Uppsala Internationalization Model Research Articles

The determinants of export performance: perceived psychic distance and its antecedents

PurposeThe Uppsala internationalization model is one of the widely accepted models for the development of exports. This model suggests that the explanation of relations between psychic distance, its antecedents and marketing mix adaptation would lead to successful export practices. Consequently, this study aims to determine the determinants of export performance, antecedents of psychic distance and marketing mix adaptation.Design/methodology/approachThis study uses a mixed-methods research design in which qualitative and quantitative research methods were used together. The face-to-face interview method was used to identify the psychic distance antecedents. The face-to-face interview was with eight Turkish exporting firms. Based on the data obtained from face-to-face interviews, a scale for measuring the antecedents of psychic distance has been developed and used in the quantitative study. The scales used for measuring marketing mix adaptation, export performance and psychic distance perception, which has both individual and country dimensions, were adapted from the literature. Data were collected from 221 Turkish exporting companies for quantitative research. Structural equation modeling was used to test relationships between the variables.FindingsAs a result of the data analysis of face-to-face interviews, six antecedents of psychic distance were determined. According to the subsequent quantitative research results, it has been determined that employee expertise, which is one of the antecedents of psychic distance, only affects the country dimension of psychic distance perception; the cooperation, institutionalization and international market experience affect both the country and individual dimensions of psychic distance perception. The country and individual dimensions of psychic distance were found to have an impact on the product, price, promotion and distribution dimensions of marketing mix adaptation. Only the product dimension of marketing mix adaption was found to affect export performance.Practical implicationsThis study offers a comprehensive perspective for both theoretical and practical studies by discussing various aspects that would help improve the exporting activities of firms within the scope of antecedents of perceived psychic distance.Originality/valueIn this research, a scale was developed for measuring the antecedents of psychic distance, and the variables affecting export performance were analyzed holistically.

Analysing the decision approach of the SME entrepreneurs relating to internationalisation of firms: the study of Kenyan SME entrepreneurs

PurposeThe purpose of this study is to analyse the internationalisation decision-making process using causation and effectuation.Design/methodology/approachThe proposed hypotheses are tested with a survey data set of 148 Kenyan small and medium-sized enterprises (SMEs) to assess the pre-internationalisation decision-making of the firm. Multinomial logistic regression has been used to predict the categories from total effectuation to total causation.FindingsThe results of this study show that firm resources and capability provide a solid basis for firms' internationalisation. The entrepreneur becomes more effectual commence as they assess the firm's resource and capability. Entrepreneurs with a high entrepreneurial self-efficacy use both causation and effectuation with a bias towards effectuation. Increasing environmental predictability led the firms to use less effectuation, and increasing psychic distance entails high effectuation relative to high causation in the Kenyan context.Research limitations/implicationsThe sample choice of the category is Kenyan SMEs which may raise some questions. This study assumed that SMEs sampled had the same level of internationalisation experience regardless of the number of years in business.Originality/valueThis study theoretically advances the field of international business by combining the Uppsala internationalisation model with effectuation; this study defines four antecedents of decision-making to form its conceptual framework to study internationalisation decision-making approach for SMEs using the effectuation logic and adds to the stream of literature that has reviewed the factors that influence the internationalisation decision-making process for SMEs in developing countries.

We are family! The role of family members’ identification in the internationalization of family firms

When examining family firms' strategic decision-making processes, it is important to consider the role of non-financial goals and the preservation of socioemotional wealth (SEW). This study contributes to this discussion by integrating arguments from the SEW framework into the Uppsala internationalization model to investigate the importance of family emotional attachment factors in family firms' internationalization. Specifically, we analyze how the identification of family members with the firm influences its international activities, proposing that this influence is moderated by family involvement in the governance of the firm. The results show that the initial negative effect of family members’ identification on firm internationalization turns positive with higher levels of family involvement in the board and longer CEO tenure.

Business group affiliation and SMEs’ international sales intensity and diversification: A multi-country study

This study examines the impact of business group (BG) affiliation on international sales intensity and diversification in small and medium-sized enterprises (SMEs) by using a multi-country sample of over 13,000 SMEs from 34 European countries. Drawing on the revised Uppsala internationalization model and network theory, this paper suggests that the effects of BG affiliation on international sales intensity and diversification depend on the geographical dispersion of the BG network ties, the size and the age of the firm, and the institutional support in the home country. Thus, we find that interfirm networks in the form of BGs are a double-edged sword that can have both favorable and unfavorable consequences for international sales, depending on the geographical dispersion of the BG’s ties. In addition, the results reveal that BG affiliation is more beneficial for smaller SMEs and SMEs in countries with lower institutional support that are more dependent on the network resources embedded within BG networks.

Management accounting and control system in the u-model internationalization process. A case study

This study examines the role of management accounting and management control systems (macs) in the successful implementation of the Uppsala Internationalization Model (U-Model) and in the improvement of firms’ performance. To achieve this, and after a broad literature review, a case study was conducted. Using a dynamic and “inside-out” approach, data was collected through interviews and documental analysis. The internationalization model (im) of a company and the relationship between macs and its internationalization strategy (U-Model) were analyzed. This study emphasizes the existence of several roles (passive and active) of macs and highlights the fact that these systems are used throughout the internationalization process (ip) in differentiated ways. As far as we know, it is the first time the relationship between macs and a specific internationalization model (U-Model) has been studied. This research helps to increase knowledge in practice, as it helps companies understand how they can adjust their macs according to their U-Model development phase. Given the growing interest in internationalization, we hope to contribute to improving the knowledge on the relationship between macs and the ip and its effects on companies’ performance. This study points to promising results that justify further studies of this relationship.

Foreign Direct Investment and Activities of Transnational Corporations of the PRC

Based on the analysis of the transnationality index, the nature of mergers and acquisitions of the largest Chinese companies, as well as the dynamics and geographical distribution of their outward direct investments, the paper concludes, that in case of taking into account some specific factors of institutional environment, J. Dunning's eclectic paradigm can be used as basic theoretical framework for the analysis of foreign investment activities of the largest Chinese corporations. In favor of an eclectic paradigm, the theory of “newborn firms,” the Uppsala internationalization model has been consistently rejected. In the final part, the paper describes the possible influence of the institutional environment on the export of foreign direct investments by Chinese companies.

Top management teams and investment decisions: A study of executive experience and cultural diversity

We employ an empirical study of mining companies in Sub Saharan Africa (SSA) using the upper echelons theory (UET) to explore how the top management team (TMT) perceptions and experiences influence investment decisions. UET is used as it is consistent with the Uppsala internationalization model, which best fits mining companies. We assess past international experiences, nationality diversity, age, and education levels of the TMT in order to determine if these demographics impact the decision to invest in SSA countries. This study also assists in closing the gaps in the literature on how executive experiences impact the investment decision process in an international setting as well as how the cultural composition of the TMT influences corporate decisions.

The role of reciprocity in the internationalization of social enterprises

PurposeThe paper enhances our understanding of how small businesses with a strong social mission undergo international expansion. Building on the theoretical arguments on social exchange theory (SET), specifically on the literature on reciprocity, the purpose of this paper is to investigate the applicability of the Uppsala Internationalization Model to the context of a social enterprise (SE). The propositions argue that the strong social orientation of SEs encourages a reciprocal exchange with the stakeholders of the host country that limits the number of obstacles they may face during the internationalizing process.Design/methodology/approachThe conceptual development bridges SET with bodies of knowledge on SE, Uppsala Internationalization Model and organizational embeddedness.FindingsThe theoretical arguments provide evidence of how the socially oriented mission of a small business aids it with overcoming obstacles presented by internationalization. Specifically, the authors show that socially oriented enterprises are uniquely equipped to conquer the lack of adequate information about a foreign market and a lack of adequate public support in a host country. A social mission, which ignites positive reciprocity with the local stakeholders, serves as a valuable asset in the process of internationalization. Moreover, since the propositions recognize that the norms of reciprocity differ from one national culture to another, they unfold how reciprocal exchanges may be altered because of the nuances of national culture.Originality/valueThis work makes three important contributions. First, it extends our understanding of why SEs can potentially internationalize more rapidly than organizations without a strongly pronounced social mission. Second, the investigation on the applicability of the U-Model to the context of SE answers scholars’ recent call for continuous work on advancing the U-Model. Third, the authors equip practitioners with a thorough understanding of how they can capitalize on the social aspect of a SE in the unique setting of a specific national culture.

International Branch Campuses as an Entry Mode to the Foreign Education Market

Higher education institutions (HEIs), especially latecomer institutions, continue to regard exporting education services by creating a commercial presence in a foreign country with caution. The purpose of this paper is to investigate ways of creating and managing international branch campuses (IBCs) and to elaborate recommendations for universities on establishing a branch campus as an entry into the foreign education market. In order to reach this aim, we analyse the trends of IBC development in higher education in the last 30 years, compare the theory and concepts of service export in business and in higher education and, finally, conduct a case study on seven IBCs globally. The analysis shows clear synergy between business theory and higher education (HE); however, no obvious coherence is discovered between the IBC establishment practices and the traditional Uppsala internationalisation model used in international business practices. This research continues by verifying the coherence of IBCs with the revisited Uppsala model based on the relationships and market commitment.

Organizational performance feedback effects and international expansion

Drawing on performance feedback theory to develop the Uppsala internationalization model, we argue that organizational performance relative to managerial aspirations influences firms' foreign expansion propensity as well as the type of country location. Our statistical analysis of foreign entries by Japanese machinery firms between 1976 and 2002 finds that firms performing closer to aspirations were more likely to enter foreign countries than those that under- or out-performed. Underperforming firms were also more likely to enter countries with greater cultural and geographic proximity to those in which they had already invested. Our findings contribute to international business research by identifying organizational performance conditions under which firms tend to adopt an incremental approach to foreign expansion, or else a comparatively radical one of selecting more distant or unfamiliar countries.

Seafood export as a relationship-oriented supply network

PurposeThe purpose of this paper is to examine the role of relationships and networking in the international flow of seafood products through export processes and practices using empirical case examples.Design/methodology/approachThis paper provides an insight into seafood export through ten case studies of seafood exporters from Norway and a freight forwarder working with most of these companies.FindingsThe international seafood business is characterised by coordination, interactions, and exchange such that economic and social interactions among network members transcend national boundaries into international/global markets. The findings reveal how studied seafood exports are in line with the learning-based Uppsala internationalisation model, embedded in international buyer-seller relationship structures and networks, which is also a particularity of this food-producing industry. To secure long-term business in distant markets, small- and medium-sized (SME) seafood exporters have shifted the focus from transactional approaches to relationships and networking as a means of improving export performance. This paper suggests how logistics and marketing have become closely and strategically interconnected, and so marketing strategies depend on logistics strategies and the two cannot be separated in a typical global seafood supply network.Practical implicationsPurposeful collaborative interaction between exporter and importer helps in risk mitigation. Increased interactions in distant markets by SMEs can also be achieved using social media networking.Originality/valueThis paper offers an insight into the global seafood supply network using empirical case examples from Norway, an important seafood producing country.

International market entry mode – a systematic literature review

This wholly conceptual paper examines the breadth of literature on Market Entry Modes, a fundamentally important and strategic issue for managers in growing organisations of all sizes in all sectors. Key concepts and terms are defined and then a set of key Internationalisation Theories are systematically and critically reviewed, these being: the Transaction Cost Approach, Institutional Theory, the Eclectic Paradigm, the Uppsala Internationalisation Model and the Resource Based View. The final portion of the paper is integrative and highlights three key literature gaps as signposts for future work.

Rigidity in SME export commencement decisions

In an increasingly globalised world, firms generally have become more internationalised utilising a range of different modes of operation. In the case of small-medium sized enterprises (SMEs), exporting is the favoured mode of international market entry, at least in the early stages of internationalisation, and many governments have supported SME exports through export promotion policies because of the importance of SMEs in employment creation. However, in spite of this policy focus, in most countries, the proportional involvement of SMEs in exporting remains low, which raises an important question as to what factors are inhibiting firms that are successful domestically from exporting. In addressing this question, much scholarly research has focused on the broad concept of ‘export barriers’. These barriers, for example, tariffs, quotas and administrative obstacles, are seen as a primary source of export reluctance. This paper takes a different approach to previous studies and proposes that a firm's resistance to exporting can be better understood through an analysis of the behavioural decision process of firms in line with the Uppsala internationalisation model. We propose ‘lateral rigidity’, first introduced in the literature in the 1970s, as an important concept in export commencement. By applying factor analysis to a survey of Australian SMEs, we provide a measurement model for lateral rigidity, revealing its important factors and thus strengthening understanding of firms' export commencement decisions. We conclude by drawing implications for internationalisation theory, practice and public policy and suggesting ways to extend this work through future research.

Antecedents to Export Performance and How Italian and Slovanian SME's Innovate During Times of Crisis

This paper explores how small and medium enterprises (SMEs) operating in Northern Italy and Slovenia used their innovative potential to expan business across the border while their home markets suffered from the great recession that started in 2007. The background of the study is an analysis of the antecedents to export performance and internationlization, which specifically asked whether innovating incrementally or innovating radically contributes to export performance in foreign markets and how this ultimately interacts with strategic considerations and the propensity to take risks. The findings of the study showed that export performance is positively influenced by incremental innovation and risk preference and that there is a relationship between innovation and export performance. These findings contribute to the question whether classical internationalization theories such as the Uppsala Internationalization Model and the Innovation-related Model, can be applied in contingency situations of economic crisis.

Internationalization and Differentiation Strategies: The Case of American and European Business Schools

The field of management has been understudied in terms of qualitative research studies exploring the internationalization and differentiation strategies of business schools (actors). This study addresses these relevant and urgent knowledge gaps due to major changes in the management education landscape, such as global turmoil, consolidation, and a deep legitimacy crisis, exacerbated by the 2008 Global Financial Crisis. The case study method was used to examine field dynamics and the behavior of six actors in three countries between 2012 and 2015 via interviews and field observations, facilitated in my dual capacity of international programs director and part-time faculty at several American (U.S.) and European business schools. The study is based on two levels of analysis: meso (between macro and micro) to understand the community of business schools and micro (to understand actor strategies). It is designed to answer this main research question: what are the strategies underlying the internationalization and the differentiation of business schools? I combined neo-institutionalism, international business, and strategic management theoretical frameworks to gain a deep understanding of the literature and the practice in relation to this main research question.Whereas this thesis is the product of my individual research (four papers) as an embedded researcher, it has been supervised by two rigorous co-authors since 2012. Therefore, my writing style alternates between “I” and “we” in respect of co-authorship. Our main findings indicate that the Uppsala internationalization model should be extended to address these tensions: internationalization vs. globalization, dimensions of audiences, and the risks associated with internationalization pathways. We also found that trust- and reputation-building mechanisms (rankings and accreditations) have become insufficient differentiators due to global mimicry. We contribute to higher education management approaches with a new differentiation strategy beyond rankings and accreditations to show scholars and practitioners that authenticity is a way to regain credibility and legitimacy with stakeholders. Due to the inherent limitations of the case study method, our findings are not generalizable. However, we believe that they are applicable to knowledge-intensive firms and professional service firms.

The Theoretical Embedding Of Born Globals: Challenging Existing Internationalization Theories

This article examines the embedding of the phenomenon of Born Globals into three existing theories of the firm. The model of Born Globals deals with young companies that begin shortly after their foundation to internationalize. The Uppsala Internationalization Model helps to delimit the concept of Born Globals from existing internationalization models and to highlight their special features. The resource-based view takes up the integration of knowledge as the key resource of Born Globals and explains the underlying mechanism with which a company achieves a sustainable competitive advantage from a bundle of resources. The knowledge-based view is concerned with the generation of knowledge and explains the learning processes that are performed by the entrepreneur. A recurring theme could be identified and contains the following elements which interconnect the three theories of the firm with the concept of Born Globals - knowledge as a key resource, learning, and integration of knowledge into organizations.

Internationalization to China: A Model for Australian Architectural, Engineering and Construction Firms

The experiences of an architectural, an engineering, and a construction organization, when internationalizing to China, are compared to extant theories of internationalization to develop an enhanced explanation of these organizations’ internationalization. The research examines the explanatory power of both the Uppsala internationalization model and network theory for internationalization. The research determined that, whilst these organizations utilized an incremental internationalization process, the stages differed from those identified in the Uppsala model. Part of this difference reflects the fact that the participants are service organizations and the Uppsala model is more relevant to manufacturing organizations. Network theory was also found to predict some of the participant behaviors; however, it did not correctly predict the reasons for forming partnerships, which was to gain knowledge rather than develop networks. The stages of the internationalization into China identified were: (1) experiencing a motivation to internationalize; (2) adopting one of a variety of entry modes; (3) experiencing a motivation to increase internationalization to the level of a wholly-owned foreign entity; (4) establishment of a wholly-owned foreign entity (WOFE), either by acquisition or development; and (5) further horizontal expansion (such as movement to new locations). A range of different motivations for both stages one and three were identified.

The Services Internationalization Process: An Exploratory Investigation of Australian Service Company Internationalization to China

Service companies possess different characteristics from non-service-based companies, affecting their process of internationalization. This article examines the internationalization of service organizations using case studies of 23 Australian service organizations internationalizing to China. It finds that the internationalization process is influenced by the type of service the organization produces. The Uppsala internationalization model partially explains internationalization for companies producing exportable services but did not explain internationalization for companies, which produce nonexportable services (services that must be located within the market). International experience, government regulations and capital intensity were influential for internationalization. The findings develop a model for service organization internationalization.

Differences and similarities of the internationalization processes of multinational companies from developed and emerging countries

PurposeThis paper aims, by a direct comparison, to address the differences and similarities of the internationalization processes of multinational companies both from developed and emerging countries.Design/methodology/approachThis study employed qualitative approach, using an integrated model of internationalization process. Multiple case studies, with two companies with significant involvement in foreign markets and originating in countries with different levels of development, were carried out.FindingsThe results reveal that the case companies show some differences with regards to their use of ownership advantages to facilitate their internationalization. On the other hand, learning and experience of internationalization, coupled with the use of networks, have been factors that have influenced the pace and the pattern of the case companies' internationalization. An integrated model, which includes variables related to networks and learning/experience, may contribute to the understanding of the case of multinational companies from emerging economies.Originality/valueAlthough the research field of emerging multinationals has been growing lately, very few attempts have been made in the sense of directly comparing the internationalization process of firms from both developed and emerging countries. The authors proposed an integrated analytical model that draws on insights from the eclectic paradigm and the Uppsala internationalization model.

Perceptions of Institutional Environment and Entry Mode

Multinational companies from emerging and developing economies (EMNCs) are becoming major players in the globalized world economy and are likely to wield growing influence on economic dynamics in OECD, emerging, and developing countries alike. This paper presents data gathered from Turkish firms investing in the transitional economies of the Central Asian Republics. Using an integrated risk management framework (Miller 1992) as a platform for investigating executives' perceptions of environmental uncertainty in entry mode decisions, we extend the framework through the addition of variables, such as corruption, which synthesise institutional level factors. The findings indicate that greater ethical-societal uncertainties result in a preference for joint venture over wholly owned subsidiary. There is a strong correlation between the perceived risk of intervention and joint venture entry mode. We find only limited support for the Uppsala internationalisation model.