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).     

New Venture Internationalization from an Emergent Market: Unexpected Findings from Russia

This article offers new insights on determinants of degree and scope of new venture internationalization from emerging markets. We set our study by development of a theoretical framework and hypothesis integrating entrepreneur-, firm-, industry-, and institutional factors to be tested in the Russian empirical context. The results indicate that institutional factors have the strongest relationship with the degree and scope of internationalization in Russian NVs. However, contrary to our expectations and existing literature, entrepreneur-, firm-, and industry-related factors are not associated with new venture internationalization. These unexpected findings have motivated us to implement the second round of empirical research using qualitative approach. As an outcome, we were able to explain the underlying forces behind the inconsistencies in the survey results and to develop four puzzles that provide a foundation for the theoretical extension of new venture internationalization from emerging markets.     

Internationalization Factors of Thai Multinationals and Thailand's Bilateral Trade Policy

This article investigates the impact of Thailand's recent bilateral free-trade agreements (FTAs) on the internationalization of Thai multinational enterprises (MNEs). The results highlight the relative importance of internal and external factors in the internationalization of developing country MNEs. The empirical evidence indicated that Thai MNEs judged bilateral FTAs as a critical facilitator of internationalization success. The FTAs facilitated firms' exports to a certain degree and marginally expedited firms' international purchasing activities. The influence of FTAs on firms' foreign investment was not discernible.     

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.     

Performance, Internationalization, and Firm-specific Advantages of SMEs in a Newly-Industrialized Economy

In light of the lack of empirical evidence regarding issues of internationalization as they affect small and medium-sized enterprises (SMEs) from newly-industrialized economies (NIEs), this study aims to expand the applicability of existent internationalization theories. So far, such theories have largely been developed with MNCs from industrialized economies in mind. In examining a 1996 sample of 1,419 Taiwanese SMEs, we found that the relationship between internationalization and performance could be graphically depicted as one of inverted U-shaped curvilinearity, and that a specific level of internationalization corresponded to maximum profitability. Our empirical findings also confirmed a relationship of U-shaped curvilinearity between advertising investment and performance, indicating that a minimum level of investment is required in order for advertising to be effective. Investments in research and development (R&D) were also shown to be positively associated with firm performance. The external validity of our internationalization theories regarding SMEs from NIEs was generally supported, though some modifications allowing for consideration of the particular context of individual SMEs will ultimately become a necessity.     

Riding the waves of family firm internationalization: A systematic literature review,integrative framework,and research agenda

Despite the proliferation in research efforts, family firm (FF) internationalization scholarship suffers from fragmentation, theoretical limitations, and empirical indeterminacy, leaving important facets unexplored. This article’s purpose is to unpack how this body of research has evolved over time and interfaces international business (IB) theory. We conduct a systematic literature review of relevant theoretical and empirical studies covering the last 30 years of research and comprising 134 articles. Our study contributes to this corpus of knowledge by identifying and discussing four evolutionary waves of FF internationalization research. We further advance an integrative framework that offers a comprehensive understanding of the state-of-the-art as well as promising avenues for future research at the intersection of IB and FFs.     

The internationalization of knowledge-intensive business services: the effect of collaboration and the mediating role of innovation

This study theoretically and empirically analyzes the mediating role of innovation on the relation between collaboration and internationalization strategies in knowledge-intensive business services (KIBS). The work also considers the impact of foreign-based partners and examines the potential direct and indirect effects via innovation of cross-border collaboration on the internationalization of KIBS. The empirical analysis uses a wide sample of Spanish KIBS for the period 2003–2005. The study finds that collaboration positively affects the internationalization of KIBS via innovation. The results related to cross-border collaboration indicate the existence of direct and indirect effects via innovation on internationalization.     

The Impact of the Change from Partial to Full Foreign Ownership on the Internationalization of Foreign Subsidiaries

SUMMARY

This paper aims to study how host country firms' internationalization has been impacted by their foreign owners' achievement of full ownership if the companies were not fully foreign-owned at first. It starts with a review of the existing traditional internationalization literature: the Uppsala model, the innovation-related internationalization models and the Finnish model. Then it reviews other research streams: born global, foreign direct investment (FDI) and network literature and the literature on subsidiary roles. A conceptual framework is developed. Then, after a methodology section, four Estonian casestwo from banking and two from the textiles industryare introduced. After the discussion of the results, some managerial and research implications are drawn.     

Crowdsourced translation for rapid internationalization in cyberspace: A learning perspective

This paper explores how Facebook effectively used crowdsourced translation to accelerate its rapid internationalization. We apply the learning perspective of internationalization theory to unpack what the firm learned in order to mobilize crowd-based knowledge to facilitate internationalization in the virtual context, and how it did so. Increasingly, global activities are conducted in virtual space and virtual markets and thus the paper offers insights into successful expansion in this new terrain. The findings highlight two key points: (1) the firm used cognitive/explicit learning to acquire external and codified knowledge, rather than the experiential knowledge traditionally suggested in the literature on the process of internationalization, and (2) the firm's success rested on its ability to use virtual learning tools and incentive systems to acquire, articulate and integrate knowledge from communities of internationally dispersed users – the “crowd” – to accelerate its internationalization in cyberspace. This empirical study extends internationalization theory regarding knowledge and organizational learning.     

Internationalization: From incremental to born global

In this paper, we summarize how internationalization research has evolved over time, where it stands today, and how it might evolve going forward. Specifically, we examine internationalization research from earlier times to the present day. We contrast the incremental internationalization characteristic of older multinational enterprises with the early, rapid internationalization of born global firms. The paper summarizes the evolution of research on early internationalization and born global firms, and provides evidence to suggest why this area now has attained legitimacy in scholarly research. We then examine important theoretical issues in born global research and suggest avenues for future research.     

Determinants of Internationalization Strategies of Emerging Market Firms: A Multilevel Approach

Recently, debates about uniqueness of emerging market firms’ (EMFs) internationalization strategies were a focus of research. Yet, findings regarding their determinants are mixed, and conclusions on how EMFs’ internationalization strategies can be theoretically explained vary greatly. This article elaborates on the underlying reasons for these inconclusive results and addresses them by the development of a multilevel theoretical framework allowing for a better understanding of integrative influence of institutional, sector, and firm-specific determinants of EMFs’ internationalization strategies. This framework is validated by evidence from Russia, and a multiple case study approach is adopted to investigate the determinants of internationalization strategies of Russian firms.     

The relationship between multinationality and performance: Knowledge-intensive vs. capital-intensive service micro-multinational enterprises

This research explores the relationship between multinationality and firm performance (M-P) in the context of micro-multinational enterprises (mMNEs) within the service sector. We examine the moderating effects of industry characteristics using a data set of 1082 Spanish service mMNEs over an eight-year period. The empirical results provide statistical evidence that knowledge-intensive service mMNEs exhibit an inverted U-shaped M-P relationship, while capital-intensive service mMNEs present a U-shaped relationship. Our findings demonstrate that knowledge-intensive service mMNEs increase their performance in the initial stage of multinationality, encounter a threshold of internationalization at relatively low levels of multinationality and have a propensity to over-internationalize. By comparison, capital-intensive service mMNEs experience negative performance effects at low levels of multinationality and positive ones as they further internationalize. Given that their operations are scale-sensitive, they tend to expand internationally by concentrating their operations in few foreign markets as a means to overcome the liabilities of internationalization and smallness. We contribute to the literatures on multinationality research in the service sector and on SME internationalization by showing that the effects of multinationality on the performance of mMNEs depend on industry characteristics and that such contextual factors provide a better understanding of the M-P relationship.     

To be Involved or Not to be Involved? HRM Competences for Internationalization Process in Russian Companies

Abstract

This paper aims to identify the list of human resource management (HRM) competencies that are crucial for a company during the internationalization process. We focus on the Russian context and investigate the level of human resource (HR) managers’ involvement in the implementation of firm’s internationalization strategy, HRM competencies that facilitate internationalization process of Russian companies, and HR manager’s proficiency level, suitable for these competencies. Based on interviews of 125 HR managers from 110 companies, the study proves that communication competence, HR acumen, and relationship management are the most essential competencies that HR managers should possess. This research demonstrates that, in the field of internationalization there is a shift from more universal models to context-related models in terms of competence importance.     

经济国际化与政府服务创新和服务支出的相关性实证分析

本文通过对发达国家和发展中国家的经济国际化与政府服务创新和服务支出进行国际比较分析。结果表明,政府服务支出与经济国际化具有显著的相关性,其中发达国家和发展中国家的政府服务支出与对外贸易依存度具有显著正相关,发展中国家的政府服务支出与外商投资依存度成正相关,发达国家政府服务支出与对外直接投资发展具有显著正相关关系。为更好地促进我国对外直接投资发展,本文建议我国政府应加快完善我国对外直接投资的服务体系,增加我国对外直接投资的政府服务性支出。     

Internationalization of Smaller Firms: Opportunity Development through Networks

This article aims to contribute toward a better understanding of the opportunity development process that rapidly internationalizing small and medium‐sized enterprises (SMEs) undergo. Little is known about how SMEs overcome challenges in the process of recognizing and exploiting market opportunities during their rapid expansion abroad. This article presents a longitudinal case study that illustrates how a firm's relationships with business, social, and political actors enhance its opportunity development during the internationalization process. The findings highlight that conducting matching activities at different levels helps the firm overcome challenges and succeed in developing new opportunities for continued expansion abroad. This study contributes to research on rapidly internationalizing firms by broadening the empirical and theoretical understanding of the opportunity development process for smaller firms. © 2015 Wiley Periodicals, Inc.     

Learning and knowledge in early internationalization research: Past accomplishments and future directions

This article provides an evaluative overview of international entrepreneurship literature, in which the issues of learning and knowledge feature as central components underlying the causes, processes, and outcomes of early internationalization. We rely on Huber's (1991) categorization of five knowledge acquisition types - experiential learning, vicarious learning, searching, grafting, and congenital learning - to organize our review and to guide our examination of the literature. We discuss convergent findings in terms of conceptual and empirical issues and set forth areas for future research.     

The internationalization of engineering consulting from a strategy tripod perspective

This research investigates the internationalization of engineering consulting firms. The study draws on the elements of the strategy tripod (industry factors, resources and capabilities, and institutional factors). The internationalization process is examined using a longitudinal single case study of a New Zealand-based engineering consulting firm with 40 years of international experience. The research identifies five phases through which the case firm passed during that period, and highlights the different strategies that were apparent. It is shown that individual actors lead to an adjustment of the modes of operation and overall play a significant role for the internationalization of engineering consulting firms.     

A case study on the internationalization process of a ‘born-global’ fashion retailer

This case study on Zara elucidates the expansion strategies used by both born-global and gradual global fast-fashion retailers based on theories of internationalization. Aspects related to knowledge sharing, resource-based theory, and psychic distance are overlaid with Zara's internationalization strategies to advance understanding of the role fashion plays in dynamic internationalization. Zara employs a high-risk, high-reward model of internationalization to defend its unique merchandise and retail position by remaining completely vertical. Zara's born-global expansion strategy engendered a psychic distance paradox in that it was very successful in distant markets early on. It is proposed that fashion retailers may take note of Zara's success through the proposed ‘dynamic strategic planning process’ for expansion in international markets. Researchers can test the proposed framework empirically to investigate the theoretical constructs for both gradual- and born-global firms.     

跨境人民币结算与人民币国际化研究

本轮国际金融危机发生以来,现行国际货币体系的弊端更加凸显。跨境贸易的人民币结算是人民币国际化的第一步,该业务的稳健发展对于人民币国际化尤为重要,及时加强跨境贸易人民币结算与人民币国际化问题研究,对保障我国经济金融稳健发展,推动人民币国际化具有十分重要的理论和现实意义。本文在阐述货币国际化的条件和路径的基础上,考察了四种货币国际化的经验教训,探讨了我国跨境贸易人民币结算业务发展与人民币国际化面临的机遇与挑战,并提出了相关的政策建议。     

Tie the Ties: The Significance of the Binding Networks in SMEs’ Internationalization Process

This research examines the obstacles for small and medium sized enterprises’ (SMEs) internationalization and the roles of networks in SMEs’ internationalization process. It finds that the key obstacles for SMEs internationalization are lack of market insights, lack of knowledge and skills necessary for internationalization, and lack of skilled labor. In Thailand, personal networking has played the most prominent role in the early stage of SMEs’ internationalization. Trust is reported to be the critical component for a long lasting relationship in the network. “Friendship” is viewed as the ultimate level of relationship in the trusted network.