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Revisiting the relationship between product diversification and internationalization process in the context of emerging market MNEs

Published on Jun 1, 2017in Journal of World Business 5.79
· DOI :10.1016/j.jwb.2016.11.005
Georgios Batsakis5
Estimated H-index: 5
(Brunel University London),
Alexander T. Mohr15
Estimated H-index: 15
(WU: Vienna University of Economics and Business)
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Abstract
Abstract We examine the contingent effect of existing product diversification on the scope and speed of firms’ subsequent internationalization. Understanding these effects is important because prior research on the product—geographic diversification relationship assumes that the relevant decisions are taken simultaneously. This assumption does not apply to firms that consider international expansion only after having grown domestically through product diversification. Drawing on and extending transaction cost logics, we argue that product-diversified firms following geographically diverse and rapid internationalization incur higher transaction costs and are thus less likely to do so. We also find that international experience plays a moderating role.
  • References (108)
  • Citations (3)
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References108
Newest
Published on Apr 1, 2017in Management International Review 2.69
Alexander T. Mohr15
Estimated H-index: 15
(UKC: University of Kent),
Georgios Batsakis5
Estimated H-index: 5
(Brunel University London)
Existing research is divided on whether firms that rapidly expand their overseas operations perform better than firms that internationalize slowly. Drawing on Penrose’s theory of the growth of the firm, we argue that the positive effects of rapid internationalization give way to negative effects with increasing internationalization speed, leading to an inverted U-shaped association between internationalization speed and firm performance. We analyze the market-seeking expansion of 110 retailers o...
13 Citations Source Cite
Published on Oct 1, 2016in Journal of Business Research 4.03
Luciano Ciravegna13
Estimated H-index: 13
(INCAE Business School),
Esteban Brenes12
Estimated H-index: 12
(INCAE Business School)
This case discusses Selectos, a retail chain based in El Salvador, which was put under severe strain when Walmart entered its domestic market, threatening the leading position it had acquired through many decades of investment. The case illustrates that Selectos succeeded in competing Vis a Vis Walmart because it implemented the principles of high reliability organizations. First, before Walmart entered the market, the Salvadoran company invested time and financial resources to audit its routine...
8 Citations Source Cite
Published on Jun 1, 2016in Journal of Business Research 4.03
Rodrigo Bandeira-de-Mello8
Estimated H-index: 8
,
Maria Tereza Leme Fleury22
Estimated H-index: 22
+ 1 AuthorsMarina Amado Bahia Gama1
Estimated H-index: 1
Existing literature addresses the concomitant internationalization path of emerging market multinationals (EMNEs) in both advanced and emerging countries. This strategy requires that ambidextrous EMNEs simultaneously explore new capabilities and exploit their home-based capabilities. However, little is known about how this process actually happens. The ambidexterity implementation in emerging multinationals was unbundled by focusing on how three key process variables unfold: operation mode, orga...
10 Citations Source Cite
Published on Jun 1, 2016in Journal of Business Research 4.03
Luciano Ciravegna13
Estimated H-index: 13
('KCL': King's College London),
Luis López7
Estimated H-index: 7
(INCAE Business School),
Sumit K. Kundu23
Estimated H-index: 23
(College of Business Administration)
17 Citations Source Cite
Published on Jun 1, 2016in Journal of Business Research 4.03
Alvaro Cuervo-Cazurra32
Estimated H-index: 32
(NU: Northeastern University)
This study reviews the literature on multilatinas, Latin American multinationals, and provides suggestions for using these firms as a laboratory for extending exiting theories and models of the multinational. Analyses of their behavior tend to discuss their upgrading of capabilities and their patterns of internationalization. An additional opportunity exists to contribute to the literature by analyzing how some of the unique characteristics of Latin American countries affect the internationaliza...
33 Citations Source Cite
Published on Apr 1, 2016in Journal of World Business 5.79
Mario Kafouros21
Estimated H-index: 21
(University of Leeds),
Murod Aliyev2
Estimated H-index: 2
(University of Leeds)
Although transition economies experience significant institutional transformations that vary in their pace and magnitude, our understanding of how such changes influence firm performance is rather limited. We examine how variations in institutional reforms and international openness in 16 transition economies in Central and Eastern Europe (CEE) influence firm profitability. We enhance the understanding of this subject by showing that such institutional changes have different effects on the compe...
20 Citations Source Cite
Maria Alejandra Gonzalez-Perez7
Estimated H-index: 7
(EAFIT University),
Eva Cristina Manotas2
Estimated H-index: 2
(National University of Colombia),
Luciano Ciravegna13
Estimated H-index: 13
(INCAE Business School)
Abstract The internationalization of firms from emerging markets has been studied mainly from the perspective of large firms. Smaller and younger international firms based in emerging markets suffer from underrepresentation in the literature. This study sheds light on the internationalization of emerging market SMEs, focusing on Colombian textile and apparel exporters. Using mixed research methods, it illustrates the role of firm age in influencing internationalization strategy. It examines 1165...
5 Citations Source Cite
Published on Oct 1, 2015in Strategic Management Journal 5.57
Michael Mayer13
Estimated H-index: 13
(University of Bath),
Christian Stadler14
Estimated H-index: 14
(Warw.: University of Warwick),
Julia Hautz11
Estimated H-index: 11
(University of Innsbruck)
We establish prior diversification experience as a key determinant of the relationship between growth of product and international diversification. Prior diversification experience allows firms to overcome short run constraints on simultaneous diversification growth imposed by the difficulty to transfer tacit knowledge, ambiguous competencies, and limited absorptive capacity. Studying U.S. and European firms we find a positive relationship between growth in product and international scope for fi...
26 Citations Source Cite
Published on Sep 1, 2015in Journal of International Management 2.83
Chang Hoon Oh21
Estimated H-index: 21
(SFU: Simon Fraser University),
Timo Sohl2
Estimated H-index: 2
(UPF: Pompeu Fabra University),
Alan M. Rugman56
Estimated H-index: 56
(University of Reading)
Despite the importance of geographic expansion in the services sector, few studies have analyzed the relationships between regional diversification, product diversification and performance for services firms. Here, we focus on experiential learning benefits and managerial complexity to investigate whether and how firms in the retail sector may benefit by expanding their activities within and across regional boundaries. Using panel data of 65 large European retailers from 19 countries for the per...
19 Citations Source Cite
Published on Jun 1, 2015in International Business Review 3.64
Jean-François Hennart41
Estimated H-index: 41
,
Hsia Hua Sheng7
Estimated H-index: 7
,
Gustavo Pimenta1
Estimated H-index: 1
The theory of entry mode choice has modeled that choice as solely determined by the foreign investor. Hennart's bundling model, on the other hand, argues that foreign entry into a host market involves the bundling of intangibles contributed by the foreign investor with local complementary inputs contributed by local actors, and that the chosen mode of entry will be the one that maximizes the joint gains of both parties. That chosen mode will depend on the relative efficiency of the various marke...
19 Citations Source Cite
Cited By3
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Published on Dec 1, 2018in International Business Review 3.64
Dirk Michael Boehe11
Estimated H-index: 11
(Massey University),
Alfredo Jiménez10
Estimated H-index: 10
(KEDGE Business School)
Abstract How does related or unrelated geographic diversification affect future related or unrelated product diversification of exporting firms, and vice-versa? This question addresses an unresolved debate, and it is important for firms in developing countries that seek to expand their product and geographical markets. Our study contributes to a current debate by highlighting the relevance of the temporal sequence and the relatedness of international diversification. Expanding the classic transa...
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Published on Dec 1, 2018in Journal of Business Research 4.03
Georgios Batsakis5
Estimated H-index: 5
(Brunel University London),
Geoffrey Wood27
Estimated H-index: 27
(University of Essex)
+ 1 AuthorsSatwinder Singh11
Estimated H-index: 11
(Brunel University London)
Extant research indicates that the performance effect of international diversification is debatable, and to a great extent is contingent upon a number of firm- and country-specific characteristics. We argue that a critical factor determining the behaviour of the above relationship is the event of acquisition, and more specifically the conditions under which the acquisition takes place. Drawing on resource dependence theory, this paper examines the relationship between international diversificati...
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Published on Sep 3, 2018
Purpose The purpose of this paper is to develop a systematic literature review on the subject of multilatinas during 2007-2017, through a review of 55 papers published in 35 journals. Design/methodology/approach A qualitative technique for conducting a systematic literature review was used. To systematize and make the literature review more accurate, it was divided in four stages: data collection, coding, analysis and interpretation of data. Several tables and figures were developed to provide a...
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