International Firms Research Articles

Examining the influence of entrepreneurial skills, human capital, and home country institutions on firm internationalization

AbstractIn an increasingly interconnected world, understanding the factors that influence firm internationalization is crucial for businesses and policymakers alike. This study examines the complex interplay between entrepreneurial skills, human capital, institutional environments and firm internationalization. Specifically, it investigates the mediating role of home country institutional environments in the relationship between entrepreneurial skills, human capital and firm internationalization. Based on a theoretical framework that integrates resource‐based and institutional theories, this study employs a quantitative research design, using cross‐sectional international data from the Global Entrepreneurship Development Institute (GEDI) and Global Competitiveness Index 2018 reports for 137 countries. The findings of this reveal compelling insights into the factors driving firm internationalization. Both direct and indirect effects of entrepreneurial skills and human capital on firm internationalization emerge as positive and statistically significant. Moreover, the study underscores the nuanced influence of institutional environments, indicating their partial mediation of the relationship between entrepreneurial skills, human capital and firm internationalization. This sheds light on the pivotal role of the dynamic interplay between resources and institutional frameworks in shaping firms’ strategic decisions to venture into foreign markets. The implications of these results extend beyond academia, with actionable insights for both businesses and policymakers alike. This study not only contributes to our theoretical understanding of internationalization processes but also provides practical guidance for firms seeking to navigate and optimize their global expansion strategies.

Technological upgrading along global value chains: The case of automation and digital technologies in the automotive sector in South Africa

This article contributes to the growing literature on technological upgrading along global value chains, by focusing on the adoption of automation and digital technologies at different functional stages of the automotive value chain. It explores the constant tension that firms in emerging economies face between linking up to international trade and ensuring the upgrading of indigenous firms, which depends on the relationship between lead international firms’ operations and capabilities at the local level. Drawing on extensive qualitative research in South Africa, including 39 interviews and observations at the shopfloor level, this paper examines the determinants for automation and digital technologies adoption. The finding extends existing knowledge of technological upgrading along global value chains, by examining both final assemblers and lower-tier suppliers. Four production specific drivers are identified: volume, quality, material-led adoption, and ergonomics. This paper suggests policymakers should consider sector heterogeneity and specific sector-technology combinations when designing policies to sustain digitalization and production upgrade.

Role of green innovation and sustainable supply chain management in firm internationalization

PurposePurpose of this study is to explore the nature of relationship between internationalization of firms, sustainability of their supply chains, and the extent of their green innovations. Understanding of the relationship between these constructs is important because of the ever increasing sustainability awareness of consumers in the leading economies of the world. This awareness is now compelling importers of goods from cheap-labor countries to ensure that their suppliers comply with sustainability regulations. This compliance becomes very challenging because of the lack of control on second-tier and third-tier suppliers in a supply chain. First-tier suppliers in this case may drive this effort but need to be motivated enough to do so. In case of environmental sustainability, green innovation (GI) may provide a gradual, and thus more affordable and practical, move toward more eco-friendly ways. As far as the motivation to commit to sustainability and GI is concerned, internationalization and export business expansion may act as one of the most effective motivators for these suppliers. However, the nature of relationship between these three constructs, i.e. internationalization of firms, sustainability of their supply chains and the extent of their GI requires a better understanding.Design/methodology/approachThe work uses a novel data set collected from 146 medium and large textile firms operating in Pakistan. The partial least square-structural equation modeling approach is used for data analysis.FindingsAll three constructs of internationalization, GI and sustainable supply chain management (SSCM) are significantly associated and thus complement each other.Originality/valueThis work uses a novel agency theory perspective to analyze the relationship between internationalization, GI and SSCM. In that sense, the findings indicate that internationalization could be one of the incentives that can be used by the principals to deal with agents’ goal conflict and information asymmetry.

Geopolitical risk and foreign subsidiary performance of emerging market multinationals

In recent years, enterprises have faced increasing uncertainty due to rising geopolitical risks. This paper examines the impact of geopolitical risk (GPR) in host countries on the performance of foreign subsidiaries of A-share-listed Chinese multinational enterprises (MNEs) from 2003 to 2020. The results show that the GPR of host countries negatively affects the foreign subsidiary performance of Chinese MNEs. The deteriorated local business environment acts as a channel for this negative relationship. Moreover, such a negative relationship is mitigated for listed firms with more international experience and senior executives with an overseas background, when the foreign subsidiaries do not operate in sensitive industries or when there is a better institutional environment in the host countries. This study extends the literature on how external uncertainty affects the performance of foreign subsidiaries of emerging market multinational enterprises. It also sheds light on the internationalization of firms through the management of international uncertainty.

The use of big data and analytics in external auditing: Does audit firm size matter? Evidence from a developing country

Purpose: The aims of this research are to investigate the reasons for adopting big data (BD) and big data analytics (BDA), determine their extent of usage, and identify potential obstacles to their adoption in a developing country, Egypt. Motivation: Prior literature criticized the audit profession for the slow adoption of BDA, and little is known about the adoption of BD and BDA in developing countries. The reluctance to incorporate BD and BDA into auditing can be attributed to their potential obstacles. In addition, prior studies focused on the Big-4 audit firms in developed countries with little known about adopting BD and BDA in local audit firms and developing countries. Design/methodology/approach:To achieve the objectives of this study, 16 audit practitioners with various positions, specializations, and experience levels were interviewed. The 16 participants belong to audit firms of different sizes: international audit firms, local audit firms, and a governmental auditing agency. Thematic analysis was employed through using the MAXQDA software package to analyze the data. Main findings: The findings revealed that the reasons for using BD and BDA go beyond improving audit efficiency and effectiveness and satisfying clients. All audit firms collect and analyze large volumes of traditional accounting data. However, the Big-4 firms manage and analyze non-financial data and new data items as complementary audit evidence. Also, it was found that the type of audit firm affects the use of these technologies, with international firms being superior to other firms. The Accountability State Authority lags behind other audit firms in adopting BD and BDA. Furthermore, it was found that some obstacles to adopting BD and BDA arise due to the specific characteristics of the Egyptian context, while others are universal. Practical implications/Managerial impact: Determining the reasons for and obstacles to adopting BD BDA is useful for audit firms and regulators to remove these obstacles and encourage using such new audit technologies. The findings might help developers of BDA software packages to enhance their packages to meet auditor requirements. Moreover, academic scholars can benefit from the findings of this study by gaining an understanding of the main differences between developed and developing countries in relation to adopting BD and BDA. Novelty/Contribution: This study was conducted in Egypt, a developing country with a an underdeveloped audit environment. Therefore, this study enriches the relevant literature by providing information about BD and BDA in an unexplored developing environment. Besides, it delves deeper into the reasons and obstacles to using BD and BDA in external financial auditing in a developing country. Also, it adds to the literature by identifying the most common BDA software packages and techniques that auditors use in a developing country. Moreover, it considers audit practitioners’ viewpoints on audit firms of various sizes.

Triadic multilevel psychic distance in firm internationalization

PurposeThis study focuses on the triadic multilevel psychic distance (MPD) between the firm, target market and bridge-maker and its consequences for firm internationalization. Specifically, it spotlights the triadic psychic distance between firms, the levels of psychic distance in the target market (country and business) and the bridge-maker. Therefore, this study examines the triadic MPD among these three entities and its impact on firm internationalization.Design/methodology/approachThis study uses qualitative and case study research approaches. It is based on 8 case companies and 24 internationalization cases. Secondary data were collected, and interviews with bridge-makers and industry experts were conducted.FindingsThe study found that MPD appeared in the triad. The MPD between firms and markets is related to country-specific differences and business difficulties. The MPD between the firm and the bridge-maker is based on the latter’s lack of knowledge vis-à-vis bridging the firm’s MPD. Finally, the MPD between bridge-makers and the market is based on the former’s lack of knowledge of the home country’s business difficulties.Originality/valueThis is the first study to develop and adopt a triadic multilevel psychic distance conceptualization that provides evidence for and sheds light on the triadic MPD and its effect on firm internationalization. This study identifies the reasons behind triadic MPD in connection to firm internationalization. Notably, firm internationalization is interdependent on the triadic MPD setting between the firm, bridge-maker and target market. It has theoretical value and contributes to the recent advancement in the understanding of MPD in international marketing literature.

Exploring the role of women entrepreneurs in firm internationalization strategic decision-making.

Women entrepreneurs have emerged as main contributors to the dynamic landscape of the business world, with a noticeable increase in their numbers choosing entrepreneurship as a career path. This phenomenon is particularly present in developing nations like Albania, where women entrepreneurs are not only instrumental in fostering competitive advantage within the domestic market but are also making significant steps in the international arena. This study aims to investigate the crucial role played by women entrepreneurs in the process of firm internationalization, with a specific focus on the Albanian context. Through a literature review as the primary methodology, this research focuses on the experiences and contributions of Albanian women entrepreneurs to investigate the complexities of their involvement in the internationalization of businesses. The findings underline the main role women entrepreneurs play as facilitators in the internationalization process, showing their ability to drive firms towards expanded global reach. This study analyses the challenges faced by women entrepreneurs in this process, offering valuable insights into the obstacles they pass and the opportunities they seize. By exploring the experiences of women entrepreneurs in a specific geographic and socio-economic context, this study provides a perspective on the challenges and opportunities inherent in the internationalization process. This paper significantly contributes to the understanding of the role of women entrepreneurs in firm internationalization within the Albanian context, offering detailed insights into how they leverage their unique capabilities and networks to facilitate business growth beyond domestic borders. It enriches the literature by highlighting the specific challenges and opportunities encountered by women entrepreneurs.

Internationalization of firms: The impact of “Made in Albania” on strategic decisions

This study focuses on the specific case of Albanian firms operating in the fashion industry and examines the significance of the “Made in Albania” label in their internationalization endeavors. It seeks to analyze the challenges and opportunities these firms encounter throughout the internationalization process, shedding light on the dynamics of the global fashion market. Multiple case studies are used in this investigation, focusing on Albanian firms that brand their products with the “Made in Albania” label. By employing a qualitative research approach, this study aims to provide an understanding of the factors influencing the internationalization efforts of these firms. Through in-depth interviews, document analysis, and on-site observations, the research explores the strategic decisions made by these companies in leveraging their national identity for global success. The findings of this research contribute to both academic discourse and practical insights for businesses seeking to investigate the complexities of internationalization. By analyzing the multifaceted nature of the “Made in Albania” label’s impact, this study offers valuable recommendations for policymakers, industry stakeholders, and business leaders aiming to enhance the global competitiveness of Albanian firms in the fashion sector. The integration of these elements not only adds value but also reinforces the cultural authenticity of Albanian fashion.

Political Risk and International Firms: A Literature Review on Management Strategies

Political Risk and International Firms: A Literature Review on Management Strategies

Familiness and internationalisation of family firms: a resource-based view

Familiness and internationalisation of family firms: a resource-based view

Entrepreneurial Attitudes in Firms’ Credit Access

Although enterprises make significant contributions to the GDP of countries, bank credit access is one of the biggest obstacles for them to survive. However, businesses can signal their entrepreneurial behaviors that are included in the Theory of Planned Behavior (TPB) to reduce banks’ concerns about their credit default. However, firms can have various entrepreneurial attitudes depending on their international activities that increase their innovativeness, and financial performance enabling credit access. Thus, the impact of TPB on credit access can differ depending on firms’ internationalization status and this is the main of this study to examine. For this purpose, this paper analyzes 1175 firms from various countries. The researchers apply a purposive sampling method to create a research sample and direct an internet-mediated questionnaire to the selected respondents. Binary Logistic Regression analyses have been performed by the researchers to investigate the impact of TPB on credit access. The results show that the components of TPB, personal attitude, personal behavioral control, and subjective norms have different impacts on the credit access of international and domestic companies. Personal attitude and subjective norms negatively affect bank credit access of international and domestic firms, respectively while they do not determine credit access of domestic and international firms, respectively. Moreover, personal behavioral control positively affects credit access of domestic and international companies. The reason for these results might be related to firm-level and country-level characteristics. Relationship lending and the educational and financial support of academicians and policymakers can provide solutions for credit access problems of firms.

Internationalising high–tech SMEs: Advancing a new perspective of open innovation

Choosing a foreign market entry strategy is known to be essential for firm internationalisation yet there is very little focus on the role, purpose, and value of open innovation for internationalising high–tech SMEs. A review of the international business, international entrepreneurship and international marketing literature combined with a bibliometric mapping of 2501 articles on firm internationalisation, suggests that research does not readily associate open innovation and the internationalisation of high–tech SMEs. This is regardless of open innovation's activities that can span over a firm's immediate geographical space. Thus, this study introduces new theoretical explanations and a midrange open innovation theory to advance open innovation as an alternative foreign market entry strategy especially for internationalising high–tech SMEs. This has theoretical and practical implications for academics, international business managers, and practitioners because it introduces an alternative internationalisation strategy for SMEs.

Equity ownership structure and internationalization of firms: the role of international experience of board chairs

PurposeThis study aims to investigate the impact of equity ownership structure (i.e. CEO ownership, board chair ownership and institutional ownership) on internationalization of firms. The moderating role of international experience of board chairs is also examined.Design/methodology/approachThis study uses Compustat-Capital IQ data from Standard &Poor’s. The sample of this study includes 309 US multinational corporations representing different sectors. The parameters were estimated by using the ordinary least squares regression with the SPSS statistical package.FindingsThe finding of this study suggests that CEO ownership and board chair ownership have a significant, positive impact on the degree of internationalization of firms, whereas institutional ownership has a negative impact. The predicted moderating role of international experience of board chairs has found mixed results.Originality/valueThis study contributes to the literature by taking a holistic approach to examine the impact of equity ownership types (i.e. CEO ownership, board chair ownership and institutional ownership) on firms’ degree of internationalization. To the best of the authors’ knowledge, this research is also the first to investigate the impact of independent board chairs’ equity ownership and international experience on internationalization.

Paradoxical organizational culture, authoritarian leadership, and international firm performance: evidence from international firms in China

Organizational paradox has received substantial scholarly attention; however, the literature has not yet explored the idea that it can be ingrained and manifested as an international organizational culture. In this study, we conceptually explore and empirically examine paradoxical organizational culture and its impact on international firm performance. In this vein, this study advances our knowledge of international organizational culture by extending paradox theory. We propose a “paradoxical organizational culture” as a type of international organizational culture characterized by the sustained and visible coexistence of contradictory cultural features within an international organization. We also argue that the effectiveness of paradoxical organizational culture is amplified, not dampened, by authoritarian leadership. Quantitative analyses based on cluster groups were used to examine the relationships among paradoxical culture, leadership, and firm performance. The empirical results, based on original survey data collected from China (2256 individual respondents from 394 Chinese international firms), support our claims. Our study is expected to provide implications for those interested in the concepts of paradoxical organizational culture and authoritarian leadership in the international business context.

Managing food-wasting: the role of customer cooperation in influencing firms' pro-environmental behavior

PurposeFood waste is increasingly becoming a major issue for retail companies. However, there is still limited knowledge of how new forms of collaborative consumption (CC) may impact firms' behavior. This paper identifies and examines how the enablers of food waste and firms' tendency to cooperate with their customers may affect the adoption of measures oriented to diminish waste reduction, as well as the use of mobile technologies.Design/methodology/approachA empirical study has been conducted on a sample of international firms operating in the food sector as retailers (i.e. restaurants, bar and catering services) or in similar activities (i.e. hotels and accommodations). The authors tested an empirical model aimed at revealing the possible mediating role of customer cooperation in affecting the impact of food waste enablers on (1) waste recovery measures and (2) the adoption of mobile technologies for food recovery.FindingsThe results of this study showed how customer cooperation mediates the impact of food waste enablers on the intention to use mobile applications for food recovery but not on the adoption of food recovery measures that, instead, mainly depends on waste causes internal to the firm.Originality/valueThis is one of the first studies that tries to identify and evaluate the impact of the different enablers of food waste on firms' pro-environmental behaviors. Interestingly, the authors show how customer cooperation is a decisive factor to promote new forms of CC in the food industry. Importantly, customer cooperation acts as a bridge between the drivers of food waste and a firm's intention to adopt measures against it. By actively involving customers, firms can gain insights, develop effective strategies and foster a culture of waste reduction that benefits both the business and the environment.

Graftee and Grafting in Firm Internationalization

This study focuses on enhancing the understanding of how firm internationalization is triggered by investigating how firms cope with the lack of knowledge and networks when entering a foreign market. More specifically we are interested in answering the following research question: How do firms enter foreign markets without market-specific knowledge and market-specific network insidership? To this end, the present study implements a case study of 12 Swedish firms internationalizing into emerging markets. The study found that firms “graft” expert individuals to help firms penetrate foreign markets where they have no prior history or experience. Further, we observed the qualities of a specific type of actor we refer to as a “graftee” by describing grafting actions and showing how these graftees help firms acquire experiential knowledge and network insidership. Our empirical evidence shows that grafting impacts the form and process of internationalization, sometimes enabling an effectuation-driven market entry while, at other times, enabling a causation-driven process.

Becoming a Multilatina: strategic capabilities as necessary conditions for the internationalization of Latin American firms

PurposeThis study aims to challenge the generic interpretation of Multilatinas as Latin American firms that have been able to internationalize because of highly competitive strategic capabilities. The authors test whether capabilities that international business researchers commonly associate with internationalization are necessary at different stages of the internationalization process to better understand the extent to which emerging market (EM) firms need to develop them.Design/methodology/approachInternational business research suggests a positive association between strategic capabilities and firm internalization. However, it remains unclear what specific capabilities are necessary and when they are necessary. These questions are particularly important in the context of the internationalization of firms from emerging economies, such as Latin America. The authors apply necessary condition analysis (NCA) on a sample of Latin American firms at different internationalization stages to test what strategic capabilities represent necessary conditions for becoming a Multilatina.FindingsThe findings suggest that only a few strategic capabilities are necessary for Latin American firms to become “Multilatinas”. While entrepreneurial orientation and marketing and sales capabilities represent necessary conditions, EM firms may internationalize even though other capabilities are developed to a lesser extent. The authors reflect on how shifts in local markets and technology drive the emergence of different types of Multilatinas.Research limitations/implicationsMeasuring strategic capabilities across multiple EM firms implies a risk that firm-specific aspects are not fully captured. While the authors focused on the comparative competitive strength of capabilities and took great care to minimize measurement error, the authors acknowledge possible bias. Also, while NCA does not require a minimum sample size, findings from our sample of firms from four countries may not generalize to the region or other EMs.Originality/valueAs a relatively new statistical technique, the use of NCA has spread rapidly. To the best of the authors’ knowledge, the linkage between organizational capabilities and firm internationalization has not been tested from a necessary conditions perspective yet. The reflections on the “Multilatina” concept based on the notion of EM firms as configurations of strategic capabilities inform current debates on EM multinational enterprises.

Role of research and development in internationalization of high-tech firms: Empirical results from Poland

This article focuses on the significance of research and development (R&D) in driving the internationalization of Polish high-tech firms. R&D is essential for businesses to remain competitive and adapt their products to the specific requirements of different markets. The study aims to investigate the relationship between R&D and the internationalization process of high-tech firms based in Poland, with a focus on the innovation context. We used a quantitative research method and employed a survey questionnaire to evaluate the internationalization of high-tech firms in Poland. The study employed a computer-assisted telephone interviewing (CATI) method and identified the random sample of 263 fully-filled questionnaires during the survey that were important for further statistical analysis. We confirmed that research and development as it is commonly understood, i.e., having one's own R&D department and making expenditures on R&D, helps and strengthens the internationalization of high-tech firms.

Does Concentrated Shareholding Impact Family Firm Internationalisation?

This article investigates whether increase in concentrated shareholding impacts the internationalisation of family firms. Based on a multi-theoretic approach and using zero inflated beta model on a panel data set covering 307 largest Indian listed companies, we observe that concentrated ownership, adverse employee relations and business group affiliation discourage internationalisation. But as family shareholding exceeds 50%, concentrated ownership has an indirect positive balancing impact on internationalisation. Besides, status as a family firm has a significant favourable impact on internationalisation and it moderates the impact of concentrated ownership, adverse employee relations and group affiliation on internationalisation.

African Firms Internationalization: What Can We Learn from the Most Cited Articles Published in the Last Decade?

Abstract This article aims to develop a recent overlook of African firms’ internationalization and its importance in consideration of the growing interest of multinational stakeholders. We analysed 26 most-cited journal articles, i.e., based on the number of citations, in the last decade, indexed in the Web of Science database, i.e., from 2011 to 2021. The previously published studies revealed that the internationalization of African firms is a fast-growing stream of the broader topic of international entrepreneurship. Our review also summarized two main research areas identified in the studied literature. The first focuses on selected features of African firms’ internationalization process. The second part underpins factors influencing their internationalization. The provided structured knowledge from the most cited articles serves as a tool to improve stakeholders’ understanding of international entrepreneurship in Africa. The study also proposes future research directions in international business and entrepreneurship in Africa. The article contributes to international entrepreneurship research in Africa by enumerating those aspects that shape the internationalization path of these global firms.