The internationalization process in companies located at the borders of emerging and developed countries

Abstract

PurposeDespite geographical proximity, major economic differences exist between Western European countries and the formerly socialist Eastern European countries. The main objective of this study is to develop a better understanding of internationalization decision processes in this specific context.Design/methodology/approachBy means of multiple case study research, six Austrian and five Hungarian companies in order to extend and refine existing theory on internationalization decisions given the current situation in Central Europe are analyzed. In particular, the paper uses extant literature to build a conceptual framework from which we derive propositions as a basis and a guide for data collection and analysis.FindingsIn addition to cost considerations, process and product innovations are becoming increasingly important dimensions in explaining the reasons for internationalization projects. The reasons for internalization and solutions (relocated products and processes, entry mode and location) are closely interrelated.Originality/valueAlthough this framework for the internationalization decision process is applied in a very specific context, the authors believe that the framework can also be very helpful in understanding these decision processes in a more general setting. In particular, companies in other regions where developed and emerging countries are relatively close to one another might be able to utilize our framework and results (in Asia or America).

Benefits of internal manufacturing network integration

“…Thus, we operationalise country context in terms of countries' economic development. This approach is consistent with previous studies (Gupta and Govindarajan, 2000;Mudambi, 2008;Reiner et al, 2008), which usually make an explicit distinction between highly developed (advanced) and less developed (emerging) economies. Using this perspective as a starting point, the present study intends to go beyond the simple dichotomous approach to country context by using an exact, quantifiable measure of country-level economic development, thereby offering a more refined approach to this subject than previous studies.…”

“…Although the global picture is gradually changing, the main advantage of these subsidiaries continues to be their access to low-cost resources ( Jensen and Pedersen, 2011;Reiner et al, 2008;Szász and Demeter, 2015). Thus, the ability of manufacturing subsidiaries in less developed countries to reach a high level of efficiency performance primarily resides in their location.…”

Investigating the implications of business and culture on the behaviour of customers of international firms

“…Local firms as customers of international firms use these assets to compete in the local market for their business sustainability (Elango & Pattnaik, 2007;Teece, Pisano, & Shuen, 1997). The approach to business taken by local firms changes with their association with international firms as it involves taking different types of risks in business (Anderson & Gatignon, 1986;Reiner, Demeter, Poiger, & Jenei, 2008;Wang & Cheung, 2004). The grounding of the business behaviour of business customer firms theoretically can be found based on the approach taken by them towards their association with international firms and business pressure received by them for performance from international firms.…”

Internationalization Paths of Chinese Firms: Evidences From an Emerging Economy

“…By means of multiple case study research for Austrian and Hungarian companies, Reiner et al (2008) found that process and product innovations, in addition to cost considerations, were becoming increasingly important dimensions in explaining the reasons for internationalization projects. The reasons for internationalization and solutions (relocated products and processes, entry mode and location) are closely interrelated.…”