Showing papers on "Internationalization published in 2000"

International expansion by new venture firms: International diversity, mode of market entry, technological learning, and performance.

Abstract: An increasing number of new venture firms are internationalizing their business operations early in their life cycles. Previous explanations of this trend have focused on the importance of technological knowledge, skills, and resources for new ventures' international expansion. However, little is known about how these firms use the technological learning gained through internationalization. This study examined the effects of international expansion, as measured by international diversity and mode of market entry, on a firm's technological learning and the effects of this learning on the firm's financial performance.

Effects of Age at Entry, Knowledge Intensity, and Imitability on International Growth

Abstract: We employed knowledge-based theory to shed light on international growth in entrepreneurial firms. We found earlier initiation of internationalization and greater knowledge intensity to be associat...

International Entrepreneurship: The Intersection of Two Research Paths

Abstract: Reflecting the internationalization of the marketplace and the increasing prominence of entrepreneurial firms in the global economy, the research paths of international business and entrepreneurshi...

Debating Governance: Authority, Steering, and Democracy

Abstract: Leading scholars in the field of governance examine the effectiveness of the different non-institutional strategies at the disposal of modern governments in tackling issues of urban decline, public administrations, governmental regionalization, budget deficits and global economics. The governance approach to political science yields a new perspective on the role of the state, domestically as well as in the international arena. Globalization, internationalization, and the growing influence of networks in domestic politics means that the notions of state strength and the role of the state in society must re-examined.

How New Ventures Exploit Trade-Offs Among International Risk Factors: Lessons For The Accelerated Internationization Of The 21St Century

Abstract: The Organisation for Economic Co-operation and Development predicts that the internationalization of businesses will accelerate in the 21st century. Our study examined how the risks of accelerated ...

The internationalization of the firm from an entrepreneurial perspective

Abstract: There are 2 dominant views in international business research: the economic and the process view. In this study it is shown that these views give some insight into the complex phenomenon of the int ...

Internationalization of Small Firms: An Examination of Export Competitive Patterns, Firm Size, and Export Performance [*]

Abstract: Analysis of data taken from 157 small firms actively exporting to markets outside the U.S. revealed that small firms differ among themselves with respect to the competitive pattern used in their export activities. Larger (small) firms exhibited competitive patterns consistent with their size-related resource base. However, smaller (small) firms did not exhibit competitive patterns that could be viewed as consistent with their size-related resource base. In addition, no significant difference in export intensity across three size categories was found. The implications of these findings with respect to the explanatory power of the stage theory of international development and the resource-based theory of the firm are discussed. The why and how of internationalization in small businesses are subjects of significant and ongoing research. An export strategy is the primary foreign-market entry mode used by small businesses in their internationalization efforts (Leonidou and Katsikeas 1996). Exporting fits the capabilities of small business by offering a greater degree of flexibility and minimal resource commitment yet limits the firm's risk exposure (Young et al. 1989). Exporting can be an engine for individual firm growth and profitability, and for the nation's economic growth as well. In the U.S., small manufacturing firms (those with fewer than 500 employees) make up 98.7 percent of manufacturers (U.S. Bureau of the Census 1993) and play a major role in the economy. With increased internationalization, the economic growth potential afforded by small-business exporting may be quite significant (Dichtl et al. 1984; Hardy 1986). However, only a minority of all small U.S. manufacturing firms are currently engaged in any type of export a ctivity. Since Johanson and Vahlne's (1977) pioneering study on the internationalization process of small firms, much research has addressed how small firms pursue internationalization. This research stream proposes that small firms internationalize their activities through a series of progressive stages (Anderson 1993; Barkema, Bell, and Pennings 1996; Bilkey and Tesar 1977). Recently however, Oviatt and McDougall (1994) proposed that at least some small firms are international (that is, involved in significant cross-border business activities) at their inception. Obviously, such firms do not follow the successive stages that some research suggests. Based on this new insight, the literature now suggests two discreet ways that small firms internationalize -- "international-at-founding" (Oviatt and McDougall 1994) and "international-by-stage" (Johanson and Vahlne 1977). However, it is still an open question whether there are only two means by which small firms internationalize. The two methods may actually represent the end points of a continuum for internationalization. The question, "Might there be firms that are not 'international-at-founding' but that are able to circumvent or skip stages in their efforts to internationalize?" has received increased attention (for example, Oviatt and McDougall 1994; Reuber and Fisher 1997). Stated more generally, does the stage theory of small-business internationalization apply to all "domestic-at-founding" firms, or is it a special-case explanation for how (some) small businesses internationalize? With increasing global competition, falling barriers to international trade, and improved international communication and information networks, many small firms are pressed to compete in international markets. Exporting may offer an effective means for firms to achieve an international position (Ohmae 1990; Porter 1990) without overextending their capabilities or resources (Young et al. 1989). The potential ability to skip stages in the export-development process could create a relative advantage vis-a-vis those firms that follow a stepwise path. There is an extensive and well-developed body of literature that examines many issues in small-firm internationalization. …

Small High-Technology Firms and International High-Technology Markets

Abstract: In this qualitative investigation, the authors report on the overseas expansion processes of technologically oriented U.K. small and medium-sized enterprises (SMEs). The findings provide further challenges to the incremental approach to internationalization; also, the authors put forward criticisms in relation to policymakers’ current approach to categorizing internationalizing SMEs in the provision of trade assistance programs.

International experience in the executive suite: The path to prosperity?

Abstract: Attention is increasingly focused on the potential individual career and firm-level benefits of international experience for upper level executives. This research examines the relationships between CEO international experience, CEO tenure, firm internationalization, succession events, and corporate financial performance. Results indicate a significant interactive effect between CEO tenure and outside succession on CEO international experience. In addition to a relationship with CEO international experience, there are two additional interactive effects in the examination of corporate financial performance: (1) CEO international experience and the degree of firm internationalization, and (2) CEO international experience and CEO succession. These interactive effects are evident in accounting and market indicators of corporate financial performance. Copyright © 2000 John Wiley & Sons, Ltd.

In Search of Centre of Excellence: Network Embeddedness and Subsidiary Roles in Multinational Corporations

Abstract: * In this paper the authors explore the role of a subsidiary as a centre of excellence within the multinational corporation (MNC). It is argued that such a role can be based on the characteristics of a subsidiary's internal resources, its relationships with the rest of the MNC and the business context of which the subsidiary is a part. Based on the perspective of an MNC as a Network the latter aspect is especially focused. Through an analysis of 98 subsidiaries the importance of the subsidiary's embeddedness, in terms of business relationships with specific customers and suppliers for its role as a centre of excellence, is investigated. Key Results * A conceptual result from this paper is that it offers a framework for analysing the role of the business context for the subsidiary's role as a centre of excellence. Productive relationships with external counterparts in the business environment can be used by the subsidiary to enhance its role as a centre of excellence. An empirical result is that the external embeddedness of the subsidiary is an important and significant explanatory variable of the subsidiary's possibilities to be considered important to the MNC as well as a prerequisite to influence the future behaviour of the MNC. Introduction In traditional foreign direct investment theory it is assumed that firms base their internationalisation on specific advantages created and located at home. These firm-specific advantages make it possible to overcome the disadvantages associated with carrying out the business activities in foreign markets (Hymer 1976, Kindleberger 1969, Vernon 1966, Buckley/Casson 1976, Johanson/Vahlne 1977, Caves 1982, Hennart 1982, Dunning 1988). But in some of the recent literature about internationalisation, it has been argued that the firm-specific advantage can be located at different places in the organisation, not only in the parent-country (Kogut 1983, Hedlund 1986, Bartlett/Ghoshal 1989, Forsgren 1989). Having different assets in different industrial and commercial contexts is an important driving force for internationalisation as such (Cantwell 1991, 1995, Dunning 1996, Zander/Zander 1997). This new approach to foreign direct investment and the internationalisation process also gives rise to a reformulation of how we look at the structure of the multinational enterprise. Within the former "centre-periphery" view, the firm specific advantages of the multinational corporation (MNC) are developed and controlled by the parent company, while the foreign subsidiaries exploit these advantages in the local markets. According to the new perspective, MNCs are considered "multi-centre" structures, where firm-specific advantages also can be located in different subsidiaries (Forsgren et al. 1992). Sometimes the concept "centre of excellence" has been used to describe this new subsidiary role (Surlemont 1996). However, even if the received theory today recognises the existence of "centres of excellence" within the MNC, it tells us very little about why and how they emerge. It has been argued elsewhere that it is difficult to give the concept "centre of excellence" in relation to MNCs a precise definition (Forsgren/Pedersen 1998). For instance, in the literature about product mandates, the possibility for a subsidiary to operate as a full-fledged unit with its own export and R&D is focused (Dhavan et al. 1981, Eteman/Dulude 1986, D'Cruz 1986). Although there is no undisputed definition of what characterises a subsidiary with a product mandate (Fratocchi 1994), most of the literature on product mandate seems to emphasise autonomy rather than interdependence vis-a-vis the rest of the MNC as the crucial factor (Roth/Morrison 1992, Birkinshaw/Morrison 1995). A subsidiary which can function as a quasi-firm in the MNC, because of the independence and completeness of its resources, can also, according to this view, be called a centre of excellence within the corporate family. …

Transnational firms and the changing organisation of innovative activities

Abstract: It is suggested that a transition is taking place towards new modes of organising transnational corporations’ innovative activities. First, different units of multinational firms, including foreign-based subsidiaries, are increasingly involved in the generation, use and transmission of knowledge. Secondly, multinationals are developing external networks of relationships with local counterparts, through which foreign affiliates gain access to external knowledge sources and application abilities. As a result of this evolutionary process, multinationals’ organisation is subject to both centripetal and centrifugal forces. Considerable efforts are then necessary to innovate coordination procedures and mechanisms, in order to enhance the generation, circulation and use of knowledge. A number of empirical works are reviewed, providing some evidence of the evolutionary process discussed in the paper. 1. Transnational companies as networks of innovators Economists have long viewed innovation as being primarily generated by firms in their home countries. Classic contributions in the economics of multinational corporations have consolidated this view. Referring mainly to the US-based multinationals, Vernon (1966), Kindleberger (1969) and Stopford and Wells (1972) theorised a quasi-colonial relationship between the parent company and foreign subsidiaries, wherein the latter are in charge of replicating the former’s activities abroad, with strategic decisions—including R&D and innovation strategies—being rigidly centralised. Particularly, Vernon emphasised that coordinating international innovative activities would be too costly, owing to the difficulties of collecting and controlling relevant information across national borders. Host countries and foreign subsidiaries would then play a role almost exclusively in the adoption and diffusion of centrally created technology. This view was supported mainly by US economists and based on US evidence from the early post-World War II period, but it was very influential for the development of studies on the economics of transnational companies (TNCs) and the internationalisation of

The internationalization process of small and medium-sized enterprises: An evaluation of stage theory

Abstract: The aim of this study is to provide better insight into the internationalization process of small and medium-sized enterprises (SMEs). Using a five-year panel dataset and a relatively new technique, DEL analysis, the predictive validity of the export stage concept of Cavusgil's innovation-related internationalization model (the I-model) is examined This stage theory conceptualizes the internationalization process using five stages: a domestic marketing stage, a pre-export stage, an experimental involvement stage, an active involvement stage, and a committed involvement stage. In addition, the time period to be considered in moving from one stage to another is explicitly tested. The results suggest within certain limits that Cavusgil's stage theory holds for European manufacturing SMEs. According to the considered time frame, the results are slightly in favor of a two year-period.

Path Dependence and Knowledge Development in the Internationalization Process

Abstract: ■ This paper is based on the Uppsala internationalization process model, which claims that the behaviour of the international firm is path or history dependent This is so because the internationalization process of firms is based on the stock of their firm-specific tacit or experiential knowledge in the firm However, no empirical research has explicitly investigated this issue ■ The empirical investigation uses a sample of 362 Swedish service firms, and the data was processed with LISREL The effect of a firm's first international step on its existing level of experiential knowledge is measured

Effect of Variation on Knowledge Accumulation in the Internationalization Process

Abstract: This article examines the effect of variation in the geographical scope of international business operations on experiential knowledge development in the internationalization of the firm. Based on learning theory, this article develops five hypotheses on the effects of variation on three interrelated components of international experiential knowledge: internationalization knowledge, business knowledge, and institutional knowledge. LISREL analysis indicates that variation has a positive effect on the accumulation of experiential knowledge in internationalizing firms. In particular, it demonstrates that internationalization knowledge is a key variable that mediates the effect of variation on the other knowledge variables.

Internationalization and Firm Risk: An Upstream-Downstream Hypothesis

Abstract: Corporate international diversification theory posits that multinational corporations (MNCs) should have lower risk and higher financial leverage than purely domestic corporations (DCs) We suggest an alternative upstream-downstream hypothesis according to which the overall effect of internationalization on the risk and leverage of MNCs is expected to vary with home and target market conditions The empirical results are consistent with the suggested hypothesis

Accumulating technological competence: its changing impact on corporate diversification and internationalization

Abstract: Recent studies have suggested that firm-specific technological competence may be diversified and internationalized. We show that increases in competence increased corporate technological diversification until the early 1970s, and then again more recently. However, a new interrelationship has now emerged between the accumulation, diversification and internationalization of technological competence, due to the formation of internationally integrated networks within firms. The empirical analysis consists of a dynamic cross-section model applied to the corporate patenting in the US, of 166 of the largest European and US industrial firms from 1901 to 1995. Copyright 2000 by Oxford University Press.

Internationalization, Tacit Knowledge and the Top Management Teams of MNCs

Abstract: This study investigates the effects of several dimensions of internationalization on the behavior of MNCs’ top management teams. The effects include top executives’ personal presence in foreign markets, their participation in meetings about international strategic issues, and their tacit knowledge of the firms’ international business activities.

Internationalization of Born Global and Gradual Globalizing Firms: The Impact of the Manager

Abstract: INTRODUCTION March and Simon (1958) argue that, due to a large behavioral component, strategic choices reflect the idiosyncrasies of decision-makers. To each administrative situation, each decision-maker brings his or her own set of givens, which reflect his/her values and principles. Research has supported this assertion and shown that the characteristics of the owner/founder contribute to the decision to internationalize (Bilkey, 1978; Reid, 1981). Indeed, more attention and greater examination of the entrepreneur and managerial characteristics have been called for in international entrepreneurship research (McDougall, Shane, & Oviatt, 1994). At the managerial level, the attitudes and mindset of the management team play an important role in determining the extent to which a firm engages in international activities. The managerial mindset can be defined as the propensity of managers to engage in proactive and visionary behaviors in order to achieve strategic objectives in international markets. Conceptually, this line of reasoning has its foundations in the work of Perlmutter (1969). The idea of a managerial mindset affecting internationalization is supported by many researchers. For example, Bartlett and Ghoshal (1989) argue that managers' cognitive processes affect the international strategic capabilities of the firm. More simply put, the mindset of the entrepreneur and the top management team affects the firm's expansion into international markets. In terms of managers of born global and gradual globalizing firms and their mindsets, there is very little research. One exception is the work of Cavusgil and Knight (1997). In examining managerial mindset of born global firm managers, they further delineated the mindset concept and its subsequent link to firm performance. Their results show that managers of born global firms have a global orientation which is a bundle of dispositions and competencies the sum of which appears to be positively correlated with export-marketing performance (Cavusgil & Knight, 1997: 5). In support of this finding, Kobrin (1994) had previously found that firms with managers with more world-oriented mindsets (geocentric) are more likely to enter international markets quickly. In this research, it is expected that managers of gradual globalizing firms will have more of an ethnocentric mindset but will be open to international opportunities if they arise. As suggested by Eriksson, Johanson, Majkgard and Sharma (1997), managers of gradual globalizing firms are expected to have more ethnocentric mindsets and only act when they are able to detect the opportunities and reduce the uncertainties of going abroad (342). In contrast, managers of born global firms are expected to have more geocentric mindsets with more positive attitudes toward internationalization. A recent case study found that geocentrism is linked to the ability of born global firms to make their own opportunities in the international marketplace (Cavusgil & Knight, 1997). Based on the preceding arguments, the following hypothesis is given. Hypothesis 1: Born global firms will have managers with more geocentric mindsets than managers of gradual globalizing firms, Managerial experience abroad has also been shown to affect the internationalization process. This concept is defined as the amount of experience that a manager has accumulated in an international context. Roth (1992) posits that mere exposure to the international arena is not sufficient for development of a deep understanding. Rather, managers are more likely to develop a deeper understanding when they have been posted in other countries or are required to spend considerable time overseas than domestic managers who are responsible for overseas functions. Consequently, managers with international work experience or who have attended schools in ,other countries (outside the U.S.) would tend to be more familiar with the foreign market conditions and opportunities than managers without such experience. …

Internationalization and Organizational Growth: The Impact of Internet Usage and Technology Involvement Among Entrepreneur-led Family Businesses:

Abstract: For many years, large, multinational corporations were thought to dominate international business. It was recently recognized that a number of entrepreneurial and family firms are active in the international arena (Oviatt & McDougall, 1994). Using data from a U.S. survey of entrepreneur-led family businesses, this paper examines the extent to which certain entrepreneurial characteristics, Internet usage, and investments in information technology influence internationalization and organizational growth among such firms. The results of regression analyses identify variables leading to success in the emerging global economy and their differential impact on these performance outcomes.

The retail internationalisation process

Abstract: Considers the development of international retail thought and the need for an integrated conceptual approach to the process of retail internationalisation. The paper considers the development of international retail thought within the context of international retail activity and subject development and suggests the intellectual influences on the development of retail thought have, at times, constrained the development of a better understanding of the internationalisation process. Having established the parameters of debate, the paper considers the search for a synthesised approach to the understanding of the internationalisation process and integration of retail international theory within broader economic and international business frameworks. In the context of this theoretical material, the paper presents a framework within which international activity may be considered.

Globalization and Politics

Abstract: This chapter reviews the issues at stake in current public and scholarly debates over the impact of changes in the international economy on domestic politics and society. Over the past two decades, there have been dramatic increases in the flow of portfolio capital, foreign direct investment, and foreign exchange trading across borders at the same time as barriers to trade in goods and services have come down. These changes raise many new questions about the effects of trade and capital mobility on the autonomy of nation-states and the relative power in society of various groups. The first signs of realignments within and between political parties of both the left and the right over issues of national independence and trade openness suggest a rich new terrain for political inquiry.

Nordic International Business Research. A Review of Its Development

Abstract: This article identifies the specific characteristics of Nordic international business research by analyzing how Nordic researchers over time have perceived and conceptualized their research object, “the international firm.” Their perceptions about essential features of the international firm are arguably reflected in their theoretical and empirical work on the internationalization of the firm and the management of the international firm.

Globalization, Four Paths of Internationalization and Domestic Policy Change: The Case of EcoForestry in British Columbia, Canada

Abstract: Governments appear increasingly constrained in their ability to make independent policy choices in an era of global economic finance and communication. As a result, scholars are more closely examining how actors, institutions and economic forces that extend beyond state borders can influence domestic public policies and politics. This scholarship on “globalization” and “transnational relations” serves as a corrective to a comparative public policy literature that has tended to treat external pressures as either exogenous shocks, or as simply other interests to which the state must respond.

Power and control in international retail franchising: evidence from theory and practice

Abstract: Franchising is fast becoming one of the most popular entry mode strategies for international retail companies when moving into international markets. Academic research, however, has only recently begun to examine international franchising within the context of retailer internationalisation. A major gap in the literature is the nature of the international retail franchise relationship and, in particular, the mechanisms used to control and co‐ordinate the international franchise network. This paper reports the findings from an in‐depth, ethnographic study of the internationalisation activity of one retail franchise company and examines the extent to which the marketing channels and agency theory literatures can, in practice, explain power and control in international retail franchising.

In search of the changing role of the corporate human resource function in the international firm

Abstract: There has been considerable research on the issues of board-level representation by personnel/HR directors and senior HR managers' involvement in strategic decision making. Since the early 1990s there has been a growing interest in international HRM, reflecting the growing recognition that the effective management of human resources internationally is a major determinant of success or failure in international business. There is also evidence that HR constraints often limit the effective implementation of international business strategies. More recently, it has been argued that the more rapid pace of internationalization and globalization leads to a more strategic role for HRM as well as changes in the content of HRM. Yet, while there have been some attempts to integrate international corporate strategy and human resource strategy, surprisingly, the role of the corporate human resources function has been neglected, particularly in the context of the international firm. This article seeks to redress the bal...

Global Marketing: A Market-Responsive Approach

Abstract: *Preface *PART 1: THE DECISION WHETHER TO INTERNATIONALIZE *International Marketing in the Firm *Initiation of Internationalization *Export Behaviour Theories *Development of the Firm's International Competitiveness *PART ONE CASES *PART TWO: DECIDING WHICH MARKETS TO ENTER *The International Market Selection (IMS) Process *The International Environment *PART TWO CASES *PART THREE: DECIDING HOW TO ENTER FOREIGN MARKETS (MARKET ENTRY STRATEGIES *Some Approaches to the Choice of Entry Mode *Export Modes *Intermediate Entry Modes (Contractual Entry Modes) *Hierarchical Modes *International Sourcing Decisions and the Role of the Subsupplier *PART THREE CASES *DESIGNING THE INTERNATIONAL MARKETING PROGRAMME *Product Decisions *Pricing Decisions and Terms of Doing Business *Distribution Decisions *Communication Decisions (Promotion Strategies) *PART FOUR CASES *IMPLEMENTING AND COORDINATING THE INTERNATIONAL MARKETING PROGRAMME *International Sales Negotiations *Organization and Control of the International Marketing Programme *PART FIVE CASES *Appendix A: International Marketing Research/Decision Support System *Summary