Exporters moving toward emerging markets: a resource-based approach

Abstract

Purpose-The purpose of this paper is to understand whether and how specific capabilities at the firm level can sustain firms during the process of international expansion in emerging markets (EMs). Design/methodology/approach-A quantitative study was carried out, and the authors analyzed data from a sample of 271 manufacturing firms. A logistic regression was used to check for differences in the endowment of resources and capabilities of firms solely focussing on advanced markets (AMs) or extending their international scope to EMs as well. Findings-Firms that expanded their business in EMs showed a significantly higher endowment of international experience and marketing capabilities compared with firms that focussed only on AMs. The authors found that the size of the firm is irrelevant: Even small firms can reach EMs by leveraging an appropriate set of capabilities. Research limitations/implications-The study is cross-sectional and cannot provide a longitudinal view of the process of capability development. Future research will be needed to detail the process of capability development during the international expansion of firms into EMs. Practical implications-Regardless of size, firms that plan to enter EMs should develop specific capabilities, especially marketing capabilities, to increase the likelihood of success. Already internationalized firms have a considerable advantage due to the knowledge they have accumulated in other markets. Originality/value-This paper advances understanding of the process of the international expansion of firms in EMs from a resource-based perspective

The Growth Challenge ofWestern smes in Emerging Markets: An Exploratory Framework and Policy Implications

“…Since the pioneering work of Johanson and Vahlne (1977) on the role exerted by the accumulation of market knowledge in reducing the psychic distance of firms in foreign markets, the Resource-Based Theory (Wernerfelt 1984;Barney 1991) has drawn increasing attention in the International Business literature (Ruzzier, Hisrich, and Antončič 2006) and has been successfully applied also to the case of smes entering ems (Balboni, Bortoluzzi, and Grandinetti 2013;Bortoluzzi et al 2014). The difficulties faced by small firms in the international markets have been traditionally described and discussed as 'the cost of doing business abroad' (Hymer 1976) and as the 'liability of foreigners' (Zaheer 1995).…”

“…In practice, smes must be aware of the effect that Institutional Voids will have on their resources and capabilities and hence be available to make additional investments to reinforcing them. This implies that smes both develop existing resources and capabilities but also supplement them with new ones (Bortoluzzi et al 2014). An effective means of resource adjustment and development is through networking, especially to accelerate the process of knowledge sharing and transfer between firms (Sandberg 2014).…”

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“…Since the pioneering work of Johanson and Vahlne (1977) on the role exerted by the accumulation of market knowledge in reducing the psychic distance of firms in foreign markets, the Resource-Based Theory (Wernerfelt 1984;Barney 1991) has drawn increasing attention in the International Business literature (Ruzzier, Hisrich, and Antončič 2006) and has been successfully applied also to the case of smes entering ems (Balboni, Bortoluzzi, and Grandinetti 2013;Bortoluzzi et al 2014). The difficulties faced by small firms in the international markets have been traditionally described and discussed as 'the cost of doing business abroad' (Hymer 1976) and as the 'liability of foreigners' (Zaheer 1995).…”

Pluripotent Dynamic Capabilities in the Internationalization of Firms: Focus on Learning, Innovating and Networking in SMEs from Sweden

“…According to the business network and relational-based literature, there are different definitions as well as dimensions for NC provided by related researchers Mu and Benedetto, 2012;Ritter et al, 2002;Walter et al, 2006). As depicted in Table 2 (Freeman and Styles, 2014;Kaleka, 2012, Morgan et al, 2012Murray et al, 2011;Raymond and St-Pierre, 2013;Zou et al, 2003); (e) innovation (innovative) capability (Bianchi, 2009;Guan and Ma, 2003;Hortinha et al, 2011;Luo et al, 2005;Yi et al, 2012); (f) technological competence and unique product development (Knight and Cavusgil, 2004); (g) production capability as a component of technological capabilities (Flor and Oltra, 2005); (h) technological capability (Chen et al, 2009;Yiu et al, 2007); (i) innovation and technology capabilities as a sub-dimension of capability for internationalization (Camison and Villar, 2009 product innovation (Bortoluzzi et al, 2014) ; and (q) differentiation capability (Chen et al, 2014).…”

“…The following capabilities or capability dimensions from different studies could be classified under Cluster 1 (C1) as follows: (a) external collaboration (Lefebvre et al, 1998), (b) relational capability (Freeman and Styles, 2014;Lages et al, 2009;), (c) supplier and customer relationship capabilities (Kaleka, 2002), (d) communication capability (Zou et al, 2003), (e) relational-building capability (Morgan et al, 2004), (f) leveraging foreign distributer competences (Knight and Cavusgil, 2004), (g) alliance and network development capabilities (Freeman et al, 2006), (h) cooperation capability (Flor and Oltra, 2005), (i) networking capability (Bianchi, 2009;Chen et al, 2009;Raymond and St-Pierre, 2013;Van Geenhuizen, 2008;Weerawardena et al, 2007), (j) parental network capabilities (Elango and Pattnaik, 2007), (k) external communication as a sub-dimension of commercial capabilities (Camison and Villar, 2009), (l) meeting foreign customer demands and requests as dimensions of adaptive capability , (m) network capability upgrading , (n) marketing communication capability (Murray et al, 2011), (o) customer relation capability as the export marketing capabilities' dimension (Kaleka, 2011), (p) "building of sound and long-lasting relationships" as a sub-dimension of export-related organizational capabilities (Leonidou et al, 2011), (q) customer relationship capabilities as a component of dynamic marketing capabilities (Kaleka, 2012), (r) channel management and delivery management as a function of specialized marketing capabilities (Morgan et al, 2012), (s) alliance management capability (Khalid and Larimo, 2012), (t) channel networking capabilities (Boso et al, 2013), (u) listening to customers and scanning the business environment as components of dynamic capabilities (Al-Aali and Teece, 2014), (v) network learning capability (Weerawardena et al, 2014), and (w) distribution network as a function of marketing capability (Bortoluzzi et al, 2014).…”