Showing papers on "Internationalization published in 2007"

The Internationalization of Higher Education: Motivations and Realities

Abstract: Globalization and internationalization are related but not the same thing. Globalization is the context of economic and academic trends that are part of the reality of the 21st century. Internationalization includes the policies and practices undertaken by academic systems and institutions—and even individuals—to cope with the global academic environment. The motivations for internationalization include commercial advantage, knowledge and language acquisition, enhancing the curriculum with international content, and many others. Specific initiatives such as branch campuses, cross-border collaborative arrangements, programs for international students, establishing English-medium programs and degrees, and others have been put into place as part of internationalization. Efforts to monitor international initiatives and ensure quality are integral to the international higher education environment.

International expansion of emerging market enterprises: A springboard perspective

Abstract: In this article, we present a springboard perspective to describe the internationalization of emerging market multinational corporations (EM MNEs). EM MNEs use international expansion as a springboard to acquire strategic resources and reduce their institutional and market constraints at home. In so doing, they overcome their latecomer disadvantage in the global stage via a series of aggressive, risk-taking measures by aggressively acquiring or buying critical assets from mature MNEs to compensate for their competitive weaknesses. We discuss unique traits that characterize the international expansion of EM MNEs, and the unique motivations that steer them toward internationalization. We further delineate peculiar strategies and activities undertaken by these firms in pursuit of international expansion, as well as internal and external forces that might compel or facilitate their propulsion into the global scene. We finally explain the risks and remedies associated with this international ‘springboarding’ strategy and highlight major issues meriting further investigation.

Internationalization and the Performance of Born-Global SMEs: The Mediating Role of Social Networks

Abstract: This paper offers a social network explanation for the purported relationship between internationalization and firm performance in the context of born global small and medium enterprises (SMEs). We argue that home-based social networks play a mediating role in the relationship between inward and outward internationalization and firm performance. The mediating mechanism is attributed to three information benefits of social networks: (1) knowledge of foreign market opportunities; (2) advice and experiential learning; and (3) referral trust and solidarity. Using survey data from SMEs in the largest emerging economy of China, we found some support for this mediating role of social networks in the form of guanxi . The results imply that international business managers should consider social networks as an efficient means of helping internationally oriented SMEs to go international more rapidly and profitably

The Global Diffusion of Public Policies: Social Construction, Coercion, Competition, or Learning?

Abstract: Social scientists have sketched four distinct theories to explain a phenomenon that appears to have ramped up in recent years, the diffusion of policies across countries. Constructivists trace policy norms to expert epistemic communities and international organizations, who define economic progress and human rights. Coercion theorists point to powerful nation-states, and international financial institutions, that threaten sanctions or promise aid in return for fiscal conservatism, free trade, etc. Competition theorists argue that countries compete to attract investment and to sell exports by lowering the cost of doing business, reducing constraints on investment, or reducing tariff barriers in the hope of reciprocity. Learning theorists suggest that countries learn from their own experiences and, as well, from the policy experiments of their peers. We review the large body of research from sociologists and political scientists, as well as the growing body of work from economists and psychologists, pointing to the diverse mechanisms that are theorized and to promising avenues for distinguishing among causal mechanisms.

Internationalization and the performance of born-global SMEs: the mediating role of social networks

Abstract: This paper offers a social network explanation for the purported relationship between internationalization and firm performance in the context of born-global small and medium enterprises (SMEs). We argue that home-based social networks play a mediating role in the relationship between inward and outward internationalization and firm performance. The mediating mechanism is attributed to three information benefits of social networks: (1) knowledge of foreign market opportunities; (2) advice and experiential learning; and (3) referral trust and solidarity. Using survey data from SMEs in the largest emerging economy of China, we found some support for this mediating role of social networks in the form of guanxi. The results imply that international business managers should consider social networks as an efficient means of helping internationally oriented SMEs to go international more rapidly and profitably.

The Happy Few: The Internationalisation of European Firms

Abstract: Policymakers tend to view the internationalisation of firms from the perspective of export, import and FDI statistics. A lack of statistical information at the firm level has so far prevented the systematic inclusion of firm-level analysis in the policymaker's standard toolbox. Some firm-level datasets are now available, however, and their analysis reveals some new facts that are simply unobservable at the aggregate level.

Building capabilities for international operations through networks: a study of Indian firms

Abstract: In this study we seek to explain how firms from emerging markets build capabilities to operate in international markets through learning from parental networks. The building of these capabilities is of particular interest, as firms from emerging markets may not necessarily possess the monopolistic advantages commonly referred to in IB literature, which allow a firm to succeed in international markets. Using lagged cross-sectional regression models on a sample of 794 Indian firms, we found that firms draw on the international experience of their parental and foreign networks to build such capabilities. Findings also indicate that network scope is beneficial for increasing exposure to international markets only in the case of networks that are either small or medium sized. Additionally, we found that firms lacking market power in their home market benefit through foreign partnerships when internationalizing operations.

What makes a process a capability? Heuristics, strategy, and effective capture of opportunities

Abstract: While organizational processes, such as internationalization, acquisition, and alliance, are a fundamental concept within many literatures and central to firm capabilities, controversy exists regarding how they become high performing. One view emphasizes the role of experience while a second view emphasizes cognition and, in particular, the role of articulated heuristics. Using qualitative and quantitative field data on the internationalization process of entrepreneurial firms from three culturally distinct regions (Finland, U.S., Singapore), we juxtapose these two competing theoretical views to better gain insight into organizational processes and capabilities. The core contribution of our paper is insight into the structure of firm capabilities. Results show that organizational heuristics more closely relate to the development of a high performing process and hence a firm capability. At a broader level, we contribute to strategy by empirically validating the strategic logic of opportunity, a logic that is particularly relevant in dynamic markets and growth oriented firms. We also contribute to entrepreneurship by adding to the opportunity discovery vs. opportunity creation debate, and by shedding light on the relationship between structure and performance in new ventures. Overall, we contribute to the emerging but growing body of research emphasizing a more cognitive view of firms. Copyright © 2007 Strategic Management Society.

Causes of the difficulties in internationalization

Abstract: We study the causes of the difficulties faced by firms when they internationalize in search of new markets. We build on the resource-based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage: loss of advantage provided by resources transferred abroad; creation of a disadvantage by resources transferred abroad; and lack of complementary resources required to operate abroad. In each set, we further distinguish difficulties that are specific to a firm from those that are common to a set of firms. We argue that only a few of the resulting types of difficulties of internationalization are exclusive to the cross-border expansion, and propose solutions that address the root cause of each type.

Toward a Typology of Commitment States among Managers of Born-Global Firms: A Study of Accelerated Internationalization:

Abstract: Substantial scholarly work has shed much light on the development of a contemporary global environment—namely, the phenomenon of born-global firms. These young entrepreneurial firms, which take on ...

The Internationalization of SMEs and International Entrepreneurship: A Critique and Policy Implications

Abstract: Wright M., Westhead P. and Ucbasaran D. (2007) Internationalization of small and medium-sized enterprises (SMEs) and international entrepreneurship: a critique and policy implications, Regional Studies 41, 1013–1029. Practitioners are seeking to provide a supportive environment for growing ventures. An important policy challenge is the provision of support for small and medium-sized enterprises (SMEs) seeking to internationalize. To guide practitioner resource allocation decisions, recent conceptual and empirical developments relating to SME internationalization are discussed. An international entrepreneurship perspective is presented as a counterpoint to the established internationalization perspectives, which may have guided practitioner understanding of the aspirations and needs of SMEs. The emerging international entrepreneurship perspective relating to SME internationalization is critically reviewed with regard to the following seven themes: the timing of internationalization; the intensity and susta...

Internationalization as a response to globalization: Radical shifts in university environments

Abstract: This case study probes recent developments in a number of academic and non-academic aspects of a private research university in response to current globalization trends. Under the name of internationalization, university administrators and external firms are emerging as powerful decision-makers shaping academic content and even academic governance. This is manifested in student recruitment and in the hiring of prestigious professors and researchers to increase university reputation and thus to appeal to more students and secure more research funds. Among disciplines central to economic and technological globalization, such as communication, business, and engineering, patterns of convergence are emerging. Rather than internationalism, internationalization is found to prevail, and internationalization is found to signify predominantly a search for student markets domestically and abroad rather than positioning the university’s knowledge at the service of others in less advantaged parts of the world.

Liabilities of regional foreignness and the use of firm-level versus country-level data: a response to Dunning et al. (2007)

Abstract: We are pleased that Dunning et al. have provided macro (country) level data demonstrating the increased internationalization of many nations over the past decade. We also appreciate their findings lending support to our perspective on the regional nature of world business. Our work was based solely on micro (firm) level data. Both country-level data and firm-level data have methodological problems, which we attempt to reconcile in this commentary. We also address the broader conceptual issues of how to interpret country-level vs firm-level data.

Internationalisation, Innovation and Productivity: How Do Firms Differ in Italy?

Abstract: This paper addresses the issue of intra-industry heterogeneity and internationalisation. We show that, after controlling for sector, location, firm age and size, Italian manufacturing companies exhibit different economic and innovative performance according to their involvement in foreign activities. In particular, exporters show intermediate innovative performance between non-internationalised firms and those carrying out foreign production. Multinationals with a lower commitment to foreign markets, i.e. with non-manufacturing activities abroad only, exhibit a higher productivity than exporters but they do not appear to innovate more than the latter. Heterogeneity in productivity is robust to controlling for innovation inputs and outputs, suggesting that the difference in economic performance cannot be entirely attributed to different innovative activities, and that the involvement in international operations can be a distinct channel of knowledge accumulation.

Questing for internationalization of universities in Asia : critical reflections

Abstract: Globalization and the evolution of the knowledge-based economy have caused dramatic changes to the character and functions of higher education in most countries around the world. One major trend related to reforming and restructuring universities in Asia that has emerged is the adoption of strategies along the lines of the Anglo-Saxon paradigm in internationalizing universities in Asia with the intention to make the higher education systems more globally competitive. The principal goal of this article is to critically reflect on internationalization of universities in Asia. The first half of the article focuses on strategies in internationalizing universities in Asia, and the second half of the article discusses key issues related to the internationalization of universities in Asia, especially examining the implications for following the Anglo-Saxon paradigm in transforming and internationalizing the university systems in Asia.

The role of path dependency and managerial intentionality: a perspective on international business research

Abstract: Several decades of research in the field of international business have advanced various theories and studies on the internationalization of firms. Our assessment of the literature on internationalization shows that the focus has been primarily on path-dependency and learning-based aspects of internationalization, while managerial intentionality and the possibility of managers making deliberate strategic choices towards further internationalization have not been very prominent in the IB literature. We argue that internationalization paths and processes should be approached as a joint outcome of management intentionality and experience-based learning. In other words, managers are assumed to have the ability and the intention to influence the evolutionary paths of the firm. We derive a future research agenda that calls for the pursuit of this promising and emergent research stream. Moreover, we develop a model integrating managerial intentionality, knowledge/experience and other factors (institutional and selection forces) to explain heterogeneous outcomes of internationalization positions, paths and processes.

Is international business good for companies? The evolutionary or multi-stage theory of internationalization vs. the transaction cost perspective

Abstract: and Key Results This paper’s objective is to articulate, more precisely than has occurred in the past, the principal theory rationales underlying the Multinationality/Performance (M/P) link, by examining each claim for the negative or positive benefits of internationalization, from the lens of the theory of the firm and the multinational enterprise. A concurrent objective of this paper is to respond to critiques of M/P theory and discuss methodology and operationalization problems in empirical testing. While international expansion of a firm will not necessarily always improve performance (during the initial international expansion stage, or in cases where a firm may have over-internationalized), for the most part, over the considerable middle range of expansion, net positive benefits accrue from internationalization. Underlying theory rationales are detailed in the paper. The results of over one hundred empirical studies over the past 30 years appear, on superficial examination, to be contradictory, but can be reconciled by the recently proposed 3-stage or S-shaped general theory.

The internet and international marketing

Abstract: Purpose – This paper aims to provide a link between the concepts of internationalization and internetalization, since both have become an e‐business.Design/methodology/approach – This study extends a model developed by Buttriss and Wilkinson which offers a starting‐point for classifying elements and identifying interactions in the internationalization process in global marketing. The objective has been achieved through the comparison between the Buttriss and Wilkinson model and a suggested model by the researcher.Findings – The adoption of internationalization provides excellent opportunities in international marketing activities. It is suggested that e‐business is made up of many elements, such as business intelligence, supply chain management, customer relationship management, and enterprise resource planning. All of these existed in electronic form prior to the web but to a limited degree of penetration and below the level of sophistication that is prevailing today.Originality/value – This paper fulfil...

Human capital and SME internationalization: a structural equation modeling study

Abstract: This study uses a structural equation modeling technique to predict the internationalization of small and mediumsized enterprises (SMEs) from the entrepreneur's human capital (dimensions: international business skills, international orientation, environmental perception, and management know-how). While international orientation and environmental risk perception predicted internationalization, international business skills and management know-how did not. The implications of these findings for research and practice are discussed. Copyright © 2007 ASAC. Published by John Wiley & Sons, Ltd.

The Internationalization-Performance Relationship at Swiss Firms: A test of the S-Shape and Extreme Degrees of Internationalization.

Abstract: and Key Results Researchers have recently suggested that on average the relationship between internationalization and performance will be S-shaped. In this study, we test this pattern investigating 87 Swiss multinational companies in manufacturing industries over an 8-year period (1998–2005; N = 696). Large Swiss companies cover the full range of internationalization, with many measuring over 90 percent foreign sales-to-total sales. This allows for a unique test of performance levels at very high degrees of internationalization. We find that in the case of Swiss MNCs the S-curve is shifted to the right, and preceded by an initial stage of increasing performance. We find that companies operating at extreme (very high) degrees of internationalization face lower average performance and higher average performance variation.

40 Years of Research on Internationalization and Firm Performance: More Questions than Answers?

Abstract: and Key Results * Our introduction to this focused issue of MIR (i) provides an overview of alternative approaches to the modeling of the relationship between internationalization and performance, (ii) suggests answers to the question why previous research on the relationship has yielded contradictory results and (iii) suggests ways how to overcome current problems of research in this important field of international business. * The focused issue reflects the diversity of research on the internationalization-performance relationship: it comprises both conceptual papers and empirical studies, the latter using different methods and data sets. Each of the papers represents a unique answer to the question of how research on the internationalization-performance relationship can be conducted. In total, the papers provide a broad, but also detailed overview of the state-of-the-art in the field. Key Words Internationalization, Performance, Degree of Internationalization Performance as a Basic Research Objective of International Business The question of whether there is a systematic relationship between the internationalization of firms and their performance is central to the field of International Business. Explicitly or implicitly, the question is a major element of all contributions to the theory of foreign direct investment (FDI) and to other theories of foreign market entry. Furthermore, over the years the question has been the subject of a great number of empirical studies, based on various methods. The empirical studies have come to heterogeneous, sometimes contradictory results (Grant 1987, Geringer et al. 1989, Tallman/Li 1996, Gomez-Meija/Palich 1997, Hitt et al. 1997, Gomes/Ramaswamy 1999, Geringer et al. 2000, Denis et al. 2002, Capar/Kotabe 2003, Ruigrok/Wagner 2003, Lu/Beamish 2004, Chiang/Yu 2005). Given the pivotal importance of the topic for the field of International Business, this is highly unsatisfactory. More recently, the debate on the relationship between internationalization and performance has received increased attention. This is mainly due to new empirical studies that make use of new models. While previous empirical research was mostly based on linear (Grant 1987, Daniels/Bracker 1989, Kim et al. 1989) or, in some cases, quadratic models (Gomes/Ramaswamy 1999, Capar/Kotabe 2003), now several authors have postulated a so-called "3-stage theory" based on a sigmoid model (Riahi-Belkaoui 1998, Contractor et al. 2003, Lu/Beamish 2004, Thomas/Eden 2004, Chiang/Yu 2005). This model has quickly established itself in the literature as a "benchmark model". Its proponents claim that the 3-stage theory can be interpreted as a "general theory", i.e., a theory that encompasses other attempts to model the relationship between firm internationalization and performance (for details, see the article by Contractor 2007 in this focused issue). Another contribution that has also helped to rekindle the debate is a paper by Hennart in which he, using arguments from transaction cost theory, very forcefully argues that there is no theoretical basis for expecting a systematic relationship between a firm's internationalization and its performance (Hennart 2007, in this issue). After so many years of research that has been based on the explicit or implicit assumption of a positive relationship of exactly that kind, such a paper is bound to provoke and to irritate. In our opinion, it is helpful to distinguish several levels, or problematic areas, in the discussion on the relationship between internationalization and performance. 1. First of all, there is the fundamental theoretical question of whether one can expect a systematic positive (or negative) relationship between firms' internationalization processes over time, or their degrees of internationalization at any point in time, and their contemporaneous or subsequent performance. …

Internationalization of Higher Education in the OECD Countries: Challenges and Opportunities for the Coming Decade:

Abstract: This article explores the possible development of internationalization of higher education in Organisation for Economic Co-operation and Development (OECD) countries, analyzing how the main driving forces may influence the internationalization process, globalization and the changing role of nation-states, regional and international bodies, and multilateral frameworks and agreements. The analysis is carried out based on four future scenarios for higher education developed by the OECD. Implications of various scenarios are analyzed in terms of their broader meaning for the main functions of higher education and issues of access, quality, and equity. Consequently, the implications for internationalization are derived. A special focus is placed on the consequences of the various scenarios for cooperation and competition as major strategic categories in the internationalization process. Finally, some further questions are raised with respect to the internationalization mission of higher education institutions in a globalized world and how the concept of internationalization may evolve.