Rapid internationalization of emerging market firms—The role of geographic diversity and added cultural distance

Abstract

In this study, we examine drivers of internationalization speed of emerging market multinational enterprises who have been known to internationalize rapidly, even to culturally distant countries. Drawing on the organizational learning theory, we argue that, devoid of a pre-existing knowledge base before they begin their international expansion, these firms are unencumbered by the pathologies and traps that are likely to slow a firm with pre-existing knowledge. We posit inverted U-shaped relationships between geographic scope and added cultural distance on the one hand, and internationalization speed of Indian software multinationals, on the other hand. We also hypothesize a moderating effect of the regularity of added cultural distance on the relationship between added cultural distance and internationalization speed. Our analyses of 650 internationalization expansions of 32 largest Indian software firms over a ten-year period support our hypotheses.