The antecedents and the outcomes of foreign market knowledge accumulation – the dynamic managerial capability perspective

Abstract

PurposeThe purpose of this study is to establish the antecedents and the outcomes of foreign market knowledge (FMK) accumulation in the context of emerging economies. The antecedent is dynamic managerial capability (DMC) with managerial human capital, social capital and cognition as its dimensions. The outcomes are financial and non-financial performances. This study bridges the gap by linking individual-level capability and FMK accumulation to achieve performance.Design/methodology/approachThis study has utilized a survey-based approach to collect data. The sample consists of 365 export manufacturing firms operating in the apparel industry of Bangladesh. Structural equation modeling analysis has been used to test the hypothesized model.FindingsThe direct effects of managerial social capital and managerial cognition on FMK accumulation are positively significant. The results also show that FMK accumulation fully mediates the relationship between: managerial social capital and financial and non-financial performances and managerial cognition and financial and non-financial performances.Practical implicationsExport manufacturing entrepreneurs in the low-tech industry should focus more on the network development and leverage on their cognitive mentality as a global mindset to succeed in international markets. These two factors are critical to accumulate foreign knowledge.Originality/valueThis study provides empirical evidence on dynamic managerial capability and FMK accumulation of export manufacturing firms in low-tech emerging economies context. Out of the three building blocks of DMC, this study has found that managerial social capital and managerial cognition of entrepreneurs are crucial as antecedents to FMK accumulation and firm performance.