Daniel Gulanowski, Nicolas Papadopoulos and Llynne Plante
This paper aims to critically review and integrate the literature available on Uppsala (incremental) and Born Global (rapid) internationalization models and propose an integrative…
Abstract
Purpose
This paper aims to critically review and integrate the literature available on Uppsala (incremental) and Born Global (rapid) internationalization models and propose an integrative model that applies to both the initial and subsequent stages in internationalization.
Design/methodology/approach
This study draws on a systematic review and analysis of the relevant literature, using 87 articles from 28 journals which deal with the Uppsala and/or Born Global conceptualizations.
Findings
To date, the two views of internationalization have been presented as competing and fundamentally different explanations, as past research focuses mostly on the original 1977 Uppsala model without accounting for its five subsequent extensions (1990-2013) and not considering in sufficient depth the critical role of the knowledge construct in both models.
Research limitations/implications
The study focuses on English-only publications dealing expressly with the Born Global and Uppsala models; while some studies which address the focal theme tangentially may have been missed, the systematic approach to identifying the key studies of interest and the focus on a carefully delineated research domain provides confidence that the main studies relevant to the theme have been captured.
Originality/value
The study highlights the important role of knowledge in the internationalization of firms, and it addresses the current divide between the “incremental” and “rapid” conceptualizations which have impeded the development of theory, by positing six research propositions and an integrative model that accounts for both the incremental and rapid approaches.
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Martin Johanson, Pao T. Kao and Heléne Lundberg
The purpose of this paper is to understand knowledge grafting through localized professionals in the internationalization of the firm. Knowledge grafting refers to firms…
Abstract
Purpose
The purpose of this paper is to understand knowledge grafting through localized professionals in the internationalization of the firm. Knowledge grafting refers to firms increasing their knowledge stock by acquiring new staff, and while the concept is not new in studies on firms’ internationalization, there is little understanding of the characteristics of the individuals carrying the knowledge, the types of knowledge grafted and how it contributes to a market entry process.
Design/methodology/approach
The authors conducted an explorative study with a multiple-case research design and purposely selected five localized Swedish managers working for Russian subsidiaries of Swedish firms. Face-to-face interviews were conducted. The interviews were transcribed and analyzed based on three types of knowledge: general foreign market knowledge, social network knowledge and professional knowledge. The authors also considered both private and professional ties.
Findings
The findings show that characteristics of the localized professional and the firm can influence the type of knowledge grafted and how it is used. The findings also highlight the key role of the individual as knowledge carrier and show an alternative way to obtain knowledge in firm internationalization.
Research limitations/implications
This study comes with limitations. Only Swedish firms entering Russia with wholly owned subsidiaries have been considered. Further studies comparing knowledge grafting with firms in different entry mode, varying stage of market entry, as well as other countries of origin can further enrich our understanding. Future studies can also focus on localized professionals to shed light on the knowledge transfer between them and other individuals within the firms and the potential impact of their departure on knowledge grafting.
Practical implications
Internationalizing firms should pay attention to the opportunity of grafting knowledge by appointing localized professionals already living in the market. Governmental agencies in the host county can be a valuable source for identifying foreign nationals of the same origin as the firm.
Originality/value
To the best of the authors’ knowledge, this is the first study to focus on the individual level of knowledge grafting and to examine how localized professionals acquire knowledge to support firms in internationalization.
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Mikael Hilmersson, Martin Johanson, Heléne Lundberg and Stylianos Papaioannou
Few researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing models…
Abstract
Purpose
Few researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing models ignore the role of serendipity in the opportunity discovery process. The authors provide a nuanced view on international opportunities by developing the role of serendipitous opportunities in the foreign market entry process. The authors develop a model integrating the notions of serendipity, entrepreneurial logic, experiential knowledge and network knowledge redundancy. From the study’s model, the authors condense three sets of hypotheses on the relationships among experiential knowledge and entry strategy, network knowledge redundancy, entry strategy and serendipity.
Design/methodology/approach
The authors confront the study’s hypotheses with data collected on-site at 168 Swedish firms covering 234 opportunities, and to test the hypotheses, the authors ran ordinary least squares (OLS) regression tests in three steps.
Findings
The results of the study’s analysis reveal that experiential knowledge and network knowledge redundancy both lead to a logic based on rigid planning and systematic search, which in turn reduces the likelihood that serendipitous opportunities will be realized in the foreign market entry process.
Originality/value
This is the first study that develops a measure of opportunities that are the outcome of serendipitous events. In addition, the authors integrate network and learning theories and internationalization theory by establishing antecedents to, and outcomes of, the entry strategy.
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Wensong Bai, Mikael Hilmersson, Martin Johanson and Luis Oliveira
The authors seek to advance the understanding of small- and medium-sized enterprise (SME) internationalization at the regional level and examine the role of home market…
Abstract
Purpose
The authors seek to advance the understanding of small- and medium-sized enterprise (SME) internationalization at the regional level and examine the role of home market institutions in this process.
Design/methodology/approach
The authors analyze hypotheses with data from SMEs in five country markets and from the Global Entrepreneurship Monitor. A cluster analysis establishes the regional diversification patterns (based on regional diversification scope, speed and rhythm) and a multinomial regression tests the effect of home market institutions on their adoption.
Findings
The results offer a refined picture of SME regional diversification by revealing three patterns: intra-regionally focused firms, late inter-region diversifiers and early inter-region diversifiers. They also suggest that the adoption of these patterns is determined by SMEs' home market institutions.
Originality/value
The authors develop a nuanced understanding of SME internationalization by building upon and expanding the regionalization rationale in the internationalization patterns literature. Additionally, the authors address the acknowledged, yet rarely investigated, country-level determinants of internationalization patterns.
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Rubina Romanello and Valerio Veglio
In February 2020, Covid-19 health crisis severely hit Italy and then spread around the world. To contrast the spreading of the virus, the whole country was initially forced in a…
Abstract
In February 2020, Covid-19 health crisis severely hit Italy and then spread around the world. To contrast the spreading of the virus, the whole country was initially forced in a strict lockdown, with people closed in their houses and companies shutting down their activities. Although the spread of vaccinations is slowly bringing back a sort of normality, the crisis has immediate and long-term effects. Moreover, it has shown the vulnerabilities of managing businesses on a global scale, alerting internationalizing firms about the necessity to adapt their strategic asset to face the next crisis. This chapter aims at stimulating reflections on the potential interactions among the Covid-19 crisis, digitalization and the localization decisions. Through quantitative and qualitative data related to Italian internationalizing firms, this research shows that, thanks to digitalization, value chain activities localized abroad are expected to become more geographically concentrated, while headquarters perform stronger control and coordination activities on less autonomous business functions abroad. Drawing on in-depth interviews, companies reconsidered their long-term strategies, showing that some reactions to the crisis may suggest potential rising trends in specific industries.
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Martin Johanson and Pao T. Kao
Purpose – The purpose of this chapter is to provide a review of literature that analyses the internationalisation of the firm, through the function and role of…
Abstract
Purpose – The purpose of this chapter is to provide a review of literature that analyses the internationalisation of the firm, through the function and role of networks.
Design/methodology/approach – A total of 23 papers (published between 1988 and 2008) explicitly using network as a research framework to study the internationalisation process of the firm were selected. They have been analysed according to a range of factors, including the author, journal, time frame in which they were published, type of focal firm, country of origin of focal firms, market entered, methods applied in the studies, theories adopted and research topic.
Findings – Networks have emerged as one of the dominant frameworks used to explain the phenomenon of internationalisation. Having originally been applied in studies of firms from developed countries entering similar markets, network theories are now as popular in studies of firms both originating in and entering emerging markets. This review also finds that both qualitative and quantitative methods have been adopted in the studies; however, few papers have tried to combine the two. Furthermore, the network approach has been used for comparative analysis with findings from FDI theory, as well as to supplement international new venture (INV) and born global theories. Lastly, this review highlights topics that have been explored in previous studies and suggests areas for further research.
Originality/value – This is the first review paper on this subject and as such it contributes to the growing body of knowledge on the network approach and assists in understanding the internationalisation phenomenon of the firm.
This paper investigates the internationalization of consulting providers that supply to multilateral institutions such as the World Bank, United Nations and Asian Development…
Abstract
This paper investigates the internationalization of consulting providers that supply to multilateral institutions such as the World Bank, United Nations and Asian Development Bank. Previous research has identified that such clients do play a notable role in the internationalization of some consulting firms, but little empirical research has been undertaken. In this paper, a “network” approach to internationalization is taken, with the findings from an interview study suggesting that while consulting providers “follow” multilateral institutions to new markets, this is only one of several “relationship strategies” that firms use in combination to enter and develop foreign markets.
Christiane Prange and Youzhen Zhao
The authors of this chapter investigate internationalisation strategies of small and medium-sized companies (SMEs) in China. We highlight the specific challenges that Chinese SMEs…
Abstract
The authors of this chapter investigate internationalisation strategies of small and medium-sized companies (SMEs) in China. We highlight the specific challenges that Chinese SMEs encounter when selecting international country markets in terms of distance and entry speed. The authors adopt an ambidexterity perspective that differs from traditional explanations of internationalisation behaviour by highlighting the need to balance seemingly disparate options for international expansion. Three cases provide an illustration of how Chinese companies combine distant with proximate market entries and slow with accelerated entry speed. The authors highlight how these strategies can drive and enhance international aspirations of Chinese SMEs.
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João Carvalho Santos, Hortênsia Barandas-Karl and Francisco Vitorino Martins
In this chapter we test a conceptual model to shed light on the psychic distance (PD) hazards in cross-border acquisitions’ (CBAs’) performance. Only a few studies have sought to…
Abstract
In this chapter we test a conceptual model to shed light on the psychic distance (PD) hazards in cross-border acquisitions’ (CBAs’) performance. Only a few studies have sought to examine the impact of national-level dimensions on CBAs’ performance, such as cultural distance or PD, with non-conclusive and contradictory results. Event study methodology is used to scrutinize the impact of the five key dimensions of psychic distance stimuli (PDS) on the stock market performance of the US acquirer firms and 26 countries involved in the CBA. Our results support that PD, as a whole, has a negative impact on CBAs’ performance although only in the short term there is a statistically significant negative impact, whereas in the long term no effect is statistically significant. Analyzing the different dimensions of PDS, only differences in language, education, and political systems are significant. This chapter is the first to empirically examine the PD hazards on CBAs by breaking down the PDS and test the effect of each dimension on CBAs´ performance. The findings of this study may be useful for managers of firms that wish to undertake CBAs as it denotes important dimensions which hinder post-deal performance.
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Desirée Blankenburg Holm, Rian Drogendijk, Jukka Hohenthal, Ulf Holm, Martin Johanson and Ivo Zander
Purpose – We examine the fundamental assumptions and features of the Uppsala model of internationalization and argue that we need to look beyond this model for studying…
Abstract
Purpose – We examine the fundamental assumptions and features of the Uppsala model of internationalization and argue that we need to look beyond this model for studying internationalization processes in the multinational corporations (MNCs) of today. The purpose of our paper is to identify gaps and neglected issues regarding MNCs' internationalization processes that demand further theoretical and empirical study.
Methodology – Our approach is conceptual: based on the most cited model on internationalization, the Uppsala model, we approach the complex internationalization processes that continuously go on in modern MNCs. We use related bodies of literature, on MNC structure and strategy, headquarters–subsidiary relationships, MNC subsidiary strategy and development, and opportunity seeking and entrepreneurship, to fill in the gaps and develop the emerging research themes.
Findings – We identify the following three issues that need further investigation: the opportunity recognition process preceding internationalization processes in MNCs, the internationalization of multiple products within the confines of the growing MNC, and the internationalization of foreign MNC units.
Research limitations – In this paper, we open up new research fields, but do not offer empirical studies to inform us about these relevant issues. Future research should study these issues empirically, preferably through case study methodologies and/or with longitudinal designs.
Originality – The contribution of our paper is its identification of three research issues in relation to internationalization processes of modern MNCs, which we argue are neglected by contemporary research.