Keeping up with the neighbors: The role of cluster identity in internationalization

This paper explores the implications of the collective identity of a regional cluster on firms’ internationalization. Prior research has established the value of cluster “insidership” through access to knowledge and resources. Through a longitudinal study, we find that cluster identity, through distinct identity claims, provides imperatives and shapes the motivation of firms to internationalize. These imperatives, we argue, stem from cluster identity seen as defined features of regional collectives, extending reference theory to encompass the role of social cues from similar firms located geographically close. The imperatives are particularly salient in the early stages of firms’ internationalization, adding the role of cluster identity to explain the differences between inexperienced and experienced firms in internationalization.     

The internationalization of Nigerian firms: Motivations and location patterns

Despite the increased number of studies of the internationalization of emerging‐market multinationals (EMNCs), Latin American and Asian firms have dominated the focus of such studies, while the study of the internationalization process of sub‐Saharan African firms in the international business literature is quite limited. Therefore, this article examines the motivations and location patterns of the internationalization process of four Nigerian firms through a multiple case study approach. The findings show that the internationalization of the Nigerian firms is a recent phenomenon, but the foreign investment pattern reflects a pan‐African investment strategy. However, the findings also reveal that the firm‐specific advantages that had been accumulated in the domestic market, coupled with home‐country factors and regional‐/host‐market factors, were key determinants of the motivations and location patterns in the internationalization process of Nigerian firms.     

Small Firms in Regional Clusters: Local Networks and Internationalization in the Southern Hemisphere

This paper reports on a three‐country comparative study examining the internationalization of family winemakers in distinct regional wine clusters of Argentina, Chile, and New Zealand. In‐depth interviews were conducted with owner–operators, to understand the drivers and barriers to internationalization of their businesses. Key findings reveal that while size and age are not determinants of the ability or propensity to export wine, the existence of an independent industry body has a positive impact and greatly speeds up the internationalization process, providing an effective route for small firms to establish their very often, relatively unknown brand(s) in lucrative foreign markets.     

Firms' use of organizational,personal, and intermediary networks to gain access to resources for internationalization

This study explores which networks are beneficial for gaining resources for firms' internationalization. Little is known about firms' use of organizational, personal, and intermediary networks to gain access to resources for internationalization. Firms are seeking resources through their organization's relationships (organizational networks) and individuals' personal contacts (personal networks). Governmental and industry actors are implementing networks to promote international growth and act as an intermediary between business actors (intermediary networks). We conduct in‐depth interviews with firms and representatives for intermediary networks complemented with a survey. The findings reveal which resources are accessed through the different networks. We find organizational networks provide considerable access to most resources (except financial resources) that are beneficial for internationalization, whereas intermediary networks provide access to reputational, human, and market resources. Personal networks primarily provide access to human resources. This study contributes to theory by giving a more fine‐grained understanding of how different types of networks give access to different resources valuable for internationalization.     

The internationalization of small firms: The relationship between the global mindset and firms’ internationalization behavior

Some firms in internationally oriented industries are internationalized while other comparable firms in the same sector or industry do not. Observing this difference in strategic behavior among small firms led us to consider how differences in CEOs’ attitudes, international orientation, and mindset might explain it. Therefore, this study adopts a cognitive perspective on management to explore the formation of the global mindset and the relationship between the global mindset of small-firm decision makers and their firms’ internationalization behavior. A theory-based conceptual model and measurement instrument are developed and—using structural equation modeling—the model is estimated based on empirical data from cross-sectional samples of small Norwegian and Portuguese firms. The study finds: (1) a strong causal relationship between the global mindset and firms’ internationalization behavior; (2) the combination of the findings and substantive theory indicates that the main driver of firms’ internationalization operates through the global mindset. This study also covers the factors that strongly influence the formation of a global mindset, especially the decision makers’ work experience and personal characteristics in terms of propensity to interdisciplinary collaboration, cognitive flexibility, and networking capability. Based on these findings, suggestions are made for policies that can foster the internationalization of small firms.     

Are the Stages of Internationalization Empirically Supportable?

How firms progress through internationalization has been of great interest to many scholars attempting to develop a theory internationalization of business firms. This paper attempts ro identify different stages internationlization and to empirically validate some of the earlier findings with extensions and implications to management and theory development.     

CEOs’ regulatory focus and firm internationalization: The moderating effects of CEO overconfidence,narcissism and career horizon

While the international business literature has mainly focused on the firm- or industry-level antecedents of internationalization strategies, scholars have recently advocated a greater focus on the microfoundations of firms’ strategic decisions. Building on the regulatory focus theory, this study focuses on how CEO promotion and prevention foci impact firm internationalization. Looking into dispositional and situational attributions, this study also theorizes how these factors moderate the relationship between a CEO’s psychological motivations and firm internationalization. Using data from publicly traded US firms listed in the Fortune 500, the findings of this study show that a CEO’s promotion focus is positively associated with the extent of a firm’s internationalization, whereas a CEO’s strong prevention focus limits the extent of a firm’s internationalization. The findings also reveal that the relationship between a CEO’s regulatory focus and the extent of a firm’s internationalization is moderated by a CEO’s overconfidence, narcissism, and career horizon. These findings have important research and managerial implications for firms engaged in international business.     

Not all family firms are equal: The moderating effect of family involvement on the political risk exposure of the foreign direct investment portfolio. Preliminary evidence from Spanish multinational enterprises

We investigate the effect of political risk (PR) exposure and family control on the internationalization strategy of multinational enterprises (MNEs) using social capital theory. Our results from a negative binomial cross‐sectional analysis in 2007 of Spanish MNEs show family ownership or the limited presence of family members on the board has no effect on internationalization. However, when the conceptualization of family firms (FFs) includes majority ownership and board presence, we find a direct negative effect on their internationalization scope but a positive moderating effect on the relationship between the exposure to PR and internationalization scope. FFs have some specific advantages suitable to be employed in their corporate political activity allowing them to develop long‐lasting relationships with relevant political actors. By disentangling the effects of family control on internationalization and PR, this article explains how FFs can be simultaneously risk‐willing and risk‐averse.     

How do managers decide on internationalization processes? The role of organizational slack and performance feedback

This study draws on the behavioral theory of the firm to the postulate relationships between organizational slack and performance aspirations, and internationalization processes. Based on longitudinal data (2000–2008) from 772 publicly listed firms in Taiwan, the findings indicate that organizational slack significantly influences the internationalization processes. Specifically, firms with high organizational slack that have performance that falls below aspirations managers are more likely to exhibit (1) a rapid pace, (2) a wider scope, and (3) an irregular rhythm in their internationalization processes. In addition, we observed an interaction effect between performance feedback and different levels of slack on the internationalization processes.     

Internationalization of Small Family Firms: The Influence of Family from a Socioemotional Wealth Perspective

We explore the factors influencing the internationalization of small family firms. Based on interviews with six family firms in Singapore, we highlight the importance of (1) family harmony, (2) trust in external relationships, (3) social and business networks, and (4) organizational resources and capabilities in the internationalization process. We show how the socioemotional wealth factors of trust and harmony affect networking and resources, which in turn affect internationalization. We find that initial internationalization through exports is enabled through trust in family networks, but the typical family characteristics of a desire to maintain family harmony and distrust of outsiders have a negative impact on network creation and resource development, which constrains the extent to which the firm internationalizes beyond exporting. In order to move from the first stage (exports/similar markets) to the second stage (joint ventures/different markets) of internationalization, less emphasis on trust and family harmony accompanied by more emphasis on building external networks and resources may be necessary. We propose a new model of internationalization of family firms based on our findings. © 2015 Wiley Periodicals, Inc.     

International SMEs from emerging markets—Insights from the Colombian textile and apparel industry

The internationalization of firms from emerging markets has been studied mainly from the perspective of large firms. Smaller and younger international firms based in emerging markets suffer from underrepresentation in the literature. This study sheds light on the internationalization of emerging market SMEs, focusing on Colombian textile and apparel exporters. Using mixed research methods, it illustrates the role of firm age in influencing internationalization strategy. It examines 1165 export contracts by 50 SMEs, discussing export intensity, speed, and geographic scope using recurrence analysis and cluster analysis. It contributes to international entrepreneurship by exploring new empirical evidence and examining it using a novel methodological approach.     

Does internationalization make a difference? Stock market reaction to announcements of international top executive appointments

In recent years, there has been an increasing scholarly and practical interest in the internationalization of top management teams. It is argued that international firms need international top managers to meet the challenges arising from operating across borders. However, the few existing studies that focus on the link between top managers’ internationalization and firm performance yield inconclusive results. Thus, it is an open question if and to what extent international firms can benefit from international top managers. Drawing on upper-echelons theory, resource-dependence theory, and signaling theory, this paper examines how the stock market reacts to the appointment of an international top manager. Our empirical study of German firms employs an event study to analyze the direct impact of internationalization on a firm's stock price. Piecewise regression analysis reveals that a top manager's internationalization needs to exceed a certain threshold before investors incorporate this individual characteristic into their investment decisions. Furthermore, our analysis shows an inverted U-shaped relationship between internationalization and abnormal returns, suggesting that internationalization may have both positive and negative effects on a firm's stock price. We present several explanations for our empirical findings and discuss future research directions.     

The internationalization of African firms: Opportunities,challenges, and risks

There has been a marked increase in the internationalization activities of African firms over the last two decades or so, resulting in the emergence of regional challenger firms that are aggressively competing with foreign multinationals in terrains historically dominated by the latter. However, our understanding of this phenomenon is limited, as empirical research examining the nature of internationalization of African firms is scarce, and research directly investigating drivers, outcomes, and boundary conditions of the internationalization of African firms is lacking. The goal of this special issue, therefore, is to contribute to the scholarly understanding of the increasingly prevalent internationalization of African firms. This guest editorial provides a summary of the six articles in this special issue, and highlights three broad thematic issues: internationalization opportunities for African firms (accelerated private‐sector development and regional integration, and ability to overcome institutional voids); internationalization challenges (global competitiveness challenges, limited management and cross‐cultural capabilities, and overcoming the liability of Africanness); and internationalization risks (losing focus on home markets and over‐internationalization).     

Explicating the Reverse Internationalization Processes of Firms

ABSTRACT

Reverse internationalization (RI) is a crucial phenomenon in a world of globalization; however, research on RI remains scarce. In light of the 2008–2009 economical global crises, many internationalizing firms worldwide have deinternationalized. Given that scholars and functionaries have been sending warning signals about imminent global crisis, revisiting the RI domain and its drivers is a timely and important research area.

This study uses a qualitative approach with a prime objective of exploratory work and theory development of RI. The study explicates the RI phenomenon further, proposes a broader RI conceptualization and an operational definition, and develops propositions and a model to direct future research and assist managers. Grounded in data emerged from field in-depth interviews of senior managers, findings show that RI emerges as a multifaceted formative construct reflecting a reduction in firms’ activities on one or more explicit dimensions. Various internal and external factors foster RI. Since firms apply sophisticated forms of international involvement, RI domain should address its wide-ranging forms with a clearer and richer view that facilitates its conceptualization. Managers learn to pay attention to likely scenarios where episodes in internationalization may arise and lead to RI and of ways to approach them.     

The effect of internationalization on firm capital structure: A meta-analysis and exploration of institutional contingencies

Despite extensive research on the relationship between internationalization and firm capital structure, findings in this research area remain inconclusive. In this paper, we review the literature on the internationalization–capital structure relationship and investigate its direction, effect size, and multiple contingencies through a meta-analysis of 31 studies with a grand total of 223,658 firm observations and at least two separate samples each. Our cumulative evidence indicates lower debt ratios of multinational corporations compared to domestic corporations, in line with arguments of increased risk and agency costs in international operations. We extend our analysis to institutional characteristics in firms’ home countries and find that much of the existing variation in study findings can be explained using theory arguments on firm risk in internationalization. We contribute to an integration of international business and finance literature and point to directions for future research on determinants of the internationalization–capital structure relationship and its multiple contingencies.     

Organizational slack and firm’s internationalization: A longitudinal study of high-technology firms

We employ both organization theory and economic theory for exploring how the effects of high-discretion organizational slack and low-discretion organizational slack impact the degree of firm’s internationalization. We tested hypotheses using longitudinal data (2000–2005) from 179 high-technology publicly listed companies in Taiwan. The results indicate a U-shaped relationship exists between high-discretion organizational slack and the internationalization of firms. In contrast, low-discretion organizational slack presents a positive linear relationship with the internationalization of firms.     

The UK supermarket industry: an analysis of corporate social and financial performance

In a previous paper (Moore, 2001), the headline findings from a study of social and financial performance over three years of eight firms in the UK supermarket industry were reported. These were based on the derivation of a 16‐measure social performance index and a 4‐measure financial performance index. This paper discusses the formulationof the indices and then reports on: discussions with two supermarket firms concerning the overall results; inter‐relationships between individual financial performance measures; inter‐relationships between individual social performance measures; stakeholder group analysis; and inter‐relationships between turnover, age and gearing with social performance measures. The paper discusses these inter‐relationships, incorporating comments from the interviews with the two supermarket firms, and reports on both factor and cluster analysis. The interviews lend support for Preston and O’Bannon’s (1997) Available Funding Hypothesis in both its positive and negative form. The findings show that there are individual or combinations of related measures that could be used as surrogate measures for social and financial performance, instead of deriving a full index. However, the recommendation is that a full index continues to be used until there is further corroboration of these results. The findings also provide statistically significant support for the Negative Synergy Hypothesis (Preston and O’Bannon, 1997), show a statistically significant association between pre‐tax profits (both lagged and contemporaneous) with community contributions, and show that all statistically significant associations between individual social performance measures are positive – suggesting that they are mutually reinforcing. The association of size with social performance, noted in the previous paper, is also reinforced. Findings in relation to the proportion of women managers and the number of women on the Board and positive associations with other social and environmental performance measures raise interesting gender issues for business ethics. Factor analysis leads to no clear conclusions but cluster does show two or three clear clusters of firms, where size would seem to be the main but not sole factor. Further areas of research are noted.     

How Industry Dynamics Influence the Internationalization–Performance Relationship: Evidence From Technology‐Intensive Firms

The relationship between internationalization and performance has been the topic of a significant number of research studies, which report a mixed pattern of findings. However, the incorporation of global industry characteristics in the testing of this relationship has not been a facet of these studies. This article investigates the impact of intrafirm trade and differential market growth of the industry on the relationship between internationalization and performance. It focuses on technology‐intensive industries using a sample of 795 firms drawn from five countries. Findings indicate that internationalization has a positive relationship (which is quadratic in nature) with performance. Intrafirm trade and differential growth rates were found to interact with the relationship between internationalization and performance, thereby indicating the benefits of internationalization to be contingent on global industry characteristics. © 2012 Wiley Periodicals, Inc.     

Country of origin and network effects on internationalization: A comparative study of SMEs from an emerging and developed economy

This study examines the internationalization of high technology small and medium enterprises (HTSMEs). It explores how they develop and use networks to penetrate their first foreign market relying on information collected via direct interviews with the CEOs or founders of 58 high technology small firms that operate internationally. It uses mixed methods to discuss the network building mechanisms identified — client–supplier relationships, existing personal contacts, contacts acquired by chance, and contacts acquired through specific strategies. The findings provide the basis for developing propositions for further comparative analyses of the internationalization of HTSMEs based in emerging and developed markets. The study contributes to the literature on networks, internationalization and international entrepreneurship.     

Informal institutions and international entrepreneurship

This study examines the influence of three informal institutions, performance orientation, self-expression and social desirability, on the extent of internationalization by early stage entrepreneurial firms. We employed multi-level modeling techniques using 20,656 individual-level responses obtained from the Global Entrepreneurship Monitor (GEM) survey for 39 countries from 2001 to 2008, and supplementing with country-level data obtained from the World Values Survey (WVS) and the Global Leadership and Organizational Behavior Effectiveness (GLOBE) study. The results demonstrate that high performance orientation, high self-expression, and low social desirability of entrepreneurship in societies increase the extent of internationalization by early-stage entrepreneurial firms. The study promotes new theory and empirical findings on the relationship between informal institutions and entrepreneurial agency.