International Firms Research Articles

Leveraging foreign diversification to build firm resilience: A conditional process perspective

Foreign diversification is crucial for risk management, but its role in building resilient international firms is underexplored. This research combines the organizational information processing theory with international business literature to examine how and when foreign diversification relates to firm resilience in the context of SME exporters. The study suggests that while foreign diversification may contribute to firm resilience, foreign market scanning mediates this effect under varying supply chain disruption conditions. An analysis of primary data from 272 SME exporters in Ghana reveals that foreign diversification alone does not explain firm resilience. Instead, the results support the arguments that foreign market scanning positively mediates the foreign diversification – firm resilience relationship, and that this indirect relationship is stronger in highly disruptive supply chain environments. Implications of these findings for international business research and practice are discussed.

The influence of state ownership on environmental proactivity: An institutional perspective of international firms

AbstractThe influence of state ownership on a firm's environmental strategy is still unclear due to the varied relationships across different international institutional contexts in the firm's home and host country. Applying mixed effect regression models to a sample of 2997 observations of 298 firms from the MSCI World Index for the period 2007–2018, this paper analyzes the different effects of key institutional factors on this relationship. While a state‐owned firm from a state with a high home country environmental profile will have a more positive effect on a firm's environmental proactivity, internationalization will weaken it, since the firm will encounter higher complexity when translating its green actions into a more global institutional context. In addition, when internationalization involves a very different host country environmental profile, the greater institutional distance seems to modify the influence of state ownership on environmental proactivity. Our results provide key theoretical and practical implications for managers in relation to state‐owned firms' global environmental strategies.

On the (in)effectiveness of standardized versus adapted international promotion strategies: Evidence from entrepreneurial firms

This study investigates how internationally active firms’ international promotion strategy is linked to international marketing performance. It addresses the issue of effectively balancing the economic benefits of standardized strategies with the potential performance gains achieved when adapting to local customer preferences and market situations. Based on contingency theory and the strategic fit paradigm, we argue that there is no panacea solution to the promotion strategy standardization versus adaptation debate. Instead, our empirical results from 298 international entrepreneurial product-market ventures based in Sweden support the view that international firms must fit the promotion strategy to relevant macro- and micro-environmental conditions in order to optimize their international marketing performance. Our results caution against assuming that all environmental factors exert an equivalent effect on the level of international promotion strategy standardization and reveal that neither standardization nor adaptation is a superior strategy in pursuing international marketing performance.

Institutional distance, slack resources, and foreign market entry

AbstractTraditional theories from the international business and strategy literatures have posited that institutional distance constrains firm internationalization and that slack financial and managerial resources can be redeployed to help overcome this distance and facilitate growth. However, are slack resources equally effective when entering host markets of different institutional quality? Combining an institutional economics’ view of distance with a Penrosean perspective on resources, we argue that financial slack allows firms “to pay their way” into more institutionally developed markets, whereas managerial slack allows firms “to work their way” into less institutionally developed markets. From data on the internationalization of 307 Indian computer software companies over 16 years, we find support for our hypotheses when considering formal institutional distance. We also find that managerial slack mitigates informal institutional distance, irrespective of the direction of internationalization. Additional robustness tests, using propensity score matching, and an alternative sample of 3600 manufacturing firms from 49 countries, support our main results. Our findings suggest that slack is not a generic panacea for overcoming institutional distance, in that the effectiveness of each type of slack is dependent on both the direction of entry and the type of institutional distance to be overcome, formal or informal.

Adapting to uncertainty: navigating the pandemic with green and traditional HR practices

This research explores the relationship between green human resource management (HR) practices and organizational agility in the context of international organizations based in Karachi, Pakistan, during the COVID-19 pandemic. Drawing upon previous research and theories, the study investigates the impact of traditional and green HR practices on organizational agility. The research underscores the crucial role of organizational support as a predictor of organizational agility during the pandemic. The study utilizes a convenience sample of international firms operating in Karachi, chosen for their potential adoption of green HR practices. Data were collected through a survey questionnaire consisting of two sets of questions, one for organizations implementing green HR practices and the other for those employing traditional HR practices. The survey items measured green training and development, green rewards and recognition, organizational support, and traditional HR counterparts. The internal consistency of the constructs was established through Cronbach’s alpha values, indicating good reliability. The results supported the hypotheses that organizations with green training and development and green rewards and recognition exhibit higher organizational agility levels than their traditional HR counterparts. However, the interaction between green HR practices and organizational support did not significantly predict organizational agility. Despite this, the study highlights the substantial impact of organizational support on organizational agility during the pandemic. These findings emphasize the need for organizations to invest in green HR practices, given their potential to enhance organizational agility. Organizations are encouraged to consider the adoption of green HR practices not only as a sustainability initiative but also as a means to enhance their ability to navigate complex and unpredictable environments.

Internationalising Spanish Firms to the East: Business Strategies of the National Institute of Industry towards the Soviet Union (late 1950s to 1991)

This article examines the internationalisation of Spanish firms, promoted by the National Institute of Industry (Instituto Nacional de Industria, INI), to the Soviet Union market within the context of the Cold War and East-West economic collaboration. Backed by the Business History methodology and the primary sources of the National Institute of Industry, this paper argues the following. First, the National Institute of Industry’s approach to the Soviet Union was dictated by national strategic interests, such as industrial policy goals, resource-seeking, technology-seeking investment, or profit-seeking attitudes. Second, the INI’s approach to the Soviet Union was dictated by political purposes such as establishing or maintaining relations with Spain and the Soviet Union. Third, before the restoration of diplomatic ties in 1977, the ‘stateness’ of INI was considered a disadvantage. Finally, after restoring diplomatic relations, the ‘stateness’ of INI was deemed an advantage.

Brazil’s national champions strategy (2007–13): A critical appraisal

The recent multiple crises have led to a renaissance of the role of the state in the economy throughout the world. Hence, industrial policy is once again back at the agenda of academic and policy debates in advanced as well as emerging economies. We want to contribute to this debate by discussing the controversial results of a recent case of industrial policy—the “national champions” strategy of the Brazilian National Development Bank (BNDES) between 2007 and 2013. Being the centerpiece of Brazil’s move toward a more state-led economic model in the late 2000s, its successes and failures should be of great importance to the ongoing debate about industrial policy, state capitalism, and development. The national champions strategy has become an integral part of contemporary state capitalist models, with China being the most outstanding example. By looking at the Brazilian case, an upper-middle income democracy, and therefore a more representative case for countries with similar political settings, the paper aims to provide a critical appraisal of revived industrial policies in the early 21stcentury as a separate policy tool of the newly emerging variety of state capitalism. We apply a political economy approach to highlight the context-sensitivity and institutional embeddedness of firms and the complementarities between several institutional spheres as resources and constraints for companies’ competitiveness and internationalization. The paper aims to contribute to the current debate about state-financed firm internationalization in general and the viability of a national champions strategy in particular.

Sustainable international business model innovations for a globalizing circular economy: a review and synthesis, integrative framework, and opportunities for future research

AbstractThe global imperative has increased in recent years for international firms to respond to major threats such as unintended environmental, social, and economic problems arising from ecological destruction, population growth, and economic activity. To respond to this confluence that has created an emerging existential crisis, we identify that a globalizing circular economy (CE) is required and subsequently define a new construct: sustainable international business model innovations. In doing so, we introduce circular inputs, sharing platforms, product as a service, product use extension, and resource recovery as business models that contain the potential to reply to these grand challenges. Based on CE principles, the innovations and designs introduced are contrasted with the traditional linear economic model and are presented as actionable standardization/adaptation alternatives for companies responding to differing informal and formal international institutions. Based on the theoretical underpinnings of the resource-based, dynamic capabilities, and international business model innovation perspectives, we introduce an integrative framework that is accompanied by a series of detailed research questions to provide future research opportunities for the domain. This conceptual approach holds that international resource design influences marketing capabilities adaptation which, in turn, impacts international performance and offers a foundation from which to build the literature.

Regulation of the Legal Profession in China: A Historical Overview

Abstract Understanding a legal system requires understanding of its legal service providers. The Chinese legal system has undergone major transformations since the late nineteenth century, and a series of approaches to regulating China’s lawyers has accompanied those transformations. This article offers a historical overview of those approaches, discussing the regulation of the Chinese legal profession and the foreign lawyers operating in the Chinese environment. The Chinese legal profession has never achieved significant self-regulation or autonomy from the state, and, during the Mao era (1949–1976) it was nearly obliterated. In the late 1970s, China began to rehabilitate its legal profession and create a space in which foreign law firms can operate legally. To a remarkable degree, that effort succeeded: Chinese law firms now operate around the world, and many major international firms operate successfully in China. In the first decade of the twenty-first century, there were signs that China’s leaders were willing to allow the legal system more autonomy and that part of that would comprise liberalizing the regulation of the legal profession. Instead, under Xi Jinping (China’s leader since 2012), political control over the Chinese legal profession has tightened, and foreign firms face new regulations that make it increasingly difficult for them to operate successfully. Going forward, Chinese firms might be supported to the extent they further the Xi regime’s economic aspirations, but they will be subject to closer oversight by the Chinese Communist Party. Foreign firms are no longer considered necessary for China’s economic rise, and they will be able to remain in China only if they are willing to abide by significant new restrictions.

Unraveling the Internationalization Barriers among Oil and Gas SMEs: A Path to Global Expansion

The remarkable expansion of globalization stands as one of the most significant phenomena in the twenty-first century, shaping both the business landscape and robust strategic approaches that prioritize the internationalization of domestic firms. In addition to large multinational corporations, small and medium-sized enterprises (SMEs) also recognize the vast opportunities international markets offer for business growth and development. Furthermore, SMEs that venture into global markets can strengthen their competitiveness and global presence by integrating valuable global experiences and incorporating their benefits into their domestic operations. Despite the potential, SMEs' involvement in the global market has remained disappointingly low, with little improvement since 2011. In light of this challenge, our study endeavors to unravel the multifaceted factors contributing to SMEs' internationalization dilemmas. Analyzing a total of 409 valid datasets, the findings highlighted the main factor behind SMEs' hesitancy to engage in internationalization: a lack of resources. Consequently, it becomes crucial for SMEs, particularly those in the Oil and Gas Equipment and Service segments, to focus on strengthening their resources to facilitate the internationalization process. Complementing this resource-centric approach, adjustments in managers' attitudes are equally crucial, as they have the potential to ignite SMEs' active engagement in international markets, ultimately contributing to national economic growth.

Internationalisation patterns of African sharing economy companies: The role of gateway markets

Sharing economy companies (sharecoms) have been internationalising rapidly, including entering African markets. Little research has been conducted on the strategies and behaviours of African sharecoms. Questions have been raised as to whether existing theories adequately explain the internationalisation of African firms. Thus, we analyse the internationalisation patterns of six African sharecoms, focusing on time, speed, and scope. The findings indicate that firms apply unique combinations of various internationalisation models. A novel pattern of internationalisation where the firms use “foreign gateway markets” as strategic “launchpads” before rapidly internationalising was also uncovered. Locational advantages, strategic networks, and relative technological advancement characterise the foreign gateway markets. We also propose the concept of “complex regional context” to define the context of emerging regions with many neighbouring countries with the potential for high levels of internationalisation but low levels of international business due to the lack of common enabling frameworks and institutions.

Institutional fragility and internationalization of Indian firms: Moderating effects of inward FDI and linkages

In this paper, using institutional and organizational learning theories, we argue that institutional fragility within India impacts the internationalization of Indian firms such that firms from more fragile regions are likely to have lower internationalization levels. We also suggest that this effect is moderated by inward (industry-level) foreign direct investment (FDI) and inward (firm-level) linkages with foreign firms. We test our hypotheses based on the analysis of 707 Indian firms over the period 2008–2018. Our study contributes to the literature examining the complexity, and the speed and consistency of institutional progress in emerging economies, and its impact on firms’ internationalization.

Exploring co-creation with agri-food smallholders in Vietnam

The food system in Vietnam is changing whilst the middle class is growing. Agri-food smallholders have the strengths of responding to the changing needs of the middle class by offering freshness, proximity and convenience but they also face increasing competition from larger and international firms. At the same time, issues with food safety are prevalent and a rising concern among consumers. For this study we completed sixteen co-creation workshops between local agri-food smallholders and consumers. The goal of these workshops was to explore the value of participatory processes, non-hierarchical decision making and creativity for smallholder firms in Vietnam through co-creation workshops focused on sustainability. The outcomes show that the workshops can stimulate customer understanding and participatory processes among the smallholder businesses, but creativity in the form of novel ideas less so. The workshops did not result in directly feasible or manageable product and service concepts. The topic of sustainable food opened a dialogue: insights between the firms and customers on this topic were mutually rich. The outcomes suggest that co-creation workshops can create a sense of community and urgency for sustainability. In the future, the challenge for smallholders is to invest in participatory processes with a long-term view on sustainability as well as come to practical design outcomes on the short term.

Founder's Financial Knowledge and the New Firm's Ability to Obtain Debt Financing

AbstractHow does a founder's knowledge of debt financing influence his/her new firm's ability to obtain the amount of debt financing it desires? Building on the cognitive psychology literature, we propose that the depth of a founder's debt financing knowledge is positively associated with the new firm's ability to obtain debt financing as he/she will be better at selecting and acquiring relevant sources of debt financing. Integrating insights on entrepreneurial growth‐oriented strategies, we further argue that this relationship will be more pronounced when the new firm internationalizes and innovates more. Using a Heckman full information maximum likelihood model, we analyse survey data on 1845 Flemish new firms. The first stage of the model estimates the new firm's probability of raising debt financing. The second stage tests the relationship between the founder's knowledge depth of debt financing and the new firm's debt financing ability, conditional on the decision to raise debt financing. We find that the founder's knowledge depth of debt financing is positively associated with the new firm's ability to obtain debt financing. This association becomes even more pronounced when the new firm internationalizes more. These findings extend the entrepreneurial finance, entrepreneurial strategy and cognitive psychology literature.

Research on the Influencing Factors, Paths and Effects of Chinese Enterprises' Internationalization Strategy

With the contraction of the global economy and the multiple impacts of the epidemic on the world economy, Chinese enterprises are facing a changing international environment and adapting to a different kind of globalization. China insists on the strategy of both "Bringing in" and "Going abroad", and seeks the road of Internationalization through high-level two-way investment and efficient use of global resources and market space. On the topic of Internationalization of Chinese enterprises, many scholars have conducted many fruitful researches and accumulated many research results. This paper searches and collates relevant literature at national and abroad, and constructs a theoretical model of Chinese enterprises' internationalization , that includes three dimensions: influencing factors, entry modes and influencing effects. By reading the relevant literature in these three areas, we find some results, firstly the process of internationalization of firms is influenced by both internal and external factors; internal factors include the diversity of the executive team and the need for firms to innovate, and external factors include government subsidies, the active promotion of global production networks, the passive promotion of industry-specific needs and the need to expand markets. The second internationalization path includes the export access model, the contract access model, and the investment access model. Thirdly the impact effects of firm internationalization include the level of business growth, the level of research and development innovation and the level of dynamic capacity building.

Left in the dark: Colonial racial capitalism and solar energy transitions in India

India is globally renowned as a burgeoning solar energy superpower. Solar park development is occurring in the Indian context of an ascendant Hindu nationalism (Hindutva) that is violent and oppressive to minority populations, particularly against Muslims and Dalits. Yet it remains unclear how Hindutva influences solar-related land politics and resource access. Utilizing original data from extensive mixed methods fieldwork to examine the case studies of the Bhadla Solar Park and the Fatehgarh Solar Park in Rajasthan, we document a clear pattern of dispossessionary forces driving solar development, compounding the harms of climate coloniality. Drawing on literature from political ecology and racial capitalism, we ask the following research questions: 1) How do distribution conflicts arising from uneven solar development vary between projects?; 2) To what extent does solar park development perpetuate colonial production relations and the racialized dispossession of local populations? Solar park development in Rajasthan has not translated into the upliftment or empowerment of marginalized peasants struggling with energy poverty. On the contrary, solar coloniality is perpetuating and compounding the harms of climate coloniality, mitigating carbon emissions through the landed extraction of photons and the erasure of racialized peasants. Hindutva influences solar development in ways that reproduce marginality and vulnerability of racialized groups burdened by the dispossession of land and resources for solar park development for the benefit of domestic and international firms. Emancipatory and redistributive solar interventions are vital for ensuring the survival of those left in the dark within sustainable sacrifice zones by dispossessionary and destructive energy transitions.

From cultural intelligence to workgroup inclusion through synchrony preference and perceived workgroup similarity

Inclusion is an important consideration for international firms to fully realize their strategic human resources, yet there is limited research on how international business competencies relate to perceived inclusion. This study proposes and tests a social identity-based framework about how cultural intelligence relates to perceived inclusion through the mediating effects of synchrony preference and perceived workgroup similarity (in work styles and cultures/ethnicities). Support was found for this model based on data from a three-wave time-lagged study of working professionals. These findings offer theoretical contributions to several literatures and provide international organizations with practical knowledge about perceived inclusion in diverse workgroups.

Mapping the barriers to socio-economic freedom in internationalisation of women-owned SMEs: Evidence from a developing country

Internationalisation of women-owned firms is considered a new strategy for unlocking the full economic potential of a country. However, there has been a desultory work on gender and trade, particularly the epistemological and methodological approaches to explore this phenomenon, which has received inadequate attention. Drawing on the institution-based- theory and incorporating the feminist perspective, this study identifies barriers to socio-economic freedom as a multidimensional concept that influences the internationalisation of women entrepreneurship. Using mixed methods and based on findings from focus group discussion (study-1), in-depth interviews (study-2) and a survey (study-3) of SME women entrepreneurs, the study develops and validates a gender-specific model of barriers to socio-economic freedom that women entrepreneurs face in the internationalisation of their firms. The findings confirm that the additional barriers that women entrepreneurs face emerge from three dimensions (i.e. socio-interactional patterns, socio-psychological attachment and socio-cultural embeddedness) that influence the internationalisation of women-owned SMEs through the lack of foreign market knowledge and information and lack of international business experience. This study extends internationalisation and women entrepreneurship research by identifying novel dimensions of the barriers to socio-economic freedom landscape. Implications of our findings for theory, methods and practice with limitations and future research directions are discussed critically.

Social media adoption and export intensity: the moderating role of firm size

PurposeSocial media (SM) networks offer a golden opportunity for firms that particularly engage in international activities to set up sustainable customer relationships and improve competitiveness. The purpose of this study is to examine the influence of SM adoption on the export intensity (EI) of firms listed on Borsa Istanbul (BIST) for the years 2010–2020. The authors use social media index (SMI) to measure SM adoption and firm size (FSize) as a moderator on exploring the interaction of SM and EI.Design/methodology/approachUsing a sample of 150 firms listed on the BIST Industrials Index, this study explores how the adoption of SM affects EI by using panel data analysis over the period of 2010–2020.FindingsThe results indicate that the SMI has a positive and significant effect on the EI. FSize positively moderates the interaction of SMI and EI, indicating that large firms benefit more from the SM in increasing export performance. The findings reflect high potential of EI improvement through adopting right SM policies in emerging markets.Research limitations/implicationsThe sample covers only public companies listed on the BIST Industrials Index. Future studies may extend the coverage and include multiple emerging markets to draw generalized results for the export-oriented firms. This research also analyzes solely four SM networks, i.e. Facebook, Instagram, Twitter and YouTube. However, there are many other SM networks that firms use in online marketing in foreign markets. Finally, this research did not discuss the potential factors that could influence the use of SM in emerging market firms.Practical implicationsThis study denotes the significant role of SM adoption on the EI of firms in an emerging market setting from the perspective of resource-based view. It presents an insightful approach in understanding the mission played by SM networks in enhancing the EI of Turkish firms. Policymakers may use the findings to develop public support programs to promote the adoption and implementation of the SM among exporting firms in emerging markets.Originality/valueThe study provides evidence on the effects of SM adoption on the EI from the perspective of emerging countries. It also helps to gain a deeper understanding of how different SM platforms contribute to the internationalization of firms.

Business modeling under adversity: Resilience in international firms

AbstractResearch SummaryThis study employs resilience theory and examines the dynamics of business modeling in international firms that enable them to resist environmental shocks under the adverse conditions of a global pandemic. Our multiple‐case study shows that firms develop various dynamic states of their business models (BMs) during the resilience process; each state differs in terms of the scope of BM change and the concurrent degree of BM innovativeness. Shifts in dynamic states result from attaining certain resilience capabilities. We contribute to the dynamic view on BMs, and the process perspective on organizational resilience; we also advance BM research in the context of internationalization.Managerial SummaryUnder conditions of extreme disruptions that take the form of long‐lasting adversity, international firms need to continuously adjust their BMs to brave force majeure and remain resilient. This study takes a dynamic perspective on business modeling and examines how international firms develop different dynamic states of their BMs to stay resilient under extreme uncertainty; each state differs in terms of the scope of BM change, concurrent degree of BM innovativeness and the attained resilience capabilities. We show that business modeling is a continuous task of international firms that allows them not only to resist adversity but also to open new markets.