Post-entry Performance Research Articles

International corporate social responsibility and post-entry performance of developing market INVs: The moderating role of corporate governance mechanisms

Building on the stakeholder, agency, and resource dependence theories; this paper investigates the role of international corporate social responsibility (CSR) for the post-entry performance of developing market international new ventures (INVs) in the presence of corporate governance mechanisms to overcome their agency and environmental problems. We test and validate the conceptual model using survey data collected from 110 INVs operating in the developing market of Pakistan. Our results show that international CSR promotes the post-entry performance of developing market INVs. Further, we found that this association is moderated by corporate governance mechanisms of ownership, board independence, and returnee board members. Specifically, the relationship between international CSR and post-entry performance is weaker when ownership is concentrated but stronger when outsider and returnee board members are present in developing market INVs. The findings of this study have important theoretical and practical implications for INVs' social strategies and international performance contingent upon corporate governance.

Pre-entry knowledge base complexity and post-entry growth: evidence from Italian firms

Abstract Knowledge is largely recognized as a key driver of survival and growth of new entrants. Previous literature on the role of pre-entry knowledge in post-entry performance has focused on entrepreneurial and managerial capabilities and education and on knowledge incorporated in material and immaterial resources. In this paper, taking to the firm level the intuition behind the notion of economic and technological complexity of countries, we hypothesize that post-entry performance of new firms may be explained by their knowledge base complexity, which captures the reinforcing mechanism between variety and creation of new valuable knowledge. We provide a measure of firm-level complexity derived from the analysis of textual content of patents and exploit it to examine the empirical relation between pre-entry complexity of knowledge and post-entry growth in a sample of Italian firms entering the market in 2009-2011. Baseline results show a significant and positive association between knowledge complexity and post-entry growth, even after controlling for firm characteristics and year, sector, and region fixed effects. Robustness analysis reveals that this positive effect is more significant over the medium run than in the initial years after entry, while relatively weaker for the so-called Innovative Small and Medium-Sized Enterprises.

Entrepreneurial and market orientations: The moderating role of social networks on post-entry performance of international new ventures

This paper investigates whether entrepreneurial and marketing orientations (respectively EOs and Mos) impact – individually or collectively – international new ventures’ (INVs’) post-entry performance growth. Furthermore, we investigate whether such relations are moderated by the foreign social networks, both formal and informal, of international new ventures. Using a survey, we test our hypotheses on a sample of Italian high-tech INVs located in a cluster near Rome. A quantitative analysis is used to test the hypotheses. We found that EOs and MOs positively impact the post-entry international performance growth of INVs. Moreover, while informal foreign social network ties significantly moderate the impact of EOs and MOs, formal foreign social network ties do not have a significant moderating effect. Many theoretical and practical contributions are discussed in the paper.

The role of organisational factors and environmental conditions on the success of newly founded firms

Abstract This study examines the influence of founding conditions and decisions on new companies' performance, analysing how both environmental context and organisational dynamics interact to determine their success. It distinguishes between two different success indicators: survival and profitable growth. An empirical study conducted using a sample of 3,722 new agri-food companies in two different periods, one of economic stability and the other of recession, showed that founding conditions had long-lasting effects on post-entry performance. The economic context acted as a moderator of the relationship between individual factors and success. Adverse environmental conditions were also a determinant of success, making surviving firms more competitive and resilient. The results reflect the survival of the fitter principle by showing that early profitability reduced the risk of failure and made firms more likely to become profitable in the medium term. Internationalisation strategies developed organisational capabilities that created an imprint for adaptability and growth.

Entry Mode Choice: A Meta-Analysis of Antecedents and Outcomes

The entry mode decision is a critical topic in international business. Several studies have tested the antecedents of entry mode choices and compared the outcomes after entry. However, the results reported in these studies are contradictory and difficult to explain. Furthermore, the reviews using qualitative approaches cannot statistically combine empirical results and fail to fully discuss these relationships. Additionally, the mediating effects remain unexamined in the existing studies. Drawing upon transaction cost economics and the resource-based view, this paper presents a meta-analysis that combines entry mode choices, antecedents and post-entry outcomes to address these issues. This meta-analysis is based on 1499 effect sizes from 230 published empirical studies. This study focuses on 15 antecedents as well as post-entry performance and survival of entry mode choices. In addition to bivariate relationships (i.e. how a single antecedent affects entry mode choices), the paper uses meta-analytic structural equation modelling to analyse the mediating effects of entry mode choices on the antecedent - outcome relationship.

Import experience and the post-entry performance of first-time exporters

<abstract> <p>Using the universe of Spanish first-time exporters selling manufactured products over the period 1997–2018, we show that import experience is associated with higher survival rates in the export markets, and conditioning on survival, a higher growth rate of their exports. In both cases, the highest impact is obtained when previous import experience occurs within one year before firms start exporting. Import experience improves general knowledge about foreign markets but it is not market-specific. Post-entry success in terms of survival and persistent growth rises if new exporters are large importers and if they buy intermediate inputs from competitive foreign suppliers.</p> </abstract>

Import experience and the post-entry performance of first-time exporters

<abstract> <p>Using the universe of Spanish first-time exporters selling manufactured products over the period 1997–2018, we show that import experience is associated with higher survival rates in the export markets, and conditioning on survival, a higher growth rate of their exports. In both cases, the highest impact is obtained when previous import experience occurs within one year before firms start exporting. Import experience improves general knowledge about foreign markets but it is not market-specific. Post-entry success in terms of survival and persistent growth rises if new exporters are large importers and if they buy intermediate inputs from competitive foreign suppliers.</p> </abstract>

Status Heterophily, Market Entry and Market Performance

Drawing on the status and market entry literature, we propose and empirically test hypotheses that dynamic changes in the size of different status groups in the target market influence the focal firm’s market entry decisions and post-entry performance. Our research utilizes operational data at the project level of China’s listed real estate enterprises to explore how the relationships among members of different status groups in the submarket affects the probability of firms’ market entry and subsequent market performance, as well as the moderating effect of the degree of multimarket contact. This study shows that, as the size of the status-heterophilous group in the submarket continuously increases, the consequences of forming ties with incumbents of different status have shifted from more advantages to more disadvantages. There is an inverted U-shaped curve between the status-heterophilous group’s size and the probability of the firm’s market entry and post-entry submarket performance. Moreover, the degree of multimarket contact between status groups weakens the two relationships. Specifically, the greater the degree of multimarket contact between two status groups in the market is, the smaller effect on market entry possibility and submarket performance the status-heterophilous group’s size has.

Learning From the Diverse Perspectives and Voice of Newcomers: A Contingency Model

New organizational members can be an essential source to work teams. Yet, it is unclear whether teams can leverage newcomers’ distinct backgrounds, knowledge, and expertise through communicative processes to improve team effectiveness. This study develops and tests a theoretical account of the efficacy of newcomer communicative behavior for boosting team effectiveness. In doing so, this study specified the circumstances in which a positive relationship between the two is likely to occur. Results ( N =160 teams) showed that newcomer voices’ positive influence on post-entry team performance was contingent upon individual-, team-, and organization-level boundary conditions, including age dissimilarity, team adaptability, and competitive intensity.

Entrepreneurial marketing and reconfiguration towards post-entry performance: Moderating effects of market dynamism and entry mode

Research is limited that explores the performance of international new ventures (INVs) from emerging markets in mature growth stages. Therefore, this study aims to develop and test a model of post-entry performance in the INV context, focusing on entrepreneurial marketing (EM) and reconfiguration as knowledge-based capabilities. Furthermore, the study examines market dynamism and entry mode with respect to their moderating roles in the relationship between knowledge-based capabilities and post-entry performance. INVs are often disadvantaged owing to resource constrained and market complexity. Hence, investigating this framework in this context is valuable. Using a sample of INVs from India, this article finds that EM shapes reconfiguration, and each drives post-entry performance of INVs. The results provide support for the utility of EM towards reconfiguration and post-entry performance, when navigating market dynamism. Moreover, EM and reconfiguration are useful in dynamic markets when INVs select an equity entry mode.

International network formation, home market institutional support and post-entry performance of international new ventures

Effectuation and causation decision-making logics are noted to be major alternative approaches to international network formation. However, knowledge is lacking on how and the conditions under which the two approaches contribute to post-entry performance of international new ventures (INVs). We integrate the theory of effectuation and institutional development logic to explain how effectuation and causation approaches to international network formation individually and jointly contribute to post-entry performance under varying conditions of home market institutional support. We test our proposed framework on primary data from 228 INVs in a sub-Saharan African economy. Results suggest that greater uses of both effectuation and causation approaches to international network formation are associated with stronger post-entry performance. More interestingly, results show that the joint effect of the two international network formation approaches on post-entry performance is amplified under conditions of low home market institutional support. Our findings provide theoretical and managerial insights on the importance of complementing effectual and causal reasoning in international network formation in weak home market institutional environments.

Survival and performance of strategic restructuring spin-offs and necessity spin-offs

In the past decade, researchers have increasingly explored the performance of spin-offs created by events that adversely affected the incumbent. Extant literature has, however, mainly focused on employee made necessity spin-offs, while the post entry performance of incumbent made strategic restructuring spin-offs has largely been ignored. This may result in an overestimation of the performance of the former type of spin off. In the current study, we explore the post entry performance and survivability of 26 strategic restructuring and necessity spin-offs from four Danish shipyard closures over almost four decades. We find that strategic restructuring spin-offs outperform necessity spin-offs on several growth parameters including turnover and employment. Surprisingly, we also find strategic restructuring spin offs to have higher survival rate than the necessity spin-offs. The study adds to our knowledge on the relationship between spin-off type and firm growth and suggest that further attention should be given to spin-offs created in strategic restructurings.

Performance and Survival of Maturing Early Internationalizers—A Review and Research Agenda

Despite abundant research on early internationalization, we still lack systematic knowledge about what occurs to born globals as they grow and evolve over time. Prior reviews do not offer a comprehensive view of the factors influencing the long-term growth and survival of born globals. To fill this void, this paper critically examines 184 articles that have appeared in 28 academic journals over the past three decades. Drawing on complexity theory, this review identifies and maps a dynamic system comprising the interplay of four sets of factors relating to internal resources and capabilities, networks, environmental factors, and firm strategies, and the influence of the interplay of these elements on firm outcomes. This paper contributes to the extant literature by taking stock of the present state of knowledge on the different sets of factors influencing the post-entry performance and survival of born globals. Furthermore, this review reveals significant gaps and contradictions in the literature, which lead to important opportunities for future research.

Strategic ambidexterity and its performance implications for emerging economies multinationals

Emerging market multinational enterprises (EMNEs) are attracting significant scholarly attention in the international business and general management domain. The extant research has provided important insights into the EMNEs’ internationalization processes and whether the existing theories adequately explain their outward investment motives. This special issue aims to provide a platform suited to extend the current understanding of the rapid rise of EMNEs and examine the vital role played by strategic ambidexterity and its performance implications for the EMNEs. The current research on EMNEs has failed to adequately leverage strategic ambidexterity and link it with the post-entry performance of EMNEs. We argue that the strategic ambidexterity perspective offers valuable opportunities to understand the post-entry performance of EMNEs as they expand into developed and developing markets. The article also highlights important areas for future research by taking into account the current COVID-19 pandemic crisis.

Experience, Consumers, and Fit: Disentangling Performance Implications of Preentry Technological and Market Experience in 2G Mobile Telephony

We offer theory and evidence about how the fit between firm experience (supply side) and consumer preferences (demand side) affects postentry performance into a new technology. Specifically, we explore different types of preentry experience (technological and market experience) and use different aspects of postentry performance to draw inferences about consumer heterogeneity. Preentry technological experience (same product and different consumers) helps firms attract a larger share of intensive users (aligning with early adopters) but only if they enter the market early when these adopters make decisions. Preentry market experience (different product and same consumers) helps firms attract a larger share of lighter users, consistent with characterizations of mass market users. Exploiting different components of firm performance in the global second-generation mobile telecommunications industry (average usage intensity and market penetration) allows us to articulate and identify the paths and mechanisms that allow preentry experience to affect postentry performance. The theory as well as important theoretical boundary conditions have implications for research on preentry experience, demand-side heterogeneity, and industry evolution.

The contingent effect of political ties on post-entry performance

PurposePolitical ties are critical for multinational enterprises’ (MNE) survival and success. However, the effect of political ties is not monotonic. The purpose of this paper is to look into the contingent effect of political ties on MNEs’ post-entry performance.Design/methodology/approachBased on survey data collected from 416 foreign subsidiaries operating in China, which was combined with several secondary data sources, this study examined the three-way interaction of political ties, entry mode and industry restriction.FindingsThe findings support the hypotheses that the impact of political ties on firm performance is contingent on firms’ ownership-based entry modes and industry restriction. In particular, the impact of political ties is stronger for joint ventures (JV) in less restricted industries and wholly owned subsidiaries (WOS) in more restricted industries.Practical implicationsPolitical ties have different effects on WOS and JV. While in general political ties have a stronger impact for JV than for WOS, their impacts on both parties vary on industry restriction. Managers should consider ownership structure as well as industry restriction when making non-market strategies and decisions.Originality/valueBy analyzing the impacts of intra-organizational and market environmental factors, this study provides a fine-grained view of foreign firms’ non-market strategy in China from a post-entry performance perspective.

NECESSITY VERSUS OPPORTUNITY MOTIVATION: NASCENT FIRM PERFORMANCE IN CARIBBEAN SMALL ISLAND DEVELOPING STATES

This paper investigates entry motivation of nascent entrepreneurs and their post-entry performance in Caribbean Small Island Developing States (SIDS). The study estimates the effect of being a nascent opportunity/necessity entrepreneur on three business-performance variables — firm growth, exports and innovation using regression analysis and control for time, country and sector effects. The data come from the Global Entrepreneurship Monitor (GEM) Adult Population Survey (APS) for Barbados, Jamaica and Trinidad and Tobago. The results show that opportunity versus necessity entrepreneurial start-up motivation tends to be related to a superior post-entry firm performance. In addition, personal and firm characteristics influence post-entry firm performance including gender, education, household income, number of owners, firm age and number of workers at start-up.

Do initial financial conditions determine the exit routes of start-up firms?

This study investigates the impact of initial financial conditions on the post-entry performance of firms in a sample of 16,185 Japanese joint-stock companies. We examine whether initial financial conditions, including entry regulations, affect the duration of survival among Japanese start-up firms, distinguishing between failure and merger. We provide evidence that start-up firms that rely more on equity than on debt financing are less likely to fail within a shorter period, although we find little evidence that initial equity size has a significant effect on the time to failure of start-up firms in our sample. Moreover, we find the negative effect of equity financing on the time to failure to be greater for start-up firms founded following the abolition of regulations for minimum capital requirements. Furthermore, the results reveal that start-up firms with larger initial equity capital are more likely to exit through merger, indicating that the effects of initial financial conditions depend on the type of exit route.

How Does Pre-Entry Experience Enhance Entrant Performance? Evidence From Learning Curves of New Banks

Extant theory holds that new entrants’ pre-entry experience is an important asset that enhances their post-entry performance. While the logic is compelling, empirical findings have been inconsistent. We argue that this gap results, in part, because the empirical literature tends to confound two distinct mechanisms. Pre-entry experience may act: (a) directly by increasing an entrant’s post-entry performance (silver spoon effect) and (b) indirectly by influencing the properties of new entrant learning post-entry (helping hand effect). This latter mechanism has received sparse attention in the literature. We build on prior work on learning curves to develop a theory of how pre-entry experience impacts the rate and asymptote of post-entry learning curves, and how context dissimilarity bounds the relationship. We test the theory using a longitudinal census of new entrants in U.S. commercial banking. In the absence of accounting for the indirect effect, our estimates show that pre-entry experience appears to be performance reducing for new entrants. We then estimate models in which we account for post-entry learning curves. We find strong support for the positive implications of pre-entry experience — it improves new entrant performance at entry by 12.5 percent via the direct effect, and increases an entrant’s post-entry experiential learning rate by 211 percent via the indirect effect.

Post-entry performance of international new ventures: The mediating role of learning orientation

This article investigates the role of learning orientation in the post-entry performance of international new ventures (INVs) by examining the relationships of niche strategy, network resources and learning orientation with the multi-dimensional post-entry performance of INVs. Based on the INV internationalisation literature, we develop and validate a conceptual model, using a sample of 147 INVs from the two relatively small and open economies of New Zealand and Australia. The results show that the learning orientation of INVs positively mediates the relationship between niche orientation and network resources and post-entry performance of INVs. Our study indicates that learning orientation is an important capability through which focused strategies and resources of INVs may influence their multi-dimensional post-entry performance in terms of operational, financial and overall effectiveness measures. We draw key implications for research on post-entry behaviour of INVs by explicating the role played by the learning capabilities of the firms, and how these capabilities interact with their strategies and resources in enhancing the post-entry performance of INVs.