For decades, scholars have put forward the idea that change in industrial networks depends on the relationships and networks themselves. However, models are still lacking that conceptualize the heterogeneity of relationships and networks and that show how this heterogeneity actually affects change. This paper puts for-ward a model suggesting that network structure-in terms of an open or closed system-and relational embeddedness together affect the ways knowledge is gained, given knowledge flow and problem solving as two sources of knowledge. Moreover, the paper proposes that this effect influences the tacitness and novelty of the knowledge gained. Additionally, network structure and gained knowledge are postulated to have an impact on two changes, the establishment of relationships and the development of technology, which take place in industrial networks. The paper advances six propositions and concludes with implications for research and practice.
This paper sheds light on the international new ventures led by returnee entrepreneurs and investigates the influence of networking capability and the usefulness of international knowledge for the overall performance of so-called international returnee ventures (IRVs). By integrating network theory with a capability view of firm performance, it advances six hypotheses that form a structural model, which is tested with LISREL on a sample of 194 IRVs from China. The findings show that international networking capability has a positive influence on the provision of international business knowledge, which in turn is positively related to the innovation performance, but they have a negative impact on the financial performance. Hence, this study presents a discussion of the usefulness of knowledge gained from the international network relationships of emerging market returnee entrepreneurs.
By integrating social capital theory with a capability-based view on performance, this paper aims to examine the extent to which returnee entrepreneurial ventures (REVs) gain international performance advantages from the founding entrepreneurs’ experience with international networks. Using data on 200 Chinese REVs, the paper proposes and tests a structural model with a focus on the link between individual entrepreneurs and the subsequent development of firm capabilities. The results provide evidence that it is important that the returnee entrepreneurs have an international social network for the REV to develop an international network capability, which, in turn, mediates the effects on opportunity knowledge and the international performance of the REVs. The findings highlight the concurrent effect of the role of entrepreneurs and organizational learning in internationalization, and they provide an understanding as to the importance of the returnee-specific advantages for the international performance of these firms.
Opportunity seeking has become increasingly important for explaining firm internationalization, but our understanding of how opportunity is mediated within international networks is limited. This study probes the concept of network-mediated opportunities and attempts to identify what drives a firm's reception of new international opportunities. Based on the notion of opportunity in the entrepreneurship literature with the network view on internationalization, we bring together the concepts of relationships, networks, capabilities, and opportunity in a structural model, where we hypothesize that network-mediated opportunity is dependent on networking capability. This, in turn, is positively influenced by network closure and relational embeddedness. We test the model on a sample of 200 Chinese firms. The analysis partly supports the model, as we find that networking capability is a mediating factor between relational embeddedness and network-mediated opportunity, but does not mediate the relationship between network closure and network-mediated opportunity; on the other hand, we find a direct relationship between network closure and network-mediated opportunity. The paper ends with a discussion of the results and suggestions for future research.
This study aims to answer whether and how returnee entrepreneurs’ international experience and returnee entrepreneurial firms’ international market knowledge influence these firms’ internationalization. Anchored in a framework combining an entrepreneurial and knowledge-based view, we develop a model and four hypotheses on the relations between returnee entrepreneurs’ international experience, international market knowledge, international market commitment, and level of internationalization of the returnee entrepreneurial firm. Empirical evidence of the proposed model is derived from a recent sample of Chinese returnee SMEs in knowledge-intensive and high-technology industries. The main finding is that returnee entrepreneurs’ international experience nurtures international market knowledge of returnee entrepreneurial firms, which in turn has a positive effect on these firms’ international market commitment and level of internationalization. In terms of theory, the study extends our understanding of returnee entrepreneurial firms by uncovering the role of returnee entrepreneurs’ international experience and returnee firms’ international market knowledge during their initial and early international expansion.
By applying the network position concept, we untangle the firm's recognition and exploitation of opportunities during the internationalisation process. We view the transition of network position from outsidership to insidership, in terms of the strength and number of relationships in the foreign market network. Departing from the revised Uppsala model, we argue that opportunity development in the business network consists of recognition and exploitation. Path dependence impacts how a firm exploits opportunity in the network as well as the next opportunity to be recognised, as they are contingent on the network position. Four opportunities are identified from a historical case study of Elekta, a Swedish medical device manufacturer that entered China between 1980 and 2010. We analyse the initial network position of the firm, its opportunity recognition and exploitation, and the network position of the firm in return. Based on the cases we demonstrate that outsidership tends to lead to discovery, while insidership results in creation. The insidership enables direct and indirect relationships, which are involved in the exploitation of the opportunity.
To better manage and understand the speed at which firms internationalize, managers and scholars need an appropriate conceptualization and a reliable and valid measure of speed of internationalization. The literature, however, adopts a limited temporal perspective and usually conceptualizes and measures it as the time it takes the firm to start to internationalize. This unidimensional view neglects the central aspects of internationalization that create speed. Our purpose is, therefore, to propose a new, theory-driven – embedded in the main concepts of the original Uppsala model – and multidimensional conceptualization and operationalization. The main contribution is that we develop this conceptualization and measure.
The transistion to market economy in Russia in the 1980s and 1990s is analysed in terms of fragmented and and integrated relationships in business networks. A longitudinal case study of the relationships of a Russian company shows that integrated relationships are replacing fragmented ones, that is, relationships which only include either exchange connections or resource use dependence are phased out in favour of relationships which include both these dimensions. This development towards a network of integrated relationships is driven by the pressure of change generated by the incompleteness of fragmented relationships but slowed down by the complexity of multilateral use dependence.
A case study of a printing house in Russia is used to analyse relationship dissolution after the Russian transition to market economy in 1992, when many customer-supplier relationships inherited from the plan-governed economy were dissolved. The thin networks around the relationships, together with mutual lack of knowledge and weak interdependence between firms, made the relationships fragile and easily dissolved when exposed to shifts in demand and supply and to the new rights of the firms to choose their customers and suppliers
Framgångsrika näringslivsregioner består ofta av dynamiska miljöer med täta företagskontakter som har växt fram under lång tid. För att åstadkomma liknande resultat i regioner som behöver stöd satsar EU:s regionala fonder, statliga myndigheter som Nutek och Vinnova samt länsstyrelser och kommuner stora resurser på så kallade klusterinitiativ, nätverksåtgärder eller regionala strategiska nätverk för att få företag att höja sin kompetens och samverka så att den regionala ekonomiska tillväxten stärks.
Den här boken handlar om satsningar på regionala strategiska nätverk.
Boken behandlar tankarna bakom satsningarna, processerna som dessa satsningar ger upphov till och möjligheterna att bedöma resultaten. Flera praktiska exempel ger en bakgrund till de regionala strategiska nätverkens existens och karaktär, och deras operativa verksamhet i form av engagemang, kommunikation och lärande analyseras. Författarna ägnar speciell uppmärksamhet åt nätverksnavens och universitetens och högskolornas roll samt åt de problem som är kopplade till att utvärdera verksamheten.
Boken är ett resultat av ett forskningsprojekt vid Mittuniversitetet i Sundsvall som bedrivits i samverkan med forskare vid andra lärosäten. Den vänder sig till beslutsfattare och praktiker som arbetar med strategiska nätverk eller utvärderar sådana satsningar och till forskare med intresse för marknader och näringspolitik. Den lämpar sig också som kursbok i universitetens och högskolornas ekonomutbildningar.
This paper studies the performance consequences of the speed of SME internationalization. The authors identify three research gaps: few studies treat speed as an independent variable; most studies analyze speed only until internationalization starts; and, finally, studies have paid little attention to the multidimensionality of the speed concept. The authors seek to address these gaps and to contribute to the literature on the dynamics of internationalization by developing three measures of internationalization speed, which capture its multidimensionality. Building on the theories of learning advantage of newness and time compression diseconomies, the study presents three hypotheses on speed’s effect on performance, and the theoretically derived research model is tested on a sample of 183 SMEs visited on site. The analysis demonstrates that the speed of a firm’s increase in the breadth of its international markets has a positive but curvilinear effect on firm performance. It also demonstrates that the speed of a firm’s increase in commitment of foreign resources has a negative but curvilinear effect on the performance of the firm. These results have implications both for scholars interested in the dynamics of firm internationalization and for SME managers
Speed of internationalization is a multidimensional concept with performance consequences, but little is known about the interrelatedness between different time-related concepts. The authors address this deficiency by developing three hypotheses, which are confronted with a dataset collected on-site at 203 SMEs. The analysis reveals that (i) the longer the time to internationalization, the lower the speed of international expansion, (ii) the earlier the point in time of start of internationalization, the lower the speed of international expansion, and (iii) there is an antagonistic interaction effect revealing that the negative effect on the speed of international expansion caused by a longer time to internationalization is moderated by the point in time of internationalization start. The study contributes to theory by examining the interrelatedness between temporal concepts in the internationalization literature and by showing how the underlying mechanisms influencing internationalization speed changes over time. For managers, insights into the importance of time and temporality for successful international expansion are provided.
The innovativeness of an opportunity indicates its profit potential for firms. Extant research has shown that a systematic search for, and a well-developed experience ofinternational opportunity development, increases the likelihood that the firm will develop new opportunities. To this point however, the literature falls short in examining how experience and search behaviour influence the degree of opportunity innovativeness. This study analyses 192 international opportunities developed by Swedish SMEs over the last seven years. Our analysis reveal that the more developed the prior experience from opportunity development and the more systematically the SME search for new opportunities, the lower the innovativeness of the developed opportunity. Thus, our results show that prior experience andsystematic search behaviour may hamper the SME from developing innovative international opportunities.
Market entry performance is critical during internationalisation; prevailing views suggest that firms need to carefully plan their entry before putting the plan into action. This article focuses on three attributes affecting the possibility and usefulness of making a pre-planned market entry: unpredictability, improvisation and business network commitment. We develop six hypotheses tested on a sample of 250 entries; our main finding is that improvisation plays a mediating role in relation to performance in unpredictable markets. The analysis reveals that the relationship between unpredictability and network commitment is not significant, while the effect of unpredictability on market entry performance is negative. These findings suggest implications for internationalisation and international entrepreneurship theory. For managers and entrepreneurs, we show that unpredictability weakens market entry performance, a negative effect that can be mitigated if the entrant firm improvises.
The objective of this paper is to formulate a theoretical framework for studies of antecedents and consequences of discoveries during international expansion. By introducing market discovery it seems to be possible to offer a richer understanding of the pattern and pace of the international expansion of a firm. Market discovery is the result of both exploration and exploitation activities, but in order to exploit market discovery, a firm must learn to handle the discovered opportunity. A discovery, usually made while a firm is conducting daily activities, occurs in connection with search, planning, routine, and improvisation. The resulting learning can lead to changes in pace, orientation, and extension of the international expansion of the firm. © 2003 Elsevier Ltd. All rights reserved.
Based on the key assumptions that firms are opportunity seeking and that they gain critical knowledge operating in a network of relationships, this paper focuses on early expansion in foreign market networks. In particular, the paper examines the relation between experience and business-relationship value in a foreign market. While experience and experiential knowledge are central concepts in international business, little has been written about their effects on the value of business relationships. The paper formulates a set of interrelated hypotheses on the effects of international experience, experiential network knowledge and importance of customer and competitor knowledge on the value of business relationships in a foreign market. They are combined in a structural model, which is tested on a sample through LISREL. The main conclusion drawn from the study is that experiential network knowledge and knowledge about the importance of customers and competitors in the network influence the value of business relationships in a foreign market in different ways. © 2013 Elsevier Ltd.
In several studies it has been observed that single business relationships can play a critical role in the early international expansion of SME firms (Chetty and Blankenburg Holm, 2000; Child et al., 2002; Ellis, 2000; Hilmersson and Jansson, 2011; Johanson and Vahlne, 2003; Sharma and Blomstermo, 2003). It has also been shown that network constructs can be used fruitfully for understanding and explaining SME internationalisation (Coviello and Munro, 1995; Hadley and Wilson, 2003; Oviatt and McDougall, 2005). Against this background, a purpose of this paper is to study how networks influence business relationships in foreign markets.
A fundamental element of planned economies is the idea that exchange between units and firms should be planned by authorities remote from the performance of the exchange. The institutions, where plan governance is the main mechanism, are therefore assumed to affect how trust is developed and maintained in an economy. However, when the planned economy undergoes institutional changes and plan governance erodes, trust is likely to play a different role. The paper proposes a model for analysis of development of trust depending on the institutions involved and the exchange characteristics. The model suggests that both inter-unit exchanges and inter-firm exchanges contain three dimensions, which are influenced by the degree of plan governance: knowledge use, interaction, and dynamics. Depending on the plan governance, the use of the knowledge produced takes different forms, but the plan governance also influences the interaction in the exchanges. Moreover, it is proposed that plan governance has an effect on the exchange dynamics. A 10-year longitudinal one-firm case study from the Russian printing industry is divided into two periods: the planned economy between 1987 and 1991 and the transition economy from 1992 to 1997. It shows that plan governance in various degrees influenced the exchanges, which, in turn, gave a different level of importance to the role of trust in the economy.
Olika sätt att se på nätverk och relationer samt deras betydelse för internationalisering har under de senaste åren blivit en viktig del i forskningsaktiviteterna inom CER, där ett sådant forskningsprojekt pågår sedan 2013 under ledning av Martin Johanson. Det går under namnet "Network, opportunity and turbulence" och ambitionen är att öka kunskapen om nätverkens betydelse för internationaliserande små och medelstora företag. Delresultat har tidigare publicerats i den internationella tidskriftsartikeln ”Network knowledge and businessrelationship value in the foreign market” (Hohenthal, Johanson och Johanson, 2014).
Firms entering transition markets are typically ignorant about those markets, and the markets, owing to the transition from a planned to a market economy, are typically turbulent. Consequently the entry process involves discoveries that could not have been predicted in advance. This position is supported by a longitudinal study in real-time of a Swedish firm's entry into the Russian market between 1987 and 1993. ■ The paper distinguishes between three types of activity that form part of the entry process, namely search, routines and improvisation, and it discusses how they relate to operative and strategic discoveries made and the characteristics of the entry process.
By adopting a processual and dynamic view on internationalization, we develop the concepts of acceleration and deceleration, providing analytical tools to enhance our understanding of the non-linearity and multidimensionality of internationalization. We argue that acceleration and deceleration are embedded in the internationalization process and are a consequence of the firm’s capability to absorb and integrate acquired knowledge, and to find and exploit opportunities. In addition, we advance the idea that changes in speed are further influenced by how the firm integrates and coordinates the resources it has deployed within and across various internationalization dimensions. Thus, it emerges that the overall evolution of commitment to internationalization is more complex than received theories tend to present; therefore, empirical studies should aim to include a wide set of international activities and processes embedded in time.
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.
Firms enter emerging markets to capture untapped opportunity and pursue high growth potential. Yet emerging markets are also characterized by unstable institutions that may affect firms' market entry behavior. Although most existing studies have taken a rather short-term and static perspective to addressing foreign market entry, we specifically draw on the Uppsala internationalization process model and use a long-term approach to examine the China market entry of three Swedish firms in terms of their market knowledge and market commitment. We argue that the relation between institutional change in the host market and the market entry behavior of a particular firm evolves over time. The findings also show that the type of institutional change, as well as the accumulated market knowledge and commitments firms have made, can influence the relation between them.
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.
In many regions the current focus of the state is to initiate and stimulate the emergence of inter-firm networks in order to produce growth. This book takes a management perspective on the operations and processes in these networks and describes and analyzes how and why geographical proximity influences inter-firm networks The last twenty years have seen a change in the economic policies pursued in many countries. The focus is not on specific firms or on the market in general any longer, but instead specific relationships and networks between firms residing in a region are the object for policy-makers' priorities. A vast amount of public resources are now pooled into projects and programmes that follow these ideas. The state initiates and stimulates the emergence of inter-firm networks in order to produce growth in a specific region. Both authorities' and firms' strategies are scrutinized as it displays how economic policy guides the inter-firm networks. These strategies do often differ, which make the networks difficult to manage for the actors involved, which makes this book an essential tool for those involved in these types of regional networks.