Higher Order Capabilities in International Firms: Review, Analyses and Future Directions

Abstract

This paper aims to add to our understanding of both the international as well as the dynamism aspects of higher order capabilities in the international context. Beginning with the ubiquity of the dynamic capability construct in management research over the past two decades, we survey research in the international context to promote understanding of these important strategic assets. We begin with a brief overview of resource-based research in the international context, with more attention to higher order capabilities. A systematic review follows, resulting in 98 articles from 16 leading journals. Our analysis of the capabilities studied in these articles, led to a classification of 13 higher order capabilities in international contexts—six of which we call meta dynamic capabilities, and seven strategic dynamic capabilities. Looking separately at each of these 13 capabilities, we present evidence from the literature to help understand both the internationality as well as the dynamic aspects of these capabilities. Finally we consider directions for future research on capabilities in the international context.