This research article examines how international orientation influences export performance in born global firms. It hypothesizes that international orientation has a strong positive effect on export performance for born global firms. However, this relationship is moderated by innovative capacity, market dynamism, and environmental favorability, which strengthen the effect of international orientation on export performance. The article reviews relevant literature on born global firms, international orientation, export performance, and potential moderating factors. It then proposes a conceptual model and hypotheses to be tested using a structural equation model. The goal is to better understand how born global firms achieve superior international performance through capabilities like international orientation.
This master's thesis examines the relationship between innovation and export performance in transition economies, and how the home country business environment moderates this relationship. Using survey data from over 15,000 firms in 30 transition economies, the study finds that innovation has a positive effect on export performance. It also finds that better access to finance positively moderates the innovation-export performance relationship. However, lower corruption and stronger intellectual property rights protection do not moderate the relationship as expected. The results provide insights into how the business environment influences the ability of firms in transition economies to leverage innovation for export success.
This document provides an overview of born global firms. It defines born global firms as companies that seek significant competitive advantage from international resources and sales from inception. In contrast, traditional firms gradually increase international involvement. The document outlines the typical development stages of born global firms and compares them to traditional firms. Born global firms internationalize earlier, have a global vision from the start, and use networks to rapidly penetrate international markets. The document also provides examples, such as Amazon, and discusses challenges faced by born global firms like lack of experience and financing.
This document discusses factors that allow some companies ("Born Globals") to internationalize their business from a very early stage. It identifies several key factors that differentiate Born Globals from traditional firms: management with an entrepreneurial orientation and international experience, investment in innovative products with short lifecycles in high-tech sectors, targeting of niche global markets, use of advanced marketing strategies, reliance on new communication and transportation technologies, and obtaining mixed financing from banks and external sources through reinvestment in R&D. The rapid changes in global markets and technologies make it difficult to generalize factors beyond the specific period being studied.
This paper investigates the differences in innovation behaviour, i.e. differences in innovation sources and innovation effects, among manufacturing firms in three NMS: the Czech Republic, Hungary and Poland. It is based on a survey of firms operating in four manufacturing industries: food and beverages, automotive, pharmaceuticals and electronics. The paper takes into account: innovation inputs in enterprises, cooperation among firms in R&D activities, the benefits of cooperation with business partners and innovation effects (innovation outputs and international competitiveness of firms' products and technology) in the three countries. After employing cluster analysis, five types of innovation patterns were detected. The paper characterises and compares these innovation patterns, highlighting differences and similarities. The paper shows that external knowledge plays an important role in innovation activities in NMS firms. The ability to explore cooperation with business partners and the benefits of using external knowledge are determined by in-house innovation activities, notably R&D intensity.
Authored by: Ewa Balcerowicz, Marek Pęczkowski, Anna Wziatek-Kubiak
Published in 2009
Leopoldo Laborda Castillo , Daniel Sotelsek Salem & Justo de Jorge Moreno (2014)
Foreign Direct Investment and Productivity Spillovers: Firm-Level Evidence From Chilean Industrial
Sector, Latin American Business Review, 15:2, 93-122, DOI: 10.1080/10978526.2014.905152
International%20 Business%20 Strategies%20 M A N 30020Khenddro Low
This document provides an overview of topics related to international business strategies, including:
1. It introduces concepts like globalization, the drivers of globalization, and debates around issues like anti-globalization and national sovereignty.
2. It discusses theories relevant to understanding globalization and international business, such as cultural theory, global economic theory, and political theory.
3. It outlines several industries - including confectionery, football, theme parks, and airlines - and proposes analysis of case studies involving strategic issues within those industries.
Po b lecture 8 global business models studentsDiana Shore
This document discusses various topics relating to global business models and internationalization strategies. It will cover different types of firms operating internationally like multinational corporations and born global firms. Various forms of international business activity and strategic approaches to entering foreign markets will be examined. Product and market entry strategies available to global companies will also be considered, along with frameworks for determining optimal global business structures. The implications of competitive and cooperative business models will be determined. Reasons for the existence of black markets and their key issues will be explored.
Internationalization and Sustainable Operations: A Broad Investigation of Chi...Scientific Review SR
We investigate if internationalization behaviors encourage sustainable operations of China’s manufacturing firms due to their substantial impact on climate change and special governance modes, and organize a heterogeneity test to clarify what kind of internationalization behaviors can robustly influence such operations. We find that firms with abundant assets and heavy-polluting feature are more committed to sustainable operations. Getting close to international sustainability standards, international auditing standards, and international business all improve sustainable operations. Heterogeneity test further shows that compared with international standards, the positive impact of international business on sustainable operation lacks a robustness, which responds to an argument that for one country, international business acts as a double-edged sword. Overall, this paper reveals internationalization as a key indicator significantly influencing economic, ecological, and social spheres in manufacturing sectors of emerging markets, and complying with well-accepted international standards can be significantly embodied in a more optimistic sustainable operations. However, how to deal with international business in a right manner is a research highlight worthy of ongoing discussion. We focus on different types of internationalization behaviors, and this indicator can theoretically inspire future study to dialectically evaluate the role of internationalization in addressing sustainability problems in emerging markets’ pillar industries.
This master's thesis examines the relationship between innovation and export performance in transition economies, and how the home country business environment moderates this relationship. Using survey data from over 15,000 firms in 30 transition economies, the study finds that innovation has a positive effect on export performance. It also finds that better access to finance positively moderates the innovation-export performance relationship. However, lower corruption and stronger intellectual property rights protection do not moderate the relationship as expected. The results provide insights into how the business environment influences the ability of firms in transition economies to leverage innovation for export success.
This document provides an overview of born global firms. It defines born global firms as companies that seek significant competitive advantage from international resources and sales from inception. In contrast, traditional firms gradually increase international involvement. The document outlines the typical development stages of born global firms and compares them to traditional firms. Born global firms internationalize earlier, have a global vision from the start, and use networks to rapidly penetrate international markets. The document also provides examples, such as Amazon, and discusses challenges faced by born global firms like lack of experience and financing.
This document discusses factors that allow some companies ("Born Globals") to internationalize their business from a very early stage. It identifies several key factors that differentiate Born Globals from traditional firms: management with an entrepreneurial orientation and international experience, investment in innovative products with short lifecycles in high-tech sectors, targeting of niche global markets, use of advanced marketing strategies, reliance on new communication and transportation technologies, and obtaining mixed financing from banks and external sources through reinvestment in R&D. The rapid changes in global markets and technologies make it difficult to generalize factors beyond the specific period being studied.
This paper investigates the differences in innovation behaviour, i.e. differences in innovation sources and innovation effects, among manufacturing firms in three NMS: the Czech Republic, Hungary and Poland. It is based on a survey of firms operating in four manufacturing industries: food and beverages, automotive, pharmaceuticals and electronics. The paper takes into account: innovation inputs in enterprises, cooperation among firms in R&D activities, the benefits of cooperation with business partners and innovation effects (innovation outputs and international competitiveness of firms' products and technology) in the three countries. After employing cluster analysis, five types of innovation patterns were detected. The paper characterises and compares these innovation patterns, highlighting differences and similarities. The paper shows that external knowledge plays an important role in innovation activities in NMS firms. The ability to explore cooperation with business partners and the benefits of using external knowledge are determined by in-house innovation activities, notably R&D intensity.
Authored by: Ewa Balcerowicz, Marek Pęczkowski, Anna Wziatek-Kubiak
Published in 2009
Leopoldo Laborda Castillo , Daniel Sotelsek Salem & Justo de Jorge Moreno (2014)
Foreign Direct Investment and Productivity Spillovers: Firm-Level Evidence From Chilean Industrial
Sector, Latin American Business Review, 15:2, 93-122, DOI: 10.1080/10978526.2014.905152
International%20 Business%20 Strategies%20 M A N 30020Khenddro Low
This document provides an overview of topics related to international business strategies, including:
1. It introduces concepts like globalization, the drivers of globalization, and debates around issues like anti-globalization and national sovereignty.
2. It discusses theories relevant to understanding globalization and international business, such as cultural theory, global economic theory, and political theory.
3. It outlines several industries - including confectionery, football, theme parks, and airlines - and proposes analysis of case studies involving strategic issues within those industries.
Po b lecture 8 global business models studentsDiana Shore
This document discusses various topics relating to global business models and internationalization strategies. It will cover different types of firms operating internationally like multinational corporations and born global firms. Various forms of international business activity and strategic approaches to entering foreign markets will be examined. Product and market entry strategies available to global companies will also be considered, along with frameworks for determining optimal global business structures. The implications of competitive and cooperative business models will be determined. Reasons for the existence of black markets and their key issues will be explored.
Internationalization and Sustainable Operations: A Broad Investigation of Chi...Scientific Review SR
We investigate if internationalization behaviors encourage sustainable operations of China’s manufacturing firms due to their substantial impact on climate change and special governance modes, and organize a heterogeneity test to clarify what kind of internationalization behaviors can robustly influence such operations. We find that firms with abundant assets and heavy-polluting feature are more committed to sustainable operations. Getting close to international sustainability standards, international auditing standards, and international business all improve sustainable operations. Heterogeneity test further shows that compared with international standards, the positive impact of international business on sustainable operation lacks a robustness, which responds to an argument that for one country, international business acts as a double-edged sword. Overall, this paper reveals internationalization as a key indicator significantly influencing economic, ecological, and social spheres in manufacturing sectors of emerging markets, and complying with well-accepted international standards can be significantly embodied in a more optimistic sustainable operations. However, how to deal with international business in a right manner is a research highlight worthy of ongoing discussion. We focus on different types of internationalization behaviors, and this indicator can theoretically inspire future study to dialectically evaluate the role of internationalization in addressing sustainability problems in emerging markets’ pillar industries.
This document summarizes the results of the 2009 Survey of Innovation Activities conducted in the Philippines. The survey aimed to gather data on innovation activities among firms to better understand innovation and its relationship to economic growth. It found that over half of sampled firms engage in some form of innovation, with larger firms innovating more than smaller ones. Firms varied in innovation activities across study areas and industries. Effects of innovation were largely customer-driven. Firms reported that cost factors were the biggest barriers to innovation and government support for innovation was limited, especially for medium-sized firms and product innovations. Knowledge and cooperation networks for innovation in the Philippines were also found to be relatively weak.
This document discusses a study analyzing the internationalization process of family businesses in the wine industry. The study examines how resources from private and professional networks facilitate internationalization. It analyzes differences in networking competencies between wine business owners and how these relate to the level of internationalization. The study challenges the Uppsala Model of incremental internationalization, finding support for the "born global hypothesis" after a business succession process. Networks are found to provide both financial resources and informal resources like information and knowledge that encourage international involvement.
A comparative study of incubators’ landscapes in europe and the middle eastAlexander Decker
1) The document reviews literature on incubator models in Europe and the Middle East, focusing on four dimensions: graduate firms, goals, services, and client firms.
2) It finds that Europe has more graduate firms (832) than the Middle East (43), and that incubators' goals generally focus on entrepreneurship, job creation, and technology commercialization.
3) Incubator services tend to be stronger in Europe, providing both tangible and intangible support, while Middle Eastern models provide medium support.
4) Europe has more client firms in incubators (391) than the Middle East (68), attributed to differences in founding years.
Daniel Sotelsek www.danielsotelsek.com
This paper examines two sources of global knowledge spillovers: foreign direct investments and trade. Empirical evidence demonstrates that foreign direct investment and trade can contribute to overall domestic productivity growth only when the technology gap between domestic and foreign firms is not too large and when a sufficient absorptive capacity is available in domestic firms. The paper proposes the terms research and development and labor quality to capture the innovative and absorptive capacity of the country. The spillover effects in productivity are analyzed using a stochastic frontier approach. This productivity (in terms of total factor productivity) is decomposed using a generalized Malmquist output oriented index, in order to evaluate the specific effect in technical change, technical efficiency change, and scale efficiency change. Using country-level data for 16 Latin American countries for 1996-2006, the empirical analysis shows positive productivity spillovers from foreign direct investment and trade only when the country has absorptive capacity in terms of research and development. Foreign direct investment and trade spillovers are found to be positive and significant for scale efficiency change and total productivity factor change.
Cassiman in search of complementarity in the innovation strategyCristiano Cunha
- The document discusses complementarity between internal R&D and external knowledge acquisition by firms. It presents two approaches to provide evidence of complementarity from an econometric analysis of Belgian firm data.
- The productivity approach compares innovation performance across firms that pursue different combinations of internal R&D and external knowledge acquisition. The adoption approach examines the correlation between these activities and how they are affected by contextual factors.
- Preliminary results are not fully conclusive on complementarity but provide insights, identifying reliance on basic R&D as an important driver that increases the knowledge benefits of combining internal and external innovation activities.
Porter's theory of national competitive advantage argues that a nation provides the "home base" that allows firms to gain advantages. The theory identifies four determinants of competitive advantage: factor conditions, demand conditions, related and supporting industries, and firm strategy/rivalry. Government policy can influence competitiveness by supporting investment, innovation, and high domestic rivalry rather than protecting industries. Competitive advantage is dynamic and requires continuous upgrading and innovation to withstand erosion over time.
This paper investigates how internal and external knowledge sources contribute to firms' innovation performance. The study analyzes data from 303 firms across 7 European countries. The results show that internal knowledge sources, such as in-house R&D, continuous improvements, and employee training, have the strongest influence on innovation. However, firms also need external knowledge to innovate. Knowledge from local, national, and international sources helps firms supplement their internal knowledge and introduce new ideas that lead to innovation. Firms mainly rely on links with other firms and institutions in their local and global environments to access external knowledge flows that support innovation.
1. Carrefour and Wal-Mart entered the Chinese retail market with different internationalization strategies.
2. Carrefour adopted a decentralized strategy, allowing its Chinese subsidiaries significant autonomy. Wal-Mart used a more centralized global strategy with purchasing.
3. The case of Carrefour and Wal-Mart in China highlights that internationalization is a complex process and different market entry strategies can lead to varying results. Understanding the local market context is important for success.
This document discusses definitions and measures of competitiveness for manufacturing industries and nations. It defines price competitiveness as the ability to price products below competitors, measured by real exchange rates. Non-price or structural competitiveness refers to factors like quality, technology, efficiency. Performance can be indicated by profitability, productivity, efficiency and technological advancement. The author examines how these concepts can be defined and measured, noting challenges in accurately capturing concepts like productivity. Overall the document provides context for understanding competitiveness as it relates to Irish manufacturing.
This document provides a critical review of firm-level innovation models based on research from developed countries and discusses implications for firms in developing countries. It summarizes five generations of innovation models from the 1950s to the 1990s, showing increasing integration of research and development, marketing, manufacturing, and suppliers. However, the models often lack empirical evidence and do not sufficiently account for diversity in innovation processes. The document suggests how firms can best apply innovation models while overcoming limitations in future research.
This document summarizes a study on corporate entrepreneurship and innovation in the Ethiopian leather footwear industry. It provides background on Ethiopia's focus on developing its manufacturing sector, including the leather industry. The leather industry lacks competitiveness in domestic and international markets and is not innovative. The study aims to analyze the relationship between corporate entrepreneurship variables and innovation in leather companies. It developed a model linking these variables and administered a survey to 6 companies. The findings showed corporate entrepreneurship and innovation levels were below average. A positive correlation was found between the variables. Reward systems and time availability contributed most to innovation. The model explained 48% of innovation variance. The results can help managers improve innovation through modifying organizational variables.
Internationalization Process of Chinese Enterprises (updated Sep 19, 2011)Hora Tjitra
Opening Keynote Speech at the 4th China Week for the Ohm Hochschule MBA Students in Hangzhou.
Internationalization Process of Chinese Enterprises - short introduction about China, (new) influences of China to the world, Chances and Challenges of Chinese Enterprises going Abroad.
The document discusses international strategy and provides frameworks for assessing internationalization potential, sources of competitive advantage, types of international strategies, market selection, entry modes, performance impacts, and subsidiary roles. Key factors in internationalization include drivers of globalization, Porter's Diamond model of national advantages, and the four main international strategies. Markets should be evaluated based on attractiveness, distance, and retaliation risk. Common entry modes are exporting, licensing, joint ventures, and foreign direct investment. Internationalization may follow an inverted U-shape performance relationship.
Internationalization presents many challenges for businesses in emerging economies. The document summarizes the key challenges as export challenges including non-tariff barriers and regulations. Debt and cash management challenges due to underdeveloped markets and currency volatility. Integration challenges due to cultural differences and lack of experience. Marketing challenges including lack of market information and adapting to foreign standards. Talent challenges with lack of international experience among managers. The document uses Suzlon Energy as a case study of a company that has successfully navigated these challenges through decentralization, professionalization, international R&D, and an emphasis on performance and culture.
Discovery of key factors that may influence the success of multinational ICT ...Anand Sheombar
This document summarizes a research paper that investigated key factors influencing the success of multinational ICT companies in Base of the Pyramid (BOP) markets in Africa. The research analyzed 10 case studies of ICT projects through literature reviews, case reports, and interviews. Three key factors emerged: 1) BOP strategy and business model, 2) partnerships, and 3) product and service development. The paper argues that successful contributions in developing countries made through ICT depend partly on the health of relationships between partners.
The Internationalisation of Young Internet CompaniesJeroen Reunis
This study is motivated by the lack of explanation in existing literature concerning International New Ventures, SMEs and Born Global firms. To address this lack of explanation this study defines and studies a new type of international new venture, the Internet Enabled International New Venture. These internet ventures are enabled by the internet to exist, generate most of their revenue via the internet and often sell digital products to an increasingly global marketplace. These new type of internet firms are studied in their strategic process of internationalisation. Four key components of this process are studied. (1) Motivation, (2) Market Selection, (3) Market Entry and (4) Internationalisation Barriers. This qualitative study aims to reveal how these new type of internet firms internationalises. A case studies have been conducted for which founders, CEOs and managers of thirteen young international internet firms were interviewed.
The Entrepreneurial Challenge – A comparative study of entrepreneurial dynamics in China, Europe and the US is based on data from the Global Entrepreneurship Monitor (GEM). GEM is the most comprehensive worldwide study on entrepreneurship. Since the first survey, which covered 10 countries and was conducted in 1999, the study has grown to include 181,000 respondents in 62 countries in 2015, representing over 72 percent of the world’s population and 90 percent of the world’s GDP. Pontus Braunerhjelm (editor), Johan P Larsson, Ylva Skoogberg and Per Thulin have contributed to this report.
Contents lists available at SciVerse ScienceDirect Industrial Marketing Manag...محسن حمزه ای
This document examines how entrepreneurial orientation influences firm performance in export markets through exploitative and explorative capabilities. It develops a model showing that entrepreneurial orientation leads to both product development capabilities and overseas market capabilities. Product development exploration capabilities and overseas market exploitation capabilities then enhance new product differentiation, improving market effectiveness. The study investigates these relationships in the context of exporting, addressing gaps in the literature around capabilities beyond just product development and in international settings.
Incubators as tools for economic growth and technology transfer in developed ...Alexander Decker
This document discusses key challenges of business incubators based on a literature review and interview with a US business incubation program. It finds that the three main challenges are:
1) High job creation, graduate companies, and tenant survival rates lead to economic development.
2) High cooperation with R&D and innovation lead to technology commercialization.
3) High sustainable growth, entrepreneurial climate, and smart networking foster entrepreneurship.
The interview assessed variables related to economic development, entrepreneurship, and technology commercialization, finding high results for all, indicating positive potential in these areas. In conclusion, business incubators in developed countries like the US effectively support economic growth, entrepreneurship, and technology transfer.
The document discusses the effects of international marketing environments on entrepreneurship development. It summarizes that cultural, political, and technological environments in foreign markets present both opportunities and threats for entrepreneurs seeking to introduce products globally. The study finds that factors like government policies, regulations, technological changes, and cultural differences in overseas markets significantly impact business transactions and entrepreneurial success abroad. It recommends governments establish supportive frameworks to help entrepreneurs succeed in international markets by navigating challenges from differences in cultural, political, and technological environments across countries.
This document discusses evaluating a firm's readiness for internationalization. It proposes a new framework for assessing small and medium-sized enterprises (SMEs) that want to increase their chances of success in internationalization. The framework goes beyond traditional "go or no go" export diagnostic models, which are outdated given changes in international business. It considers a broader range of international operations for SMEs beyond just exporting. The proposed framework specifies an SME's preparedness and defines preliminary axes in terms of product-market combinations and internationalization modalities. The framework was developed through a literature review, expert panel, and validating its practical application with 54 Canadian SMEs entering international markets over 4 years.
Export_promotion_programmes_as_export_performance_catalysts_for_SMEs.pdfJesus Hidalgo Salas
The purpose of the study is to analyse the joint impact of external factors of small and medium-sized enterprises (SMEs), such as export promotion programmes (EPPs), which encompass trade mobility-, information-, education-, and training- related programmes, and internal factors of SMEs, which encompass export-related resources, preceding-year export performance, and its impact on current-period export performance.
This document summarizes the results of the 2009 Survey of Innovation Activities conducted in the Philippines. The survey aimed to gather data on innovation activities among firms to better understand innovation and its relationship to economic growth. It found that over half of sampled firms engage in some form of innovation, with larger firms innovating more than smaller ones. Firms varied in innovation activities across study areas and industries. Effects of innovation were largely customer-driven. Firms reported that cost factors were the biggest barriers to innovation and government support for innovation was limited, especially for medium-sized firms and product innovations. Knowledge and cooperation networks for innovation in the Philippines were also found to be relatively weak.
This document discusses a study analyzing the internationalization process of family businesses in the wine industry. The study examines how resources from private and professional networks facilitate internationalization. It analyzes differences in networking competencies between wine business owners and how these relate to the level of internationalization. The study challenges the Uppsala Model of incremental internationalization, finding support for the "born global hypothesis" after a business succession process. Networks are found to provide both financial resources and informal resources like information and knowledge that encourage international involvement.
A comparative study of incubators’ landscapes in europe and the middle eastAlexander Decker
1) The document reviews literature on incubator models in Europe and the Middle East, focusing on four dimensions: graduate firms, goals, services, and client firms.
2) It finds that Europe has more graduate firms (832) than the Middle East (43), and that incubators' goals generally focus on entrepreneurship, job creation, and technology commercialization.
3) Incubator services tend to be stronger in Europe, providing both tangible and intangible support, while Middle Eastern models provide medium support.
4) Europe has more client firms in incubators (391) than the Middle East (68), attributed to differences in founding years.
Daniel Sotelsek www.danielsotelsek.com
This paper examines two sources of global knowledge spillovers: foreign direct investments and trade. Empirical evidence demonstrates that foreign direct investment and trade can contribute to overall domestic productivity growth only when the technology gap between domestic and foreign firms is not too large and when a sufficient absorptive capacity is available in domestic firms. The paper proposes the terms research and development and labor quality to capture the innovative and absorptive capacity of the country. The spillover effects in productivity are analyzed using a stochastic frontier approach. This productivity (in terms of total factor productivity) is decomposed using a generalized Malmquist output oriented index, in order to evaluate the specific effect in technical change, technical efficiency change, and scale efficiency change. Using country-level data for 16 Latin American countries for 1996-2006, the empirical analysis shows positive productivity spillovers from foreign direct investment and trade only when the country has absorptive capacity in terms of research and development. Foreign direct investment and trade spillovers are found to be positive and significant for scale efficiency change and total productivity factor change.
Cassiman in search of complementarity in the innovation strategyCristiano Cunha
- The document discusses complementarity between internal R&D and external knowledge acquisition by firms. It presents two approaches to provide evidence of complementarity from an econometric analysis of Belgian firm data.
- The productivity approach compares innovation performance across firms that pursue different combinations of internal R&D and external knowledge acquisition. The adoption approach examines the correlation between these activities and how they are affected by contextual factors.
- Preliminary results are not fully conclusive on complementarity but provide insights, identifying reliance on basic R&D as an important driver that increases the knowledge benefits of combining internal and external innovation activities.
Porter's theory of national competitive advantage argues that a nation provides the "home base" that allows firms to gain advantages. The theory identifies four determinants of competitive advantage: factor conditions, demand conditions, related and supporting industries, and firm strategy/rivalry. Government policy can influence competitiveness by supporting investment, innovation, and high domestic rivalry rather than protecting industries. Competitive advantage is dynamic and requires continuous upgrading and innovation to withstand erosion over time.
This paper investigates how internal and external knowledge sources contribute to firms' innovation performance. The study analyzes data from 303 firms across 7 European countries. The results show that internal knowledge sources, such as in-house R&D, continuous improvements, and employee training, have the strongest influence on innovation. However, firms also need external knowledge to innovate. Knowledge from local, national, and international sources helps firms supplement their internal knowledge and introduce new ideas that lead to innovation. Firms mainly rely on links with other firms and institutions in their local and global environments to access external knowledge flows that support innovation.
1. Carrefour and Wal-Mart entered the Chinese retail market with different internationalization strategies.
2. Carrefour adopted a decentralized strategy, allowing its Chinese subsidiaries significant autonomy. Wal-Mart used a more centralized global strategy with purchasing.
3. The case of Carrefour and Wal-Mart in China highlights that internationalization is a complex process and different market entry strategies can lead to varying results. Understanding the local market context is important for success.
This document discusses definitions and measures of competitiveness for manufacturing industries and nations. It defines price competitiveness as the ability to price products below competitors, measured by real exchange rates. Non-price or structural competitiveness refers to factors like quality, technology, efficiency. Performance can be indicated by profitability, productivity, efficiency and technological advancement. The author examines how these concepts can be defined and measured, noting challenges in accurately capturing concepts like productivity. Overall the document provides context for understanding competitiveness as it relates to Irish manufacturing.
This document provides a critical review of firm-level innovation models based on research from developed countries and discusses implications for firms in developing countries. It summarizes five generations of innovation models from the 1950s to the 1990s, showing increasing integration of research and development, marketing, manufacturing, and suppliers. However, the models often lack empirical evidence and do not sufficiently account for diversity in innovation processes. The document suggests how firms can best apply innovation models while overcoming limitations in future research.
This document summarizes a study on corporate entrepreneurship and innovation in the Ethiopian leather footwear industry. It provides background on Ethiopia's focus on developing its manufacturing sector, including the leather industry. The leather industry lacks competitiveness in domestic and international markets and is not innovative. The study aims to analyze the relationship between corporate entrepreneurship variables and innovation in leather companies. It developed a model linking these variables and administered a survey to 6 companies. The findings showed corporate entrepreneurship and innovation levels were below average. A positive correlation was found between the variables. Reward systems and time availability contributed most to innovation. The model explained 48% of innovation variance. The results can help managers improve innovation through modifying organizational variables.
Internationalization Process of Chinese Enterprises (updated Sep 19, 2011)Hora Tjitra
Opening Keynote Speech at the 4th China Week for the Ohm Hochschule MBA Students in Hangzhou.
Internationalization Process of Chinese Enterprises - short introduction about China, (new) influences of China to the world, Chances and Challenges of Chinese Enterprises going Abroad.
The document discusses international strategy and provides frameworks for assessing internationalization potential, sources of competitive advantage, types of international strategies, market selection, entry modes, performance impacts, and subsidiary roles. Key factors in internationalization include drivers of globalization, Porter's Diamond model of national advantages, and the four main international strategies. Markets should be evaluated based on attractiveness, distance, and retaliation risk. Common entry modes are exporting, licensing, joint ventures, and foreign direct investment. Internationalization may follow an inverted U-shape performance relationship.
Internationalization presents many challenges for businesses in emerging economies. The document summarizes the key challenges as export challenges including non-tariff barriers and regulations. Debt and cash management challenges due to underdeveloped markets and currency volatility. Integration challenges due to cultural differences and lack of experience. Marketing challenges including lack of market information and adapting to foreign standards. Talent challenges with lack of international experience among managers. The document uses Suzlon Energy as a case study of a company that has successfully navigated these challenges through decentralization, professionalization, international R&D, and an emphasis on performance and culture.
Discovery of key factors that may influence the success of multinational ICT ...Anand Sheombar
This document summarizes a research paper that investigated key factors influencing the success of multinational ICT companies in Base of the Pyramid (BOP) markets in Africa. The research analyzed 10 case studies of ICT projects through literature reviews, case reports, and interviews. Three key factors emerged: 1) BOP strategy and business model, 2) partnerships, and 3) product and service development. The paper argues that successful contributions in developing countries made through ICT depend partly on the health of relationships between partners.
The Internationalisation of Young Internet CompaniesJeroen Reunis
This study is motivated by the lack of explanation in existing literature concerning International New Ventures, SMEs and Born Global firms. To address this lack of explanation this study defines and studies a new type of international new venture, the Internet Enabled International New Venture. These internet ventures are enabled by the internet to exist, generate most of their revenue via the internet and often sell digital products to an increasingly global marketplace. These new type of internet firms are studied in their strategic process of internationalisation. Four key components of this process are studied. (1) Motivation, (2) Market Selection, (3) Market Entry and (4) Internationalisation Barriers. This qualitative study aims to reveal how these new type of internet firms internationalises. A case studies have been conducted for which founders, CEOs and managers of thirteen young international internet firms were interviewed.
The Entrepreneurial Challenge – A comparative study of entrepreneurial dynamics in China, Europe and the US is based on data from the Global Entrepreneurship Monitor (GEM). GEM is the most comprehensive worldwide study on entrepreneurship. Since the first survey, which covered 10 countries and was conducted in 1999, the study has grown to include 181,000 respondents in 62 countries in 2015, representing over 72 percent of the world’s population and 90 percent of the world’s GDP. Pontus Braunerhjelm (editor), Johan P Larsson, Ylva Skoogberg and Per Thulin have contributed to this report.
Contents lists available at SciVerse ScienceDirect Industrial Marketing Manag...محسن حمزه ای
This document examines how entrepreneurial orientation influences firm performance in export markets through exploitative and explorative capabilities. It develops a model showing that entrepreneurial orientation leads to both product development capabilities and overseas market capabilities. Product development exploration capabilities and overseas market exploitation capabilities then enhance new product differentiation, improving market effectiveness. The study investigates these relationships in the context of exporting, addressing gaps in the literature around capabilities beyond just product development and in international settings.
Incubators as tools for economic growth and technology transfer in developed ...Alexander Decker
This document discusses key challenges of business incubators based on a literature review and interview with a US business incubation program. It finds that the three main challenges are:
1) High job creation, graduate companies, and tenant survival rates lead to economic development.
2) High cooperation with R&D and innovation lead to technology commercialization.
3) High sustainable growth, entrepreneurial climate, and smart networking foster entrepreneurship.
The interview assessed variables related to economic development, entrepreneurship, and technology commercialization, finding high results for all, indicating positive potential in these areas. In conclusion, business incubators in developed countries like the US effectively support economic growth, entrepreneurship, and technology transfer.
The document discusses the effects of international marketing environments on entrepreneurship development. It summarizes that cultural, political, and technological environments in foreign markets present both opportunities and threats for entrepreneurs seeking to introduce products globally. The study finds that factors like government policies, regulations, technological changes, and cultural differences in overseas markets significantly impact business transactions and entrepreneurial success abroad. It recommends governments establish supportive frameworks to help entrepreneurs succeed in international markets by navigating challenges from differences in cultural, political, and technological environments across countries.
This document discusses evaluating a firm's readiness for internationalization. It proposes a new framework for assessing small and medium-sized enterprises (SMEs) that want to increase their chances of success in internationalization. The framework goes beyond traditional "go or no go" export diagnostic models, which are outdated given changes in international business. It considers a broader range of international operations for SMEs beyond just exporting. The proposed framework specifies an SME's preparedness and defines preliminary axes in terms of product-market combinations and internationalization modalities. The framework was developed through a literature review, expert panel, and validating its practical application with 54 Canadian SMEs entering international markets over 4 years.
Export_promotion_programmes_as_export_performance_catalysts_for_SMEs.pdfJesus Hidalgo Salas
The purpose of the study is to analyse the joint impact of external factors of small and medium-sized enterprises (SMEs), such as export promotion programmes (EPPs), which encompass trade mobility-, information-, education-, and training- related programmes, and internal factors of SMEs, which encompass export-related resources, preceding-year export performance, and its impact on current-period export performance.
This document provides a summary of a World Bank policy research working paper on global value chains. The paper aims to provide a framework and tools to measure countries' performance in global value chains and provide guidance on how countries can join, maintain participation in, and move up global value chains. Global value chains have become an important source of opportunities for trade, competitiveness, and development. The paper analyzes what global value chains are, why they are important, and provides context on how production has increasingly fragmented across borders through various organizational models like outsourcing and offshoring.
This document discusses a conceptual model that examines the impact of digitalization on the speed of internationalization for small and medium enterprises (SMEs). The model proposes that digitalization moderates the relationship between international business competencies (such as entrepreneurial orientation, international knowledge, networks, marketing capability, innovation capability, learning capability, and digital capability) and the speed at which SMEs internationalize. The document reviews literature on born global firms and digitalization, and develops seven propositions about how greater digitalization strengthens the impact of various international business competencies on faster internationalization for SMEs operating in digitalized industries and markets.
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Entrepreneurial Orientation and Global Mindset: Impact on Internationalizatio...scmsnoida5
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The document discusses foreign direct investment (FDI) and multinational corporations. It examines the article "FDI and Multinationals: Patterns, Impacts and Policies" by A.T. Tavares and S. Young. The document summarizes key points from the article, including the main drivers for firms to engage in FDI, such as accessing new markets or resources. It also classifies FDI based on factors like ownership structure and firm motives. The impacts of FDI from the perspective of host and home countries are outlined, noting concerns about national welfare as well as potential benefits from technology transfer and competitive pressures spurring efficiency.
The Relationship between Foreign Trade and Financial Performance of the Liste...IOSRJBM
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This document summarizes and critically analyzes five major theories on the choice of foreign market entry mode: the stage of development model, transaction cost analysis model, ownership-location-internalization model, organization capacity model, and decision making process model. It discusses the strengths and weaknesses of each theory based on empirical studies testing them. There are inconsistencies between the theories and between theories and empirical results, calling for further research to better understand factors influencing entry mode choice.
This document summarizes a study investigating the barriers to internationalization faced by small and medium enterprises (SMEs) in Sri Lanka. The study identified 38 potential barriers through interviews and a literature review. A survey of 1,500 SMEs found that the majority (83.6%) had not experienced export growth. Factor analysis identified four main categories of barriers: informational, operational, marketing, and environmental. The study found significant differences in how owners of growing versus non-growing businesses perceived the impact of some barriers. Overall, the results show SME internationalization in developing countries faces many obstacles.
Human Resources Management Practices and Productivity of Selected Mncs in Eme...inventionjournals
This study investigates the mode of entry of multinational corporation and their performance Nigerian market. Research on the entry mode of multinational companies (MNCs) to Nigerian market has been one of the major topics in the international business, and the performance factor has been regarded as one of the major factors to explain the entry mode selection of MNCs. Based on the developing nature of the Nigerian market, MNCs can enter a market with Franchising, Licensing agreement, Exporting, joint venture or a wholly owned subsidiary, and Turnkey. This study test reasons for entering in the Nigerian market, modes of entering, challenges faced by multinational during entry and finally the impact of mode of entry of MNCs and their performance in the Nigerian market. The research adopted the survey method, with the use of the Questionnaire. The results from the analysis on the first hypothesis show that a MNCs come into the Nigerian market for different reasons with different modes peculiar to their organization. The second hypothesis indicated that there are various challenges MNCs faced when entry into Nigerian market. And the third hypothesis was supported indicating significant influence of mode of entry on the performance of MNCs in Nigerian markets.
The document discusses internationalization strategies for small and medium enterprises (SMEs). It explores common drivers for SME internationalization including accessing new markets, resources, and technology. Key internationalization strategies discussed include exporting, turnkey projects, licensing, franchising, and wholly owned subsidiaries. The document also examines factors that influence internationalization approaches, such as entry timing, scope, and pace. Finally, it outlines some challenges SMEs face in internationalization like a lack of capital, information, and managerial time.
21. exploring the capabilities for export enhancement ofikhwanecdc
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In an attempt to use the resource-based theoretical approach, this article tried to empirically investigate the influence and impact of theinternal (micro) and external (macro) environmental factors of innovation performance using a sample of small and medium sized firms in the telecommunication cluster in Ghana with the main focus on examining variables such as customer inputs, the intensive role of R&D, cooperative networks, the uncertain environment and the complex environment of the firm. A sample of 31 SMEs in the telecommunication cluster was selected with 109 questionnaires administered. The results indicate that the macro environmental sources as cooperative network and customer inputs actually impact positively on the innovation performance of SMEs in the communication cluster in Ghana. However, firm size, network size and complex environment were shown to be negatively related to firm innovation performance.
The document discusses market entry strategies for companies looking to enter international markets. It provides examples of popular strategies like direct exporting, joint ventures, licensing, franchising, and turnkey projects. Important factors to consider when choosing a strategy are identified, such as company size, goals, product type, resources, investment level, and target market. The sources cited provide analyses of foreign markets and comparisons of market entry strategies and success across different countries.
This document presents a research model exploring the relationships between geographic scope, product diversification, proprietary assets, and corporate performance of Japanese firms. The model incorporates both antecedents and consequences of geographic scope. Six main hypotheses are developed: 1) Industry profitability is negatively related to product diversification. 2) Product diversification is negatively related to firm performance. 3) Product diversification is negatively related to R&D and advertising intensity. 4) R&D and advertising intensity are positively related to geographic scope. 5) Geographic scope is positively related to firm performance. 6) R&D and advertising intensity are positively related to firm performance. The model will be tested using data on 399 Japanese manufacturing firms.
Purpose of AssignmentThe purpose of the learning team assignme.docxwoodruffeloisa
Purpose of Assignment
The purpose of the learning team assignment is to offer students the opportunity to investigate their understanding of how globalization affects a company's strategic plan. Additional objectives include allowing students to assess the effectiveness of strategic alliances in the growth process of a company and to understand the necessity for innovation to create a sustainable long-term organizational environment. The students will also identify how organizational structures facilitate company growth and controls in the global environment.
Assignment Steps
Create a 4-slide Microsoft® PowerPoint® presentation (excluding the title slide and references) with speaker notes and address the following topic:
· Evaluate the effects of globalization on strategic management planning.
International Journal of Management Vol. 29 No. 4 Dec 2012 531
The Effects of International Diversification on Firm
Performance: An Empirical Study across Twelve
European Countries
Alfredo M. Bobillo
University of Valladolid, Spain
Felix López-Iturriaga
University of Valladolid, Spain
Fernando Tejerina-Gaite
University of Valladolid, Spain
The relationship between international diversification and firm performance is a
binomial that has led to many investigations leading to mixed results, in some cases
there is a positive relationship, in others no significant relationship or even negative. In
this paper we try to find the possible reasons why these results occur. The international
diversification is assessed by the ratio of exports to total turnover. Besides, we extend
the research to the different performance that industrial and service firms could have,
bearing in mind, too, if their business culture base originates from civil law or common
law countries. Based on a sample of 1721 firms from twelve European countries, we
compare this relationship for the 2000-2009 period. The empirical results obtained
show a stronger ID-performance positive relationship in service firms than in industrial
ones. Those firms with a culture based on civil law systems (bank oriented financial
system) will have greater flexibility to counteract the negative relationship between ID
and performance, than those firms with culture based on common law systems (capital
market oriented system).
Introduction
Accessing foreign markets is becoming a more and more attractive option for firms.
International diversification (ID) is a stabilisation procedure for the firm’s sales and
also a way of reducing the risks derived from the reduction in demand on the domestic
market. Likewise, the presence of a firm on the global market entails greater derived
risks, mainly due to the greater uncertainty and commitment of resources entailed by this
action. It also represents a challenge to improve their competitiveness in their fight with
local firms (Lucas, 1993; Bowen & Wersema, 2005). The degree of internationalisation is
also contemplated a ...
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2. industries compared to gradual internationalizer that often operate in
traditional manufacturing industries or labor-intensive or small-scale
industries (Paul and Rosado-Serrano, 2019).
The internal capabilities and competences are the most important
aspects for small firms to succeed in international markets (Knight and
Cavusgil, 2004; Wu et al., 2007; Zahra et al., 2000). This is due to their
lack of tangible resources compared to their more resource-rich, larger
counterparts. Considering the salience of the firm's vision and commit-
ment towards international market as a key driver for BGs, we choose the
construct of international orientation (Knight and Kim, 2009; Sorensen
and Madsen, 2012) in order to research its relationship to export per-
formance. Managements' international orientation has been researched
in many studies focusing on export behavior and several literature re-
views point out that this strategic orientation is positively related to
export success (Aspelund et al., 2007; Knight and Kim, 2009; Leonidou
and Katsikeas, 1996; Sorensen and Madsen, 2012). However, the
construct has not been applied in the context of BGs. This is surprising
since the international orientation of the founders of the BG is considered
an important characteristic that differentiates this type of firm from
gradual internationalizers.
Considering both the internal push and the external pull effects of
internationalization (Mathews and Zander, 2007), we are also interested
in exploring the moderating effects on the relationship between inter-
national orientation and export performance. As previously mentioned,
BGs often operate in technology and knowledge-intensive industries
compared to gradual internationalizer. Innovation becomes a tenet in
these markets in order to achieve sustainable, superior performance
(Efrat and Shoham, 2012; Knight and Cavusgil, 2004). We therefore
consider the BG's innovative capacity (Luo et al., 2005) as a moderator
between the firm's international orientation and its export performance.
External pull effects within the environment of the BG are also able to
moderate this relationship. We therefore take into account the market
dynamism (Jaworski and Kohli, 1993) and the favorability of the busi-
ness environment (Sutcliffe and Huber, 1998) as moderators. Consid-
ering these moderators, we also answer calls for more research on the
effects of variables related to the environment and context of BGs (Knight
and Liesch, 2016).
Altogether, in this study we are interested in exploring how BGs
achieve superior international performance from a capability perspec-
tive. We thereby focus on international orientation and its relationship to
export performance considering the impact of internal and external
drivers on this relationship. Doing so, we answer calls for more research
that relates to: 1) Providing explanations of how BGs are able to achieve
precocious internationalization and superior international performance
(Knight and Liesch, 2016); 2) Analyzing the effects of variables related to
the environment and context of BGs (Knight and Liesch, 2016); 3)
Contribute research in the context of a developing country (i.e.
Colombia) (Baier-Fuentes et al., 2019; Oyna and Alon, 2018; Paul and
Rosado-Serano, 2019).
In the following section we derive the conceptual model based on the
review of literature. This is followed by a description of the methodology
in section 3. In section 4 we present the results of the main effects and the
moderating effects following Aiken and West (1991). For the discussion
in section 5, we first summarize the results before elaborating on the
theoretical contributions of our findings. Subsequently, we present the
managerial implications. We conclude with an acknowledgment of the
limitations of our study and the directions for future research.
2. Hypothesis
Exporting remains an important strategic option for firms to inter-
nationalize and is the most frequently used entry method due to its cost-
effectiveness and high flexibility as compared to other foreign market
entry modes such as foreign direct investments (Sousa et al., 2008).
Exporting also serves as the major foreign entry mode for firms from
developing countries (Singh, 2009). Due to the importance of exporting
for many firms’ growth and survival, there is an increasing interest in
understanding the drivers for export performance (Chen et al., 2016).
Studies on the export performance in BGs focus on capabilities for
entering and operating in international markets that include entrepre-
neurial skills to exploit resources and capacities, acquiring new tech-
nologies and entering new markets, and adapting such resources and
capabilities to take advantage of market opportunities (Gerschewski
et al., 2015; Holmqvist, 2004; Jin et al., 2018; O'Reilly and Tushman,
2008; Teece, 2007).
Taking into consideration that we are interested in understanding
how BGs achieve superior international performance, we are adopting a
capability perspective. Earlier research shows that internal capabilities
are able to offset the resource-disadvantage of smaller firms for achieving
early and rapid internationalization particularly regarding tangible re-
sources (Autio et al., 2000; McDougall et al., 1994; Zahra et al., 2000).
This perspective is rooted in the resource-based view of the firm (Barney,
1991; Wernerfelt, 1984). A reviewer of this article points to the owner-
ship advantage of Dunnings's eclectic paradigm (Dunning, 1980) as
preceeding the resource-based view of the firm by Wernerfelt. We agree
with it but also acknowledge that the ownership advantage as the
competitive advantage of the firm rather explains the motivation for an
enterprise to engage or increase its existing foreign direct investment,
whereas, we are rather interested in explaining the expansion of firms
through the export mode of foreign market entry.
According to the resource-based view of the firm (Barney, 1991;
Wernerfelt, 1984), in order for a firm to create a competitive advantage it
needs resources that are valuable, rare, inimitable, and non-substitutable.
In our research we focus on intangible resources due to their difficulty to
imitate by competitors and due to their relevance for achieving sustained
competitive advantage and, therefore, superior performance (Hall,
1993).
Among the strategies that are adopted by BGs in order to achieve
early and rapid internationalization, an international orientation is a
critical factor as it represents the mentality and the attitude of the
entrepreneur and decision-maker for international expansion (Dahms,
2015; Jin et al., 2018; Knight, 2000; Reuber and Fischer, 2002). An in-
ternational orientation is considered to be a strategic orientation that is
used by firms that seek to improve international performance (Sorensen
and Madsen, 2012). Other strategic orientations include market focus
(Ahimbisibwe et al., 2013; Cadogan et al., 2006; Kohli and Jaworski,
1990; Narver and Slater, 1990; Olimpia et al., 2006; Zhou et al., 2005),
entrepreneurial focus (Str€omberg and Bindala, 2012; Okpara, 2009; Patel
& D'Souza, 2009; Str€omberg and Bindala, 2012), learning focus
(Andersson, 2004; Moen et al., 2004; Weerawardena et al., 2007; Wu,
2007), and innovation focus (Cadogan et al., 2003; Kirbach and
Schmiedeberg, 2006; Wagner, 2001).
International orientation refers to entrepreneurs' attitudes and the
assignment of resources to international activities (Sorensen and Madsen,
2012). International orientation has been studied in various empirical
research on internationalization processes (Knight and Cavusgil, 2004;
Knight and Kim, 2009; Madsen, 1989) and is considered to be a part of
management's mentality. This is because an international orientation
depends on seeing the world as one's market within which to create the
motivation to negotiate with international clients (Sorensen and Madsen,
2012). Jantunen et al. (2008) argue that firms with an international
orientation search for new methods of market entry that can allow them
to expand and they are therefore willing to invest more resources to
achieve this goal. Moreover, Heinonen et al. (2004) note that an inter-
national orientation allows firms to be differentiated according to their
motivation for expansion in international markets.
Shoham (1998) brings together different conceptualizations of export
performance, highlighting authors, such as Aaby and Slater (1989),
Madsen (1987) and Shoham (1991), who in their definition include the
effectiveness and efficiency of exports and the continued commitment of
enterprises to export activities. Moreover, Cavusgil and Nevin (1980)
note that the analysis of export performance should not only include the
D. Escandon-Barbosa et al. Heliyon 5 (2019) e02688
2
3. performance that is generated but also all of the decisions that are made
regarding international activities. Cameron (1986) finds four aspects that
should be considered in evaluating a firm's export performance: the in-
ternational strategy that is used, sales performance, the impact of the
internal activities of the firm, and the environment in which the firm
operates. Subsequently, Zou et al. (1998) argue that export performance
refers to the level of satisfaction with export operations as an indication
of the international activity's success. Other studies define export per-
formance as the results of a firm's activities in international markets
(Cadogan et al., 2003). Leonidou et al. (2002) suggest the following
export performance indicators: export intensity, growth of international
sales, export profit level, volume of international sales, and market share.
In addition to these indicators, Olimpia et al. (2006) opt to use subjective
measures in relation to firm expectations.
In our study, we adopted the definition by Zou et al. (1998) to analyze
export performance. We choose this definition because it focuses on the
joint action that concerns the export product and the market, thus
overcoming various difficulties in measuring export performance by
integrating the three criteria that have been used in other studies:
financial performance, strategic performance and satisfaction of the en-
terprise export activities. Although the purpose of this investigation does
not involve the decomposition of these three criteria for the purposes of
analysis, conceptualization and measurement scale, Zou et al. (1998)
considers all three criteria of export performance for a company because
successful performance is achieved through the analysis of sales growth
without neglecting the strategic objectives of export companies. These
objectives include the strategic position and the market share. Addi-
tionally, a firm's satisfaction with export results indicates a higher
perceived success. Therefore, the firm's satisfaction with export results is
able to reinforce its attitudes towards export and increases its propensity
to expand its international operations (Zou et al., 1998).
Innovative capacity is considered to be a strategic element in firms as
it allows the development of practices that are able to promote innova-
tive activities among employees (Atuahene-Gima and Ko, 2001). Inno-
vative capacity is considered an ability to produce a new process,
product, or idea within an organization (Damanpour, 1991; Hult et al.,
2004; Hurley and Hult, 1998) by involving different agents in the orga-
nization through a process of cultural change. In our study, innovative
capacity is considered an internal driver that enhances the effects of in-
ternational orientation on the export performance of BGs. This capacity is
considered an intangible resource and key driver for generating a
competitive advantage for the firm.
Related to the external drivers for firm performance, Shoham (1999)
points to the need to assess changes in business conditions in environ-
ments where national and international markets interact. Therefore, a
clearer understanding of the relationship between export performance
and an international orientation can be obtained by analyzing factors that
are related to the business environment. Two factors affect the quantity
and complexity of the market information that is needed for managers
with an international outlook: Market characteristics and industry
characteristics (Lorhke et al., 1999). Markets change constantly, there-
fore, obtaining the required information for a firm that attempts to enter
new international markets can be difficult due to an increased uncer-
tainty (Johanson and Vahlne, 1977).
According to Sutcliffe and Huber (1998), the market dynamism is a
condition of the environment that affects corporate behavior and is
defined as the rate of change and instability of the environment in which
the organization operates (Dess and Beard, 1984). This includes the ac-
tions of entrepreneurs, customers, suppliers, partners and the community
in general that over time can affect the decision-making of an organi-
zation. This study adopts the concept of market dynamism that Jaworski
and Kohli (1993) defined as market changes that are caused by customers
and competitors. Therefore, given the existence of a dynamic interna-
tional market, a firm should analyze the needs and preferences of its
clients. Thus, firms operating in dynamic international environments
tend to promote a high degree of international focus. Moreover,
according to Sutcliffe and Huber (1998), the favorability of the envi-
ronment also affects export performance, which represents the avail-
ability of the resources that exist in the environment that can be used by
companies. This variable assesses the potential growth of organizations,
given the greater availability of resources (provided by a favorable
environment) and greater opportunities to access international markets
with better results for the firm (Wan and Hoskisson, 2003). Based on the
findings of previous studies that have found the business environment to
be a moderating factor in export success and the different associated
strategic foci (Zhou, 2006), we consider that the strategies that are
adopted by firms to become international should factor into how such
firms can adapt to their business environment. Therefore, the present
study focuses on the moderating effect of the environmental attributes of
market dynamism and the favorability of the business environment.
Fig. 1 shows the conceptual model that has been developed in the present
study.
2.1. International orientation and export performance
Previous research proposes a positive relationship between interna-
tional orientation and export performance (Behyan et al., 2015; Jantunen
et al., 2008; Knight and Kim, 2009; Sorensen and Madsen, 2012; Martin
et al., 2018; Racela and Thoumrungroje, 2014), suggesting that the way
that managers think reflects the international strategies that have been
adopted by their firms. Furthermore, the international orientation of the
firm can lead to the promotion of opportunity-seeking in foreign markets
among employees.
Studies find that an international orientation provides the ability of a
firm to enter international markets (Michel and Hambrick, 1992). Sor-
ensen and Madsen (2012) conclude that an international orientation
leads to a greater capacity to compile and interpret key information on
international markets that can be used to make decisions to enter such
markets. In the case of BGs, Knight (2000) notes that an international
orientation allows these firms to develop strategic initiatives that are
aimed at improving organizational performance. The author also argues
that experience with internationalization and expansion to different
markets allows a firm to learn more about foreign markets and therefore
ensure a greater possibility of success. In other words, the rapid inter-
nationalization of BGs demonstrates that their employees know the
environment in which they operate. Therefore, their operations in export
markets become routines.
The international orientation of the founders, managers and em-
ployees of BGs allows them to acquire the abilities that are necessary to
maintain their competitive advantage. This makes them more willing to
assume risk when they expand into new markets and improves their
export performance (Kuivalainen et al., 2007; Martin et al., 2018). Given
the literature's emphasis on the importance of an international orienta-
tion, we hypothesize:
Hypothesis 1. An international orientation has a positive effect on the
export performance of BGs.
2.2. Moderating effects
2.2.1. International orientation and innovative capacity
The resource-based view proposes that the importance of internal
resources is a key factor for achieving a competitive advantage. Barney
(1991, 2001) discussed the impact of innovation capacity on export
performance. At the company level, Teece (1996) argues that innovative
companies have greater incentives to enter new international markets,
thereby generating increased profitability.
Knight and Cavusgil (2004) find that BGs are characterized by a
strong innovative capacity and a tendency to search for new markets,
which leads them to become international at an earlier stage. This
innovative capacity, in addition to generating new products and pro-
cesses, should also facilitate the acquisition of new knowledge, which can
D. Escandon-Barbosa et al. Heliyon 5 (2019) e02688
3
4. then lead to a greater capacity to obtain improved firm performance.
Therefore, the export performance of BGs is the result of their interna-
tional focus, which refers to their knowledge of the international market
and their international operations (Autio et al., 2000; Boso et al., 2013;
Cavusgil and Knight, 2015). Such a focus often has a greater impact on
performance when the firms simultaneously develop processes that
incentivize innovation by providing greater capacity to their employees
to compete in and understand international markets (Autio et al., 2000;
Kraus et al., 2017; Zahra et al., 2000). Consequently, the following hy-
pothesis is proposed:
Hypothesis 2. Innovative capacity positively moderates the relation-
ship between an international orientation and export performance in
BGs.
2.2.2. International orientation and market dynamism
Besides the resource-based view that focuses on the internal factors
that drive export performance, our study also considers institutional
theory. We postulate that the influence of environmental factors on the
BG's behavior is based on the influence of market dynamics and the
favorability of the environment in the relationship between international
orientation and export performance. The social, economic and political
factors that frame society determine the survival of companies in the
market and their decision-making processes (DiMaggio and Powell,
1983). Thus, market dynamism depends on a set of factors, results, and
conditions at the firm level.
BGs can be confronted with greater problems in dynamic markets
because such firms may not have yet developed response mechanisms to
changes due to their recent creation and early internationalization. These
problems may also stem from the fact that they are still at the stage of
learning about the market (Rodriguez Serrano et al., 2012; Welter and
Smallbone, 2011; Zhang et al., 2013). Given these circumstances, market
dynamism tends to promote a higher degree of international orientation
among BGs because of their need to frequently analyze their clients and
competitors' actions and to develop organizational capacities that favor
international activities. In line with Dimitratos and Plakoyiannaki
(2003), BGs develop an international orientation that directs their
attention to external market opportunities and the need to adapt to
changing market conditions. Thus, BGs push strategic actions through
their managers’ commitment to promoting various firm processes among
employees and investing the resources that are necessary to initiate these
processes and to generate a positive impact on export performance
(Madsen, 1989). Therefore, the following hypothesis is proposed:
Hypothesis 3. Market dynamism positively moderates the relationship
between an international orientation and export performances in BGs.
2.2.3. International orientation and a favorable business environment
As noted previously, markets are subject to constant change and firms
must evaluate their capacity to adapt to these changes. In international
business environments, changes in global markets tend to be more
dynamic because firms must adapt their processes to the regulatory
framework of each country and the varying preferences of consumers
(Shoham, 1999). In this context, one of the characteristics of the business
environment that greatly affects firms’ struggle to adapt to international
markets and remain in these markets is the favorability of the business
environment, which is often considered to be an indicator of the stability
and ability for growth for organizations in different international settings
(Sutcliffe and Huber, 1998).
Previous research identified that favorable environments mean better
access for firms to international markets. Firms often promote strategies
that focus on obtaining better results because managers’ positive per-
ceptions about their business environment can help them to acquire new
commitments and to create better conditions within which to improve
management practices in international activities (Elbanna, 2009;
Elbanna and Alhwarai, 2012; Elbanna and Child, 2007). Thus, it is
assumed that all types of firms, including BGs, promote a greater inter-
national orientation if they recognize a high likelihood of obtaining su-
perior yields from export activities. Therefore, the following hypothesis
is proposed:
Hypothesis 4. The favorability of the business environment positively
moderates the relationship between an international orientation and
export performance in BGs.
3. Methodology
3.1. Sample selection and data collection
Our study focuses on 112 exporters in major cities in Colombia (South
America). The firms were classified based on three requirements for BGs
defined by Escandon (2009) and Escandon and Hurtado (2012). The first
criteria relates to a founding year of no more than seven years, that is, its
year of creation was subsequent to 2007 (Jolly et al., 1992; Shrader et al.,
2000; Zahra et al., 2000). Second, firms should be exporters and they
should manage to achieve more than 25% of annual sales abroad or
through consolidated international presence (Jantunen et al., 2008;
Kuivalainen et al., 2007; Milanov and Fernhaber, 2009; Taylor and Jack,
2013). The third criteria, although in the case of Colombia does not show
any results, relates to not include subsidiaries of foreign firms (Iborra
et al., 1998; Knight et al., 2004; Madsen and Servais, 1997).
3.1.1. Variable measurement
To collect the data, a questionnaire was developed that consisted of a
set of general information questions on the firms, followed by the mea-
surement scales that were taken from the literature. To measure inter-
national focus, we considered the scale that was developed by Sorensen
and Madsen (2012), which was inspired by the multi-purpose indicator
that was proposed by Knight and Cavusgil (2004) and Knight and Kim
(2009), which has been used widely in other research. To measure export
performance, we adapted the scale that was developed by Zou et al.
(1998) to create a scale called EXPERF, which consists of three types of
Fig. 1. Conceptual model.
D. Escandon-Barbosa et al. Heliyon 5 (2019) e02688
4
5. performance: Financial performance, strategic performance, and export
satisfaction. To measure innovative capacity, we adapted a scale that was
developed by Luo et al. (2005) that was based on the propositions of
Hurley and Hult (1998) in which innovation is taken into account as an
indispensable element for firm success. To measure the business envi-
ronment variables, we used the Jaworski and Kohli (1993) scale to
measure market dynamism, and we filtered five items that measured
changes in the market that were due to changing client preferences or
competitor behavior. For the measure of favorability of the business
environment, we adapted the scale that was developed by Sutcliffe and
Huber (1998) that indicates to what extent a business environment favors
the stability and growth of firms. These scales were measured using a
seven-point Likert scale (1 ¼ completely disagree, 7 ¼ completely agree).
Details on the items in each scale are presented in Appendix 1.
Independent of the described variables, the other specific character-
istics of a firm can also assert an impact on export performance. There-
fore, we used firm size and international experience of the firm as control
variables. We assumed that both variables positively affect export per-
formance. Firm size was measured using the number of employees, and
international experience was determined using the number of years that
a firm has operated in international markets. For the regression analysis,
we used a logarithmic scale to transform these variables and to correct
asymmetries (Hair et al., 1999).
3.2. Measurement analysis
To analyze the psychometric properties of the scales that were used in
this study, we conducted a correlation analysis and an exploratory factor
analysis for each scale to identify its fit and unidimensionality. We then
conducted a confirmatory factor analysis to assess the convergent and
discriminate validity of the constructs. The factor analysis indicates that
the data have a reasonable fit, and all of the measures show adequate
reliability as measured by compound reliability indices (SCR) that exceed
0.6 (Bagozzi and Yi, 1988) and average variance extracted (AVE) mea-
sures that exceed 0.5 (Fornell and Larcker, 1981). The first indicator
allows us to analyze the levels of reliability of all of the constructs that
belong to a scale and level of contribution (Fornell and Larcker, 1981)
and the AVE captures the ratio of the variance that is associated by a
factor and the variance that is due to measurement error. We have
concluded that the scales have the necessary reliability criteria (SCR and
AVE). In addition, all of the loads correspond to their hypothetical fac-
tors, and the estimates are significant given their high t-values, thus
providing evidence of convergent validity (Bagozzi and Yi, 1988).
Discriminant validity is confirmed in all of the scales by verifying that the
value “1” is not present in the confidence intervals that were calculated
between each of the construct pairs (Anderson and Gerbing, 1988). We
also confirmed discriminate validity because we obtained in each scale
an average variance that was extracted by the underlying construct that is
greater than the variance shared with another latent construct (Her-
nandez-Espallardo et al., 2010). The resulting fit statistics are as follows:
χ2
(485) ¼ 799.82; GFI ¼ 0.88; RMSEA ¼ 0.041; SRMR ¼ 0.047; CFI ¼
0.95; TLI (NNFI) ¼ 0.95. Table 1 presents the descriptive statistics, the
correlation coefficients, and the compound and average reliability of the
variance that was extracted for each measurement scale.
4. Results
To rule out the presence of multicollinearity in the indicators that
make up each construct value's factor inflation variance (VIF), condition
indices that are well below the threshold of 10 and not as close to 0 are
used (greater than 0.1); they indicated no multicollinearity problems
(Hair et al., 1999). Additionally, the bi-variate correlations with values
well below the critical value for the presence of multicollinearity (0.8)
were obtained, allowing us to infer that they measured different
concepts.
A Harman factor was used through the potential barrier of common
method variance, which is a frequent problem when all of the variables
are measured with the same instrument (questionnaire), which can
potentially lead to the variance being attributed to the method and not
the constructs (Podsakoff et al., 2003). Therefore, a factor analysis was
developed and confirmed that the eigenvalues of all of the factors were
greater than one and represent more than 68% of the total variance.
Moreover, it is important to note that the survey respondents
expressed interest in the study and its subsequent results, and therefore
their responses may prevent response bias. Additionally, a high response
rate was achieved due to the development of surveys and forecasts some
respondents found to be personally unacceptable or they were unable to
answer or they simply were not available to respond. In this sense, a
subset of the companies that met the conditions of being born global was
selected.
However, although we made a great effort to avoid problems of bias,
it is clear that these challenges are inherent in studies of this nature, but
they do not invalidate the results.
The model estimation was performed using a hierarchical linear
regression (see Fig. 2). Before estimating the model, the independent
variables were mean centered to reduce the multicollinearity that results
from the presence of the multiplication terms that are used to estimate
the moderating effects (Aiken and West, 1991). We started by estimating
the model with the control variables, and subsequently, we estimated a
model including all of main effects. Next, we estimated a second model,
including the moderating effects. This form of model estimation complies
with the parsimony principle that establishes the introduction of
higher-order terms only if they significantly improve a model's explan-
atory capacity (Aiken and West, 1991), i.e., the estimated main effects
model explained a significant amount of variance (F ¼ 30,20; p 0.001;
R2
¼ 0,28; R2
adjusted ¼ 0,28). When we included the moderating ef-
fects, the R2
value increased by 8,9% (p 0.001). The results of the final
model that includes the main effects and the moderating effects are
presented in Table 2.
Hypothesis 1 proposes that an international orientation has a positive
effect on the export performance of BGs, and the results support this
prediction (β ¼ 0.62; p 0.05). Hypothesis 2 proposes that an innovative
capacity positively influences the effects of an international orientation
on export performance, and Table 2 shows a significant, positive inter-
action effect in line with this hypothesis (β ¼ 0.153; p 0,05). Hy-
pothesis 3 proposes that market dynamism positively influences the
effects of an international orientation on export performance, and a
significant, positive effect is obtained (β ¼ -0,106; p 0,001). Finally,
according to Hypothesis 4, a favorable business environment should
positively influence the effects of an international orientation on export
Table 1
Descriptive statistics, correlation matrix, and compound and average reliability of the variance extracted.
Mean SD 1 2 3 4 5 SCR AVE
1 International orientation (IO) 4.39 0.31 0.51 0.80 0.51
2 Export performance (EP) 5.25 0.05 0.40 0.70 0.92 0.70
3 Innovative capacity (IC) 5.14 0.13 0.42 0.27 0.5 0.75 0.51
4 Market dynamism (MD) 4.28 0.54 0.35 0.19 0.24 0.51 0.76 0.51
5 Favorability of business environment (FE) 4.39 0.43 0.24 0.30 0.38 0.22 0.6 0.83 0.61
6 Size of firm 31.2 41.1 0.19 0.68 0.57 0.41 0.51
7 Experience of firm 4.65 0.04 0.35 0.51 0.61 0.69 0.38
D. Escandon-Barbosa et al. Heliyon 5 (2019) e02688
5
6. performance, and the results support this prediction because a signifi-
cant, positive interaction coefficient is obtained (β ¼ 0,192; p 0.05).
To interpret the results of the main effects and the moderating effects,
we followed the procedures that were proposed by Aiken and West
(1991) and graphically represented the interactions for which the high-
and low-level values of the variables included in the interaction were
estimated. For the low values, we defined a standard deviation that is
lower than the mean, and for the high values, we defined a standard
deviation above the mean. To estimate the results, the effects of the other
variables were maintained constant.
Figs. 3, 4, and 5 show the effect of an international orientation on
export performance for different values of the moderating variables of
innovative capacity, market dynamism, and favorability of business
environment. The Y-axis of each graph represents the values that were
obtained for export performance (EP) when different values of innovative
capacity (IC) (Fig. 3), market dynamism (MD) (Fig. 4), and favorability of
business environment (FE) (Fig. 5) are introduced into the estimated
regression function. On each X-axis, we present the different values of an
international orientation (IO).
Fig. 3 shows the moderating effect of innovative capacity, which
demonstrates that the positive impact of an international orientation on
export performance is subject to high innovative capacity in a firm. At
low IO levels (-1.4), when IC also has low levels (-1.039), the effect of IO
on EP is 0.622 with a standard error of 0.747 and a t-value of 0.863 (P
Fig. 2. Model.
Table 2
Results of the estimated model.
Variable Coefficient Control Model Main Effects Model Theoretical Model
Standardized Coefficient P-Value Standardized Coefficient P-Value Standardized Coefficient P-Value
Constant b0 2.57 0,000 2.20 0,000 2.29 0,000
Size of firm b1 0,15 0,000 0,078 0,048 0,369 0,000
Experience of firm b2 0,48 0,000 0,399 0,000 0,079 0,043
IO b3 0,086 0,180 0,234 0,451
IC b4 0,136 0,003 0,142 0,002
MD b5 0,229 0,000 0,239 0,000
FE b6 -0,017 0,765 -0,017 0,765
IO*IC b7 0,070 0,058
IO*MD b8 0,116 0,041
IO*FE b9 -0,182 0,000
R2
(R2
Adjusted) 0,28 (0,28) 0,369 (0,357) 0,41 (0,391)
F value (F-probability) 62.75 (0,000) 30,20 (0,000) 23,44 (0,000)
R2
Changes (R2
adjusted) - 0,089 (0,357) 0,041 (0,391)
Fig. 3. Moderating effect of international orientation x innovative capacity.
D. Escandon-Barbosa et al. Heliyon 5 (2019) e02688
6
7. 0.1). For high values of IC (þ1.039), the effect increases to 6.174 with a
standard error of 1.26 and a t-value of 4.9 (P 0.01). For high levels of IO
(þ1.4), when IC has a low value (-1 standard deviation, -1.039), the ef-
fect of IO on EP is -2.276 with a standard error of 1.415 and a t-value of
2.916 (P 0.01). This effect increases to 1.426 (t ¼ 1.769; P 0.10)
when IC has high levels.
The results show that IO is more effective on EP when it is accom-
panied by high levels of IC. Thus, the variables seem to complement each
other, as postulated in Hypothesis 2. Nevertheless, we needed to prove
that the moderating effect of IC is significant. To do so, using prior values,
we obtain a jumping effect of IO on EP that equals 5.554 (t ¼ 5.554; P
0.01) when we went from low IC values to high IC values. Thus, we can
conclude that IO is more effective in the presence of high levels of
innovative capacity. Innovative firms will therefore have a greater
chance of obtaining better results. When the managers of BGs have an
international orientation but innovative capacity is not a feature of their
organization, the firms are less likely to achieve good export
performance.
Fig. 4 shows that the positive implications of an international orien-
tation on export performance are subject to the high market dynamism of
BGs. For low values of IO (-1 standard deviation, -1.4), the change of the
IO effect on EP in low values of MD (-1 standard deviation, -0.862) is
1.826 with a standard error of 0.49 and a t-value of 3.727 (P 0.01). For
high values of MD (þ0.862), the effect is 4.97 with a standard error of
0.924 and a t-value of 5.38 (P 0.01).
Moreover, for high values of IO (þ1.4) and a low MD (-0.862), the
effect of IO on EP is -2.924 with a standard error of 1.23 and a t-value of
-2.38 (P 0.05). For high values of MD (þ0.862), the effect of IO on EP is
0.22 with a standard error of 0.944 and a t-value of -0.23 (P 0.1). In all
of the IO levels are considered, we obtain a difference in the effect of IF
on EP between the low levels and high levels of MD. This difference is
3.14, and t ¼ 3.309 (P 0.01). This result allows us to confirm Hy-
pothesis 4, i.e., market dynamism moderates the relationship between IO
and EP. This moderation is present for low values of MD and both high
and low values of IO. However, for small MD values with high IO values,
the relationship with export performance is improved, but when the
values of IO are high, a saturation process begins that affects the rela-
tionship with export performance in a significant but negative way.
However, although the moderating effect of market dynamism is not
significant at high levels of MD and high levels of IO, the change in the
effect when passing from low levels to high levels of MD is significant and
allows us to confirm that there is a moderating effect of market dyna-
mism on the relationship between IO and export performance.
Finally, according to Fig. 5, the more favorable the business envi-
ronment in which BGs operate, the greater the positive influence of an
international orientation on export performance. For low IO values (-1
standard deviation, -1.4), the change of the effect of IO on EP in low
values of FE (-1 standard deviation, -0.957) is 1.945 with a standard error
of 0.58 and a t-value of 3.353 (P 0.01). For high values of FE (þ0.957),
the effect is 5.86 with a standard error of 0.946 and a t-value of 6.194 (P
0.01).
Moreover, for high values of IO (þ1.4) and low values of FE (-0.957),
the effect of IO on EP is -3.045 with a standard error of 1.46 and a t-value
of -2.08 (P 0.05). For high values of FS (þ0.957), the effect of IO on EP
is 0.55 with a standard error of 0.996 and a t-value of -0.55 (P 0.1). At
all of the IO levels considered, we obtain a difference in the effect of IO on
Fig. 4. Moderating effect of international orientation x market dynamism.
Fig. 5. Moderating effect an international orientation x favorable business environment.
D. Escandon-Barbosa et al. Heliyon 5 (2019) e02688
7
8. EP between low levels and high levels of FS. This difference is 4.15, t ¼
3.819 (P 0.01). This result allows us to confirm Hypothesis 4, i.e., a
favorable business environment moderates the relationship between IO
and EP. This moderation is present with low values of FE and both high
and low values of IO. However, for low FE values with high values of IO,
the relationship with export performance is improved, but if the values of
IO are high, a saturation process is generated that affects the relationship
with export performance in a significant but negative way. Moreover,
although the moderating effect of a favorable business environment is
not significant at high levels of FE and high levels of IO, the fact that the
change in the effect from low levels of FE to high levels is significant
allows us to confirm that there is a moderating effect of a favorable
business environment on the relationship between IO and export
performance.
In summary, this study contributes to the literature because it en-
riches our knowledge of BGs and export performance and their deter-
mining factors. Additionally, the study allows us to shed light on other
research that assumes that an international orientation is a strategy
(Jantunen et al., 2008; Knight and Kim, 2009). It furthermore allows us
to examine the various variables that affect the impact of international
orientation on export performance by demonstrating that there are both
internal and external factors that influence this relationship (Hagen and
Zucchella, 2014; Madsen and Servais, 1997; Rialp et al., 2005).
5. Discussion
The purpose of our study consisted in exploring empirically how BGs
achieve superior international performance from a capability perspec-
tive. Particularly we were interested in the relationship between the BGs
international orientation and its export performance mediated, on the
one hand, by its innovation capacity (internal factor), and, on the other
hand, by the market dynamism and the favorability of the business
environment (external factors).
Through the conceptual model we have chosen and the empirical
context of our research, we make the following contributions to research
on the phenomenon of BGs. Firstly, our research is the first to use the
construct of international orientation in the context of BGs. We therefore
provide important explanations of how BGs are able to achieve superior
export performance through particular capability antecedents (Knight
and Liesch, 2016). Secondly, we contribute to a better understanding of
the effects of variables related to the environment and context of BGs in
order to achieve superior export performance (Knight and Liesch, 2016).
Thirdly, we focus on BGs from Colombia and therefore contribute to
research from a developing country perspective (Baier-Fuentes et al.,
2019; Oyna and Alon, 2018).
In the following we present a summary of the results, followed by a
discussion of the theoretical contributions, and conclude with the
managerial implications of our findings.
5.1. Summary of results
We predicted a positive relationship between the BGs international
orientation and its export performance and the result supports this pre-
diction. The results further show that international orientation has a
greater effect on export performance through the internal and external
mediator variables introduced into the model. Related to the innovative
capacity of the BG as an internal firm capability, our results indicate that
international orientation is more effective on export performance when it
is accompanied by high levels of innovative capacity. Related to the
market dynamism as an external market factor, our results indicate that
the positive relationship of the international orientation on export per-
formance are subject to the high market dynamism where BGs operate in.
Related to the favorability of the business environment as an external
factor, our results show that the more favorable the business environ-
ment in which BGs operate, the greater the positive influence of an in-
ternational orientation on export performance. Hence, the results
confirm the moderating effect of all internal and external variables on the
relationship between international orientation and export performance.
5.2. Theoretical contributions
Our results confirm the findings of literature that establish a strong
and positive relationship between the firm's capabilities and its export
performance (Jantunen et al., 2008; Knight and Cavusgil, 2004; Knight
and Kim, 2009; Sorensen and Madsen, 2012). To the best of our
knowledge, our study is the first to apply the construct of an international
orientation (Knight and Kim, 2009) to the context of BGs. We therefore
provide explanations of how BGs are able to achieve precocious inter-
nationalization and superior export performance based on the mindset of
their managers towards international markets (Knight and Liesch, 2016).
Or as Sorensen and Madsen (2012, p. 426) puts it: “International orien-
tation is a question of mindset (whether managers see the world as their
market place as well as their motivation to deal with international cus-
tomers and partners), but it is also critical that top management has a
clear commitment of resources and develops an organizational culture
that motivates employees' behavior in the direction of international ac-
tivities. […] [T]he mindset of the managers should reflect the interna-
tional strategies of the firm, implying that top management encourages
employees to actively explore possibilities in foreign markets, and
stresses that organizational agility and adaptability is crucial to compete
successfully in foreign markets.”
The international orientation of the BG therefore constitutes an
important intangible resource that contributes to the sustained compet-
itiveness of the firm (Barney, 1991). Furthermore, we show that inter-
national orientation is indeed an important internal capability for the BG
able to offset the lack of tangible resources in order for the smaller firm to
achieve early and rapid internationalization (Autio et al., 2000; Cavusgil
and Knight, 2015; Zahra et al., 2000). In their recent review of the
literature on BGs, Paul and Rosado-Serrano (2019), consider the inter-
national orientation of the entrepreneur as one of the important char-
acteristics that differentiate gradual internationalizing firms from BGs.
Therefore, it is therefore surprising that no previous empirical research
looked at the international orientation-performance relationship in the
context of BGs.
Besides, establishing the international orientation as an important
internal capability able to contribute to superior export performance of
the BG, we provide insights into its moderating effects. Moderating ef-
fects are important as both internal and external drivers are found to
impact the early and accelerated internationalization of new ventures
(Hagen and Zucchella, 2014; Madsen and Servais, 1997; Mathews and
Zander, 2007; Rialp et al., 2005).
In line with previous export literature (Pla-Barber and Alegre, 2007;
Filatotchev et al., 2009) and BGs (Cavusgil and Knight, 2015; Knight and
Cavusgil, 2004), our results confirm the importance of innovative ca-
pacities for early internationalization. Particularly, our results indicate
that international orientation is more effective in the presence of high
levels of innovative capacity. However, our results also show an effect of
diminishing return of export performance for high levels of innovative
capacity once a certain level of international orientation is achieved (see
Fig. 3). In other words, beyond a certain point, the additional exploration
of new business opportunities for export markets, the additional devel-
opment and adaptation of products for exports, and the additional pro-
motion of export activities among employees, does not add as much value
as their associated costs for investing in an innovative capacity.
The effect of a diminishing return is most evident for high levels of
international orientation at high levels of market dynamism (see Fig. 4).
This means that beyond a certain point and at high levels of market
dynamism, it does not justify to dedicate additional resources to increase
the firm's international orientation as it does not contribute to an increase
in export performance. This effect is less pronounced for operating in
favourable business environments (See Fig. 5). In favourable business
environments, an additional increase in the BG's international
D. Escandon-Barbosa et al. Heliyon 5 (2019) e02688
8
9. orientation still leads to a significant increase in its export performance.
The differences in these diminishing effects is best explained by the
nature of markets where BGs are operating in. Market growth is generally
considered to have a positive impact on the firm's international perfor-
mance (Whitelock, 2002). A favourable business environment facilitates
the BG to establish its market niche and to become a dominant player in a
less competitive environment. Research found that BGs are able to
benefit from their niche's growth potential especially in the short-term
(Efrat and Shoham, 2012). Therefore, BGs operating in favourable,
growth markets, are still able to experience increased export performance
while increasing their committment towards these international markets.
BGs are also characterized for being active players in turbulent markets
where they are able to exploit technological trends for creating their
niche offer (Knight and Cavusgil, 2004). Frequent changes, however,
require a constant adaptation to new trends. The BGs in our sample seem
to reach a saturation point regarding their capability to continuously
adapt to market trends, so that, an increase in their international orien-
tation does not lead to a significant increase in export performance at
high level of market dynamism. These diminishing effects, to a lesser
extend for innovative capacity and favourable business environments
and to a greater extend for market dynamism, have important managerial
implications as we will explain below.
Our current understanding on BGs focuses largely on the description
of their formation and to a lesser extent on the determinants of their
performance (Gerschewski et al., 2015; Rialp et al., 2005). Our research
provides much needed insights into the determinants of international
performance of BGs (Knight and Liesch, 2016; Oyna Alon, 2018; Paul
and Rosado-Serrano, 2019). Our results emphasize the importance of an
international orientation as a decisive capability for the BG in order to
achieve a sustained competitive advantage. This resembles the general
view of the importance of intangible resources for the likelihood of early
internationalization. However, the possession of a strategic international
orientation alone does not explain the superior export performance of our
BGs. Both internal and external drivers impact on this relationship and
are able to enhance its effects: 1) The innovative capacity is an important
characteristic that defines a BG (Cavusgil and Knight, 2015; Knight and
Cavusgil, 2004) and our results indicate that it also enhances the export
performance of the BG; 2) BGs are known to operate in turbulent markets
and high-growth environments (Efrat and Shoham, 2012; Knight and
Cavusgil, 2004). Our results show that BGs are not only active in these
markets but that their operations in these markets also contribute to an
increased performance. Hence, we also contribute to extant research by
analyzing the effects of variables related to the environment and context
of BGs (Knight and Liesch, 2016).
The country context of our BGs also contributes to a better under-
standing of this type of firm from a developing country perspective (i.e.
Colombia). As noted by many (Baier-Fuentes et al., 2019; Oyna and Alon,
2018), we lack an understanding about the characteristics and perfor-
mance drivers of BGs from Latin America. According on Barbosa and
Ayala (2017) Born global had been studied in Latinoamerican countries,
especially in Brazil, Colombia and Chile, but it tried to analyze and
contributed in Born global definition. Other hand, it researcher had
emphasis in tech sector and qualitative methods to analyze internation-
alization behavior, role of networks and speed of internationalization (De
Mello et al., 2019).
5.3. Managerial implications
Developing a global vision, where the firm sees the world, not just
Colombia, as its market, is most probably the most important determi-
nant for export success of Colombian BGs. Founders and managers of
these firms are advised to develop a global outlook for their operations
and to promote vigorously the exploration of new business opportunities
on export markets. Policy makers can contribute to the development of
an international orientation by promoting exports and facilitate inter-
national trade fair participation and export missions to potential firms.
The development of an international orientation as a firm capability
should most probably be one of the most important development ob-
jectives for export promotion agencies in Colombia as it helps to offset
the resource scarcity of these small and medium-sized firms in order to
make these firms more competitive in export markets.
However, the sole commitment towards export markets is not suffi-
cient. The firm also needs to develop an innovative capacity and target
appropiate markets. Compared to the external factors of the environ-
ment, the development of a capability for innovation is more challenging
for the BG. It is similar to the international orientation, an intangible
resource that needs to be developed over time and requires constant
attention in order to be maintained as a capability. The environmental
drivers are easier to control. Nevertheless, spotting attractive interna-
tional markets requires significant and constant attention on behalf of the
managers of BGs. Policy makers can assist firms by providing necessary
market intelligence in order to survey international markets for their
trends and growth potential.
Due to the diminishing effects on export performance we observed in
our results, founders and managers of Colombian BGs should be aware
that the development of an international orientation reaches a saturation
point. Beyond that point, the contribution of additional international
orientation does not contribute significantly to more export performance.
Hence, the development of an international orientation reaches a tipping
point and no further investments for strengthening the international
orientation are necessary.
Our study, like all empirical quantitative research, is subject to lim-
itations. We are recognizing that our quantitative method have two main
limitations. First, hierarquical model is a transverse method and does not
include a dynamic behavior for our variables and this information might
be associated a punctual economic effect. Other hand, this method has a
high tendency to increase our results, especially R2 adjust, due to it has
more variables.
Future research should consider the following aspects building on the
findings of our study. First, we researched capabilities and external
drivers applying a static perspective. The survey instrument we used
allowed us to construct a one-shot image of the current relationship be-
tween international orientation ad export performance. However, we
were not able to provide insights into the dynamics of capabilities. Ca-
pabilities are subject to change and development (Al-Aali and Teece,
2014). Future research should consider the changing and dynamic nature
of capabilities by capturing their differences over time. This also applies
for the evolving nature of the markets and environments the BGs operate
in.
Second, the focus of our research has been on a particular capability –
the international orientation of the BG. Other capabilities such as a
learning orientation, market orientation, international entrepreneurial
orientation, and international growth orientation have shown to be
positively related to the international performance of BGs (Gerschewski
et al., 2015). These capabilities should be taken into consideration along
international orientation for future research on BGs as possible intangible
resources allowing a sustained competitive advantage.
Third, our sample consists of BGs from Colombia. In Latin America,
Colombian and Chilean entrepreneurs particularly show a high interna-
tional orientation (Amoros et al., 2015). Therefore, comparing the results
of the Colombia study with other countries would be useful in order to
derive more generalizable findings.
Finally, the institutional environment is important to keep into
consideration for the study of BGs (Szyliowicz and Galvin, 2010). The
impact of institutional forces on entrepreneurship is particularly
heightened in emerging economies (Gupta et al., 2014; Kiss et al., 2012;
Peng et al., 2008) and different formal and informal institutional envi-
ronments seem to impact the performance of BGs in Latin America
(Alvarez et al., 2014; Torkkeli and Fuerst, 2018). Future studies should
therefore keep in mind the impact of the institutional environment on the
export performance of BGs.
D. Escandon-Barbosa et al. Heliyon 5 (2019) e02688
9
10. Declarations
Author contribution statement
D. Escandon-Barbosa, J. Rialp-Criado, S. Fuerst, G. Castro-Aristizabal:
Conceived and designed the analysis; Analyzed and interpreted the data;
Wrote the paper.
A. Rodriguez-Orejuela: Contributed analysis tools or data.
Funding statement
This research did not receive any specific grant from funding agencies
in the public, commercial, or not-for-profit sectors.
Competing interest statement
The authors declare no conflict of interest.
Additional information
No additional information is available for this paper.
Appendix 1
Items Standardized Loading t value Reliability
SCRa
AVEb
International Orientation (adapted from Sorensen and Madsen, 2012)
The desire for growth is a strong motive for the expansion of international activities
The possibility of increased profits is a strong motive for international expansion
We see the world, not just Colombia, as our firm's market
We find it better to expand our export activities cautious and gradually
Active exploration of new business opportunities on export markets
Strong capability to develop and adapt new and existing products/services
Our priority is success with export activities
Development of human and other resources that may contribute to successful export
0.64
0.68
0.75
0.77
0.71
0.70
0.69
0.70
11.95
12.93
14.57
15.25
14.30
14.26
14.20
14.26
SCR ¼ 0.80
AVE ¼ 0.51
Export Performance (adapted from Zou et al., 1998)
has been very profitable
has generated a high volume of sales
has achieved rapid growth
has improved our global competitiveness
has strengthened our strategic position
has significantly increased our global market
has been very satisfactory
has had been very successful
has exceeded our expectations
0.74
0.73
0.90
0.87
0.77
0.81
0.83
0.82
0.79
14.93
14.63
20.15
18.92
15.25
SCR ¼ 0.89
AVE ¼ 0.66
Innovative Capacity (IC) (adapted from Luo et al., 2005)
Technical innovations based on research, are easily accepted
The company leads actively seeks new ideas
The staff of the company easily accepts innovation company
The staff is rewarded for new ideas, even if they do not work
Innovation is perceived as an opportunity, not as a risk
0.72
0.76
0.78
0.75
0.82
14.24
15.40
15.95
15.48
17.18
SCR ¼ 0.88
AVE ¼ 0.59
Market dynamism (MD) (adapted from Jaworski and Kohli, 1993)
In our kind of business, costumers' product preferences change quite a bit over time
Our customers tend to look for new products all the time
Our customers are very price-sensitive, but on other occasions, price is unimportant
Demand for our products and services from customers who never bought them before
New customers tend to have product-related needs that are different of our customers
We cater to many of the same customers that we used to in the past
0.60
0.85
0.68
0.75
0.69
10.35
14.67
11.88
12.15
12.18
SCR ¼ 0.76
AVE ¼ 0.51
Favorability of Business Environment (FS) (adapted from Sutcliffe and Huber, 1998)
The demand in international markets is growing and will continue to grow
Investment or marketing opportunities for firms are very favorable at the present time
There are great opportunities for businesses to expand their international markets
There are available resources for further growth in these markets
0.76
0.74
0.85
0.72
14.55
14.06
16.84
15.22
SCR ¼ 0.83
AVE ¼ 0.61
Adjustment stadistics with 5 constructs:: χ2(485) ¼ 799.82; GFI ¼ 0.88; RMSEA ¼ 0.041; SRMR ¼ 0.047; CFI ¼ 0.95; TLI (NNFI) ¼ 0.95. a Scale composite reliability
(ρc¼(
P
λi)2 var (ξ)/[(
P
λi)2 var (ξ) þ
P
θii]; (Bagozzi and Yi, 1998)).b
Average variance extracted (ρc¼(
P
λi2 var (ξ))/[
P
λi2 var (ξ) þ
P
θii]; (Fornell and Larcker,
1981). c anchors: 0 ¼ Totally disagree; 7 ¼ Totally agree. (*) Item eliminated during the validation process of the scale.
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