Internationalization performance effects of causation and effectuation: a contingency approach

Abstract

Our study addresses a fundamental research question at the heart of IB and IE research: what specific configurations of internal (organizational) characteristics, external contingencies and entry mode choice drive organizational performance? We incorporated insights from the literature on cognitive micro-foundations in the internationalization process model that allowed us to include effectuation logics in the analysis of entry mode decision making of MNEs and performance of an internationalizing firm. We also explored the combined and simultaneous effects of endogenous and exogenous factors on the firm’s performance, such as the decision-making logic (effectuation and causation), the actual entry mode decision, entrepreneurial and international experience of the decision makers as well as exogenous factors such as the psychic distance of the host country. Examined through fuzzy set Qualitative Comparative Analysis (QCA), we look at the simultaneous effect of the endogenous and exogenous variables on a firm’s performance offering a holistic view and a more nuanced understanding of the possible configurations that lead to superior performance.