Too big, too quick?

Abstract

This paper presents some stylized facts about the expansion of the Russian metallurgical industry from the early nineties to the aftermath of the global financial crisis of 2008-2009. It retraces the internationalization of these firms and examines the characteristics of this movement in terms of geographical and industrial orientation (horizontal, vertical upstream or downstream). The magnitude and speed of Russian metallurgical expansion abroad represent a great opportunity to discuss the literature on how firms become transnationals. After an assessment of the limits of the available theoretical tools and of the need to articulate micro-mechanisms and macro- and meso-dynamics, the paper provides an institutional and systemic explanatory framework.

A literature review on CEE firms’ internationalization: success measurement, achievement and outcomes

“…Regarding local conditions, authors have mentioned support programmes for exporters: if the home country helps firms to expand further via providing financial or informational support, then they can become more competitive and increase geographic scope and/or export intensity more easily (Ciszewska-Mlinari c, 2018;Gorynia et al, 2015;Njegi c et al, 2020;Tinits and Fey, 2022). Of course, smallness of the home market, decreased local demand (Durand and Lautier, 2013;Nowi nski and Rialp, 2013) and other factors mentioned in the previous section can also motivate firms to expand further. From foreign market and/or industry conditions, authors have mentioned foreign market growth (Abramova and Garanina, 2016;Atnashev and Vashakmadze, 2016), suitabilityfor example, location and sizeof the foreign market (B ek es and Muraközy, 2012;Gorynia et al, 2015), industry growth (Cie slik and Kaciak, 2011), favourable exchange rates (Atnashev and Vashakmadze, 2016), similar product standards (Gorton and White, 2009), investment incentives offered by the host country (Gorynia et al, 2015), attractive foreign acquisition opportunities (Atnashev and Vashakmadze, 2016), trade liberalization (B ek es and Muraközy, 2012;Stoian et al, 2016;Szymura-Tyc and Rollins, 2020) and availability of cheap resources (Gorynia et al, 2015).…”

“…Naturally, the firm should also have enough capacity for growing : it should be able to increase its production capacity or use its production potential more effectively (Ďaďo et al , 2015). Moreover, having enough financial (Ciszewska-Mlinarič et al , 2020; Ermolaeva et al , 2018) and managerial resources (Durand and Lautier, 2013) and capabilities (Barłożewski and Trąpczyński, 2021b; Ciszewska-Mlinarič et al , 2020) is necessary for initial international expansion.…”

“…Regarding local conditions, authors have found that smallness of the home market can push firms abroad (Coşkun et al , 2022; Nowiński and Rialp, 2013). Moreover, decreased local demand (Durand and Lautier, 2013) or local consumers’ low interest for the firm’s products or services (Mihailova et al , 2020) can motivate them to seek for more promising foreign markets (Stoian et al , 2016). In addition, some firms internationalize successfully after getting financing – for instance, financial incentives – from their home country’s institutions (Earl et al , 2022; Panibratov, 2016).…”

“…For that, it might be necessary to use a wide range of marketing channels (Jarosiński and Barłozewski, 2019), search for prospective international customers (Gorton and White, 2009), participate in foreign trade shows and exhibitions (Shirokova and McDougall-Covin, 2012), develop international sales offices (Ciszewska-Mlinarič et al , 2020; Vissak, 2013) or acquire foreign firms (Annushkina, 2014). Such activities could help firms to increase market power or achieve technological or other advantages (Durand and Lautier, 2013).…”