•We explore the role of Chinese government in the internationalization.•Chinese governmental promotion of SOEs and the institutional escapism on POEs.•This contributes to a new understanding of the ...internationalization process.•This study identifies the limits and fills a gap of the Uppsala model.
The main focus of this study is the contrasting mechanisms through which the Chinese government influences the internationalization of Chinese state-owned enterprises (SOEs) and of privately owned enterprises (POEs). The different circumstances created by the Chinese government at the outset of internationalization are found to affect the speed of internationalization and the network positions of the internationalizing firms. The research design is an in-depth multiple-case study comprising two SOEs and two POEs in the process of entering into both developed and developing host countries. The value of this study lies in its identification, theorization and analysis of, on the one hand, the Chinese governmental promotion of SOEs and, on the other hand, the institutional escapism on the part of the POEs. This contributes to a new understanding of the process through which the government takes on the role of ecological management, to which is applied self-theory. This study also identifies the limits of the Uppsala model with regard to the paths to internationalization and proposes a mechanism to explain why these limits exist. The four network positions identified in the study indicate how firms are embedded in the network of the foreign markets and in so doing contributes to filling a gap in the research on the concept of network position as outlined in the revised Uppsala model (of 2009).
The myth of the stay-at-home family firm Hennart, Jean-François; Majocchi, Antonio; Forlani, Emanuele
Journal of international business studies,
07/2019, Volume:
50, Issue:
5
Journal Article
Peer reviewed
The prevalent view among family-firm internationalization scholars is that family management discourages internationalization. This is because selling abroad is said to require more specialized ...managers and more resources than selling at home, and yet family firms are unwilling to recruit non-family managers with the required international skills and to dilute their control to obtain the necessary finance. We hypothesize that this argument overlooks the possibility that managers of family-managed SMEs choose business models that both minimize the above-mentioned limitations and leverage the strengths of family governance. Specifically, we argue that selling quality products in global niches allows family-managed SMEs to internationalize without the cosmopolitan managers and the high financial investments required for selling mass-market products abroad; at the same time a global niche business model requires the long time horizon and the high level of social capital that family governance can provide. Modeling a firm’s foreign sales through a gravity model, we test this hypothesis on a large sample of SMEs from four European Union countries. We find that family-managed SMEs have fewer foreign sales than other type of SMEs, but that the difference is partially bridged if family-managed SMEs have adopted a global niche business model.
Existing approaches at explaining accelerated internationalization of born global firms are incomplete as they do not capture the learning that is undertaken by these firms and their founders prior ...to the firm's legal establishment. Building on the extant literature and drawing on the dynamic capabilities view of competitive strategy, this paper presents a conceptual model of born global firm internationalization. We conjecture that a set of dynamic capabilities that are built and nurtured by internationally-oriented entrepreneurial founders enable these firms to develop cutting-edge knowledge intensive products, paving the way for their accelerated market entry. We develop propositions and offer concluding remarks.
•We contribute to existing literature with a comprehensive approach to study the CEO characteristics that may influence family firms in their decision of internationalize their activity.•There have ...been no studies so far analysing whether the gender variable predict the propensity to export.•We show specific barriers to internationalization in the case of small and medium family firms.•Our results contribute with new and original evidence to analyze specific characteristics of CEO that have not been studied previously in the internationalization literature of family firms in Continental countries.
This research uses a survey dataset of 187 Spanish family firms to study the characteristics that may influence family firms in their decision of internationalize their activity. Based on individual and demographic variables, the study concludes that the CEO academic level of achievement influences the level of success in international expansion. In addition, the capacity for generating resources of the family firm provokes a lower resistance from family members to export. Moreover, we confirm that industry characteristics do matter in internationalization processes, noting that the specific market, product/service and technology characteristics influence the family firm internationalization. Contrary to expectations, the gender variable and the percentage of family members sitting on the board do not significantly predict the propensity to export.
Our findings suggest family firm leaders seeking greater levels of firm internationalization to seriously consider the qualification level of their CEO. These insights can be useful for regulators who have to develop programs for supporting sales internationalization, as well as owners and managers of family firms, who need to understand the CEO abilities that may improve their capacity to internationalize their business.
•Organizational outcomes of CEO narcissism have not been analyzed in the context of international business.•The study analyzes potential relationships between narcissistic tendencies of CEOs and ...their internationalization decisions.•CEOs with a high degree of narcissism tend to intensify business activities abroad in general.•The expected relationship between CEO narcissism and business activities in “high-risk” markets cannot be identified.
Internationalization decisions represent major objects of international business research; in this context, the respective role of decision-makers, i.e., strategic actors has been under study for now nearly 50 years. However, some important individual characteristics of strategic actors, which seem to influence individual decision-making in a significant way, have been – in contrast to general management research – widely disregarded. Among those characteristics, narcissism plays a decisive role. Trying to provide a first attempt to fill this research gap our paper aims at theorizing on as well as empirically analyzing potential relationships between narcissistic tendencies of CEOs and their internationalization decisions. The empirical study of major German manufacturing firms over the period 2004–2013 shows that CEOs with a high degree of narcissism tend to intensify business activities abroad in general while the expected effect on intensified activities in markets with a high psychic distance cannot be identified. These research results help to better understand the drivers of firms’ internationalization, stress the importance of recognizing managerial decision-making in the context of analyzing business activities abroad, and improve the prediction of CEOs’ decision-making behavior in general.
The performance implications of internationalization have been a matter of debate in management literature for decades. Similar to developed market multinational enterprises (DMNEs), scholars found ...that emerging-market internationalizing firms (EMIFs) have initial costs and subsequent benefits of internationalization such that internationalization-performance (I-P) relationship is U-shaped. Emergingness of EMIFs gives us the opportunity to theorize how these internationalizing firms develop novel capabilities relevant to their state of evolution and resource conditions. Relying on resource management theory, we propose two capabilities – management of R&D investments (RIM) to balance between market and resource seeking motivations and re-deployment of strategic resources (SRD) to catch-up with the competitors. We use 20 years data from 837 Indian firms to empirically test whether the proposed capabilities steepen the I-P relationship and shift the turning point of the U-shaped curve to left. We find empirical support for our hypotheses, and thereby contribute to the literature on resource management in EMIFs and empirical analysis of non-linear relationship.
While CSR has become an integral part of most firms’ agendas, questions remain as to why some firms embrace CSR more than others. By drawing on legitimacy theory, we suggest that firms that are ...exposed to elevated levels of internationalization are more prone to engage in CSR. We differentiate between the internationalization of activities, the internationalization of ownership, and the internationalization of boards and propose that each dimension has a distinct effect on CSR. Our empirical analysis focuses on Japan, a country where CSR has previously been considered a “foreign” concept. With our study, we emphasize the role of legitimacy as a source of firms’ increasing engagement in CSR and underline the necessity for a more differentiated view of the internationalization-CSR relationship. We also provide practical implications as we suggest firms to use CSR as a solution to respond to legitimacy threats resulting from internationalization.
To reimagine means, literally, to reassess, rethink, and recreate. It implies a need for radical change and innovation. In this special issue, authors explore the possibilities of connecting ...internationalization to society, for the benefit of society. Hitherto, much of the literature published on internationalization has been essentially inward looking, focused on how students and institutions experience internationalization and how they benefit, or not, from it. The papers in this issue explore a broader vision for internationalization, one focused also on the real and potential impact of internationalization activities on local and global communities. In different ways, each of the articles contributes to a new vision for internationalization, through the important process of reimagining internationalization for society.
•The study explores the role of absorptive capacity in international performance.•Absorptive capacity plays a strong role in performance of early internationalizer.•Absorptive capacity has a weak ...impact on international experienced firms.
While learning plays an important role in firms’ internationalization process, the impact absorptive capacity has on the international performance when considering the timing of the internationalization is still unclear. Our research explores the role of absorptive capacity in international performance of early internationalizing firms and international experienced firms. Combining established theories, we propose opposing effect of absorptive capacity as the learning advantages of newness vanish over time and are replaced by organizational rigidities and inertia. Based on survey data from 162 Chinese firms, our empirical results indicate that the influence of absorptive capacity on international performance becomes stronger when the firm enters foreign market in its earlier stage of life cycle. However, we find that as the learning advantages of newness diminish, so does the effectiveness of high levels of absorptive capacity. Absorptive capacity resources become captured by organizational and operational rigidities and contribute less to firm performance.
While studies show that different internationalization rhythms may result in differing financial performances or cost efficiencies, the relationship between internationalization rhythms and ...innovation performance remains underexplored. More importantly, the moderating role of speed on this relationship has not been examined, given the limits to how much expansion firms can absorb within a given period without jeopardizing operations and as time compression diseconomies may emerge with high-speed expansion. Here, we apply an absorptive capacity perspective to examine the moderating role of internationalization speed. Unbalanced panel data from Chinese multinational enterprises between 2008 and 2014 reveal a negative relationship between parent companies’ internationalization rhythm and innovation performance, with stronger effects under high internationalization speed. Meanwhile, this relationship weakens (strengthens) with increasing internal organizational slack (external competitive intensity).
•Internationalization speed moderate the relationship between internationalization rhythms and innovation performance.•Organizational slack and competitive intensity moderate the impact of rhythms on innovation performance.•The study explores the mediating role of absorptive capacity in innovation performance.
PDF