How psychic distance and opportunity perceptions affect entrepreneurial firm internationalization

Psychic distance, now established as an individual perceptual construct, is so far a partial explanation of internationalization processes of entrepreneurial firms. Opportunity in foreign markets, although considered important, has hitherto been an assumption rather than explored as an explanatory factor in internationalization theories. Through qualitative data from technology entrepreneurs from New Zealand this study considers opportunity, like psychic distance, as an individual perceptual construct and posits that a combination of opportunity and psychic distance perceptions better explains entrepreneurial internationalization action/intention decisions. The explicit combination proposed is “opportunity‐distance quotient” and signifies a shift from psychic distance obstacles based explanations to an opportunity‐psychic distance interaction based exploration of entrepreneurial internationalization. Limitations of the study and further research are discussed. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

Measuring the diversification benefits of investing in highly internationalised firms

A vast literature exists investigating if Multinational Companies (MNCs) provide indirect international exposure to investors. These studies produce mixed results. Unlike previous studies, we distinguish between various types of MNCs, in particular firms that are consistently international versus firms that are in the process of internationalising. We provide a unique longitudinal dataset of firm-level multinationality of 396 Russell 1000 firms between 1996 and 2010, and estimate the diversification benefits of investing in these firms using mean variance spanning and Sharpe ratio tests. We find that the most consistently international firms provide the greatest diversification benefits. Rapidly internationalising firms provide little benefit, suggesting that the costs of rapid firm-level internationalisation are substantial. This distinction between firms at differing stages of internationalisation adds to the debate on the benefits of investing in MNCs and provides a possible explanation to the conflicting findings in the literature.     

Antecedents of strategic ambidexterity in the context of internationalisation: a panel study of Taiwan Small and median-sized enterprises

This study seeks to investigate the antecedents of Small and median-sized enterprises’ (SMEs’) ambidexterity strategy, and also to explore the association between ambidexterity strategy and SMEs’ performance with internationalisation as a moderator. Based on a longitudinal panel data set of 225 Taiwan SMEs, we testify the proposed hypotheses with STATA 10.0 by a series of panel data analysis. The empirical results show that both learning capability and top management team heterogeneity positively relate with SMEs’ ambidexterity strategy, while SMEs’ network capability cannot predict ambidexterity strategy. We also find that there is an ‘S’ shape relationship between ambidexterity strategy and SMEs’ performance, and this relationship is negatively moderated by the degree of internationalisation. Theoretical and managerial implications are discussed.     

An institution-based view of international entrepreneurship: A comparison of context-based and universal determinants in developing and economically advanced countries

The objective of this paper is to investigate the institutional characteristics of different geographic contexts that affect the internationalisation of small and medium-sized enterprises (SMEs). The study focuses on three categories of factors: (a) sociocultural, (b) political/legal, and (c) economic. Under economic factors, it examines competitive pressures in international markets, the nature of demands in international markets, domestic resources advantages, and domestic general economic characteristics. The paper identifies universal factors that influence the internationalisation of SMEs regardless of the location of the firm. These universal factors are distinguished from context-based factors, which are specific to the particular conditions of the people/location of the firm. A comparative analysis of cases from Italy and Iran allow us to find factors that are universal, others that are Iranian context-based, and one factor specific to the Italian context. Also, our analysis suggests the existence of some factors without significant influence in either country.     

The Impact of Psychic Distance on the Internationalisation of the Australian Firm

Abstract

This paper explores the relationship between management characteristics and psychic distance, psychic distance and internationalisation and management characteristics and internationalisation. It is argued that internationalisation takes different forms and that psychic distance will impact differently on each form whether it is outward, inward or linked. It is shown that whereas some management characteristics impact on internationalisation directly, others have impact through psychic distance acting as an intervening variable. The management implications for the above are discussed, as is its effect on planning future international activities.     

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.     

International Strategy Formation in Small Canadian High-Technology Companies– A Case Study Approach

For some companies, especially in the high technology sector, internationalisation is no longer a matter of choice, but of necessity. This paper explores the strategy development patterns of internationalising small high-technology companies in an environment where windows of opportunity close quickly. Findings from in-depth interviews suggest that emergent strategies within or outside established networks are likely to trigger small high-technology companies' initial internationalisation. Further overseas expansion is constrained by resource availability. This study demonstrates that internationalisation is an iterative process that happens in a holistic way much more than a systematic one. Rather than trying to fit small and medium enterprises' (SMEs') internationalisation patterns into a stage model, managers and policy-makers should recognise the importance of networks. Training and programs could, therefore, help identify strategic networks of importance for the companies and assist them in both contributing and taking advantage of these.     

The internationalisation of family firms: case histories of two Chinese overseas family firms

Internationalisation is an important part of the business history of both non-family and family firms. The discourse regarding both is based on the mainstream microeconomic theories of the firm. This article, through examining the case histories of two successful Chinese overseas family firms, shows that explanations of internationalisation need often to venture beyond the confines of existing theories, especially where contextual factors are influential in shaping decision-making. The experiences of these firms point to the role of the state as a major contextual factor. The case history approach is the most relevant in this and other instances where context matters.     

Robust strategies: lessons from GKN 1759–2013

GKN is Britain's surviving top 50 company from 1905, a flourishing world top-player in automotive and aero components. This article traces 254 years of its development, domestically and internationally, drawing on corporate access and the author's worldwide field research since 1974, and three in-depth business histories including one by the co-author. Lessons confirm just some traits expected of successful ‘Built To Last’ (BTL) companies. However, GKN's ‘robust’ sustained strategy also reflects financial conservatism; constant adaptation to its historical and competitive context; highly proactive internationalisation and, from 1902 onwards, a determination to develop always at least ‘three major business legs’ to survive evolutionary processes as sectors mature and consolidate globally.     

Internationalisation of Hypermarket Retailing in Poland

ABSTRACT

Retailing in Poland after 1989 was privatised rapidly. There was an explosion in the number of small shops and kiosks. By 1996 rationalisation had begun in the store network. By the mid-1990s foreign retailers were perceiving the Polish market as a potentially lucrative one. Several store formats were introduced. Hypermarket operators from Western Europe have moved into the market strongly since the mid-1990s. French and German retailers are making substantial investments in this format. There are notable implications for the supply chain, logistics and the behaviour of manufacturers of fast-moving consumer goods, particularly food. There are implications also for the training and development of a cadre of managers in operational and strategic functions. The development of hypermarkets represents a significant transfer of managerial know-how from Western to Central Europe. There are also implications for the small shopkeeper sector which has already been affected but is likely to be more heavily affected as hypermarket numbers increase. In the process of the modernisation of retailing in Poland foreign hypermarket operators are playing an important role.