Unpacking the relationship between post-entry speed of internationalization and export performance of SMEs: A capability-building perspective

Abstract

Prior research has acknowledged the merits of firms' post-entry speed of internationalization (PSI) for export performance. However, remarkably little attention has been devoted to the transformational mechanisms that enable firms to convert their PSI into performance outcomes. Drawing on the capability-building perspective, we examine the mediating role of two key firm-specific capabilities, i.e., knowledge capability upgrading (KCU) and adaptive capabilities (ADC), on the relationship between PSI and financial and non-financial export performance. Employing a sample of 208 New Zealand exporting SMEs, we found a positive relationship between PSI and both KCU and ADC and found support that PSI's effect on export performance is conveyed through ADC. We found that although KCU does not directly mediate the PSI-export performance relationship, it acts as a driving factor for ADC, which in turn contributes to export performance. This study contributes to the evolving literature on post-entry dynamics of internationalization and capability-building perspective.