Internationalisation and firm performance of emerging market firms: exploring the moderating effects of differential knowledge-based resources

Abstract

Building on the knowledge-based view (KBV) of the firm, this study updates and extends research on the internationalisation-performance relationship in emerging market firms by examining the moderating impacts of two types of knowledge-based resources. Empirical results obtained from a large longitudinal sample of manufacturing firms in China show that not all knowledge is equally important for emerging market firms to succeed in the process of international expansion. More specifically, technological knowledge is shown to have a significant positive influence on the relationship between internationalisation and performance of emerging market firms, whereas the effect of marketing knowledge does not appear in the regression models. An appropriate explanation for this finding is that internationalising emerging market firms may find it more difficult to replicate and transfer their marketing knowledge or know-how than technological knowledge in different foreign environment settings because marketing knowledge is more context dependent than technological knowledge. This study brings together the study of knowledge characteristics and emerging market firms' international expansion, which not only advances our understanding of how emerging market firms can succeed in the process of international expansion, but also provides important implications and avenues for future research.