Is internationalisation beneficial for novice internationalisers? The performance effects of firm-specific advantages, internationalisation degree and firm size revisited

Abstract

Research background: Research on the performance outcomes of different forms of internationalisation has attracted significant attention due to its theoretical and practical relevance. Still, the related findings have remained conflicting. Scholars have argued that companies need to possess or acquire firm-specific advantages (FSAs) to succeed internationalisation. However, a significant part of International Business (IB) research has treated FSAs as enablers of internationalisation, while some have argued that internationalisation in itself only helps firms translate the possessed resources into performance.
 Purpose of the article: The objective of this study, which is based on the resource-based view (RBV), is to explore the moderating effect of internationalisation on the relationship between FSAs and performance, considering internationalisation degree and firm size as boundary conditions for that relationship.
 Methods: We carry out statistical analyses on a longitudinal dataset containing 304 novice internationalisers from the post-transition economy of Poland and a total of 1167 firm-year observations. Thereby, we compare SMEs with large firms.
 Findings & value added: We find that while FSAs do positively affect firm performance, this relationship becomes weaker for higher levels of internationalisation. However, the negative moderating effect of the internationalisation degree becomes weaker for larger novice internationalisers, which are more able to handle the complexity of managing foreign operations.

Internationalisation motives and the multinationality-performance relationship: The case of Polish firms

“…Our findings from the context of newly internationalised firms from a post-transition economy help to understand the apparent inconsistencies in extant findings on the MP relationship (Barłożewski & Trąpczyński, 2021). Scholars argue that the said relationship may be only a loose association, as there is no specific reason for it to exist (Hennart, 2011;Berry & Kaul, 2016).…”

“…Our analysis relied upon data obtained from 97 Polish listed newly internationalised firms with foreign activities established in the period of 2006-2013 (also see Barłożewski & Trąpczyński, 2021). As data on foreign activities are not readily available, we needed to use a two-stages approach to building a proprietary database for further exploitation.…”

“…firm size, industry, firm age, experience gathered in foreign market, R&D investments, and institutions in the country of origin. Some argue that -among these contextual variables -the appropriate understanding of performance outcomes of internationalisation requires considering its underlying motives (Barłożewski & Trąpczyński, 2021;Elango, 2012;Verbeke & Brugman, 2009;Verbeke, Li, & Goerzen, 2009;Singla & George, 2013). In fact, firms expanding for different reasons will set their performance priorities in different areas, and hence the evaluation of internationalisation outcomes can be different for specific dimensions (Benito, 2015;Caputo, Pellegrini, Dabic, & Dana, 2016).…”

Naive independent directors, corporate governance and firm performance

“…This study finds that in order to gain a good professional reputation, naive independent directors tend to be more conscientious and perform their monitoring duties better, thus improving the governance level of their companies, which is conducive to corporate performance. Based on the advantages of naive directors, firms should employ naive independent directors as an effective way to improve corporate governance, this effect is also similar to novice internationalization in the post-transition economy of Poland (Barło Żewski and Tra ¸pczyński, 2021).…”

Exploitation-exploration balance and its performance outcomes: A study of FDI portfolio decisions of new multinationals

“…firms from mid-range emerging economies with an often accelerated speed of internationalisation (García-Canal, Guillén, Fernández, & Puig, 2018;Guillén & Garcia-Canal, 2009;Hoskisson, Wright, Filatotchev, & Peng, 2013;Kumar, Singh, Purkayastha, Popli, & Gaur, 2020;Lee & Fernando, 2020;Polowczyk, Zaks, & Trąpczyński, 2021), have emerged on a global scale, therefore challenging existing academic and practitioner wisdom. Their importance has been continually increasing, even though new multinationals are still in general less known internationally for their brands (Ramamurti, 2012;Maciejewski & Wach, 2019;Barłożewski & Trąpczyński, 2021b). Because of their relatively weaker intangible resource base, new multinationals have been facing a strategic dilemma to what degree host markets that are more advanced than the domestic market should prevail in their foreign direct investment (FDI) portfolios.…”