International Firm Performance Research Articles

International managerial skill and big Colombian big exporting firms' performance, 2006–2014

AbstractThis paper uses a sample of the biggest private Colombian exporting firms to propose and estimate a two‐step methodology for measuring international managerial skill and calculating its impact on international firm performance. The first step quantifies the managerial team's organisational capital contribution to rise firms' export proficiency through the average of a regression residuals group conformed by export unit value residuals for differentiated products (multiplying by −1 the price competition products' residuals) and export quantity residuals for homogeneous products. The second step results indicate that: (i) international managerial quality has a significant and robust positive effect on export value, (ii) better managers in the international market do not increase the number of products exported but upgrade export basket's quality and (iii) export value elasticity relative to international managerial quality is around 5 times larger than export value elasticity relative to exogenous global demand shocks.

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.

Internationalization and firm performance: moderating role of multi-stakeholder initiatives

PurposePrevious scholars have assumed that multinational enterprises (MNEs) can reduce the liability of foreignness and increase profitability by investing in corporate social responsibility (CSR). However, empirical validation of this assumption has rarely been attempted. This study aims to provide empirical evidence that the adoption of multi-stakeholder initiatives, which are globally recognized as signals of CSR, helps MNEs increase profits from internationalization.Design/methodology/approachFixed effect models, which address model misspecification problems, and instrumental variable estimation, which controls for the endogeneity in firms’ choice of internationalization, offer empirical evidence supporting the moderating effects of global multi-stakeholder initiatives on the relationship between internationalization and firm performance.FindingsThis study examines the moderating role of multi-stakeholder initiatives in the relationship between internationalization and firm performance, drawing on signaling and stakeholder theories. The results suggest that the signaling effect of multi-stakeholder initiatives can help MNEs overcome the liability of foreignness and, therefore, profit from overseas markets.Originality/valueAlthough the internationalization–firm performance relationship has been a subject of debate in the field of international business, the role of firms’ stakeholder engagement in this relationship has been largely overlooked in previous studies. In this study, the authors explore the impact of multi-stakeholder initiatives on the internationalization–firm performance relationship. Our primary contention is that multi-stakeholder initiatives have moderating effects on this relationship by reducing the liability of foreignness experienced by MNEs in host countries. Furthermore, the findings suggest that active engagement in multi-stakeholder initiatives significantly contributes to the financial success of MNEs as they internationalize.

Learning Orientation as Mediator between International Entrepreneurial Orientation and International Firm Performance in Global Halal Industry

The halal industry has provided a new competitive advantage for Muslim countries, especially Malaysia, as the export of halal products is now one of the most important contributions to the national income. The contribution is mostly by small-medium enterprises (SMEs). However, in ensuring the sustainability of SMEs in the international market, the firm needs to hire managers with internationally oriented entrepreneurs to prepare SMEs to face uncertain environments globally through the intervention of learning orientation as an organizational culture. Thus, this research was conducted to examine the mediating effect of learning orientation between the international entrepreneurial orientation and international firm performance of SMEs in the global halal industry. This study is a quantitative, cross-sectional study. Purposive sampling was used as the sampling method where the sample was selected based on four criteria: SMEs, manufacturer, possession of a Malaysia halal certification, and exporter of halal products. Responses collected from 136 top management teams from participating firms were analyzed using PLS-SEM. The results show that the relationship between international entrepreneurial orientation with international firm performance is conditional upon learning orientation. To operate internationally, having managers equipped with prior entrepreneurial behavior is insufficient to increase performance. Learning orientation thus serves as a platform to transfer tacit knowledge to employees and at the same time value employees’ ideas so that continuous changes can take place. This improvement will ultimately result in higher international firm performance.

Digital resilience and firm internationalization: a study of Chinese listed companies

PurposeThe aim of this research is to explore the impact of digital resilience on firms' international performance. Using internal operation efficiency and innovation as channel variables, this paper explores the relationship between digital resilience and international firm performance of Chinese listed firms.Design/methodology/approachThe research design follows a quantitative approach. Using firm-level panel data from 2007 to 2020, this paper tests the hypotheses between digital resilience and international firm performance through internal efficiency and innovation.FindingsThe results note that digital resilience has a positive effect on internationalization while operation efficiency is a channel through which digital resilience promotes internationalization. Digital resilience also facilitates innovation by improving research and development (R&D) efficiency and matching innovation collaborators.Originality/valueThis paper is one of the first to explore digital resilience in the context of internalization and international firm performance. This paper extends the notion of resource-based view (RBV) to examine the relationship between digital resilience, internal efficiency and innovation on international firm performance.

MANAGERIAL CAPABILITIES, LEARNING ORIENTATION AND PERFORMANCE OF INTERNATIONAL HALAL INDUSTRY USING UPPER ECHELON THEORY

Upper echelon theory (UET) emphsizes the role of management in determining firm strategy that can lead to performance. Many studies have been conducted on UET but very few have addressed UET in international business research, especially in the halal industry. Implementing learning orientation as a culture can serve as a medium in transferring tacit knowledge within the firm. Therefore, this research was conducted to examine the mediating effect of learning orientation between managerial capabilities and international firm performance of small and medium-sized enterprises (SMEs) in the halal industry. This is a quantitative, cross-sectional study with a total of 136 responses analyzed using PLS-SEM. The results show that the impact of top-management team’s (TMT) knowledge of foreign markets on international firm performance depends on learning orientation and partially mediates the relationship between TMT’s international experience and international firm performance. The study is novel in that it tests UET in the halal industry and introduces a new mediator to the UET framework.

International Firm Performance and Proximity to Rare Disaster Risk

International Firm Performance and Proximity to Rare Disaster Risk

How effectuation, causation and bricolage influence the international performance of firms via internationalisation strategy: a literature review

PurposeThis study aims to investigate the antecedents of the internationalisation strategy i.e., effectuation, causation and bricolage on the international performance of the firm.Design/methodology/approachIn total, the study uses 138 peer-reviewed articles on effectuation, causation, effectual/causal decision-making logics and related issues such as the impact of antecedent factors of international strategy (i.e. effectuation, causation and bricolage) on the international performance of the firm.FindingsEven though the theory of effectuation was formulated in 2001, to a large extent it has still not moved away from the realm of small entrepreneurial firms. The development of effectuation logic has accelerated in recent years, but the bulk of the research still focusses on small entrepreneurial firms rather than on the application of the theory in larger, non-entrepreneurial firms. Furthermore, effectuation theory would benefit from being developed into the realm of psychology and sociology.Originality/valueThis study offers a conceptual model on how effectuation, causation and bricolage influence internationalisation strategy, which, in turn, impacts the international performance of the firm. Furthermore, the study discusses the effectual logic for larger firms. The exponential growth of studies on effectuation during recent years, i.e. 2017 to the first quarter of 2020, shows that researchers have responded to calls by leading authors stating that effectuation theory is a field with great potential for further theoretical developments. This study presents a literature review of the critical issue of the engagement of internationalisation strategies with effectuation, causation, bricolage and the international performance of the firm compared to the earlier literature review for the period 2001–2016 by Matalamäki (2017) and Karami et al. (2019) on effectuation and internationalisation.

Strategic agility, environmental uncertainties and international performance: The perspective of Indian firms

This paper focuses on how firms use exploitation and exploration to develop strategic agility, and how strategic agility impacts the international performance of firms from emerging markets. Analyzing proprietary data on firms operating in India, we find that exploration and exploitation help them develop strategic agility. Explorative agility is shown to improve international performance in competitive environments, while exploitative agility enhances it in dynamic ones. Our paper contributes in examining the role of exploration and exploitation as the antecedents of strategic agility, and their contingent effects on international performance in environmental uncertainties. The discussion provides guidance for managers coping with environmental uncertainties in the international markets.

Entrepreneurial orientation and international performance of born global firms: the mediating role of entrepreneurial competencies

PurposeThis study aims to extend the understanding of entrepreneurial orientation (EO) by investigating the international EO (IEO) from the perspective of the international performance of born global firms. The born global firm's EOs toward global firms led to innovation and dynamic organizational capabilities and to improve the firms' international performance and development.Design/methodology/approachIt is a hypothesis that IEO predicted that utilization of export promotion programs (EPPs) would be positively associated with international performance. The samples of 405 respondents were collected from born global firms to acquire higher international performance of firms in China. Structural equation modeling (SEM) and mediation analysis are processed to test the proposed hypotheses empirically.FindingsThe results from the SEM test revealed that the network relationships and utilization of EPPs fully mediate the effect of IEO on international performance. These results indicate that not only IEO is an important factor of network relationships but also the utilization of EPPs and international performance for born global firms. IEO can motivate managers to find the right network relationships and ultimately improve company performance. The IEO of the initiative has strong impact on the performance of international firms.Originality/valueThere is a comprehensive view among the relationships of IEO, entrepreneurial competencies and the network utilization of government EPPs, international performance in the context of born global firms. Theoretical and practical implications are discussed in detail.

A mediation analysis: Board of directors’ composition, R&D investment, and international firm performance

The comprehension and the explanation of the research and development (R&D) investment behaviour are done within the framework of a reflection on corporate governance. This investment does not contribute to creating value only if it is framed by governance mechanisms which role is to keep organizational, agency, or transaction costs as low as possible. In this context, we try to determine whether an integrating model exists; one that measures the simultaneous effect of the characteristics of the board of directors on R&D and the firm performance in an international context. Our model seeks to identify whether the dominance of inside directors and the dual structure influence the level of R&D investment, the mediating variable, and hence the firm performance. Our empirical study was carried out on a total sample of 509 firms divided between 165 American firms, 173 Japanese firms, and 171 French firms over the period 2014 to 2019. The findings of the mediation analysis according to the approach of Preacher and Hayes (2004, 2008) show the significant role of mediation by R&D investment between, on the one hand, the dominance of inside directors and duality, and on the other hand, the firm performance. Differences in the configuration of board of directors (BD) in different countries thus lead to different attitudes to the fulfillment of the control task and the R&D investment decision, value creator

Development of international market information in emerging economy family SMEs: The role of participative governance

ABSTRACT Emerging economy family SMEs pursuing internationalization have to develop international market information acquisition capability. However, there is limited knowledge about how to develop and utilize this capability. We investigate the role of participative governance and the extent to which participation of board and family members enhances this capability. We also examine the mediating role of this capability in the relationship of participative governance and international firm performance. Our analysis of 192 Turkish firms corroborates the role of participative governance. However, we find that this capability plays a partial mediating role only when family firms measure their performance subjectively but not objectively.

Modelling the effects of institutional support and international knowledge on competitive capabilities and international performance: Evidence from an emerging economy

This paper explores the process through which institutional support initiatives contribute to the international performance of firms from the small open economy of Malaysia. We examine both direct and indirect causal effects of institutional support (informational, training, trade mobility and financial aid-related support) on internationalization. We develop a model to address how institutional support initiatives affect the performance of export-oriented or so-called born global firms. From a survey of 250 firms from Malaysia, an emerging Southeast Asian market, we find that government support initiatives do not have significant impacts on firm performance unless examined based on processes of government support initiatives, international knowledge, commitment, competitive capabilities, and international performance. Government support initiatives play a critical role in export-oriented firms from small open economies (SMOPECs) in emerging markets by contributing to a number of contextual deficits that determine the international performance of a firm. This study provides guidelines for policy makers and business owners on how institutional support can facilitate the accumulation of knowledge about international markets, enhance commitment to exports and help firms gain competitive capabilities in the export market for greater success in international markets.

Organisational learning as a mediator in the host-home country similarity–international firm performance link: the role of exploration and exploitation

PurposeThis study aims to shed light on the lack of understanding and previous mixed results regarding why and how some internationalised firms take advantage of host-home country similarity (HHS) while others do not.Design/methodology/approachDirect and mediating hypotheses are examined through an empirical investigation of 156 CEOs in internationalised Spanish companies, using structural equation modelling validated by factor analysis.FindingsThe results suggest that exploitation (EI) and exploration (ER) constitute important learning mechanisms that impact on the liability of foreignness when internationalising a business. In particular, the positive influence that HHS has in international firm performance (IP) depends on both exploitative and exploratory learning.Practical implicationsThis research adds insights into the importance of two of the main components of organisational learning (i.e. ER and EI) as mediators of the HHS and IP relationship, which can help senior managers or business owners make consistent decisions by matching potential international market locations with firm learning factors.Originality/valueThis study clarifies contradictory theoretical assertions and mixed empirical results about how HHS impacts on international performance. In particular, by responding to recent calls for research, this study has shown that organisational learning is a key component in the aforementioned link where ER and EI positively mediate this relevant relationship.

Croissance de la productivité et réallocation des ressources en France : le processus de destruction création

[eng] Based on a large sample of French firms, this article examines the contribution of resource reallocation and of the learning effect to changes in total factor productivity (TFP) before (2000-2007) and after (2008/2009-2012) the 2008 crisis. First, we show that there was very little TFP growth before the crisis and that a fall occurred between 2008 and 2012. Second, we show that the evolution of TFP is highly dependent on the learning effect, as measured here by internal firm performance. Its negative contribution after the crisis is indicative of the difficulties experienced by firms in France in adjusting their production scale rapidly and effectively. However, this effect was reduced by 1) a process of resource reallocation towards the most productive continuing firms, which only really took hold from 2009 onwards, and 2) an earlier Schumpeterian process of creative destruction (cleansing effect), the first signs of which appeared in 2008.

Internationalization Orientation in SMEs: The Mediating Role of Technological Innovation

Abstract This study examines the relationship between internationalization orientation and international performance of small and medium-sized enterprises (SMEs), and the mediating effect of technological innovation. Prior research suggests that internationalization is a prominent strategic choice for SMEs growth and profitability. However, there is still no explicit agreement on how internationalization affects international performance. Similarly, the role of innovation on performance has long been emphasized, but the implications of technological innovation on international performance are still eluding us. Our investigation of 116 SMEs in the United Kingdom reveals that internationalization orientation has a significant effect on their international performance, with SMEs adopting simultaneously an inward and outward international orientation achieving superior results. We further demonstrate that there is an inverted U-shaped relationship between technological innovation and international firm performance among SMEs. Meanwhile, we find that technological innovation positively mediates the effect of internationalization orientation on international firm performance, particularly for the SMEs exhibiting moderate levels of technological innovation activities. The findings of this study suggest that managers can improve international performance by combining inward and outward internationalization orientation with technological innovation activities in their strategic decisions.

Dynamic Problem-Solving, Corrupt Transactions and International Entrepreneurship

In a panel study covering 4627 observations of international entrepreneurial ventures in 9 countries in the Middle East and North Africa region from 2013- 2017, we demonstrate that international entrepreneurs may achieve competitive advantage through complicit problem-solving means such as corrupt transactions. The positive effect of corrupt transactions on international firm performance is stronger for entrepreneurs entering countries with lower levels of corruption and for entrepreneurs coming from countries with higher fear of failure. The results are highly consistent across several models and are robust to the choice of two firm performance indicators.

Internal social capital and international firm performance in emerging market family firms: The mediating role of participative governance

Family firms benefit from internal social capital, which refers to resources related to structural, relational and cognitive aspects of family relationships. However, it is not clear if and how possession of internal social capital can enhance the international performance of emerging economy family firms. Based on the data collected from 192 small- and medium-sized family firms from Turkey, we show that family firms can improve their international firm performance by utilising the internal social capital of family relationships. Our findings also demonstrate that the relationship between internal social capital and international firm performance is mediated by participative governance capability. In participative governance, family members as well as board members have the capability to contribute to strategic decision-making and implementation. We also show that all structural, relational and cognitive aspects of internal social capital should be developed in order to improve international firm performance.

Strategic Orientation and International Firm Performance: A Pilot Study of Malaysian SMEs Halal Product Manufacturer

Strategic Orientation and International Firm Performance: A Pilot Study of Malaysian SMEs Halal Product Manufacturer

Does an Environmental Marketing Strategy Influence Marketing and Financial Performance? A Study of Indonesian Exporting Firms

Purpose – Broadly speaking, the implementation of green practice leads to higher performance in exporting firms. To test this concept empirically, this study proposes environmental marketing strategy as an antecedent of product differentiation and cost leadership as a means to promote marketing and financial performance. Design/Methodology/Approach – This study was conducted on 388 respondents serving as operational, production, and marketing managers of Indonesian exporting firms and used structural equation modelling (SEM) with AMOS 18 as an analysis technique. Findings and implications – The findings revealed that environmental marketing strategy significantly influences product differentiation and cost leadership. More specifically, product differentiation simultaneously influences marketing and financial performance. However, cost leadership influences financial performance but not marketing performance. This study implies the importance of environmental orientation in setting a firm strategy and promoting the performance of international firms. Limitations – The measurement items proposed in this study were adopted from studies conducted in developed countries; they have not been proven appropriate for direct application in developing countries such as Indonesia. Originality – This study is original in that it explores the importance of environmental studies in setting a firm strategy and promoting the performance of international business.