Internationalization of latecomer firms from emerging economies—The role of resultant and autonomous learning

Abstract

This study tests the prescience of John Mathews’ linkage-leverage-learning (LLL) model to explain internationalization by latecomer firms (LFs)—set in an evolutionary backdrop. The hypothesis harbored in this study is that while LLL explains how LFs initially compete in international markets, it is autonomous learning, independent of LLL that is crucial to internationalization. We used panel data from 1994 to 2012 with 821 observations from 69 firms and performed multiple econometric analyses to test our hypotheses. Our results suggest that autonomous learning rather than resource leverage and learning through linkages with MNCs explain the success of Indian pharmaceutical LFs. LFs progress from being a recipient of knowledge in a global production network to a phase where they can become important contributors in the global innovation network. This study therefore demonstrates that LFs that invest in autonomous learning in addition to reaping advantages through their linkages with global innovators are the ones that are successful in their internationalization process and are able to become dominant players in the global market.