Market and internationalization knowledge in entrepreneurial internationalization processes

2019 ◽  
Vol 25 (7) ◽  
pp. 1580-1600
Author(s):  
Katia M. Galdino ◽  
Sérgio Fernando Loureiro Rezende ◽  
Bruce T. Lamont
Keyword(s):  
Market Entry ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Internationalization Process ◽  
Content Type ◽  
Types Of Knowledge ◽  
Different Types ◽  
Conceptual Paper ◽  
International Knowledge ◽  
The Relationship

Purpose By bringing together the IB and IE literatures, the purpose of this paper is to examine the internationalization process as an entrepreneurial process related to the development of international opportunities. It explicitly connects different types of knowledge (i.e. market and internationalization), international opportunities and the internationalization process comprising both new foreign market entry and sequential moves that happen after entry. Design/methodology/approach This is a conceptual paper that reviews the literature on knowledge, opportunities and the internationalization process. Moreover, the paper identifies the current gaps in the literature and builds new theory that sheds light into how these three concepts are related. The paper also presents a model and propositions that should guide future research. Findings The proposed model shows that market and internationalization knowledge combine to form the international knowledge stockpile of the firm, which moderates the relationship between the development of international opportunities and the internationalization process, comprising not only new foreign market entry but also sequential moves that happen after entry using either mode continuation or modal shift. Moreover, it shows that the development of opportunities only leads to modal shifts after a certain threshold is achieved. Research limitations/implications The propositions suggest that market and internationalization knowledge are positively related to international opportunities, which, in turn, are related to foreign market entry and sequential moves using mode continuation. International opportunities, however, are related to modal shifts only beyond a threshold. Moreover, the international knowledge stockpile of the firm moderates the relationship between international opportunities and the internationalization process. Because this is a conceptual paper, the propositions have not been tested and, therefore, lack empirical validation. Nonetheless, the model is a starting point to new research on internationalization distinguishing different types of knowledge as well as different sequential moves. Originality/value This study shows that the internationalization process is contingent on the different types of knowledge associated with it. It also introduces the idea of a threshold that shapes the internationalization process. The bulk of the research on internationalization suggests that such a process is gradual and incremental. This study offers a non-linear alternative.

scholarly journals Effectuation and foreign market entry of entrepreneurial firms

2015 ◽  
Vol 49 (9/10) ◽  
pp. 1436-1459 ◽  
Author(s):  
Sylvie Chetty ◽  
Arto Ojala ◽  
Tanja Leppäaho
Keyword(s):  
Decision Making ◽  
Market Entry ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Decision Making Process ◽  
Entrepreneurial Firms ◽  
Internationalization Process ◽  
Foreign Markets ◽  
Content Type ◽  
Original Field

Purpose – The purpose of this study is to examine the decision-making process for entrepreneurial firms when entering foreign markets and how and why they entered those markets. Design/methodology/approach – A nascent theory in entrepreneurship called effectuation is combined with internationalization process theory as the conceptual framework to study decision-making under uncertainty. The central concept in both these theories is relationships and how they can be used to gain knowledge and thus reduce uncertainty and in the case of effectuation to co-create opportunities to enter foreign markets. The research design involves a multiple case study of software firms from Finland and New Zealand. Findings – It was found that entrepreneurs differentiate between foreign market selection and foreign market entry during their internationalization process, potentially using different decision-making processes in them. They tend to interweave effectuation and causation logics as substitutes in their decision-making. Uncertainty during foreign market entry is not always a barrier because it can provide opportunities depending on the logic used. In addition, there is evidence that entrepreneurs who have existing relationships in foreign markets tend to use effectuation to select and enter foreign markets. Originality/value – This paper transposes effectuation from its original field of entrepreneurship research to the context of internationalizing entrepreneurial firms. Consequently, it contributes toward understanding the decision-making process for selecting and entering foreign markets.

The rise of emerging Indian multinationals: strategic learning for EMNC foreign market entry and internationalization

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nitya P. Singh
Keyword(s):  
Market Entry ◽  
Emerging Market ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Business Strategies ◽  
Internationalization Process ◽  
Strategic Learning ◽  
Case Study Methodology ◽  
Content Type

PurposeThe academic literature on emerging market multinational corporations (EMNCs) has classified several strategic options that EMNCs can adopt as part of their internationalization process. Although this research stream does include examples of Indian companies, it has not adequately identified specific strategic practices followed by them as part of their internationalization process. Therefore, this article aims to identify specific firm competencies, home country advantages and strategic practices that Indian EMNCs adopt to achieve foreign market entry and internationalization.Design/methodology/approachThe article adopts a multiple case study methodology supported by unstructured interviews to answer the research question. Using a combination of in-depth interviews and secondary data related to the case study in question, strategic practices of three Indian companies operating in different industry segments are identified and evaluated.FindingsThe results highlight that as part of their internationalization process, EMNCs from India adopt a combination of strategic practices that include strategic alliances, acquisitions, entry into targeted geographic markets, localized and innovative product offerings and niche market focus. This mix of strategic practices, in combination with high levels of corporate parenting, plays an important role in the ability of Indian EMNCs to internationalize successfully.Originality/valueThis study contributes to the international business field by developing a better understanding of the internationalization process followed by emerging market multinational firms. In addition, as the article adopts a case study approach, specific business strategies adopted by Indian firms as part of their internationalization process are identified. The study, therefore, provides a strategic roadmap for firms from emerging countries on how to internationalize successfully.

Uberization in Paris – the issue of trust between a digital platform and digital workers

2019 ◽  
Vol 15 (1) ◽  
pp. 20-41 ◽  
Author(s):  
Robert Wentrup ◽  
H. Richard Nakamura ◽  
Patrik Ström
Keyword(s):  
International Business ◽  
Market Entry ◽  
Business Performance ◽  
Qualitative Methodology ◽  
Foreign Market ◽  
General Assumption ◽  
Foreign Market Entry ◽  
Content Type ◽  
Digital Platforms ◽  
Digital Platform

Purpose Using the lens of Uber’s digital workers in Paris, the purpose of this paper is to investigate how the trust-building mechanism is constructed between a digital platform and its digital workers in a foreign market entry. Design/methodology/approach This is a case study based on empirical data from in-depth interviews with 35 Uber drivers. A cross-disciplinary literature framework from mainly international business and internet geography theory and a reflexive qualitative methodology are applied. Findings Results show that the relationship between the digital platform and the digital workers is characterized by mistrust and suffers from decreasing commitment levels soon after market entry. Uber mitigates its mistrust via control and scarce mechanisms. The digital drivers’ “illusionary freedom”, a state in which they feel they can log on and log off at any time, enables the digital platform to gradually lower its commitment. The authors find that the mistrust does not seem to hamper the digital platform’s business performance. Research limitations/implications The paper mainly covers the digital workers’ perspective and the case of Uber’s market entry in Paris. Social implications This paper implies that digitally conveyed control seems to come at the cost of lowered human trust. Given the pace at which digital control systems are permeating society, this could eventually lower the whole societal trust level. Originality/value The authors criticize incumbent international business theory for not being sufficiently able to explain a contemporary digital business logic and the authors challenge the general assumption that successful internationalization is built through trust. The authors contribute with the conceptualization of a new technical market entry mode for digital platforms – “digitally controlled proxies”.

Serendipitous opportunities, entry strategy and knowledge in firms' foreign market entry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mikael Hilmersson ◽  
Martin Johanson ◽  
Heléne Lundberg ◽  
Stylianos Papaioannou
Keyword(s):  
Market Entry ◽  
Foreign Market ◽  
Ordinary Least Squares ◽  
Experiential Knowledge ◽  
Foreign Market Entry ◽  
Learning Theories ◽  
Content Type ◽  
Entry Strategy ◽  
Regression Tests

PurposeFew researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing models ignore the role of serendipity in the opportunity discovery process. The authors provide a nuanced view on international opportunities by developing the role of serendipitous opportunities in the foreign market entry process. The authors develop a model integrating the notions of serendipity, entrepreneurial logic, experiential knowledge and network knowledge redundancy. From the study’s model, the authors condense three sets of hypotheses on the relationships among experiential knowledge and entry strategy, network knowledge redundancy, entry strategy and serendipity.Design/methodology/approachThe authors confront the study’s hypotheses with data collected on-site at 168 Swedish firms covering 234 opportunities, and to test the hypotheses, the authors ran ordinary least squares (OLS) regression tests in three steps.FindingsThe results of the study’s analysis reveal that experiential knowledge and network knowledge redundancy both lead to a logic based on rigid planning and systematic search, which in turn reduces the likelihood that serendipitous opportunities will be realized in the foreign market entry process.Originality/valueThis is the first study that develops a measure of opportunities that are the outcome of serendipitous events. In addition, the authors integrate network and learning theories and internationalization theory by establishing antecedents to, and outcomes of, the entry strategy.

scholarly journals Knowledge grafting during internationalization: utilizing localized professionals in the foreign market

2020 ◽  
Vol 24 (9) ◽  
pp. 2009-2033
Author(s):  
Martin Johanson ◽  
Pao T. Kao ◽  
Heléne Lundberg
Keyword(s):  
Market Entry ◽  
Foreign Market ◽  
Content Type ◽  
Individual Level ◽  
Face To Face ◽  
Governmental Agencies ◽  
Types Of Knowledge ◽  
Multiple Case ◽  
Level Of Knowledge ◽  
The Individual

Purpose The purpose of this paper is to understand knowledge grafting through localized professionals in the internationalization of the firm. Knowledge grafting refers to firms increasing their knowledge stock by acquiring new staff, and while the concept is not new in studies on firms’ internationalization, there is little understanding of the characteristics of the individuals carrying the knowledge, the types of knowledge grafted and how it contributes to a market entry process. Design/methodology/approach The authors conducted an explorative study with a multiple-case research design and purposely selected five localized Swedish managers working for Russian subsidiaries of Swedish firms. Face-to-face interviews were conducted. The interviews were transcribed and analyzed based on three types of knowledge: general foreign market knowledge, social network knowledge and professional knowledge. The authors also considered both private and professional ties. Findings The findings show that characteristics of the localized professional and the firm can influence the type of knowledge grafted and how it is used. The findings also highlight the key role of the individual as knowledge carrier and show an alternative way to obtain knowledge in firm internationalization. Research limitations/implications This study comes with limitations. Only Swedish firms entering Russia with wholly owned subsidiaries have been considered. Further studies comparing knowledge grafting with firms in different entry mode, varying stage of market entry, as well as other countries of origin can further enrich our understanding. Future studies can also focus on localized professionals to shed light on the knowledge transfer between them and other individuals within the firms and the potential impact of their departure on knowledge grafting. Practical implications Internationalizing firms should pay attention to the opportunity of grafting knowledge by appointing localized professionals already living in the market. Governmental agencies in the host county can be a valuable source for identifying foreign nationals of the same origin as the firm. Originality/value To the best of the authors’ knowledge, this is the first study to focus on the individual level of knowledge grafting and to examine how localized professionals acquire knowledge to support firms in internationalization.

scholarly journals Barriers to enter in foreign markets: evidence from SMEs in emerging market

2017 ◽  
Vol 34 (1) ◽  
pp. 68-86 ◽  
Author(s):  
Mahfuzur Rahman ◽  
Moshfique Uddin ◽  
George Lodorfos
Keyword(s):  
Developing Country ◽  
Market Entry ◽  
Emerging Market ◽  
Foreign Market ◽  
Partial Least Square ◽  
Foreign Market Entry ◽  
Barriers To Entry ◽  
Foreign Markets ◽  
Content Type ◽  
Economic Barriers

Purpose Foreign market entry is considered as a key strategy to grow and survive over longer period of time for small and medium enterprises (SMEs). The decision to enter a foreign market is not a straightforward story. Considering resource limitation, SMEs need to analyse the key barriers to entry in foreign markets very carefully. The purpose of this paper is to identify these barriers for the SMEs in a developing country. Design/methodology/approach This study has used primary data collected through questionnaires from 212 Bangladeshi SMEs. A mixed method data analysis technique is used to analyse the firms both from micro- and macro-levels. Following the running example-based case study approach, this study has developed and validated a partial least square-based structural model to assess the key barriers to entry in foreign markets. Findings This study has identified the key socio-economic barriers faced by the SMEs in a developing country to enter in foreign markets. It has successfully framed the socio-economic barriers to enter in foreign markets for Bangladeshi SMEs as a second-order hierarchical model. Originality/value It is often believed that foreign market entry is more affected by social barriers as explained by the existing theories including the Uppsala model. This study, however, revealed that the international market expansions of SMEs in developing countries are more sensitive to the economic barriers.

scholarly journals Perceptions of justice and organisational commitment in international mergers and acquisitions

2017 ◽  
Vol 34 (5) ◽  
pp. 582-605 ◽  
Author(s):  
Emanuel Gomes ◽  
Kamel Mellahi ◽  
Sunil Sahadev ◽  
Amy Harvey
Keyword(s):  
Mergers And Acquisitions ◽  
Market Entry ◽  
Strong Association ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Organisational Commitment ◽  
Entry Modes ◽  
Content Type ◽  
Cross Border ◽  
And Performance

Purpose Although there is substantial and accumulating evidence on the link between market entry modes and performance, evidence regarding their impact on employee’s perceptions and thereby their commitment is scarce. This is more so in mergers and acquisitions (M&As) where employee’s commitment has a significant impact on post-entry performance. The purpose of this paper is to examine the association between perceptions of justice and organisational commitment in cross-border M&As. Design/methodology/approach The authors draw on market entry and M&As’ literature and studies on the link between perception of justice and commitment to develop the hypotheses. The authors test the hypotheses with survey data from a merger of two culturally different partners – British and Japanese. A total of 128 responses were received, out of a sample of 151 non-managerial employees within the firm. Findings The results show a strong association between employees’ perceptions of justice during the merger and commitment to the new organisation. Surprisingly, the results do not support the widely reported interaction effects between different organisational justices and employees’ commitment. Research limitations/implications Obtaining data from a single M&A is a potential limitation of this study. Practical implications The study underscores the importance of post-market entry. The results suggest that particular attention needs to be paid to the way employees of the acquired firm are treated during their interactions with their counterparts. Originality/value The link between market entry and performance is well documented. However, little progress has been made in understanding the antecedents/factors that influence commitment in foreign market entry and in particular cross-border M&As. This study helps close this gap.

CEO characteristics and SME foreign market entry mode choice

2016 ◽  
Vol 33 (2) ◽  
pp. 246-275 ◽  
Author(s):  
Katharina Laufs ◽  
Michael Bembom ◽  
Christian Schwens
Keyword(s):  
Host Country ◽  
Market Entry ◽  
Mode Choice ◽  
Entry Mode ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Content Type ◽  
Entry Mode Choice ◽  
Foreign Market Entry Mode ◽  
Ceo Characteristics

Purpose – Using arguments from the upper echelons perspective this paper aims to examine the impact of CEO characteristics on small and medium-sized enterprises’ (SMEs’) equity foreign market entry mode choice and how these associations are jointly moderated by geographic experience of the firm and host-country political risk. Design/methodology/approach – The empirical analysis draws on data gathered from German SMEs testing triple-interaction effects between CEO’s age, firm tenure and international experience, geographic experience of the firm (organizational level), and host-country political risk (environmental level). Findings – Empirical findings validate that the influence of CEO’s age and firm tenure on SME foreign market entry mode choice varies by managers’ level of managerial discretion (i.e. latitude of action) as determined by the SME’s geographic experience and the level of political risks prevailing in the foreign market. Practical implications – Empirical findings help SME owners and managers to understand how CEO’s age and firm tenure are related with individual’s risk-taking behavior and information-processing demands and how these contingencies vary by the context in which the individual CEO is nested. Originality/value – This study contributes to the growing body of literature focussing on SME foreign market entry mode choice by emphasizing the important role of CEOs in the decision to internationalize. More specific, this study contributes by an examination of the interactive effect of CEO’s age, firm tenure and international experience, geographic experience of the firm and host-country political risk and, therefore, emphasizes the context and boundary conditions under which the association between CEO characteristics and foreign market entry mode choice is more or less pronounced.

Ownership participation of cross-border mergers and acquisitions by emerging market firms

2015 ◽  
Vol 53 (1) ◽  
pp. 221-246 ◽  
Author(s):  
Monica Yang
Keyword(s):  
Mergers And Acquisitions ◽  
Cultural Distance ◽  
Emerging Market ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Firm Level ◽  
Content Type ◽  
Cross Border ◽  
Emerging Market Firms ◽  
The Relationship

Purpose – The purpose of this paper is to adopt a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions, particularly the ownership participation in cross-border mergers and acquisitions (M&As). In addition, the author would like to know if companies from emerging markets that possess higher (or lower) ownership in cross-border M&As receive higher valuation in the market. Design/methodology/approach – Using panel data of cross-border M&As by emerging market firms from 2000 to 2012, the author tests the hypothesized effects of the independent variables on the level of ownership participation; and uses a standard event study methodology to assess the market reaction of a particular cross-border M&A deal. Findings – The author finds that a country-level factor (institutional distance), an industry-level factor (industry unrelatedness) and a firm-level factor (board concentration) have significant impact on ownership participation in cross-border M&As. The author also finds that investors do give high valuation to those emerging market firms that chose high ownership participation in cross-border M&As. However, the author did not finds the support for the relationship between ownership participation and cultural distance. Neither did the author finds the support for the relationship between ownership participation and board independence. Originality/value – This study enhances the understanding of conditions under which the level of ownership participation in cross-border M&As would increase (decrease) and how the market reacts to high (low) ownership participation of cross-border M&As by emerging market firms.

scholarly journals Cross-border e-commerce as a foreign market entry mode among SMEs: the relationship between export capabilities and performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Fabio Cassia ◽  
Francesca Magno
Keyword(s):  
Information Technology ◽  
Financial Performance ◽  
Market Entry ◽  
Entry Mode ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Content Type ◽  
Cross Border ◽  
Operations Capabilities ◽  
Foreign Market Entry Mode

Purpose Although cross-border e-commerce has become increasingly popular among small and medium-sized enterprises as a foreign market entry mode, research on the determinants of its success is scarce. Drawing on the resource-based view, this study aims to examine the relationship between a firm’s information technology, international marketing and export operations capabilities and its cross-border e-commerce strategic and financial performance. Design/methodology/approach Partial least squares structural equation modeling was used to analyze data from a sample of Italian exporters in the food and beverage industry. Findings The results highlight the mixed effects of information technology, international marketing and export operations capabilities on both e-commerce strategic and financial performance. Moreover, the use of third-party e-commerce platforms reduces the effect of exporters’ information technology capabilities on their e-commerce financial performance. Research limitations/implications The majority of exporters in this study had implemented cross-border e-commerce only recently; hence, longitudinal data on the success factors of e-commerce are not available. Practical implications While cross-border e-commerce may work as an accelerator of the overall export performance, export managers are urged to approach it strategically with a clear medium-term view to develop the required capabilities. Originality/value This study was one of the first to examine the drivers of small and medium-sized exporters’ cross-border e-commerce performance. Moreover, unlike most previous analyzes, it focused on e-commerce as a foreign market entry mode rather than a supplement to offline exporting activities.

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