Outward foreign direct investment from emerging economies: escaping home country regulative voids

The internationalisation of multinationals from emerging economies raises the question of whether mainstream theory can explain this phenomenon. We combine the explanations of outward foreign direct investment (OFDI) provided by the institution-based view and the investment development path (IDP) and suggest that the combined use of these explanations contributes to the reconciliation of the mainstream and emerging views of internationalisation. We argue that although OFDI is undertaken by firms to overcome the competitive disadvantages resulting from home country regulative voids, escapist investment is facilitated if these firms possess certain competitive advantages that help them overcome the liability of foreignness when expanding abroad. We thus expect the impact of regulative voids on OFDI to vary with the level of local firms’ ownership advantages. Our analysis of OFDI flows from 29 emerging economies over 17 years (1995–2011) provides support for the direct effects of two types of regulative voids and for the three suggested moderating effects of firms’ competitive advantages.     

An integrative institutional approach to MNC performance in China

This study adopts an integrative approach that incorporates the resource-based view and institutional theory in its analyses of the performances of multinational corporations in China. Firm-specific resources have been assumed as a unique source of competitive advantages when firms go overseas. However, differences in institutional environments between the host country and the home country can negatively affect the competitiveness generated by resource exploitation. Empirical analysis using the data consisting of 209 Japanese firms operating in China finds that while the exploitation of firm-specific resources improves their performance, institutions in China moderate the positive impact on performance.     

International buyer behaviour–commitment relationship: An investigation of the empirical link in importing

Drawing on the resource-based view (RBV) of the firm this article examines relationships between knowledge, trust, communication, volatility and sustainable competitive advantage as the exogenous and endogenous variables with importer commitment as the dependent variable. The primary data was gathered from a survey of 224 commercial and industrial firms, headquartered in Bangladesh, coming from a wide cross section of industries. Statistical analysis was carried out using Structural Equation Modelling via AMOS. The study's key findings revealed that all exogenous/endogenous variables had a significant impact on importer commitment. That is, knowledge, trust, communication, volatility and sustainable competitive advantage had a significant direct impact on importer commitment. Additionally, cultural similarity, communication, volatility and supplier opportunism all had a significant indirect impact on importer commitment. This finding makes a significant contribution to the relational side of the RBV.     

先进制造技术与企业竞争优势——基于企业资源观的述评

本文认为,企业资源观理论为我们研究先进制造技术如何影响和形成企业竞争优势提供了非常好的理论框架.企业在先进制造技术资源的应用方面能够做到差异化,企业的先进制造技术资产对其他有形或无形资产的杠杆作用可以成为形成企业持续竞争力的异质性资源,这些异质性资源的结合还会产生更强的先进制造技术动态能力.要取得有竞争力的先进制造技术资源,需要企业花费大量的时间学习和积累.先进制造技术资源难以模仿和复制,具有社会复杂性,可以成为持续竞争优势的源泉.     

Performance of professional service firms from emerging markets: Role of innovative services and firm capabilities

Professional service firms (PSF) from emerging markets face a financial dilemma: PSFs tend to utilize high-wage labor, yet their emerging market status makes foreign clients cautious regarding quality and less willing to pay high prices. To allay these concerns, PSFs may be able to develop attractive, highly innovative services, but as the resource-based view (RBV) notes, this requires emerging market firms to possess critical capabilities to support such a competitive advantage. Relying on services theory, we propose that entrepreneurial orientation (EO) of management and expert human capital (HC) are critical capabilities, enabling a PSF to develop and market innovative services profitably. In testing our model on 201 Indian PSFs, we find a mediating role for innovativeness whereby EO and HC drive service innovation which, in turn, accounts for financial performance. Further, we find EO positively moderates the innovative service–performance relationship as proactive, risk-tolerant managers improve foreign marketing. Insights for theory and practice are provided that enable PSFs to overcome the constraints and challenges of their emerging market origin.     

Evaluating sponsorship through the lens of the resource-based view: The potential for sustained competitive advantage

The resource-based view (RBV) of the firm has become a prominent management theory that firms can use to analyze resources as potential sources of competitive advantage. Theorists have suggested sponsorship of sport properties as one such resource, yet specific cases of sponsorship's role in a firm's achievement of a sustained advantage over competitors have yet to be explored. This article illuminates the case of Visa's longstanding global sponsorship of the Olympic Games, which was initiated and leveraged to counteract competitor American Express’ advantage with global business travelers. Evidence is presented that supports Visa's achievement of a competitive advantage during the term of the sponsorship. The case is then used to develop a conceptual model based on the RBV to identify the key characteristics of sponsored properties capable of assisting the sponsoring firm in achieving a sustained competitive advantage. From a managerial perspective, the model is designed to assist marketing managers tasked with the identification and evaluation of potential sponsorship properties.     

Location Advantages,Firm Advantages,and Export Success in the Latin American Automotive Parts Industry

Abstract

This paper examines the influence of location advantages and firm-level advantages on the propensity of Latin American firms to export. An empirical test based on Latin American firms in the automobile parts industry suggests that firms in more competitive Latin American country environments are more likely to export than those in less competitive country environments. Also, older and larger firms are more likely to export than are younger and smaller firms, and businesses that are subsidiary companies are more likely to export than are independent companies. Implications for managers and policy makers are presented.     

Towards understanding who makes corporate venture capital investments and why

This study examines when established firms participate in corporate venture capital (CVC). We build on the resource-based view of interfirm collaboration and emphasize the strategic flexibility of CVC relationships. We use longitudinal data on 477 firms from 1990 to 2000 to test our hypotheses. We find that firms in industries with rapid technological change, high competitive intensity and weak appropriability engage in greater CVC activity. We also show that firms that possess strong technological and marketing resources and resources developed from diverse venturing experience engage in greater CVC activity. Finally, we find that these firm resources moderate the influence of the observed industry effects in paradoxical ways.     

Integrating nonmarket and market resources,strategy and performance in Chinese enterprises: a review of the field and a resource-based empirical study

The resource-based view (RBV) regards strategy as deploying resources to obtain a competitive advantage. This article adopts such a RBV, by a simultaneous consideration of nonmarket and market factors, and then an empirical analysis of the relationships between such nonmarket and market resources, strategies and performance, focusing specifically on Chinese enterprises. The results test hypotheses related to the integrated strategy and RBV of the firm on linkages of nonmarket and market components. Combining those two views, this study reveals that there is a high and positive correlation between nonmarket and market strategies, while nonmarket strategy has a positive indirect effect on market performance via nonmarket performance. These findings suggest that the RBV is an appropriate theory for addressing the shortcomings in integrated strategy research.     

The Effect of R&;D Intensity on Corporate Social Responsibility

This study examines the impact that research and development (R&D) intensity has on corporate social responsibility (CSR). We base our research on the resource-based view (RBV) theory, which contributes to our analysis of R&D intensity and CSR because this perspective explicitly recognizes the importance of intangible resources. Both R&D and CSR activities can create assets that provide firms with competitive advantage. Furthermore, the employment of such activities can improve the welfare of the community and satisfy stakeholder expectations, which might vary according to their prevailing environment. As expressions of CSR and R&D vary throughout industries, we extend our research by analysing the impact that R&D intensity has on CSR across both manufacturing and non-manufacturing industries. Our results show that R&D intensity positively affects CSR and that this relationship is significant in manufacturing industries, while a non-significant result was obtained in non-manufacturing industries.     

Export Performance: Is It Possible through Knowledge and Capabilities? Evidence from Turkish Manufacturing Firms

Purpose: This article measures to what extent export performance is affected by certain resource-based view (RBV) elements and seeks to elucidate relationships between these elements. Design: Among those RBV elements, knowledge and experience as resources, and marketing, production, product development, logistics, and service differentiation as capabilities, are chosen to be the basis of this research. Their effects on export performance are measured with a survey applied to personnel of Turkish manufacturing firms operating in Istanbul district. Findings: The results show us that marketing planning capabilities and service differentiation capabilities have a significant effect on export performance. The overwhelming effect of knowledge and experience of firms on marketing planning capabilities is one of the intriguing findings. Notwithstanding that, we found no trace of a relationship between product development capabilities and service differentiation capabilities. Value: This research provides several managerial and academic implications by contributing to a resource-based view in terms of knowledge and capabilities. Additionally, in this study, it is underlined that collective knowledge is vital for achieving high export performance.     

Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle

The term “entrepreneurial orientation” has been used to refer to the strategy-making processes and styles of firms that engage in entrepreneurial activities. A popular model of entrepreneurial orientation (EO) suggests that there are five dimensions of EO—autonomy, innovativeness, risk taking, proactiveness, and competitive aggressiveness (Lumpkin and Dess 1996). This paper reports on two of those dimensions—proactiveness and competitive aggressiveness. Proactiveness refers to how firms relate to market opportunities by seizing initiative in the marketplace; competitive aggressiveness refers to how firms react to competitive trends and demands that already exist in the marketplace. Despite these distinctions, prior research has tended to equate these two concepts and argued that they have a similar effect on firm performance. This paper investigates how these two approaches are related to each other, how they are related to performance, and how their function differs in the environments in which firms exhibit these approaches to strategy making. These distinctions are important because proactiveness and competitive aggressiveness represent distinctly different avenues to entrepreneurial success.A field study was conducted in which 124 executives from 94 firms were surveyed. These were executives from non-affiliated, non-diversified firms who were actively involved in strategic decision making at the top level of the firm. All firms reporting had at least one respondent who was an owner. Analysis of the data was conducted in two phases. In phase 1, factor analysis was used to examine the distinctions between different dimensions of EO. Proactiveness and competitive aggressiveness emerged as two separate factors indicating that these two strategy-making modes were perceived differently by the executives in the study. In the second phase, the relationship of these two dimensions to performance was analyzed in various contexts. Initial tests found that proactiveness was positively related to performance but competitive aggressiveness tended to be poorly associated with performance.Subsequent tests of the EO-performance relationship indicated that the stage of industry life cycle tended to favor one entrepreneurial orientation over another. The performance of firms in the early stages of industry development was stronger when their strategy making was proactively oriented. In contrast, a competitively aggressive frame of mind was helpful to firms in more mature stages of industry development. These findings were supported by other tests of the business environment. In dynamic environments, characterized by rapid change and uncertainty, proactive firms had higher performance relative to competitively aggressive firms. In hostile environments, where competition is intense and resources are constrained, competitively aggressive firms had stronger performance.The findings suggest that these two different approaches to entrepreneurial decision making may have different effects on firm performance. The differences were particularly apparent in the way firms relate to their external environment. Proactiveness—a response to opportunities—is an appropriate mode for firms in dynamic environments or in growth stage industries where conditions are rapidly changing and opportunities for advancement are numerous. But such environments may not favor the kind of combative posturing typical of competitive aggressiveness. Firms in hostile environments, or in mature industries where competition for customers and resources is intense, are more likely to benefit from competitive aggressiveness—a response to threats. A further implication of this research is that the dimensions of an entrepreneurial orientation, often considered to be positively related to performance under all conditions, may not always be associated with successful outcomes. This study indicates that the dimensions of EO often vary independently rather than covary, suggesting that the extent to which an entrepreneurial approach to strategy making is useful will frequently depend on the organizational or environmental conditions under which such decisions are made.     

Achieving sustained competitive advantage in retail and consumer service firms: The role of entrepreneurial orientation and entrepreneurial bricolage

The vital role of entrepreneurial orientation and entrepreneurial bricolage in creating sustained competitive advantage in retail and consumer service firms is increasingly acknowledged in modern markets. Using data from 246 retail and consumer service firms (hereafter R&CSFs) in Japan, this paper develops and empirically tests a framework delineating how entrepreneurial-oriented R&CSFs strategically combine existing resources while managing risks to differentiate their service portfolios to be competitive. The findings reveal that entrepreneurial orientation and entrepreneurial bricolage influence differentiation advantage and risk management, which, in turn, is associated with creating a sustained competitive advantage (hereafter SCA). This paper adds novel insights to the dynamic capabilities view and retail and service marketing literature by identifying entrepreneurial orientation, entrepreneurial bricolage, and risk management as dynamic capabilities, which allows R&CSFs to create service innovations in resource-constrained environments.     

Strategic responses to low-cost competition: Technological lock-in in the Dundee jute industry

Abstract

This article examines path dependency and technological lock-in in the evolution of the Dundee jute industry, from its beginnings in the 1860s to its demise in the 1970s. The evolution of the industry is explored using the resource-based view of the firm (RBV). The results suggest that the nature and construct of jute fibre was the root cause of a lack of sustainable strategic responses in the sector. Path dependent decisions and technological lock-in meant that many firms were not able to make successful strategic switches, although the capabilities of their engineering skills allowed some firms to endure for longer. Thus, the article extends the RBV to a deeper firm capability level and complements cognate literature on the UK textile sector with a finer specification of the phases in jute’s evolution.     

Firm resources,cultural distance and simultaneous international expansion in the retail sector

Despite the fact that many firms simultaneously expand into multiple new markets, we know very little about why firms choose this type of international expansion instead of sequentially entering new markets. Drawing on the resource-based view (RBV) we argue that in order to engage in simultaneous international expansion firms have to be able to draw on intangible assets, be financially strong, and have international experience that will enable them to reduce and/or shoulder the strains on managerial resources, time compression diseconomies and costs of simultaneously entering multiple new overseas markets. We further expect the strength of these associations to be moderated by the cultural distance between a firm’s home country and newly entered countries. Our analysis of the international expansion of the sales operations of 102 retailers over the period 2003–2012, during which these retailers sequentially or simultaneously entered into a total 836 overseas markets, largely supports our hypotheses. Our study underlines the usefulness of the RBV for understanding simultaneous international expansion as an important phenomenon that has received only scant scholarly attention to date.     

Value co-creation in industrial cities: a strategic source of competitive advantages

This study proposed and tested comprehensive value co-creation activities and assessed its impact on creating value and building competitive advantages with the aim of developing a comprehensive framework for value co-creation process. Specifically, the study developed, and empirically tested, Prahalad’s and Gebauer’s et al. five activities of co-creation and explored the relationship between the new comprehensive value co-creation activities, co-creation value and competitive advantages in industrial cities. A structural equation modelling is employed to test the hypothesised relations. The data used were collected from 221 Egyptian manufacturing firms across different industries. Findings suggested the presence of a positive relationship between the activities of value co-creation (namely: partner engagement, co-reflection and co-recovery) and co-creation of value. Interesting findings revealed that self-service and co-design were not found to have an impact on co-creation of value. In addition, co-creation value positively impacts competitive advantages. This study provides guidelines for management practices within firms seeking to develop their capabilities and deliver superior value.     

Seeking Competitive Advantage in a Deepening Crisis

ABSTRACT

This paper examines how Export Processing Zone firms in Zimbabwe have responded to the economic crisis in Zimbabwe. The study investigated how exporters are responding to dissipating competitive advantages. Data was collected from a sample of 30 firms. It was analysed through factor analysis to extract constructs considered competitive advantages or disadvantages. Results show competitive advantages pursued are centred on three key factors, i.e., production, pricing, and product. Competitive disadvantages are in the area of product quality and pricing. The two competitive disadvantages are developing a contagious effect on the remaining advantages, thus, deepening the firms into the crisis.     

Competing on the edge: Implications of network position for internationalizing small- and medium-sized enterprises

Three generic competitive strategies attributed to internationalizing SMEs of targeting niches, differentiating products and leveraging networks fail to adequately explain how SMEs win customers in other countries against both large and small competitors. This study distinguishes competitive strategy (how firms compete) from competitive advantage, and from competitive engagements where firms deploy their competitive advantages to win customers within business network relationships. By abductively reasoning from the competitive engagements entered into by the internationalizing SMEs from the Fleet Management Systems industry segment in New Zealand, we show that these firms often compete with foreign rivals by using their position on the edge of a business network to leverage information asymmetries across structural holes. We contribute by integrating this conception of internationalizing SME competitive strategy with the business network foundations of the Uppsala internationalization process model.     

A study on development strategy of Korean hidden champion firm: Focus on SWOT/AHP technique utilizing the competitiveness index

The purpose of this study is to offer development strategies for hidden champion firms; it is thought that in order to overcome Korea’s economic crisis and to secure new growth engines for sustained economic development, the country needs to foster more hidden champions that can lead global market. The study draws from an empirical survey of 61 Korean firms on hidden champion promotion list as well as 45 experts; the results were analyzed using SWOT/AHP model and a corporate competitiveness index to develop development strategies for Korean hidden champions. The results suggest that Korean hidden champions should seek opportunities for industrial growth based on technological strength, create competitive advantages in the market, and reduce their dependency on large corporations. Hidden champions should target market niche rather than competing with global firms; this is possible with competitive strengths based on specialist technology that will satisfy customers. Thus, authors argue that small- and medium-sized enterprises in Korea should focus on developing technological competences in order to possess specialist core technology that will support their growth in the global market.     

Strategic choice during economic crisis: Domestic market position,organizational capabilities and export flexibility

This study examines how sudden shrinkage of domestic demand affects firm-level export performance. Using the Asian economic crisis as a natural experiment, we show that while the industrial organization (IO) economics and resource-based view (RBV) apply well in the pre-crisis period, the real options perspective does a better job in explaining firms’ efforts to increase exports in the post-crisis period. Specifically, using a real options perspective, we show how sudden change in domestic demand provides benefits to those firms that have invested in flexible capabilities while those firms that are locked in with inflexible resources fail to change. We find that the positive relationship between a firm's domestic market position and export intensity becomes stronger in the post-crisis than the pre-crisis period. Further, we find a positive relationship between non-location-bound flexible capabilities such as R&D and export intensity and a negative relationship between location-bound inflexible capabilities such as advertising and export intensity. These relationships become more pronounced in the post-crisis period.