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1 – 10 of over 2000The purpose of this paper is to investigate the performance implications of internationalization strategies for Chinese multinational corporations (MNCs). Specifically, the…
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.
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The purpose of this paper is to examine how geographic diversification affects the performance of international new ventures.
Abstract
Purpose
The purpose of this paper is to examine how geographic diversification affects the performance of international new ventures.
Design/methodology/approach
This study develops hypotheses about the individual and joint effects of geographic diversification and industry life cycle on the performance of international new ventures. This paper also introduces industry technology characteristics as a contingent factor for the above relationships and tests the hypotheses on a large panel data set.
Findings
Based on the analyses of the strategies and performance of 699 listed Chinese international new ventures between 1991 and 2014, this study finds that the impact of geographic diversification on performance is contingent on the stage of the industry life cycle and that the moderating effect differs across high-technology and low-technology industries. The results suggest that it is fruitful for international new ventures in high-technology industries to undertake geographic diversification in earlier stages of the industry life cycle, but international new ventures in low-technology industries are better off undertaking geographic diversification during the later stages of the industry life cycle.
Originality/value
The study contributes to the literature on international entrepreneurship by identifying the industry life cycle conditions under which the learning advantages of international new ventures are effective and facilitate the achievement of better performance. This paper also shows that industry technology type matters for geographic diversification strategies of international new ventures.
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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.
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Sui Sui, Matthias Baum and Dandan Li
This paper aims to study the learning-by-exporting effect among small-to-medium-sized enterprises (SMEs). Specifically, the authors propose a dynamic perspective and suggest that…
Abstract
Purpose
This paper aims to study the learning-by-exporting effect among small-to-medium-sized enterprises (SMEs). Specifically, the authors propose a dynamic perspective and suggest that learning-by-exporting is duration-dependent and contingent upon the born global internationalization strategy. In earlier phases of export activities, exporting has had a strong positive effect on SMEs’ innovations, which, however, diminishes over time. This inverted U-shape effect is even more distinct for born global firms.
Design/methodology/approach
The authors used longitudinal data with 1,689 Canadian SMEs to test their hypotheses. A two-stage instrumental approach is used to take into account the endogeneity of the born global international strategy on new product innovations.
Findings
Born globals learn faster at the early stages of exporting but also restrain their innovations more strongly than gradual internationalizers in the longer run, leveling out the initial learning advantages of newness. Thus, this study suggests that born globals have a significantly different learning trajectory than gradual internationalizers.
Practical implications
To maximize the benefits of exporting on innovation, managers should focus on learning during the initial years of exporting. However, once this period has passed, it is advisable for managers to invest in research and development as well as other innovation activities to complement the learning effect of exporting. Born global firms experience more rapid learning at the initial stage of exporting, but such learning effects wear off quicker later than gradually internationalized firms. For SME managers, this study helps draw their attention to the learning benefits of exporting in the initial years of export participation.
Originality/value
This study corroborates recent studies arguing for a “learning-by-exporting” effect. Providing longitudinal firm-level evidence, the authors also forward a dynamic perspective and show that learning by exporting is duration dependent and contingent upon the market entry strategy pursued by SMEs.
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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 for…
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.
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Lucas Liang Wang, Qing Dai and Yan Gao
New venture status is the most prominent feature of entrepreneurial startups, but its performance implications have remained under-studied. This study aims to bridge this…
Abstract
Purpose
New venture status is the most prominent feature of entrepreneurial startups, but its performance implications have remained under-studied. This study aims to bridge this knowledge void and offer precise guidelines for startup managers in boosting performance.
Design/methodology/approach
The study develops and tests a multi-perspective model on the linkage between new venture status and firm performance by integrating I/O economics, resource-based view and dynamic capability perspective. The arguments from the first two perspectives point to an adverse effect of new venture status, which is contingent, respectively, on business differentiation and resource endowments. The third perspective grounds a positive relationship between new venture status and performance, which is more pronounced for firms with weaker dynamic capabilities.
Findings
Quantitative evidence from a sample of new and established firms in China shows that the direct effect of new venture status is negative but insignificant. Neither business differentiation nor dynamic capabilities moderate the relationship. Low resource endowments, however, reinforce the negative influence of new venture status. New venture status, thus, shapes firm performance through resource scarcity from resource-based view rather than competitive vulnerability from I/O economics or strategic flexibility from dynamic capability perspective.
Originality/value
Newness and new venture performance have both been extensively examined in literature. But the relationship between them has remained largely omitted. The multi-perspective model and the findings in this study help clarify the confusion as to whether newness is good or bad in the context of an emerging market and reveals the subtle mechanism the effect of newness unfolds.
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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 in this…
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.
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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.
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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 internationalization are…
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 of “learning 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.
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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” – those…
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.
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