Knowledge acquisition strategy, speed of capability development and speed of SME internationalisation

Mikael Hilmersson,Martin Johanson

doi:10.1177/0266242620909029

Abstract

From a study following two sequential on-site data collection stages at 618 internationalising SMEs in Sweden, Poland and China, we identify and validate four distinct international knowledge acquisition strategies. In contrast to traditional theories suggesting that firms develop capabilities by generating their own experience, we show that Grafters and Pragmatists have a higher speed of international capability development than Experiencers and Networkers. Subsequently, by drawing on capability development theory, we show that the speed of capability development has a curvilinear (inverted U-shaped) effect on the speed of spread between international markets. These findings have consequences both for practitioners and theory.

Highlights

From research on the internationalisation of small- and medium sized enterprises (SMEs), we know that the speed of internationalisation has performance consequences (Sadeghi et al, 2018)
We develop three central knowledge sources in ongoing internationalisation – own experiential knowledge acquisition of a firm, grafting and networking to validate the existence of generic knowledge acquisition strategies and enabling subsequent tests of their effects on the speed of capability development and international expansion
Knowledge, experience and learning are well-documented factors explaining internationalisation (Johanson and Vahlne, 1977, 2009; Petersen et al, 2008) and extant research highlights the role of experience for internationalisation capability development

Summary

Introduction

From research on the internationalisation of small- and medium sized enterprises (SMEs), we know that the speed of internationalisation has performance consequences (Sadeghi et al, 2018). We know that the ability to acquire knowledge and develop internationalisation capabilities influences performance (De Clercq et al, 2012; García-García et al, 2017; Ipek, 2019). Studies have integrated these two research streams and empirically studied international capability development as a determinant of internationalisation temporality. Jiang et al (2014) show that a short time period between subsidiary establishments abroad reduces performance and suggest that time-compression diseconomies are central in international capability development. As early international entrepreneurship research explained the behaviour of international new ventures as a result of inherited or grafted knowledge (Reuber and Fischer, 1997), subsequent research has turned to Huber (1991), arguing that capability development is not necessarily dependent on the generation of own experience

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