Managing internationalization and innovation tradeoffs in entrepreneurial firms: Evidence from transition economies |
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| Authors: | Mona Bahl Somnath Lahiri Debmalya Mukherjee |
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| Institution: | 1. Reader in Strategic Entrepreneurship, Brunel University, Brunel Business School, Uxbridge, Middlesex, UB8 3PH, United Kingdom;2. Professor of Innovation Management, School of Management, Zhejiang University of Technology, Xihu District, Hangzhou, 310023, P.R.China;3. Lecturer in Marketing, Southampton Business School, University of Southampton, University Rd, Southampton SO17 1BJ, United Kingdom;4. Senior Lecturer in Marketing, Brunel University, Brunel Business School, Uxbridge, Middlesex, UB8 3PH, United Kingdom;5. Professor of Marketing Strategy, Department of Strategy and Marketing, The Open University Business School, The Open University, Milton Keynes MK7 6AA, United Kingdom;1. Krannert School of Management, Purdue University, West Lafayette, IN 47906; USA;2. DeSantis Distinguished Professor, College of Business, Florida Atlantic University, 777 Glades Road, Boca Raton, FL 33431 USA;3. Utrecht University School of Economics, Utrecht University, Kriekenpitplein 21-22, 3584 EC Utrecht, the Netherlands;4. University of Amsterdam Business School, Plantage Muidergracht 12, 1018 TV Amsterdam, the Netherlands;5. Endowed Chair of Interdisciplinary Management Science, Faculty of Management, Economics and Social Sciences, University of Cologne, 50672 Cologne, Germany;1. Departamento de Administración de Empresas y Marketing, Universidad de Sevilla, Calle San Fernando, 4, 41004 Sevilla, Spain;2. Lazaridis School of Business and Economics, Wilfrid Laurier University, 75 University Ave W, Waterloo, ON, Canada N2L 3C5;3. Departamento de Economía Financiera y Contabilidad, Universidad de Pablo de Olavide, Ctra. de Utrera, 1, 41013 Sevilla, Spain |
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| Abstract: | For entrepreneurial firms (EFs), internationalization and innovation present two major avenues for growth. Prior research, based primarily on EFs from advanced economies, demonstrates mixed insights for the relationship between these strategies. A deeper understanding of the tradeoffs involved in the internationalization-innovation relationship may help better comprehend the issue. In this study, we draw on the organizational learning and capabilities-based literatures to examine the relationship in the context of EFs in transition economies (EFTEs). Our findings suggest that in EFTEs, internationalization is negatively associated with the likelihood of innovation. We also find that three knowledge-based capabilities of EFTEs (absorptive capacity, appropriation capability, and managerial capability) positively moderate the aforementioned negative relationship. We do not find any evidence of reverse causality (EFTE innovation impacting internationalization). Our research provides novel insights to the IE literature by shedding light on the internationalization–innovation tradeoffs that EFTEs experience. |
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| Keywords: | International entrepreneurship Transition economies Internationalization Innovation Absorptive capacity Appropriation capability Managerial capability |
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