defines the age of the family business); and FBSIZE (variable that defines the size of the family business). The other control variables used in in the study are TA (total assets), REV (revenue), CR (current ratio), QR (quick ratio), DER (debt-equity ratio) and RONW (return on net worth). Fixed effects model was used to understand the innovativeness and internationalization of family businesses. Both industry and year fixed effects were used. SPSS 20.0 version is used for the analysis. All results are heteroscedastic consistent using Breusch–Pagan test.

Findings

It is found that family businesses are more innovative and internationalized when compared to non-family businesses. The results are consistent with the resource-based theory where it is found that family businesses are entrepreneurial in nature (Salvato, 2004; Zahra et al., 2004; Kellermanns and Eddleston, 2006) which makes them more innovative. It was also found that within the family businesses, younger firms were more innovative and internationalized than older firms. This can be explained by the theory oflearning advantages of newness”, according to which younger firms are more flexible, eager to learn, have less internal resistance and are able to adapt to the changing environment much faster.

Originality/value

During the studies, the authors have found that there is no conclusive evidence on the innovativeness and internationalization of family businesses. Further, there are apparently negligible studies that analyze what type of family businesses, age wise (younger or older firms) and size wise (smaller or larger firms) use the strategy of innovation and internationalization to grow. The present study analyses the innovativeness and internationalization of family businesses when compared to non-family businesses and also studies the type of family businesses (age wise and size wise) that are more innovative and internationalized.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 9 no. 2
Type: Research Article
ISSN: 2053-4604

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Article
Publication date: 2 October 2018

Birgit Hagen, Antonella Zucchella and Pervez Nasim Ghauri

The purpose of this paper is to conceptualize strategic agility in entrepreneurial internationalization and highlight the role of marketing “under particular conditions” …

Abstract

Purpose

The purpose of this paper is to conceptualize strategic agility in entrepreneurial internationalization and highlight the role of marketing “under particular conditions” – those of early and fast internationalizers.

Design/methodology/approach

The study is based on in-depth case studies of four entrepreneurial internationalizers using an inductive approach. The role of marketing is studied along a set of four key business processes, i.e. sensing through selective customer/partner intimacy; business development through selective experimentation and testing; coordination and harmonization of multiple stakeholders; and creative extension of resources.

Findings

Strategic agility is a composite of flexibility and selective responsiveness. Marketing thought, mainly through customer and partner interaction, plays a prominent role in achieving strategic agility. Customer- and market-centric thinking needs to be built in a key set of business processes. Marketing’s contribution to strategic agility means an ability to cope with time, relationship and functional dependencies. Strategic agility helps improve the risk profile of the entrepreneurial internationalizer. Entrepreneurial internationalizers are particularly suited to compete on and benefit from strategic agility.

Practical implications

The findings show managers and entrepreneurs in early and fast internationalizing ventures a path to strategic agility which helps to overcome the many parallel challenges that come with firm foundation and internationalization.

Originality/value

Strategic agility is a novel explanation for entrepreneurial internationalization. The study explains the prominent role played by marketing in achieving strategic agility and growth. Strategic agility is reconceptualized in the context of the young and small internationalizing firm.

Details

International Marketing Review, vol. 36 no. 2
Type: Research Article
ISSN: 0265-1335

Keywords

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Book part
Publication date: 30 May 2013

Lydia Bals, Heather Berry, Evi Hartmann and Gordian Raettich

In this chapter, we embrace the recent phenomenon of early internationalizing firms with the goal of understanding these firms in light of decades of research on…

Abstract

In this chapter, we embrace the recent phenomenon of early internationalizing firms with the goal of understanding these firms in light of decades of research on multinational firms, which has long stressed liabilities of foreignness. It is often implicitly assumed that the only way to reduce liabilities of foreignness is by doing business in foreign markets and learning about the local business environment. However, in this chapter, we focus on several distinctive antecedent firm characteristics that have been shown to facilitate early international expansion by firms, but which are not commonly considered in the international business literature. We perform a systematic review of the literature on early internationalizing firms (following David & Han, 2004), based on the seminal work of Oviatt and McDougall (1994) to guide our analysis of early internationalizing firms and to identify important ways in which these firms differ from multinational firms. We argue that long-standing arguments about the impact of liabilities of foreignness on firm foreign expansion apply to newly internationalizing firms, but that these liabilities are reduced by the experiences and knowledge of the founders and top managers in these firms acquired prior to the inception of these firms.

Details

Philosophy of Science and Meta-Knowledge in International Business and Management
Type: Book
ISBN: 978-1-78190-713-9

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