Outward Internationalization Research Articles

A literature review on CEE firms’ outward internationalization failures: definitions, processes, causes and consequences

PurposeThis paper aims to summarize the literature (journal articles and book chapters) on Central and Eastern European (CEE) firms’ outward internationalization failures: definitions and understandings of “failure”, “failed” firms’ internationalization processes, causes of “failed” initial and subsequent foreign activities and consequences of “failed” internationalization.Design/methodology/approachThis systematic-narrative hybrid literature review article focuses on CEE firms’ outward internationalization failures.FindingsThe paper demonstrates that different objective and subjective measures were used for defining and measuring “failure”. Consensus regarding which firms (from slow internationalizers to born globals) can be considered “failed” is lacking. In different studies, internal and external causes of CEE firms’ outward internationalization “failure” and internationalization-related and other consequences of “failed” internationalization also vary considerably. Due to the complexity of the “failure” phenomenon, it is impossible to identify the most characteristic type of “failed” internationalization or offer “optimal” advice for avoiding failures.Originality/valueThe author is not aware of any other literature review articles focused on CEE firms’ outward internationalization failures. This article contributes to the (international) business and (international) entrepreneurship literature focused on failures, exits and institutional and other factors affecting them.

Impact of Inward Internationalization on Outward Internationalization in Enhancing Organizational Capabilities in Iranian Pharmaceutical Companies

Background: The objective of this study was to propose a model for examining the impact of inward internationalization on outward internationalization in Iranian pharmaceutical companies by focusing on organizational capabilities. Methods: Qualitative research was employed, and the grounded theory approach was utilized for data analysis. The study involved conducting interviews with 16 individuals who possessed experience in international activities within the pharmaceutical sector and expertise, using the snowball sampling method. The data gathered from the interviews underwent open, axial, and selective coding analyses, resulting in the development of a paradigm model of internationalization within the pharmaceutical industry. The paradigm model is composed of causal conditions, background conditions, intervening conditions, central phenomena, strategies, and consequences. Results: The research findings indicated that causal factors of internationalization encompass learning from other countries, updating medical and technical knowledge, expanding activities beyond domestic markets, facilitating production quality improvement, and promoting growth within the pharmaceutical industry. Strategies for internationalization include adopting an international perspective, implementing effective macro-level policies, utilizing long-term strategies, enhancing workforce professional capabilities through training, improving standards and documentation, devising strategies for rational budget utilization, planning for optimal capacity utilization, and strengthening international communication and political relationships. Conclusion: Ultimately, the consequences of inward internationalization and the enhancement of organizational capabilities lead to outward internationalization and a favorable position within the global pharmaceutical industry, improvements in organizational capabilities and international relations, development of cross-border business, economic prosperity within the pharmaceutical industry, and heightened commitment to foreign markets.

Digitalization, internationalization, and firm performance: A resource-orchestration perspective on new OLI advantages

Digital forces and digital global connection weaken traditional ownership, location and internalization (OLI) advantages and intensify new OLI advantages (open resources, linkages and integration). However, by building on the resource-orchestration theory, we raise the question of how digitalization (utilization and orchestration of digital resources) and internationalization (firm-level outward internationalization and country-level inward internationalization) affect firm performance. We introduce the degree of outward internationalization and home-country inward foreign direct investment (FDI) inflows as moderators in achieving firm performance as a result of digitalization. Using a panel dataset of 571 U.S. manufacturing firms, we find a curvilinear relationship between digitalization and performance. The top quartile of digitalization efforts is rewarded by significant profitability. Moreover, high levels of outward internationalization and high net-FDI inflows increase the performance gains attributable to high levels of digitalization. Overall, the resource-orchestration theory complements new OLI advantages in explaining firm performance in the digital world.

Anywhere in the World? The Internationalization of Small Entrepreneurial Ventures using a Social Media Platform.

The online version contains supplementary material available at 10.1007/s11575-023-00510-8.

The Effect of Outward and Inward Internationalisation on Different Types of Innovation: Evidence from UK SMEs

This paper empirically examines the effect of outward internationalisation, inward internationalisation activities and outward-inward internationalisation (i.e., exporting and importing) on different types of innovation undertaken by UK SMEs. Specifically, we differentiate between product innovation and process innovation and examine the potential effect that they can generate individually and in combination. The results show that both inward and outward internationalisation support product and process innovation in SMEs. However, such an effect is found to be stronger for the combined outward-inward internationalisation operations than for the single mode undertaken by SMEs. The results are found to be robust across the different types of innovation. However, sub-sample analysis shows that, although innovation responds to different internationalisation operations in micro and small firms, for medium-sized firms, only the combination of outward and inward internationalisation operations increases the probability of undertaking both innovations. Using the organisational learning theory, we argue that engaging in both internationalisation activities simultaneously enables firms to acquire a more diverse and richer set of knowledge and key information — through double loop learning, which is translated into increased levels of innovation. Hence, our results have important theoretical, managerial, and policy implications and stimulate the existing debate in the area.

Entering global markets, R&D update and its role on home donation: a global value chain perspective

ABSTRACT Whether internationalisation promotes or inhibits corporate social responsibility (CSR) such as home donation is a critical question that remains controversial. Drawing on the strategic view of CSR and global value chain (GVC) perspective, we argue that the outward internationalisation of emerging market firms (EMFs) may impede their home donation, partly because as they internationalise, they are mainly embedded in the low-end positions of the GVC, which negatively affect the motivation and capability of their donation to the home market. Such a relationship is even stronger for EMFs with a lower level of R&D intensity, possibly indicating these firms may be more deeply embedded in the low-end position of the GVC. We tested our theory using data collected from public-listed firms in China, and our results can thus help us understand why some EMFs tend to not make home donations from the consideration of GVC embeddedness. Contributions towards GVC embedment and stakeholder considerations are discussed.

Cluster Internationalization: Qualitative Review, Theoretical Direction, and the Rise of Emerging Markets’ Themes

The growing phenomenon of cluster internationalization has enriched the existing international business theories, but has also brought new puzzles and problems for these theories and perspectives. To synthesize what we do and do not know concerning cluster internationalization, we employed the qualitative content analysis method, systematically reviewing 348 articles published during the period 1990–2019, as well as 16,486 references. Our review examined five major areas, including citations, co-citations, theoretical foundations, co-occurrence networks, and three-phase research topics (pre-internationalization, internationalization, and post-internationalization) based on ten keywords. Moreover, we found that the research on the internationalization of emerging market clusters has shown a rising trend in recent years. We took China as an example to conduct in-depth research on three types of cluster internationalization (inward internationalization, outward internationalization, and overseas parks) with a view to expanding the academic perspective of the internationalization of emerging economic clusters. Finally, in order to promote further research on cluster internationalization, potential future themes related to cluster internationalization research are discussed.

Staying In or Stepping Out? Growth Strategies of Second Generation Immigrant Entrepreneurs

Second generation immigrants in developed economies have contributed to the emergence of new areas of immigrant business activity, especially in information technology and the creative industries; however, an understanding of their growth strategies is limited. Compared to native entrepreneurs, immigrant entrepreneurs are more likely to have human and social capital resources needed to start international new ventures, and potentially global firms competing against multinational enterprises. Using case studies, we examine the growth strategies, and the factors influencing choice, of 12 SGIEs of South Asian origin in the UK. Our findings reveal that SGIEs are heterogenous in their pursuit of inward and outward internationalization, geographic and product-related growth, contingent on their start-up context and use of social ties. In linking founder and successor SGIEs’ use of co-ethnic (family and non-family) and non-co-ethnic ties with the product and geographic scope of their ventures, these findings contribute to the immigrant entrepreneurship, international entrepreneurship and international business literatures. Keywords: Second generation immigrant entrepreneurs; immigrant entrepreneurs; growth strategies; internationalization

Internationalization from Central and Eastern Europe: A systematic literature review

Economic transition in Central and Eastern Europe (CEE) has led to a dramatic increase in CEE firms' participation in international markets. This applies to different types of firms – from large emerging market multinationals to small international new ventures. In this paper, we systematically review the research on CEE outward internationalization, which we define as internationalization of CEE-based firms in the form of exporting or FDI, and contribute to literature by providing a complete picture of the state of the art and outlining potential avenues for future research. We find that while the CEE region has been described as a fruitful ground for developing new and testing existing theories, it heavily loads on the latter. We suggest that greater reliance on theories and concepts from the field of entrepreneurship and a stronger focus on internationalization decision processes might further enrich our understanding of internationalization from CEE.

Sourcing from China: Connecting Inward and Outward Internationalisation Through Absorptive Capacity

Sourcing from China: Connecting Inward and Outward Internationalisation Through Absorptive Capacity

Learning by outward and inward internationalization and the outward/inward innovativeness of firms in Poland

Abstract Many studies raise the issue of relationships between internationalization and innovativeness, linking them with firms’ international competitiveness. However, very few of these studies focus on the influence of internationalization on innovativeness and regard the multifaceted nature of these two concepts. The study presented in this paper is based on a holistic approach to internationalization and innovativeness. It explores the influence of the outward (e.g. exporting, outward FDI) and inward (e.g. importing, inward FDI) internationalization on the outward (product and marketing) and inward (process and organizational) innovativeness of 274 firms in Poland, adopting formative variables and a correlations analysis. The key contribution of the research is that the outward internationalization is conducive to both the outward and inward innovativeness, while the inward internationalization supports only the inward innovativeness. It shows that learning by outward and inward internationalization supports innovativeness of firms, responsible for their international competitiveness. The findings might be unique for transition and emerging economies characterized with a low degree of internationalization and innovativeness, while the holistic approach is more universal, and might bring interesting results when applied to the research of highly advanced economies.

Networking and the outward/inward innovativeness and internationalisation of firms in Poland

This research explores the relationships between the networking of firms and their innovativeness and internationalisation, with the distinction between their outward and inward types. It adopts a holistic approach to firms’ innovativeness and internationalisation and examines whether networking is more strongly related to firms’ innovativeness or their internationalisation. Empirical data to test hypotheses were collected from 274 Polish firms using direct questionnaire interviews. The results show that networking is conducive both to the outward and inward innovativeness of firms, having the stronger relationship with inward innovativeness, and to outward internationalisation only. The results also indicate a variation concerning the strength of relationships corresponding to the sector in which the firms operate, their size, the capital group affiliation and the origin of capital.

Commercial diplomacy's role in entering foreign markets in the age of global value chains

We examine the role played by commercial diplomacy in firms' outward internationalisation. Based on interviews with economic counsellors and a comparative case-study analysis of firms entering foreign markets, we explore the antecedents and consequences of commercial diplomacy for foreign market entry. The moderating effects of commercial diplomacy vary with regard to the foreign market's level of institutional development as well as the entry mode. The greatest potential effect is identified in less developed, institutionally and politically less stable countries and while engaging in internalisation-related entry modes. The results also depend on firms' perceptions, the timing of the relationship that is established between firms and counsellors as well as the economic counsellors' capabilities. Commercial diplomacy is important for both recognising and exploiting opportunities in international markets. We discuss the managerial and policy implications and develop propositions for testing in later entry mode research and commercial diplomacy research.

Commercial diplomacy's role in entering foreign markets in the age of global value chains

We examine the role played by commercial diplomacy in firms' outward internationalisation. Based on interviews with economic counsellors and a comparative case-study analysis of firms entering foreign markets, we explore the antecedents and consequences of commercial diplomacy for foreign market entry. The moderating effects of commercial diplomacy vary with regard to the foreign market's level of institutional development as well as the entry mode. The greatest potential effect is identified in less developed, institutionally and politically less stable countries and while engaging in internalisation-related entry modes. The results also depend on firms' perceptions, the timing of the relationship that is established between firms and counsellors as well as the economic counsellors' capabilities. Commercial diplomacy is important for both recognising and exploiting opportunities in international markets. We discuss the managerial and policy implications and develop propositions for testing in later entry mode research and commercial diplomacy research.

Connecting Inward and Outward Internationalisation of Malaysian SMEs: A Learning Approach

When SMEs are part of global value chain, the flows of information in cross-border buyer-supplier relationships which emerge from inward-outward internationalisation connections should be addressed. This study therefore investigates the learning processes of internationalising small and medium enterprises that engage in inward and outward internationalisation. Hence, this study adopts a qualitative case study approach based on ten cases of the internationalising SMEs in Malaysia. Semi-structured interviews with the Managing Directors of the selected SMEs were conducted over a two-year period. Additionally, participant observations were conducted by attending the meetings related to import-export activities and documentations were gathered for data triangulation Findings of this study highlights that the relationship with key foreign suppliers empowered case firms to connect inward to outward internationalisation through collaborative knowledge sharing. The distribution of knowledge through tacit-tacit and tacit-explicit knowledge sharing underpinned by formal planning was a prerequisite for inward-outward internationalisation connections to be established.

China’s efforts to contain Renminbi’s depreciation and the relating impacts

ABSTRACTChina began to face Renminbi (RMB) depreciation pressure since 2014Q2, and the 8/11 reform in 2015 exacerbated the RMB depreciation pressure against USD. To contain the depreciation pressure, the People’s Bank of China (PBC) adopted three methods. Firstly, PBC tried to stabilize the exchange rate by selling USD and purchasing RMB, which resulted in the fast shrinking of China’s foreign exchange reserve. Secondly, PBC strengthened the regulation of capital outflows, which caused the stagnation of RMB internationalization. Thirdly, PBC frequently changed the pricing mechanism of the daily fixing of RMB to USD, which led to the reverse of the liberalization of RMB exchange rate. Under the new environment of RMB depreciation pressure and much lower foreign exchange reserve, Chinese government changed its strategies and became more cautious and pragmatic in outward foreign direct investment, RMB internationalization, and Belt & Road Initiative construction.

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.

Between the local and the global: diffusion of intergovernmental organization membership among Korean local governments

ABSTRACTThis article examines Korean local governments’ joining intergovernmental organizations (IGOs). In the international regime, nation-states have been regarded as the most basic unit that possesses sovereignty. In the past decades, however, substate and non-state actors have progressively gained more autonomy and legitimacy to engage in international activities, and Korean local governments have begun to affiliate themselves with various IGOs. I argue that Korean local governments join IGOs so as not to lag behind, even when they are not fully capable to join ‘glocalization,’ a combined force of localism and globalization. Event history analysis shows empirical support for this claim. A local government’s IGO memberships are likely to increase when other local governments join IGOs, especially when its peers/neighbors increasingly pursue inward and outward internationalization. Local pressures coming from peers/neighbors shape local governments’ responses to globalization. By investigating determinants of IGO memberships, this study sheds light upon motivational factors for local governments to adapt to a globalizing society.

The Internationalisation Process of an E-Commerce Entrepreneurial Firm: The Inward-Outward Internationalisation and the Development of Knowledge

Objective: The article aims at the description of the internationalisation process of an entrepreneurial e-commerce trading firm, depicting the course and mechanism of the process. Research Design & Methods: The explorative research is a single case study of three internationalising e-stores managed by a firm. The qualitative analysis is based on in-depth interviews with the entrepreneur covering six years of the firm’s operation. Findings: The increasing international involvement of the e-commerce firm follows the development of knowledge derived from the interrelationships between inward and outward internationalisation. The evolution of internationalisation forms is limited to trade (importing/exporting) and contractual cooperation. The role of entrepreneur in the internationalisation process of e-commerce firm is crucial. Implications & Recommendations: The simultaneous involvement in the inward and outward forms of internationalisation enhances the development of knowledge necessary for further internationalisation of e-commerce firms. Contribution & Value Added: The study presents a holistic description of the internationalisation process of an entrepreneurial e-commerce firm, revealing the mechanism of the process.

Emerging Market Firms' Internationalization: How Do Firms' Inward Activities Affect Their Outward Activities?

Research summary: In this study we examine how an emerging market firm's inward international activities (“inward activities”) are related to its outward international activities (“outward activities”) by focusing on the role of the firm's gain from its inward activities. On the one hand, drawing upon the organizational learning perspective, we propose that a firm's gain from inward activities may facilitate its outward activities through improving its resource fungibility. On the other hand, we draw upon the prospect theory to propose that a firm's gain from inward activities may hinder its outward activities by discouraging the firm's top managers from taking risks that are inherent in outward activities. With detailed data from a sample of manufacturing firms in China, we find empirical support for both lines of arguments.Managerial summary: Are emerging market firms with higher inward gain more likely to engage in outward internationalization activities? We argue that it depends upon how a firm uses its gain from inward activities. If the firm can improve its resource fungibility (particularly organizational resource fungibility) from its inward gain, it is more likely to engage in outward activities. If the firm cannot improve its resource fungiblity, the answer is no. Our findings suggest that for emerging market firms, internationalization is not just a path toward new markets; instead, it reflects how these firms exploit and explore what they have learned from their interactions with foreign firms at home in foreign markets. Therefore, managers must think more strategically on developing (organizational) resource fungibility from their inward activities. Copyright © 2017 John Wiley & Sons, Ltd.