Organizational entrainment and international new ventures from emerging markets

Organizational entrainment captures the temporal fit in the activity cycles between exchange partners. We argue that organizational entrainment between international new ventures (INVs) and their most important international customers positively moderates the relationship between the degree, scope, and speed of internationalization and performance of INVs. We test our hypotheses on INVs from China, India and South Africa. The results support the contingent role of entrainment for degree and scope of internationalization but not for speed. Findings suggest that, when INVs attain temporal fit with their most important international customers, they can implement their strategic goals in international markets more effectively.     

International new ventures: The cross-border nexus of individuals and opportunities

We draw on entrepreneurship research to present a framework for international new ventures as the cross-border nexus of individuals and opportunities. Opportunities may be associated with cross-border combinations of resources and/or markets and therefore vary along these two dimensions. This framework accounts for the emergence of firms whose very existence stems from opportunities to engage in the cross-border combination of resources and/or markets. This perspective has important implications for whether internationalization follows competitive advantage or vice versa and also helps explain how the identification and exploitation of opportunities to create international new ventures may contribute to economic development.     

Unleashing the dynamics of product-market ambidexterity in the pursuit of international opportunities: Insights from emerging market firms

Extending the current debate surrounding ambidexterity, this study examines how emerging market firms pursue international opportunities by leveraging the dynamics of strategic ambidexterity in product and market domains. The investigation draws on longitudinal and multiple sources of data from four Chinese multinational firms. Two follow traditional or incremental internationalization pathways, whilst the other two pursue rapid or accelerated internationalization. The study offers a more dynamic perspective to help understand the evolving nature of ambidexterity with respect to the routes of strategic product and market development options. In particularly, the findings reveal that incremental internationalization is characterized by structural ambidexterity combining product exploitation with market exploration at the initial stages, whereas accelerated internationalization is best explained by market exploration and exploitation (or market ambidexterity) when first entering foreign markets. Moreover, firms were found to maintain strategic priorities through structural and punctuated ambidexterity across product and market domains at later stages of internationalization. This study contributes to the dynamic perspective of strategic ambidexterity for seizing international opportunities among emerging market firms.     

International commitment,post-entry growth and survival of international new ventures

This paper makes several contributions to the emerging literature on the post-entry behavior of international new ventures. Based on an extensive longitudinal data set, we investigate the dynamics of commitment, growth and survival of different types of newly internationalizing Belgian firms. Global start-ups have the highest initial and rapidly rising export commitment per market and are also more likely to continue exporting over time than geographically focused start-ups, and traditional staged exporters. However, global start-ups also display the highest failure rate. This high failure rate appears to result primarily from the ‘liability of newness’ and less from the added complexity associated with rapid and wide scope internationalization.     

Learning in international new ventures: A systematic review

The present paper reports the findings of a systematic review on learning among International New Ventures (INVs). Learning has been studied fairly extensively by scholars in the field of organization theory. Learning is a prerequisite for internationalization, and the behavior of individuals working in INVs seems to indicate a strong predisposition or aptness to learning. In spite of this, research on learning among INVs has been limited and fragmented up to the present time. In seeking to advance the research niche of INV learning, we conducted a systematic review of articles published on learning within INVs. Our contributions are related to: (i) providing a review of current knowledge of learning among INVs; (ii) relating the findings of our review to the organizational learning theory proposed by March (1991); and (iii) a future research agenda.     

International network formation,home market institutional support and post-entry performance of international new ventures

Effectuation and causation decision-making logics are noted to be major alternative approaches to international network formation. However, knowledge is lacking on how and the conditions under which the two approaches contribute to post-entry performance of international new ventures (INVs). We integrate the theory of effectuation and institutional development logic to explain how effectuation and causation approaches to international network formation individually and jointly contribute to post-entry performance under varying conditions of home market institutional support. We test our proposed framework on primary data from 228 INVs in a sub-Saharan African economy. Results suggest that greater uses of both effectuation and causation approaches to international network formation are associated with stronger post-entry performance. More interestingly, results show that the joint effect of the two international network formation approaches on post-entry performance is amplified under conditions of low home market institutional support. Our findings provide theoretical and managerial insights on the importance of complementing effectual and causal reasoning in international network formation in weak home market institutional environments.     

Determinants of ownership preference of international joint ventures: new evidence from Chinese manufacturing industries

Given the large size and rapid growth of foreign direct investment in China, the subject of ownership preference is of great interest to academics as well as to firms intending to invest in China. This study focuses on two sets of variables: industry-specific factors and venture-specific factors. Statistical tests based on information of 818 international joint ventures (IJVs) in China show that duration and scale of IJVs are positively associated with the level of foreign ownership. Industry-specific factors such as skill intensity, market concentration, market potentials, and foreign business agglomerations also positively influence the ownership preference of foreign firms, while local industry R and D intensity and productivity are found to be significant but negatively associated with the ownership preference.     

Dual-edged tools of trade: How international joint ventures help and hinder capability building of Chinese firms

Forming international joint ventures (IJVs) with multinational corporations (MNCs) from advanced economies has been widely adopted by firms in emerging economies as an organizational approach to building up their innovative capabilities. In this paper, we emphasize that such an approach has both advantages (knowledge transfer from MNCs) and disadvantages (overdependence upon MNCs and reduction of innovation incentives) in the capability building of indigenous firms. Utilizing a longitudinal dataset consisting of 474 industries in China during 1998–2002, we find supporting evidence for the co-existence of the positive and negative impacts of IJVs. Specifically, we find that IJV presence has an inverted U-shape impact on innovative capabilities of indigenous firms; such an impact is stronger in industries with low (versus high) technology gap. We discuss the implications of our findings for research, managerial practice, and government policy.     

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.     

Revisiting the relationship between product and international diversification in new ventures: The moderating effect of effectuation processes

This study examines the relationship between product and international diversification in new ventures, suggesting effectuation processes to be key moderators of this relationship. Effectuation processes allow young firms to attenuate constraints imposed by the liabilities of newness, the uncertainty and the lack of prior diversification experience these firms face and which may significantly restrict the number of growth opportunities they can jointly exploit in the short run. Specifically, the findings indicate that reliance on experimentation, maintenance of flexibility and securement of pre-commitments positively moderate the relationship between product and international diversification in new ventures. From all effectuation processes, only the adoption of the affordable loss principle lacks a significant effect on the link between the two growth strategies. Theoretical and empirical implications are further discussed.     

Developing brand identities for international new ventures under uncertainty: Decision-making logics and psychic distance

While many models describe efforts to build brand identity, none specifies the brand identity development for small firms facing uncertainty, such as rapidly internationalizing international new ventures. By examining four such case firms informed by interviews and archival data spanning five years, this study identifies three brand identity development states: unbranded, sporadically branded, and focused branded international new ventures. Brand values, brand personality, and brand relationships are critical brand identity dimensions that manifest in the three states. A related model and propositions help explicate how uncertainty owing to psychic distance moderates the impact of decision-making logics on brand identity development. We show how the role of decision-making logic affects the prominence given to different dimensions of brand identity in the developmental states. Moreover, we reveal the associated change and state mechanism allowing for the rapid advancement of brand identity states in international new ventures.     

Post-entry survival of developing economy international new ventures: A dynamic capability perspective

Recent research suggests that the capabilities needed for the survival of international new ventures (INVs) may be at odds with the original aims that had brought them into the international markets. INV mortality is exacerbated by uncertainty and lack of familiarity with the host market environment, which elevates the liabilities of newness, smallness, and foreignness in the initiating companies. We investigate the key factors that determine the post-entry survival of developing economy INVs by analyzing in-depth seven software INVs originating in the developing economy of Pakistan. These INVs survived the 2000 dotcom crisis and the 2008 global financial crisis, and continue to grow. Based on a dynamic capability view on the INVs’ internationalization and survival from sensing-seizing-reconfiguration angles, we find the founders’ entrepreneurial orientations and network development capabilities (sensing), specialized product focus and niche market development (seizing), and transformation and renewal capabilities (reconfiguration) are the key capabilities that enhance the post-entry survival of these INVs. Importantly, we find that a stable leadership and the post-entry international experience of the leadership team continuously feed into facilitating the creation and maintenance of dynamic capabilities. This paper identifies key strategic aspects that determine the post-entry survival of the developing economy INVs.     

Universally-enabling and context-binding resources in new venture internationalization: Evidence from venture capital backed start-ups in an emerging market

Integrating institutional and effectuation theories, we examine the relationship between entrepreneurs’ means and internationalization in an emerging market. Results indicate that some means, such as technical expertise or business network membership, transform into valuable internationalization resources despite difficult institutional conditions. Others, however, such as industry or international experience, are best deployed locally. Findings also indicate that means such as entrepreneurial experience and number of founders act as catalysts of internationalization, allowing for other means to transform into internationalization resources. We extend effectuation theory by showing how different means transform into internationalization resources and contribute to research at the intersection of institutional theory and international entrepreneurship by expanding our understanding of universally-enabling and context-binding internationalization resources. In so doing, we identify a boundary condition to international entrepreneurship theories that emphasize the role of individual resources during venture internationalization by revealing a context in which certain traits exhibit nonstandard relationships with internationalization.     

Performance of international joint ventures in Turkey: perspectives of Western firms and Turkish firms

This study compares responses from Western partner firms and local partner firms from a sample of international joint ventures (IJVs) in Turkey, in order to analyse the performance of IJVs on a range of topics including overall performance, the relative importance of performance criteria, and actual performance in terms of various dimensions of expected performance. The results of the hypotheses tests indicate that while both groups of partner firms are equally satisfied in terms of overall IJV performance, Turkish partner firms are more satisfied than Western partner firms regarding comparison with home country operations and host country competitors. The study also finds that the relative importance of IJV performance criteria varies to a moderate extent between Western and Turkish partner firms, and that both groups of partner firms evaluate IJV performance equally favourably across most underlying dimensions of IJV performance.     

Needed B2B marketing capabilities: Insights from the USA and emerging Latin America

Firms from all parts of the world are expanding operations globally in a turbulent economic context, requiring the understanding of nontraditional markets. Much attention has been focused on China and India, but researchers have neglected Latin America, a region economically as important as Germany, India, Japan, and South Korea. Latin America, as is true of many developed and emerging markets, has a strong presence of industrial ? or business to business (B2B) ? transactions. The configuration and convergence-divergence of marketing capabilities are relevant for the understanding of the globalization phenomenon. This study aims to examine B2B marketing capabilities of firms in Chile, Mexico and Peru (as Latin American countries), seeking conceptual issues in order to comprehend their business perspectives and contribute to the almost nonexistent body of research in this region. How do the results from Latin America compare with the USA? While the study shows directional convergence between Chile and Peru, there also is interesting divergence between all Latin American countries and the USA. The findings offer a portfolio of marketing topics that we believe are worthy of practitioner and academic consideration. We propose a model of convergence-divergence of B2B marketing capabilities across nations and state propositions for hypothesis testing.     

Local and international knowledge search and product innovation: The moderating role of technology boundary spanning

Drawing on the external knowledge search literature and the literature on international diversification, this study examined the interactive effect of local and international search for new knowledge on product innovation and the moderating role of a firm's technology boundary spanning activities. Specifically, it proposed that extensive local and international search interact to positively predict product innovation success and this relationship is weaker for firms entering a new technology domain. The results using data on 343 Chinese manufacturing firms across 5 industries indicated the support for the predictions.     

Market entry into Africa: Acquisitions and international joint ventures. Studies of foreign firms' market entry strategies,challenges, and performance in Africa

While the interest in investing in Africa is rising, the know‐how of business on the continent is very limited. There have been only recently few special issues focusing on sub‐Saharan Africa in the top international business journals: “Sub‐Saharan Africa at a key inflection point” (Thunderbird International Business Review 2009); “Contemporary developments in the management of human resources in Africa” (Journal of World Business 2011); “Contemporary challenges and opportunities of doing business in Africa” (Journal of Technological Forecasting and Social Change 2016); “Critical perspectives on international business in Africa (Critical Perspectives on International Business 2016); “Strategic Management in Africa (Global Strategy Journal, 2017); and “The internationalization of African firms (Thunderbird International Business Review 2016). The aim of this special issue is to advance understanding of international business in Africa and specifically focus on how foreign firms enter African markets via acquisitions and international joint ventures and extend knowledge of these market entry strategies and performance in Africa for research and for foreign firms intending to, or currently doing business in Africa. This guest editorial provides a summary of the five articles and one book review in this special issue categorized into three broad thematic issues: International joint ventures and acquisitions as market entry strategies in Africa; cross‐border investments of African firms; and theoretical underpinnings.     

International new venture performance: Role of international entrepreneurial culture,ambidextrous innovation,and dynamic marketing capabilities

International new ventures (INVs) contend with environmental dynamism in global markets, compelling firms to enhance their innovation and marketing capabilities. While the INV literature is growing, it is not informative as to how INVs develop and utilize dynamic capabilities to overcome resource-constraints to enhance performance. We utilize the concept of international entrepreneurship culture (IEC) to better understand how INVs advance innovation and dynamic marketing capabilities to succeed in their internationalization activities. Building on the dynamic capabilities view (DCV), we empirically examine the relationships among IEC, ambidextrous innovation, dynamic marketing capabilities, and INV performance under varying levels environmental dynamism. The findings highlight that IEC influences both ambidextrous innovation and dynamic marketing capabilities; and, together, these link to INV performance gains. Furthermore, this research finds support for the mediating effects of ambidextrous innovation and dynamic marketing capabilities in the IEC – INV performance relationship. Additionally, the results indicate an international entrepreneurial culture is of greater significance in developing ambidextrous innovation when environmental dynamism is present. The study context is a sample of 286 high-technology INVs from India, a large and dynamic emerging market.     

Impact of international entry choices on the nature and type of innovation: Evidence from emerging economy firms from the Indian bio-pharmaceutical industry

As emerging economy multinational enterprises (EMNEs) enter foreign countries in search of new markets, seeking to expand their knowledge bases, research on the type and nature of innovation activity is needed to address the impact of EMNEs’ choices related to international expansion. Building on prior literature on entry mode and location choices, as well as on organizational learning, we argue that how and where an EMNE expands internationally will impact the nature of its innovation. We carry out empirical analysis on a sample of 167 Indian bio-pharmaceutical firms for the period from 1997–2017. Our findings suggest that greenfield ventures foster innovation in core technologies, while cross-border mergers and acquisitions (M&As) foster innovation in non-core technologies. In addition, locating subsidiaries in high income countries encourages product innovations, while locating in low income countries encourages process innovations. Our findings contribute to the growing literature on differences in learning outcomes of EMNE internationalization.     

Talent management motives and practices in an emerging market: A comparison between MNEs and local firms

This paper compares the differences in talent management motivations and practices between MNEs and local firms in the emerging market of Turkey. It uses institutional theory and the resource based view of the firm to explain these differences. Examining data from 201 firms the findings show significant differences between the talent management motives of MNEs and local firms, with MNEs having more tactical motivations for their talent management systems. The study also shows significant differences in the talent management practices between MNEs and local firms, with MNEs implementing more robust systems of talent management overall. The findings indicate that the motives for TM and the practices that are pursued by organizations are society-bound. The study of TM motives and practices has to be framed within the context of the institution as this shapes the way in which actors perceive and respond to environmental and organizational stimuli and the extent to which they seek to protect the rules that shape and structure their environments.