Internet marketing capabilities and international market growth

The Internet has been shown to facilitate elements of internationalisation such as information accumulation and network opportunities. However, there is limited understanding of how the Internet combined with marketing capabilities drives international market growth. This study, based on a sample of 224 Australian firms, develops and tests, using structural equation modelling (SEM), a conceptual model of Internet marketing capabilities and international market growth. Results indicate that firms deploying Internet marketing capabilities will benefit due to the reduction of information uncertainty and increased capacity to develop international network capabilities. Moreover, Internet marketing capabilities indirectly lead to international market growth when the firm has a high level of international strategic orientation and international network capabilities. Overall, Internet marketing capabilities enhance the firm's ability to generate other internal capabilities within the firm, which in turn have a positive impact on the international market growth of the firm.     

Is marketing agility important for emerging market firms in advanced markets?

Marketing agility has recently gained the attention of international marketing managers and scholars. However, scholars have not examined how this capability directly and indirectly influences firm performance and how the effects change under the complex market conditions facing emerging market (EM) firms in advanced economy (AE) markets. Hence, underpinned by the dynamic capability and complexity theories, this study investigates the direct effect of marketing agility—a dynamic meta-capability involving market sensing, speed, flexibility and responsiveness—on firm performance and its indirect effect via marketing program adaptation. Moreover, it explores changes in these direct and indirect relationships under varying market complexity levels. EM firms are often disadvantaged owing to AE market complexity, such as the presence of low-cost advantage of local AE firms. Hence, investigating this framework in this context is valuable. Using data on Pakistani firms exporting to AE markets, the study finds that marketing agility influences firm performance, and the influence is stronger under high market complexity. When market complexity is low, the influence is mediated by the firms’ ability to adapt their marketing program to meet AE market requirements. Supporting theoretical and managerial implications are offered.     

Change in international market strategy as a reaction to performance decline

While a great deal of research has explored how international marketing strategy influences performance, researchers have paid scant attention to understanding changes to international marketing strategy resulting from firm reaction to past performance. In this study, organizational learning theory addresses when and how international marketing strategy will change. Employing data from over 500 exporters, the results, which are consistent with theoretical predictions, indicate that (1) firms are generally not prone to inertia and do, in fact, change their international marketing strategy when facing declines in performance, and (2) that the direction of change depends on the level of competition in the specific foreign market, with firms adapting their international marketing strategy in low competitive markets and standardizing their international marketing strategy in highly competitive markets. The paper includes implications for academics and practitioners.     

An Empirical Investigation of Marketing Programme and Process Elements in the Home-Host Scenario

SUMMARY

The two major strategies often available to international marketers are standardisation and adaptation when deciding to operate in a foreign host market. Both strategies have pros and cons. Drawing on the findings of previous theoretical and empirical studies, this study proposes a “marketing programme/process and performance” framework. The study employed a linear multiple regression (OLS) analysis method to examine the proposed framework, based on the experience of 233 Australian and New Zealand (home markets) firms operating in the Greater China region (host markets). Factors identified as significantly associated with adaptation of programme/process include “employee” and “employer” immigrant effects, government regulations, economic development, competitive environment and product life cycle. Factors identified as influencing firm performance include product adaptation, product type and market entry mode.     

Psychic distance,marketing strategy and performance in export ventures of Brazilian firms

Compared to other issues examined in the exporting literature, less attention has been paid to the performance implications of following a standardisation or adaptation strategy. In addition, despite the interest in the psychic distance construct in the international marketing literature, there has been also little empirical research on the effect of managers' psychic distance on the international marketing strategies of the firm. To address these issues the present study offers an empirical investigation of the relationship among psychic distance, international marketing strategies, and export performance of Brazilian firms. A sample of senior managers of industrial firms in Brazil is used to test the hypotheses. The results reported here indicate that the degree of international marketing strategy adaptation is affected by the manager's psychic distance towards the foreign markets. Product and promotion adaptation were found to have a positive effect on export performance while surprisingly, distribution and price adaptation were found to influence export performance negatively. Contrary to expectations, the results also confirm that psychic distance has a positive effect on the export performance of the firm. Implications of these findings along with the limitations of the study are discussed.     

Implications of perceived competitive advantages,adaptation of marketing tactics and export commitment on export performance

The aim of this exploratory paper is to fill an important gap in the international marketing literature by examining the influence of firm behavior in foreign markets (export commitment and adaptation of marketing tactics) on perceived competitive advantages and export performance. Using a sample of 150 Spanish export firms, the study found that firms that are more committed to their foreign markets are more willing to adapt elements of the marketing program. These firms also perform better in foreign markets. Moreover, the results also point out that adapting marketing tactics does not have direct effects on export performance, although it does have on the achievement of perceived competitive advantages in foreign markets, which positively influence export performance.     

Antecedents and financial impacts of building brand love

Brand love has garnered increasing interest among practitioners and scholars, but little is known about how marketing actions drive brand love, and whether and how brand love transmutes to firm profitability. Using longitudinal brand love data collected from more than 20,000 customers of 152 corporate brands and financial data of firms who own these brands during 2006–2017, the authors examine the antecedents and financial impacts of building brand love. The results show that advertising investments help firms build brand love with diminishing returns after reaching an optimal point, whereas R&D investments positively contribute to brand love. The analyses further show that although brand love does not affect firm profitability and market value in the short term, it increases firm profitability and market value in the long term. More important, the results indicate that the positive effect of brand love on firm performance is stronger for hedonic brands, for firms in product categories that matter greatly to consumers, and those operating in highly competitive markets. Overall, the findings have important implications for marketing theory and provide actionable insights for managers into how to build and manage brand love.     

Linking international adaptation strategy,immigrant effect,and performance: The case of home–host and cross-market scenario

Previous studies suggest that a proper fit between business strategy and human resource management can enhance a firm's financial performance. Building on prior findings, this study proposes that an ideal match could occur on the choice of international adaptation strategy and immigrant effect (IE). This match would have a significant effect on firms’ financial performance. The proposed framework is examined using the experience of 121 firms operating across the Greater China region in the home–host and cross-market scenarios. It is found that the extent of adaptation strategy is positively associated with the choice of IE in both home–host and cross-market scenarios and that IE has significant direct and indirect effects on market share and profitability in the cross-market scenario. This study proposes a new strategy–human resource management-performance framework. The findings established provide some implications for researchers and managers.     

Market valuation of marketing alliances in East Asia: Korean evidence

This paper investigates firm value created by non-equity marketing alliance announcements of Korean listed firms in terms of stock price reactions to the announcements. We find evidence that on the Korean stock market, the announcements of marketing alliances produce significant positive abnormal returns, which reflect an increase in firm value, around the announcement date. This suggests that firm managers need to seek for various marketing alliances not only for an effective competition in competitive business environments but also for enhancement in shareholder wealth. The increase in firm value has inverse relationship with firm's size and growth opportunity. In particular, marketing alliances with firms based in G7-countries create greater firm value than ones with firms based in the home country. Our study provides investors, firm managers, and academics with valuable implications of an importance of marketing alliances for valuation of firms in other Asian countries as well as in Korea.     

International ambidexterity and firm performance in small emerging economies

Conventional IB theories stress the importance and implications of a firm's exploitative strategy. However, the unprecedented competitive nature of contemporary business necessitates firm “ambidexterity” — the simultaneous execution of exploitation and exploration activities. Using balanced panel data of 207 Taiwanese firms spanning six years, this research examines the effects of international ambidexterity on firm performance. Findings reveal that ambidexterity promotes a firm's performance. For firms from small emerging economies, international ambidexterity is highly vulnerable to environmental complexity and sensitive to previous international experience and the firm's capability to conduct international business. These factors significantly moderate firm performance.     

Corporate entrepreneurship,customer-oriented selling,absorptive capacity,and international sales performance in the international B2B setting: Conceptual framework and research propositions

In the international business-to-business (B2B) setting, a firm's salespeople often have more direct, prolonged, and intimate contact with the customer and market environments than any other employees of the firm. In fact, for customers in many B2B markets, the salesperson is the face of the firm. The sales function can be characterized as an inherently entrepreneurial activity. Entrepreneurship is founded on knowing or seeing something others do not see, and the sales force has long been recognized as an important source of knowledge about a firm's customers and environment. However, there has been relatively little work linking entrepreneurship to international sales performance, especially in the B2B context.This paper focuses on the intelligence-gathering role of salespeople to firms practicing corporate entrepreneurship in the international B2B setting. More specifically, drawing on the theories of corporate entrepreneurship and the knowledge-based view of the firm, the authors develop a conceptual model that proposes international sales performance for firms practicing corporate entrepreneurship will be enhanced when salespeople practice customer-oriented selling and the firm's absorptive capacity is stronger. Recommended methodology for testing the proposed model is a single-informant survey of sales managers with firms in the domain of interest, using structural equation modeling with moderator tests. The paper concludes with implications and directions for future research.     

The Impact of Changes in the Political and Economic Environment on Foreign Direct Investment Opportunities in Romania

Abstract

This study reports findings of a survey including 139 Finnish and 97 Austrian companies active in Eastern Europe. The study focuses on two major areas in the firm's business activities in Eastern Europe, namely on market strategies-the timing of market entry, market selection, entry modes and motives-and company performance. The number of market entries has increased after the transition, but the majority of business activities still take place in geographically-close countries. Companies have gradually started to use more high-commitment modes of operation, but contrary to our expectations, high commitment modes were also frequently used in more unstable markets. Company performance in Russia and especially in other countries of Eastern Europe was in general clearly lower than in domestic markets and foreign markets in general. Against expectations, firm size, dependence on international markets, length of operation, and mode of operation in Eastern Europe did not significantly influence the performance. However, firms which concentrated on Russian markets on a continuous basis performed much better than other firms.     

Home Firm Performance After Foreign Investments and Divestitures

An almost undisputed aim for firms in today's globalised world is to operate internationally. Several papers find a positive relationship between foreign direct investment (FDI) and the domestic performance of firms. In this paper, we address the ‘FDI – export’ relationship to better understand this trend. Furthermore, by presenting results on firm's post‐divestiture employment growth at home, we are able to provide a more comprehensive view on firm performance after stepping in and out of foreign markets. We apply a propensity score matching technique in combination with a difference‐in‐difference estimator to analyse the performance dynamics of French firms that either invested abroad or carried out foreign divestitures during the period 2000–2007. FDI has, on average, a positive effect in terms of export share, operating turnover and employment in firm's domestic market. Industry differences reveal that firms in high‐tech industries experience a strong increase in their domestic performance, whereas firm performance in low‐tech industries increases only moderately in post‐investment periods. In contrast, the divestiture impact on the post‐divestiture performance is rather negligible.     

Examining the influence of uncertainty on marketing mix strategy elements in emerging business to business export-markets

The degree of adaptation or standardization of the marketing program is critical in international business ventures. However, findings within this important research field and, consequently, implications for practice remain contradictory and confusing. The purpose of this paper is to examine determinants of an international marketing-mix strategy within a specific business-to-business context that includes the effects of uncertainty. Is the degree to which the marketing program is adapted or standardized dependent on the managerial perception of uncertainty? Does a firm's international entrepreneurial ability or the use of networks positively influence the degree of positive assessment of the environment? Data were collected from German companies working in different international business-to-business markets. The results indicate that international entrepreneurship has a greater impact on uncertainty reduction than the use of networks. After having reduced uncertainty, a firm tends to adapt their communication and pricing strategy, whereas the adaptation of the product and distribution strategy in general is not significant.     

Market knowledge: Evidence from importers

Previous firm‐level literature established that there are substantial costs of entry into new export markets. Chaney (The American Economic Review, 104, 2014, 3600) opens the black‐box of entry costs by building a dynamic network model of international trade where firms acquire customers in new destinations through their existing customers in other destinations. Following his conjecture, this paper examines whether firms use their existing suppliers in a destination to find their first clients in those markets. I use a disaggregated data set on Turkish firms' exports and imports for the 2003–08 period, and investigate the effect of import experience on export entry. By identifying import experience using instrumental variables, and shutting down productivity channels with firm‐year fixed effects, I find that having a supplier in the destination country raises the probability of starting to export to that country by 5.5 percentage points on average, revealing a “market knowledge” phenomenon. The paper's main contribution to the literature is finding that firms' country‐specific import experience increases the likelihood of export‐market entry. Digging further to explore heterogeneous effects, I find that this effect does not exist when trading with low‐income countries, but it increases with the destination country's size, proximity, language similarity and the size of its Turkish immigrant community. Moreover, the strength of the firm's relationship with its supplier as proxied by several variables such as the share of imported products that are differentiated increases the probability of export‐market entry.     

Does the decision to issue public debt affect firm valuation? Russian evidence

This paper examines the association between firm valuation and the sources of debt financing. In particular, using a sample of 353 firms, we test whether the decision to issue bonds affects the firm's stock market performance in the emerging Russian markets. Our results indicate that public debt financing may have a negative effect on the firm's market valuation. After controlling for the differences in firm-specific characteristics and addressing potential endogeneity issues, we document that the firms which rely on public debt underperform relative to firms with other sources of debt financing in terms of stock market valuation.     

The performance implications of outsourcing customer support to service providers in emerging versus established economies

Recent discussions in the business press query the contribution of customer-support outsourcing to firm performance. Despite the controversy surrounding its performance implications, customer-support outsourcing is still on the rise, especially to emerging markets. Against this backdrop, we study under which conditions customer-support outsourcing to providers from emerging versus established economies is more versus less successful. Our performance measure is the stock-market reaction around the outsourcing announcement date. While the stock market reacts, on average, more favorably when customer-support is outsourced to providers located in emerging markets as opposed to established economies, approximately 50% of the outsourcing firms in our sample experience negative abnormal returns. We find that the shareholder-value implications of customer-support outsourcing to emerging versus established economies are contingent on the nature of the customer support that is being outsourced and on the nature of the outsourcing firm. Customer-support outsourcing to emerging markets is less beneficial for services that are characterized by personal customer contact and high knowledge embeddedness than for customer-support services that involve impersonal customer contact and are low on knowledge embeddedness. Firms higher in marketing resource intensity and larger firms benefit more from outsourcing customer-support services to emerging markets than firms lower in marketing resource intensity and smaller firms.     

Where Do Firms Export,How Much and Why?

The empirical finding that exporting firms are more productive on average than non‐exporters has provoked a large theoretical literature based on models such as Melitz ( 2003 ), where more productive firms are more likely to overcome costs associated with trade. This paper investigates how closely the productivity heterogeneity framework fits the data from a firm‐level survey that includes information on export destinations and firm characteristics such as productivity. We find a high degree of unpredictable idiosyncratic participation in export markets by firms and a relatively weak positive correlation between the extent of a firm's export market participation and its export sales. We find that a small number of standard gravity variables provide a close fit to the country‐level determinants of trade but that greater variation results in more difficulty in explaining firm‐specific factors driving exporting behaviour. We also illustrate some elements of the dynamics over time in firm exporting patterns by destination. We show that lagged exporting activity has a significant effect on a firm's current exporting profile.     

Standardization Versus Adaptation in Global Markets: Is Channel Strategy Different?

The argument over standardization versus adaptation of marketing strategy in international markets has raged for several decades. This argument has generally taken place at the aggregate level to include all four strategic areas of the marketing mix (product, price, promotion, and place) taken together. This article disaggregates the standardization-versus-adaptation argument by focusing on just one strategic area of the marketing mix—channel strategy. We argue that three underlying phenomena or forces in global markets (culturally distant distribution behavior, distributive institution rigidity, and international functional fragmentation) inhibit a firm's ability to standardize channel strategy in global markets to a greater degree than is the case for product, price, and promotional strategies.     

Bending the rules,breaking the rules: How corruption and lobbying affect the investment market selection of Swedish firms

There is stark evidence that many policies which influence firm gains from engaging in FDI (such as tax and trade policies) are targeted by lobbying groups and that corruption can be an important determinant of market attractiveness. The scarce research that exists on firm behaviour, corruption and lobbying shows that these activities can be regarded as alternative, and interdependent, influence forms. This paper provides the novel contribution of investigating how the market infiltration of corruption and lobbying affects the firm's investment decision. We identify the interdependent effects using census data for Swedish manufacturing firms that allows a complete identification of the firm's market selection. Our results reveal that these private–public sector links influence the firm's investment decision differently, as market selection is deterred by corruption and stimulated by lobbying, and that they function as substitutes. We show that the stimulating lobbying effect largely can be attributed to its interdependency with corruption, which suggests that firms are more shielded from corruption in lobbying environments. Further investigation reveals that the corruption and lobbying effects are not always representative of larger firms: The largest firms are undeterred by corruption in markets where lobbying forms an integral part of the business environment and larger firms are not stimulated by lobbying in markets largely void of corruption.