Search results

This chapter develops a multi-path theory of diversified international expansion that explains how multiple wave-shaped performance curves are created as multinational companies expand into increasingly distant and dissimilar countries. According to this theory, multinational mobile network operators (MNOs) recover from over-diversified expansion by improving their local adaptation strategies by means of reconfiguring the value chain and entering local partnerships, by improving their global replication capabilities or by concentrating expansion to clusters of similar country markets. Three dynamic propositions are developed and exemplified concerning MNOs’ diversified international expansion. Implications for international diversification research finalize the chapter.

This chapter outlines a general theory of international expansion and its effect on the performance of firms. Using the lens of this theory, it addresses the question of why most companies are “regional,” in the sense that their geographical coverage seems to be far from complete. The chapter also treats the perplexing issue of the lack of congruence in empirical findings, over the 30-year history of the Multinationality vs. Performance sub-field in International Business studies. It argues that the apparently contradictory results of past studies are but subsets of the three stages of the general theory. Finally, the chapter indicates fruitful areas for further research.

Despite many years of research, empirical studies of the relationship between internationalization and performance of firms have given conflicting results. Contractor, Kundu, and Hsu (2003) and Lu and Beamish (2004) have recently proposed a three-stage theory of international expansion that attempts to reconcile the conflicting findings. However, other studies suggest that there are good reasons to believe that firms from less-developed countries (LDCs) differ in their internationalization from firms in developed countries. Furthermore, little research has been conducted on service firms in LDCs. This paper aims to fill some of this gap by testing the internationalization–performance relationship in a sample of service firms in the Asia-Pacific region.

The study confirms the three-stage model but adds two new dimensions. First, the results show that the internationalization–performance relationship varies significantly depending on whether internationalization is intra-regional or extra-regional. Extra-regional sales/total sales showed significant and positive relationships with return on assets (ROA) in all three models but combined foreign sales/total sales showed no significant relationships with ROA and surprisingly intra-regional sales showed a significant relationship only in the quadratic model.

Along with the “reform and open door” policy launched in the late 1970s, China has experienced an annual average GDP growth rate of 9.8% between 1978 and 2002 (Hu, 2003, October 19). China's economy system has also gone through a fundamental transition from a central planning system to a socialist free market economy. To cope with the booming economy and radical social changes, the higher education system of China has been undergoing a process of expansion with marketization (World Bank, 1997).

This paper examines how personal networks influence the internationalization process of Russian multinational corporations.

We identify and review 78 articles published in five International Business journals that address the role of networking and relationships in firm internationalization. We then use the network perspective to examine how Russian multinationals internationalize.

Combining the key conclusions of the reviewed studies with insights from the network perspective, and adding insights that we have gained both through first-hand experience and by following the Russian business media, we develop a model that links personal networking and Russian multinationals’ internationalization. We outline four functions that personal networking plays – access to information and knowledge, resource commitment, development of marketing and sales capabilities, and further network expansion.

This paper challenges established views of how firm internationalization occurs. It combines two previously unrelated streams of literature, the network model of internationalization and the role of personal networking within the Russian business environment, and argues that personal networking plays a much larger role in how Russian MNCs internationalize than has the International Business literature has acknowledged.

This study examines the effect of a firm's level of intra-regional sales in the triad markets of North American, Europe, and Asia on its performance. The form of the relationship is explored. The results show that there exists a strong positive relationship between a firm's level of intra-regional sales and its performance (measured by return on equity (ROE) and return on assets, (ROA)). A firm tends to perform better when it has its sales in the home region of the triad. The hypothesis that there exists a non-linear relationship (second- and third-order curvilinear relationship) between performance and intra-regional sales is not supported.

The study this chapter reports focuses on how network theory contributes to the understanding of the internationalization process of SMEs and measures the effect of network capability on performance in international trade and has three research objectives.

The first objective of the study relates to providing new insights into the international market development activities through the application of a network perspective. The chapter reviews the international business literature to ascertain the development of thought, the research gaps, and the shortcomings. This review shows that the network perspective is a useful and popular theoretical domain that researchers can use to understand international activities, particularly of small, high technology, resource-constrained firms.

The second research objective is to gain a deeper understanding of network capability. This chapter presents a model for the impact of network capability on international performance by building on the emerging literature on the dynamic capabilities view of the firm. The model conceptualizes network capability in terms of network characteristics, network operation, and network resources. Network characteristics comprise strong and weak ties (operationalized as foreign-market entry modes), relational capability, and the level of trust between partners. Network operation focuses on network initiation, network coordination, and network learning capabilities. Network resources comprise network human-capital resources, synergy-sensitive resources (resource combinations within the network), and information sharing within the network.

The third research objective is to determine the impact of networking capability on the international performance of SMEs. The study analyzes 11 hypotheses through structural equations modeling using LISREL. The hypotheses relate to strong and weak ties, the relative strength of strong ties over weak ties, and each of the eight remaining constructs of networking capability in the study. The research conducts a cross-sectional study by using a sample of SMEs drawn from the telecommunications industry in Ireland.

The study supports the hypothesis that strong ties are more influential on international performance than weak ties. Similarly, network coordination and human-capital resources have a positive and significant association with international performance. Strong ties, weak ties, trust, network initiation, synergy-sensitive resources, relational capability, network learning, and information sharing do not have a significant association with international performance. The results of this study are strong (R2=0.63 for performance as the outcome) and provide a number of interesting insights into the relations between collaboration or networking capability and performance.

This study provides managers and policy makers with an improved understanding of the contingent effects of networks to highlight situations where networks might have limited, zero, or even negative effects on business outcomes. The study cautions against the tendency to interpret networks as universally beneficial to business development and performance outcomes.

This paper offers a discussion of the key multilevel issues pertaining to the multinationality–performance (M–P) relationship. Arguably, one of the most important areas of research in international business, firm internationalization and its consequences are multilevel phenomena, influenced by forces at different managerial and structural levels: from the executive, subsidiary and firm, to the country and industry. We suggest that accounting for important factors at each level and for their cross-level interactions may help reconcile inconsistent findings and advance our understanding of the M–P relationship. Based on a critical review of the literature, we offer recommendations regarding the appropriate levels of theory, measurement, and analysis to guide future research.

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and non-economic activities. Researchers have increasingly focused on the adoption and use of ICT by small and medium enterprises (SMEs) as the economic development of a country is largely dependent on them. Following the success of ICT utilisation in SMEs in developed countries, many developing countries are looking to utilise the potential of the technology to develop SMEs. Past studies have shown that the contribution of ICT to the performance of SMEs is not clear and certain. Thus, it is crucial to determine the effectiveness of ICT in generating firm performance since this has implications for SMEs’ expenditure on the technology. This research examines the diffusion of ICT among SMEs with respect to the typical stages from innovation adoption to post-adoption, by analysing the actual usage of ICT and value creation. The mediating effects of integration and utilisation on SME performance are also studied. Grounded in the innovation diffusion literature, institutional theory and resource-based theory, this study has developed a comprehensive integrated research model focused on the research objectives. Following a positivist research paradigm, this study employs a mixed-method research approach. A preliminary conceptual framework is developed through an extensive literature review and is refined by results from an in-depth field study. During the field study, a total of 11 SME owners or decision-makers were interviewed. The recorded interviews were transcribed and analysed using NVivo 10 to refine the model to develop the research hypotheses. The final research model is composed of 30 first-order and five higher-order constructs which involve both reflective and formative measures. Partial least squares-based structural equation modelling (PLS-SEM) is employed to test the theoretical model with a cross-sectional data set of 282 SMEs in Bangladesh. Survey data were collected using a structured questionnaire issued to SMEs selected by applying a stratified random sampling technique. The structural equation modelling utilises a two-step procedure of data analysis. Prior to estimating the structural model, the measurement model is examined for construct validity of the study variables (i.e. convergent and discriminant validity).

The estimates show cognitive evaluation as an important antecedent for expectation which is shaped primarily by the entrepreneurs’ beliefs (perception) and also influenced by the owners’ innovativeness and culture. Culture further influences expectation. The study finds that facilitating condition, environmental pressure and country readiness are important antecedents of expectation and ICT use. The results also reveal that integration and the degree of ICT utilisation significantly affect SMEs’ performance. Surprisingly, the findings do not reveal any significant impact of ICT usage on performance which apparently suggests the possibility of the ICT productivity paradox. However, the analysis finally proves the non-existence of the paradox by demonstrating the mediating role of ICT integration and degree of utilisation explain the influence of information technology (IT) usage on firm performance which is consistent with the resource-based theory. The results suggest that the use of ICT can enhance SMEs’ performance if the technology is integrated and properly utilised. SME owners or managers, interested stakeholders and policy makers may follow the study’s outcomes and focus on ICT integration and degree of utilisation with a view to attaining superior organisational performance.

This study urges concerned business enterprises and government to look at the environmental and cultural factors with a view to achieving ICT usage success in terms of enhanced firm performance. In particular, improving organisational practices and procedures by eliminating the traditional power distance inside organisations and implementing necessary rules and regulations are important actions for managing environmental and cultural uncertainties. The application of a Bengali user interface may help to ensure the productivity of ICT use by SMEs in Bangladesh. Establishing a favourable national technology infrastructure and legal environment may contribute positively to improving the overall situation. This study also suggests some changes and modifications in the country’s existing policies and strategies. The government and policy makers should undertake mass promotional programs to disseminate information about the various uses of computers and their contribution in developing better organisational performance. Organising specialised training programs for SME capacity building may succeed in attaining the motivation for SMEs to use ICT. Ensuring easy access to the technology by providing loans, grants and subsidies is important. Various stakeholders, partners and related organisations should come forward to support government policies and priorities in order to ensure the productive use of ICT among SMEs which finally will help to foster Bangladesh’s economic development.