Does innovativeness of knowledge-intensive business services differ from other industries?

This article seeks to determine whether the innovative capabilities of knowledge-intensive business services (KIBS) do actually differ from other industries through comparing the innovation capacities and financial performance of KIBS with firms operating in other sectors (non-KIBS). Based upon a 1000-firm sample, the results of our estimated econometric model demonstrate that non-KIBS firms are in possession of significantly greater innovation capacities than KIBS firms. These differences were observed across factors such as organisational process innovation, the launch of already existing products in new markets, branding and new product designs. Nevertheless, as regards the actual importance attributed to product/service innovation, KIBS firms place a greater comparative importance on innovation in comparison with their non-KIBS peers. In addition, the empirical evidences display a significantly different range of effects of innovation capacities on financial performance and concludes that non-KIBS firms turn in better comparative performances than specialist KIBS firms.     

A taxonomy of small- and medium-sized international family firms

This study develops a taxonomy of small- and medium-sized family firms that internationalise and discusses the different configurations of these firms based on firm culture (in terms of organisational orientations), firm strategy (in terms of differentiation, cost leadership and marketing standardisation) and firm structure (in terms of integration, centralisation and specialisation). Although the literature on international family firms has highlighted the significant role of organisational culture in firm internationalisation, the strategies and structures of international family firms and their consequences for performance have been disregarded. To examine the interplay of international family firm culture, strategy and structure, we employ a quantitative taxonomic approach that is rooted in configurational theory, analysing 504 Germany-based small- and medium-sized family firms. Different combinations of strategy, structure and culture result in different configurations of family firms and different levels of non-domestic performance. In considering these configurations, we aim to determine which combinations of strategies, structures and firm orientations are primarily applied by international family firms and whether these organisational configurations are successful. Our empirical findings suggest that there are four groups of firms: Domestic-Focussed Traditionalists, Global Standardisers, Multinational Adapters and Transnational Entrepreneurs. These configurations are clearly distinctive in terms of their structure, orientations and performance but differ less in terms of their strategies. Superior international (i.e. non-domestic) performance tends to be driven by a decentralised entrepreneurial approach.     

Marketspace and the Internationalisation Process of the Small Firm

This empirical study explores the potential impact of the marketspace—the virtual world of digitised information—on the process of internationalisation within small technology-based firms (STBFs). Research findings demonstrate several effects relating to the firm's increased use of the marketspace for international business activities. In relation to internal resource-related effects, increased marketspace use is associated with: a stronger internal resource-base for international operations; and higher levels of internal international business information. Moreover, in relation to external resource-related effects, increased marketspace use is associated with: an increase in the firm's international orientation; an increase in the range and diversity of international business contacts; and an increase in unsolicited orders from foreign markets. This study confirms that the entrepreneur's prior Internet experience is a critical factor influencing use of the marketspace to support the firm's international operations. Similarly, organisational use of the marketspace (influenced by the previous experience of the entrepreneur) impacts upon certain aspects of the firm's internationalisation behaviour. Despite the significance of these findings, the marketspace is neither a replacement for traditional marketplace-based activities, nor is it a panacea that ensures effective small firm internationalisation. Complementary exploitation of both the marketspace and the traditional marketplace is likely to provide the optimal internationalisation route for small firms.     

The determinate effects of competences and decision process factors on firms' internationalisation

This study introduces the current situation of Taiwan's financial industries and presents a literature review including competences, competitive advantage, and key factors under the process of the international investment decision, and internationalisation. The study takes a ‘triangulation’ approach that uses both qualitative and quantitative methods in the exploration of the internationalisation of Taiwan financial markets. Sampling targets of the research consist of managers from banks, security firms, and insurance firms in Taiwan. The findings highlight perceptions of factors such as resources, skill, market knowledge, and international investment experience of firms aiding the internationalisation of Taiwan financial industry. Further, this study reveals that firms' internationalisation relates positively to the firms performance.     

Innovation capacity,international experience and export performance of SMEs in Brazil

Innovation capacity and international experience are factors often related to the internationalisation process of firms, with export activities as the first stage of the process. However, firms from emerging countries seem to show advantages and follow patterns of international expansion that may differ from firms based in developed countries, where the internationalisation models were created. Specifically, exporting firms from emerging countries tend to have limited resources, especially small firms (e.g., for investing in R&D). Despite these facts, the literature on export performance seems biased towards recommending firms to enhance, above all, their innovation capacity in order to achieve better export performance, while little attention is paid to international experience as a factor that is as important as innovation. In this context, the objective of this study is to investigate the impact of innovation capacity and international experience on the export performance of small and medium-sized enterprises (SMEs) located in an emerging country and to identify which factor is more significant. The Resource-Based View and Dynamic Capabilities approach were used as theoretical frameworks. A research model was developed and tested on a significant sample of Brazilian industrial SMEs. The data were analysed through partial least squares structural equation modelling. The results indicate that international experience has a greater impact on export performance than innovation capacity, showing that there is possibility of overemphasising the role of innovation in the export performance of SMEs, at least, in the Brazilian context.     

Dynamic managerial capability portfolios in early internationalising firms

It is acknowledged that dynamic capabilities can underlie internationalisation of firms, yet extant research has tended to examine the role of capabilities in international entrepreneurship in separate studies, neglecting that international enterprises tend to develop different bundles or portfolios of capabilities that may have differing impacts on their internationalisation. Applying the concept of dynamic managerial capabilities, this study illustrates how different capability portfolios of entrepreneurial decision-making and network capabilities explain early internationalisation of small- and medium-sized enterprises (SMEs). Employing a machine learning method through artificial neural network (ANN) analysis, the findings show how early internationalisation is predicted by a portfolio of different dynamic managerial capabilities. This study thus contributes to the international entrepreneurship literature by outlining the capability portfolios necessary for early internationalisation and proposing a taxonomy for capability portfolios for early and late internationalising firms, by clarifying the role of dynamic managerial capabilities in early and successful entrepreneurial internationalisation and by introducing the ANN methodology as a useful tool in the research corpus of the international entrepreneurship domain.     

Strategic resource decisions to enhance the performance of global engineering services

This paper extends our understanding of the internationalisation and firm performance (I-FP) relationship of service firms by considering the influence of strategic decisions on three types of slack resources. The research focusses on an important type of service operations ? global engineering services, which are a major part of the global economy and represent a distinctive business model in the contemporary business environment. In doing so, we theorise the I-FP relationship by addressing the knowledge-intensive, project-based and people-centric features of engineering service firms (ESFs); and test the relationship with a carefully assembled dataset containing 12 years’ data from 242 ESFs. We identify a negative overall I-FP relationship, i.e. ESFs’ international expansion leads to worse financial performance in general. The presence of slack resources explains why such a result exists. Our findings have significant implications, both for future research on internationalisation and performance and for firms to effectively deploy their resources to support global service operations in a strategic manner.     

The resource dynamics of early internationalising Indian IT firms

Building on the resource-based view of the firm, this study explores how firms entering into early internationalisation combine different resources to discover the international market opportunities. Based on an in-depth analysis of case studies of five knowledge-intensive firms from India, this study suggests that the differences in the extent of resources available and their combinations influence the early stage of the internationalisation process and pace of learning in the foreign markets. This study contributes to the existing research on international entrepreneurship by explaining how new international ventures overcome the challenges of internationalisation by wisely utilising a broad set of available and potential resources during their early internationalisation efforts and gradually shift the focus on the internalisation of resources. Moreover, this study suggests that the effects of the combination of resources vary across different ventures. A strong combination can increase internationalisation and minimise the risks of failure in new international ventures.     

Innovation as an internationalisation determinant of Brazilian technology-based SMEs

The general objective of this article is to analyse innovation as a determinant of the internationalisation patterns of Brazilian technology-based SMEs (small and medium enterprises) in different sectors and with different technological features. The theoretical background of this article centres on the typologies of innovation, SMEs’ internationalisation patterns, and innovation as an internationalisation determinant. The main theoretical contributions of this qualitative study are its analysis of innovation of the firm, focusing on the type of innovation, the degree of novelty, and the degree of control over the innovation process as determinants of their internationalisation patterns, and the influence of the external organisational environment on innovation and internationalisation. In terms of managerial implications, we highlight the effect of these factors on the competitiveness of case firms in international markets. Finally, our suggestions for future studies include the need for research replication in other emerging markets, the inclusion of both mature and young technology-based SMEs in the sample, the use of longitudinal data for case studies, and the validation of this qualitative study through a quantitative study that includes a larger sample of technology-based SMEs.

     

Experience,age and exporting performance in UK SMEs

We consider the determinants of SME exporting performance using a survey of internationally engaged UK SMEs. We first develop a model incorporating organisational and prior managerial learning effects. Our empirical analysis then allows us to identify separately the positive effects on exporting from the international experience of the firm and the negative effects of firm age. Positive exporting effects also result from grafted knowledge – acquired by the recruitment of management with prior international experience. Innovation also has positive exporting effects with more radical new-to-the-industry innovation most strongly linked to inter-regional exports; new-to-the-firm innovation is more strongly linked to intra-regional trade. Early internationalisation is also linked positively to the number of countries to which firms export and the intensity of their export activity. We find no evidence, however, relating early internationalisation to extra-regional exporting, suggesting that early-exporting SMEs tend be ‘born regional’ rather than ‘born global’.     

How international entrepreneurship characteristics influence Internet capabilities for the international business processes of the firm

This research explores the relationship between international entrepreneurship characteristics and the use of Internet capabilities for the international business processes of the firm. It has been suggested, that the accumulation of a firms Internet capability can assist international operations, especially when operating in fast changing dynamic Internet environments. However, international entrepreneurship characteristics which are seen as a precursor to leveraging Internet capabilities are still vague. Given this finding, eight case studies of small and medium sized travel and tourism firms were selected to investigate the influence of international entrepreneurship characteristics, and Internet capabilities for international business processes. Based on the eight in-depth case studies, the results signify that successful international entrepreneurial firms which encompass high levels of international innovativeness and proactiveness behaviour integrate Internet capabilities to a greater degree. Our findings also indicate that the prior international business experience, international risk-taking propensity and international networking characteristics are not necessarily precursors to successful integration of Internet capabilities for international business processes. On the contrary, international business experience and international networks actually lead to a reliance on traditional mechanisms of internationalisation and can dilute the development of Internet capabilities for international business processes.     

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.     

Internationalisation and Economic Performance of Enterprises: Evidence from Polish Firm‐level Data

This article provides evidence on the relative performance of internationalised firms using Polish firm‐level data, spanning the period 1996–2005 and covering all medium and large enterprises. We distinguish between three modes of internationalisation: foreign direct investment, exporting and importing of capital goods. Our results point strongly at the superior performance of foreign affiliates vs domestic firms, exporters vs non‐exporters, and importers vs non‐importers: internationalised firms are larger, more capital intensive, pay higher wages and are more productive than purely domestic firms. Foreign ownership is the strongest factor accounting for gains from internationalisation. The premia from exporting are substantially lower, though also significantly positive. The performance of capital goods importers is also higher compared to non‐importers and is to some extent related to their involvement in other types of international activity. The results are robust to the choice of specification and productivity estimator. The analysed enterprises recorded a sizeable and broad‐based productivity improvement over the period under consideration. Not only the initial levels of productivity of exporters, importers and foreign affiliates were on average significantly higher that those of their non‐internationalised counterparts, but they also recorded faster productivity gains (manifested in increasing productivity premia), so that the discrepancies grew even larger. We also perform the analysis of productivity spillovers from internationalised firms onto own, downstream and upstream sectors. We find evidence of significant horizontal and backward spillovers from all three types of international activity. Our results suggest that trade externalities are rather of a horizontal nature, while those related to foreign direct investment operate mainly via backward linkages.     

International Growth Orientation of Knowledge-Intensive SMES

As a response to the increasing interest in the internationalisation of knowledge-intensive firms, a measure for analysing their international growth orientation was developed. This measure was applied in empirical setting of Finnish information and communication technology companies. The development of the measure as well as the empirical findings are described in detail, and the validity and the reliability of the measure was secured in various ways. The measure seems both viable and valid, and also the findings appear to be logical, and they give a good basis for further research on the topic.     

Twenty-five years of business systems research and lessons for international business studies

Since 1992, the national business systems (NBS) approach has been increasingly used to analyse not only firm characteristics, structures and strategies within NBS, but also the nature of international business and its interactions with both national and transnational institutions. In reviewing 25 years of NBS literature, we heed calls in IB journals urging researchers to use NBS notions and findings in IB research. Our systematic review of 96 articles analyses the patterns and contributions of NBS literature, revealing four thematic junctures: (1) comparative business systems, (2) firm internationalisation and the management/organisation inside MNCs, (3) the role of internationalisation in the development of organisational capabilities and innovation and (4) the emergence of transnational communities in and across firms and societies. Themes are described in terms of (a) the research questions (RQ) they focus on, (b) how NBS approach investigates the RQ and what are the major findings, (c) how IB frames and approaches the same RQ, (d) how does the NBS approach extend the perspectives of IB and (e) what are the problems faced by NBS in terms of developing further insights into the RQ. Our review contributes to the recent endeavour of IB research to institutionalism, encouraging a productive dialogue between IB and NBS research.     

The Uses of Business History: A Contribution to the Discussion

This article relates the managerial enterprise (a firm in which decisions as to current production and distribution and allocation of resources for future production and distribution are made by salaried managers with little or no equity in the firms they operate in) to competitive success in the new capital-intensive industries that began to appear in the United States and Western Europe after the completion of modern transportation and communication networks. It begins by examining the reasons for the rapid rise of managerial firms in these industries, the global oligopolistic competition that ensued, and the organisational capabilities such competition engendered. It then reviews the competitive performance of such firms in global markets in chemicals, metals, electrical equipment, and heavy and light machinery in the early years of the century, motor vehicles in the inter-war years, and computers and semiconductors after World War II. These managerial firms grew by moving into foreign or related product markets. World War I, the Great Depression and World War II held back the full competitive impact of such growth until the 1960s. The response of US industrial firms to this intensive international, inter-industry competition of the 1960s brought unprecedented changes on the competitive capabilities of US managerial enterprises in such capital-intensive industries.     

Knowledge, values and internationalisation—introduction to the special edition

Internationalisation is increasingly being seen as an organisational learning process. However, entrepreneurial enterprises tend to be smaller, more innovative and more agile than their larger counterparts. When they internationalise, entrepreneurial firms often expand at a rapid rate. The cultures of so-called ‘born global’ firms also appear to differ from firms that internationalise in a more gradual, stepwise fashion. This raises interesting questions about how entrepreneurial firms acquire and manage knowledge about markets, networks and capabilities in turbulent and uncertain environments and how the values embedded in organisational cultures might influence strategic choices. The following articles in this special edition of the Journal of International Entrepreneurship focus specifically on how innovative firms—particularly small and medium-sized enterprises—recognise and exploit market opportunities, how they learn from international market entry and penetration experiences to improve core capabilities and how values may influence supply chain management and start-up decisions.     

Social Media Firm Specific Advantages as Enablers of Network Embeddedness of International Entrepreneurial Ventures

Combining internalisation theory and internationalisation networking literature we study how international entrepreneurial ventures use social media to internationalise. Our qualitative study reveals the governance mechanisms and learning that are part of a dynamic process. We explain how firms leverage their own social-media capabilities and bundle them with the capabilities of foreign partners, which they leverage to create new social-media capabilities to grow internationally. Firms leverage social-media capabilities to become embedded within emerging and strategic networks, a position that is central for firms to mitigate threats of opportunism and bounded reliability and to overcome liabilities connected to smallness, newness, and foreignness.     

Internationalisation Processes,Networking and Local Embeddedness in Technology-Intensive Small Firms

The paper argues that technology-intensive small firms often need to internationalise their activities, and especially sales, at a very early stage of their development because of the limited and global nature of the technological market niche which they have been set up to exploit. From a survey of 100 such firms in the Cambridge and Oxford regions, it demonstrates that many technology-based smaller firms are engaged in a range of international networks and internationalisation processes, including internationalisation of markets, research collaboration, labour recruitment, ownership and facilities location. Technology-intensive firms reporting high levels of internationalisation also differ significantly from those which are more nationally-oriented, for example in terms of size, age, research intensity, university links, and innovativeness. There are also differences with respect to recent growth rates. Finally, the paper demonstrates that far from substituting international for local networks, technology-intensive firms which have achieved high levels of internationalisation in fact also exhibit above-average levels of local networking with respect to research collaboration and intra-industry links. Internationalisation therefore appears to be grounded or embedded in successful local networking and research and technology collaboration.     

Internationalisation of family small and medium sized enterprises: The role of stewardship orientation,family commitment culture and top management team

The purpose of this paper is to determine how aspects of organisational culture, typical to family businesses, influence internationalisation. Proposing that stewardship orientation, family commitment culture and top management team related factors influence internationalisation; we empirically examine 80 internationalising family SMEs (FSMEs) from the manufacturing sector in Finland. Variance based structural equation modelling (PLS) shows that family commitment culture is negatively associated with the degree of internationalisation. On the other hand strategically flexible top management teams with industry experience in FSMEs are positively associated with the degree of internationalisation. Contributing to an understanding of the internationalisation of family businesses, the findings suggest that family commitment culture and stewardship orientation, often associated with an inward orientation, may operate against internationalisation, however when coupled with the strategic flexibility of the top management team, we found stewardship orientation to positively impact internationalisation suggesting that it provides an outward orientation. Implications for practice are advanced.