The role of entry nodes in industrial firms’ internationalization: the significance of network structures for value innovation

Abstract

PurposeThe paper explores the links between network structures and internationalization, conceptualized as a process of value innovation. The exploration sets off from the concept of an entry node, i.e. whether network entrance is facilitated by a direct dyadic or an indirect triadic relationship.Design/methodology/approachThe paper is mainly conceptual, but also presents an empirical cross-border actor constellation which highlights the implications of the study.FindingsBi-directionality implies that value innovation is contingent on the fit between the actors involved in the entry node, not on the fulfilment of the needs of a focal actor. Further, the attractiveness of an entry node depends on network structures, the network positions of the actors in the entry node, the desired outcomes of entry (immersion or reach), and the actual behavior of the actors. The dynamics of transitivity can influence triadic entry nodes. However, transitivity operates differently in business networks than in social networks constituted by inter-personal ties. Therefore, closure of open triadic entry nodes is neither an automatic outcome of strong ties, nor a normatively better outcome.Research limitations/implicationsThe theorizing offered by this paper must be further explored in different empirical contexts to assess its practical adequacy. Still, the presented empirical case indicates that the expected attractiveness of entry nodes is closely linked to (in)transitivity.Originality/valueThe paper supports the relevance of expanding from a dyadic to a network perspective in order to capture the dynamics of value innovation in an international setting.