Professional Documents
Culture Documents
http://dx.doi.org/10.1108/IJoEM-12-2014-0207
Downloaded on: 14 January 2017, At: 21:41 (PT)
References: this document contains references to 78 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 2 times since 2017*
Access to this document was granted through an Emerald subscription provided by emerald-
srm:173272 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald
for Authors service information about how to choose which publication to write for and submission
guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as
well as providing an extensive range of online products and additional customer resources and
services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the
Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for
digital archive preservation.
IJOEM
12,1 Internationalization
and performance of
Indian born globals
108 Moderating role of presence of foreign equity
Received 14 December 2014
Revised 6 February 2016
Manish B. Ganvir and Neeraj Dwivedi
Accepted 17 March 2016 Department of Strategic Management, Indian Institute of Management,
Lucknow, India
Downloaded by University of Newcastle At 21:41 14 January 2017 (PT)
Abstract
Purpose The purpose of this paper is threefold: first, to study internationalization-performance
relationship of Indian born global (IBG) firms from multi-theoretical lens and establish the nature of this
relationship; second, to highlight the role of foreign equity in moderating this relationship; and third, to
establish the relevance of export intensity (EI) in determining these firms financial performance.
Design/methodology/approach In total, 411 IBG firms were identified based on born global (BG)
definition and post-entry internationalization age requirement of this study. A balanced panel comprising of
three years from 2010 to 2012 was analyzed using pooled panel and moderated multiple regression techniques.
Findings The authors empirically prove that though EI and financial performance are positively related at
overall level, this relationship is curvilinear in nature. In presence of foreign equity this positive curvilinear
relationship is moderated to inverted-U shape.
Research limitations/implications The data sample is restricted to 411 private limited IBGs between
the years 2009 and 2012. Implications of the findings are for policy makers and managers to sharpen their
strategic foresight for exporting firms in its post-entry period. Also, investors can take level of
internationalization into cognizance when investing in BG firms.
Practical implications The authors believe the results have practical implications for numerous parties,
such as shareholders, institutional investors, scholars, policymakers and managers. It emboldens modern day
managers to make further foray into internationalization due to its positive benefits on both productivity as
well as profitability. Also, firms that look for foreign equity participation have to balance their strategies for
greater scale and scope into international markets.
Originality/value This is the first study that brings out the vital relationship aspect of EI with financial
performance of IBG firms in their post-entry internationalization period, adding to international business
literature in area of BG firms in their post-entry internationalization period.
Keywords Emerging market multinationals, Multiple regression analysis, Business performance,
Born globals, Foreign equity, Post-entry internationalization
Paper type Research paper
Introduction
Internationalization as a subject has fascinated researchers over the years and still
continues to do so. Firms that internationalize early in their life-stage caught the attention of
researchers in the early 1990s. Various nomenclatures have been used by researchers to
differentiate such firms from the other gradual or slow internationalizing firms. Some of the
most common nomenclatures being international new ventures (Oviatt and McDougall,
1994); instant internationals (Preece et al., 1998); global start-ups (Oviatt and McDougall,
1994) and born globals (Gabrielsson et al., 2008; Yaprak and Karademir, 2010).
These fast internationalizing firms treat the world as their marketplace right from their
inception and see the domestic market only as support for their international business
International Journal of Emerging
Markets
(Andersson, 2011). Increasing prevalence of such firms and their important role in
Vol. 12 No. 1, 2017
pp. 108-124
Emerald Publishing Limited An earlier version of this paper was accepted at 2014 Academy of International Business-SE
1746-8809
DOI 10.1108/IJoEM-12-2014-0207 Conference in Miami, Florida, USA.
international competition indicates a need for greater understanding of these firms Moderating
(Oviatt and McDougall, 1994). In line with contemporary literature on this topic, we refer to role of
early internationalizing firms as born global (BG) firms for this paper. presence of
Liberalization and reduced trade barriers have enabled firms to enter international
markets earlier in their life-stage (Khanna and Palepu, 2006). As a result, there is an foreign equity
increased influx of such firms especially from emerging economies, making it pertinent to
investigate the factors determining performance of such firms (Child and Rodrigues, 2005). 109
Literature on BG firms is still evolving, and has primarily remained focused on studying the
pre or initial entry stage of these firms. Gabrielsson et al. (2008) argue that even two decades
after the seminal work of Oviatt and McDougall (1994), we do not know enough about what
happens to BG firms after their initial entry phase (Zahra, 2005).
Research gap
This paper is in response to three key gaps identified in the current international business
Downloaded by University of Newcastle At 21:41 14 January 2017 (PT)
Firm-level or internal factors have been found to have more explanatory power as
antecedents of financial performance as compared to external factors (Hawawini et al., 2003).
This has been further substantiated in more recent research linking firm-level factors and
firms resources in explaining internationalization and financial performance (Galbreath and
Galvin, 2008; Efrat and Shoham, 2012). This leads us to focus our attention on firm-specific
internal factors or antecedents in explaining the financial success or performance of BG
firms from developing economies.
The primary focus of most research on BG firms has been on pre-launch and entry stages
of their life. There is relatively very less attention on understanding the post-entry dynamics
of internationalization of such firms (Gabrielsson et al., 2008; Morgan-Thomas and Jones,
2009). Argument by Bruneel et al. (2010) further highlights the crucial linkage of experiential
learning, congenital knowledge and vicarious learning on the firms propensity to further
internationalization in its post-entry internationalization stage. However, there is
inconsistency in the literature as to what constitutes the post-entry internationalization
stage. For example, while Vivarelli and Audretsch (1998), in their study of Italian BG firms
considered a three-year period, Morgan-Thomas and Jones (2009) in their study of British
international new ventures (INVs) used a period of more than ten years. Further, in a study
of Malaysian firms by Chelliah et al. (2010), BG firms more than six years old were
considered to be in their post-entry internationalization stage.
Level of internationalization
The main purpose of BG firms is to garner sales from foreign markets, and thus level of
internationalization becomes a crucial factor in their performance and survival (Golovko
and Valentini, 2011). For the last three decades, international business literature has focused
on how internationalization-performance are related. However, there is no consensus on the
nature of this relationship. In past studies on BG firms, Export Intensity (EI), measured as
the ratio of foreign sales to total sales, is widely used as a measure of the level of
internationalization (Majocchi et al., 2005). However, as depicted in Table I, researchers have
Relationship Researchers
Positive linear Grant (1987), Grant et al. (1988), Tallman and Li (1996)
Table I. Negative linear Geringer et al. (2000), Denis et al. (2002)
Type of relationship U-shaped Lu and Beamish (2001), Ruigrok and Wagner (2003), Contractor et al. (2007)
between EI and Inverted U-shaped Geringer et al. (1989), Hitt et al. (1994), Hsu and Boggs (2003)
financial performance S-shaped Contractor et al. (2003), Lu and Beamish (2004), Johnson et al. (2009)
found five types of relationships between level of internationalization and financial Moderating
performance depending on the country and level of internationalization of the firms studied. role of
This highlights the complexity and context dependency of this relationship. presence of
The resource-based view (RBV) of the firm (Wernerfelt, 1984; Barney, 1991), which
postulates that a firm is able to gain competitive advantage in the marketplace through foreign equity
possession of certain competitively valuable resource and capabilities, has often been used
to explain the relationship between the level of internationalization and performance of 111
firms (Dhanaraj and Beamish, 2003; Peppard and Rylander, 2001).
For BG firms, exports are essential for survival and growth (Golovko and Valentini, 2011).
Exporting is known to develop a firms competitive advantage (Anderson and Gatignon, 1986)
and managerial skills (Kafouros et al., 2008). According to RBV, with increase in the scope of
exports, firms should be able to garner more resources and capabilities. Further, in the post-
entry internationalization stage, which is the focus of this paper, IBG firms are unlikely to face
major costs due to liability of newness and liability of foreignness (Zaheer et al., 2009).
Downloaded by University of Newcastle At 21:41 14 January 2017 (PT)
At this stage firms are also likely to benefit from knowledge acquired abroad (Contractor,
2007) and improved economy of scale (Lu and Beamish, 2001). More specifically IBG firms are
likely to face low language barrier while operating in export markets.
While there are benefits as described above, exporting also includes additional costs,
risks, uncertainties and higher costs of coordination and monitoring, especially in markets
separated by large distances coupled with the diversity (Hitt et al., 1994). We argue that
while every incremental international operation or market, would incur learning,
coordination, local adaptation and legitimacy acquisition costs, the benefits begin to
outweigh these incremental costs in post-entry internationalization stage. Hence we
postulate that IBG firms would depict a positive curvilinear relationship between level of
internationalization and performance at this stage. Using the three key measures of financial
performance used in the literature on BG firms, that is, profitability, productivity and
investor returns (Contractor, 2007; Tan and Mahoney, 2007; Lu and Beamish, 2006), we
postulate our hypotheses as follows:
H1. Level of internationalization will have a positive curvilinear relationship with the
profitability of IBG firms.
H2. Level of internationalization will have a positive curvilinear relationship with the
productivity of IBG firms.
H3. Level of internationalization will have a positive curvilinear relationship with
investor returns of IBG firms.
PFE
Literature suggests that foreign-owned firms from developing economies can bring-in firm-
specific advantages and can result in a superior firm performance (Dunning, 1993).
Developing economies such as India are preferred investment destinations for international
firms because of the advantages they offer such as access to potential markets, low cost
abundant supply of human capital and natural resources (Davis and Meyer, 2004; Frost,
2001). Based on network theory, it has been argued that foreign equity partner and BG firms
would exhibit much stronger network ties (Coviello and Munro, 1995). A foreign equity
partner can help the local BG firm to build new relationships and trust in foreign equity
partners network. This in turn allows the firm to have access to new skills and gain
credibility (Osarenkhoe, 2009). Zahra et al. (2000) argue that foreign equity partner provides
vital information and hands-on experience to top management team of BG firms, which can
have an impact on expansion and performance.
Foreign partners provide much needed networks (strengthening ties) with foreign
markets, which can be tapped by BG firms to coordinate networks of culturally
IJOEM and institutionally diverse foreign markets effectively, thereby increasing their
12,1 presence in those countries (Bartlett and Ghoshal, 1989; Tan and Mahoney, 2007).
This allows BG firms to improve on their level of internationalization and in turn
financial performance.
From the RBV of the firm described above, it also flows that the level of
internationalization influences firm profitability. According to Grant (1991), availability of
resource and capabilities is a key factor for the generation of competitive advantage of the
112 firms. Among resources, intangibles are the most sought after resources as they are difficult
to imitate and hence lead to sustained capabilities.
The presence of a foreign equity partner is also found to have reduced the perceived risks
faced by BG firms (McDougall et al., 1994). Local firms can gain access to intangible
resources such as foreign market knowledge, better access to foreign markets, advanced
technology inputs to develop creative products and in turn improve their market
performance (Wind and Mahajan, 1997). The above theory and supported literature
Downloaded by University of Newcastle At 21:41 14 January 2017 (PT)
Methodology
Data
Data for this paper were taken from Prowess database. This database covers a majority of
Downloaded by University of Newcastle At 21:41 14 January 2017 (PT)
public Indian companies and compiles financial data using audited annual reports provided
by the companies. This database is extensively used in large number of studies primarily
due to its relatively good quality and accuracy (e.g. Khanna and Rivkin, 2001).
Firms across the globe faced recessionary pressures in 2007-2009 due to a major
economic downturn affecting economies around the world. The effects of this recession were
visible in production, employment, real income and other indicators (Iqbal and Vitner, 2011).
We selected data for this study for the period 2010-2012 as we wanted to study firms that
have survived and recovered from this period.
As this study is focused on studying IBG firms who were into their post-entry
internationalization stage, we considered firms that had been in the market for at least six
years. Firms were classified as BG, when they made their first sales in foreign markets
within three years of their inception and derived at least 25 percent of their turnover outside
their home market within that period. Using the above detailed criterion, we identified 790
Indian firms satisfying the definition. This set was further refined by removing firms with
incomplete data. This finally gave us 411 firms with balanced data for 2010-2012.
Variables
Independent variable. Drawing on earlier research (Bijmolt and Zwart, 1994), we used EI as a
proxy for the level of internationalization. It is defined as the percentage of the firms sales
resulting from exports. We also use squared, cubic and prior years term of EI as
independent variables to explore the nature of the relationship.
Dependent variables. Three variables were used to measure financial performance.
Productivity was measured as return on assets (ROA). It gives insight into how efficiently the
business is employing the resources invested in fixed assets and working capital (Gomes and
Ramaswamy, 1999). Profitability was measured using return on capital employed (ROCE). It is a
valuable financial ratio for evaluating a companys efficiency and the quality of its management
(Andras and Srinivasan, 2003). Investor returns was measured as earnings per share (EPS),
generally considered to be one of the most important variable from the investors point of view:
ROA Profits after taxes interest=Total assets (1)
ROCE Operating profit=Capital employed (2)
where, Capital employed Net worth + Debt.
Regression models
The regression equations presented below are based on the six hypotheses stated earlier.
The control regression equation is on similar lines but not stated here:
ROCEit C b1 EIit b2 EIit EIit b3 EIit EIit EIit b4 DERit
ROCEit PFEit C b1 EIit b2 EIit EIit b3 EIit EIit EIit b4 DERit b5 AGEit
ROAit PFEit C b1 EIit b2 EIit EIit b3 EIit EIit EIit b4 DERit b5 AGEit
EPSit PFEit C b1 EIit b2 EIit EIit b3 EIit EIit EIit b4 DERit b5 AGEit
(2) Multicollinarity: mean centering of EI was done as per Aiken and West (1991) to rule
out the multi-collinearity issue in the data set.
(3) Tests for heteroskedasticity: the Breusch-Pagan/Cook-Weisberg tests were used to
find presence of heteroskedasticity. The test results ruled out the presence of
heteroskedasticity.
Results
Descriptive statistic and correlation analysis
A total of 411 IBG firms were selected and a total of 1,233 data points were analyzed.
Foreign equity was present in 72 percent of the firms in the data set. Pearsons correlation
matrix (Table II) shows significant correlations between ROCE and EI as well as EI3.
Whereas, ROA shows significant correlation with only EI3. There is no significant
correlation terms for EI2 for any of the financial measures studied. Industry dummies were
used for analysis, but are omitted from the tables.
Empirical results
Regression analysis for profitability (ROCE) is shown in Table III, productivity (ROA) in
Table IV and investor returns (EPS) in Table V.
Model 1 in Table III, shows the model with control variables (Size, Age, DER and
industry), this control model only explains approximately 6 percent variance (adjusted R2) of
the dependent variable profitability. Compared with Model 2 (regression Equation 4) we see
EI terms explaining a good 18 percent of variance in ROCE. value of EI3 ( 0.35,
Table III.
Export intensity R2 0.062 0.190 0.192 0.293
2
relationship with Adj R 0.062 0.180 0.182 0.281
profitability and Durbin-Watson 1.92 1.92 1.94 1.94
PFE moderating R2 0.128 0.130 0.230
impact (MMR) Notes: Significant at ***p < 0.01, **p < 0.05, *p < 0.10 levels (2 tailed), respectively
Model 8 Full EI
Model 5 Control Model 6 EI Model 7 EI + PFE Moderated
Efficiency ratio (ROA) t-value t-value t-value t-value
p o0.01) is significant. This shows a clear curvilinear (only cubic term) relationship of EI
with profitability (ROCE), supporting H1.
In Table IV, we study Model 5 (control model) for productivity (ROA). This control model
explains 3.7 percent of variance in ROA. Compared with Model 6 (regression Equation 5) we
see EI terms explaining 52.7 percent variance in ROA. value of EI3 ( 0.71, p o0.01) is
significant. This shows a clear curvilinear (only cubic term) relationship of EI with ROA,
thus supporting our H2.
In Table V, we look at Model 9, which is a control model for productivity (ROA). This
control model explains less 2.2 percent of variance in EPS. Compared with Model 10
(regression Equation 6) we see EI terms explaining 2.6 percent variance in ROA. value of
Model 12 Full EI
Moderating
Model 9 Control Model 10 EI Model 11 EI+PFE Moderated role of
Investor ratio (EPS) t-value t-value t-value t-value presence of
(Constant) 2.10 1.92 1.08 0.44 foreign equity
SIZE 0.15*** 5.11 0.14*** 4.70 0.16*** 5.33 0.14*** 4.42
AGE 0.00 0.08 0.00 0.10 0.03 0.91 0.03 1.03
DER 0.02 0.54 0.01 0.49 0.01 0.50 0.00 0.17 117
Export intensity 0.06 0.79 0.03 0.43 0.05 0.39
Export intensity2
0.01 0.15 0.00 0.11 0.30*** 3.38
Export intensity3 0.08*** 2.79 0.07*** 2.45 0.90*** 8.33
PFE 0.13*** 4.40 0.19*** 3.79
PFE Export intensity 0.04 0.31
PFE Export intensity2 0.28*** 2.92
PFE Export intensity3 0.84*** 7.99
F-value 3.51*** 3.18*** 4.23*** 6.89***
Downloaded by University of Newcastle At 21:41 14 January 2017 (PT)
Table V.
R2 0.031 0.038 0.053 0.102
2 Export intensity
Adj R 0.022 0.026 0.040 0.087 relationship with
Durbin-Watson 2.01 2.03 2.03 2.03 investors returns and
R2 0.007 0.022 0.071 PFE moderating
Notes: Significant at ***p < 0.01, **p < 0.05, *p < 0.10 levels (2 tailed), respectively impact (MMR)
EI3 ( 0.08, p o0.01) is significant. This shows a curvilinear (only cubic term) relationship
of EI with productivity (ROA), though the explanatory power does not improve
significantly. Hence H3 is partially supported.
Profitability (ROCE)
Starting with the relationship of EI on ROCE moderated by PFE, we start with Model 3 in
Table III, when we introduce the term PFE into the regression Equation 4, there is no change
in R2 value also the coefficient of PFE term is non-significant. We can conclude that the
PFE term on its own does not have any direct impact on explaining variance in ROCE.
Regression results for Equation 7 are depicted in Model 4. There is a significant
improvement in explanatory power of the model (adjusted R2 from 0.18 to 0.281). Model 4,
also shows that all three linear, squared and cubic terms of EI are significant. The sign for
EI is positive ( 0.31, p o0.01), EI2 is also positive ( 0.30, p o0.01), whereas the EI3 is
negative ( 1.20, p o0.01). This shows a clear non-linear (inverted U-shaped)
moderating effect of PFE on relationship of EI with profitability (ROCE), thus supporting
H4. Figure 2 depicts both the relationships, curvilinear type of EI with profitability and
non-linear (inverted U-shaped) with moderation by foreign equity.
Productivity (ROA)
For the relationship of EI on ROA moderated by PFE, we start with Model 7 in Table IV,
when we introduce the term PFE into the regression Equation 5, there is no change in R2
value and the coefficient of PFE term is not significant. So there is no direct relationship of
PFE with ROA.
IJOEM Regression results of Equation 8 are depicted in Model 8. There is a significant
12,1 improvement in the explanatory power of the model (adjusted R2 from 0.527 to 0.569).
Model 8, also shows that all three terms, linear, squared and cubic term of EI are
significant. With EI having positive sign ( 0.24, p o 0.01), the sign for EI2 is positive
( 0.29, p o 0.01), whereas the EI3 is negative ( 0.77, p o 0.01). This shows a clear
inverted U (+ve linear, +ve squared and ve cubic term) moderating effect of PFE on
118 relationship of EI with productivity (ROA). Hence H5 is supported. Figure 3 depicts both
the relationships, curvilinear type of EI with financial performance and non-linear
(inverted U-shaped) with moderation by foreign equity.
with a negative sign ( 0.13, p o0.01). So there is some evidence of direct relationship of
PFE with EPS.
Regression results for Equation 9 are depicted in Model 12. There is a significant
improvement in explanatory power of the model (adjusted R2 from 2.6 to 8.7 percent).
In Model 12, also show that two terms, squared and cubic term of EI are significant. With
EI2 is positive ( 0.28, p o0.01), whereas the EI3 is negative ( 0.84, p o0.01).
This shows a clear negative curvilinear (+ve squared and ve cubic term) moderating effect
of PFE on relationship of EI with investor returns (EPS). Hence H6 is not supported.
However, for EPS we find empirical evidence of a negative curvilinear relationship. Figure 4
depicts this relationship.
In sum, the moderation effect of foreign equity (PFE) is an inverted U-shaped impact on
the relationship of EI on financial performance measures (productivity and profitability) and
a negative curvilinear relationship for investor returns.
Profitability vs Internationalization
ROCE = 0.35EI3
ROCE
Exports Intensity
Productivity vs Internationalization
ROA = 0.71EI3
ROA
Exports Intensity
Figure 3.
Productivity vs
internationalization ROAPFE = 0.24EIPFE + 0.29EIPFE20.77EIPFE3
Conclusions Moderating
This study makes three major contributions. First, we argue that firms level of role of
internationalization (measured as EI) has as a positive relationship with their financial presence of
performance. This relationship is curvilinear in nature. Second, by integrating network theory,
RBV and institutional theory, this study enhances our understanding of the moderating foreign equity
impact of foreign equity on the relationship of level of internationalization and performance,
especially for developing economy BG firms. And third, we expand our understanding 119
of an under researched phenomenon, namely, the effect of firms internationalization on
financial performance outcomes in the post-entry internationalization stage of BG firms from
emerging economies.
Our findings support our argument of the relationship of EI with financial performance.
EI explained 18.0 percent variance in ROCE; 52.7 percent variance is ROA and 2.6 percent in
EPS. All these relationships are positive and curvilinear in nature. Our findings confirm that
EI has a strong effect on both firm profitability and productivity, and also has a positive,
Downloaded by University of Newcastle At 21:41 14 January 2017 (PT)
albeit marginal, impact on EPS. Based on the empirical results it is argued that the more
exports oriented the firm is, the greater its profitability and productivity. The empirical
evidence of type of relationship tries to resolve the ambiguity surrounding the nature of
relationship that level of internationalization (EI) exhibits with financial performance.
Earlier study of Lu and Beamish (2006), found a negative impact of EI on firm
performance for of Japanese firms, however our study shows that IBG firms have a positive
curvilinear relationship. This difference is possible due to the fact that IBG firms are small
to medium size (median size is less than 1 billion INR) and have a greater scale of growth
(Park and Jang, 2010) and higher scope of internationalization.
Further, we empirically prove the positive moderating impact of PFE on the relationship
that EI has with productivity, profitability and investor returns. PFE moderates the
relationship of productivity and profitability with EI, from a positive curvilinear to an
inverted U-shaped one. Moreover, for investor returns, the relationship with EI is made more
negative in PFE among IBG firms.
We believe our results have far reaching implications for research especially for BG firms
from developing economies, those that face a peculiar criteria of exporting from large
domestic market and attract high amount of foreign investments. This paper attempts to
provide empirical evidence to fill three gaps in international business literature on BG firms.
Though results of PFE impact were not in line with prior researches, it throws additional
light on the importance of increasing our understanding of INV theory and institutional
theory for emerging market BG firms. Our findings also add new dimensions to existing
international business theory, by improving our understanding about the post-entry
internationalization stage of BG from emerging markets.
We believe our results have practical implications for numerous parties, such as
shareholders, institutional investors, scholars, policymakers and managers. It emboldens
Investors Returns vs
Internationalization
EPS = 0.07EI3
EPS
EPSPFE = 0.28EIPFE20.84EIPFE 3
Figure 4.
Investors returns vs
Exports Intensity
internationalization
IJOEM modern day managers to make further foray into internationalization due to its positive
12,1 benefits on both productivity as well as profitability. Investors and other stakeholders can
take level of internationalization as well as PFE into cognizance while making investment
decisions regarding BG firms. Also, firms that look for foreign equity participation have to
balance their strategies for greater scale and scope into international markets.
research can include external environmental variables to add more insights and enrich
international business literature. Our study analyzes IBG firms, a larger study can
incorporate all internationalizing firms (including slow internationalizing firms) as well, to
get an overview of the relationship between level of internationalization and performance
for exporting firms.
References
Aiken, S. and West, S.G. (1991), Multiple Regression: Testing and Interpreting Interactions,
Sage, Arizona.
Anderson, E. and Gatignon, H. (1986), Modes of foreign entry: a transaction cost analysis and
propositions, Journal of International Business Studies, Vol. 17 No. 3, pp. 1-26.
Andersson, S. (2011), Decision-making in born globals-effectuation or causation?, AIB-UKI 2011
Academy of International Business United Kingdom & Ireland Chapter, Edinburgh, April 14-16.
Andras, T.L. and Srinivasan, S.S. (2003), Advertising intensity and R&D intensity: differences across
industries and their impact on firms performance, International Journal of Business and
Economics, Vol. 2 No. 2, pp. 81-90.
Baltagi, B. (2008), Econometric Analysis of Panel Data, John Wiley and Sons.
Barney, J. (1991), Firm resources and sustained competitive advantage, Journal of Management,
Vol. 17, pp. 99-120.
Bartlett, C.A. and Ghoshal, S. (1989), Managing Across Borders. The Transnational Solution, Harvard
Business School Press, Boston, MA.
Bijmolt, T.H.A. and Zwart, P.S. (1994), The impact of internal factors on the export success of Dutch
small and medium-sized firms, Journal of Small Business Management, Vol. 32 No. 2, pp. 69-83.
Bobko, P. and Russell, C.J. (1994), On theory, statistics, and the search for interactions in the
organizational sciences, Journal of Management, Vol. 20 No. 1, pp. 193-200.
Bruneel, J., Yli-Renko, H. and Clarysse, B. (2010), Learning from experience and learning from others:
how congenital and inter organizational learning substitute for experiential learning in young
firm internationalization, Strategic Entrepreneurship Journal, Vol. 4 No. 2, pp. 164-182.
Chandler, G.N. and Hanks, S.H. (1998), An examination of the substitutability of founders human and
financial capital in emerging business ventures, Journal of Business Venturing, Vol. 13 No. 5,
pp. 353-369.
Chelliah, S., Sulaiman, M. and Yusoff, Y.M. (2010), Internationalization and performance: small and
medium enterprises (SMEs) in Malaysia, International Journal of Business and Management,
Vol. 5 No. 6, pp. 27-37.
Chetty, S. and Campbell-Hunt, C. (2004), A strategic approach to internationalization: a traditional Moderating
versus a born-global approach, Journal of International Marketing, Vol. 12 No. 1, pp. 57-81. role of
Child, J. and Rodrigues, S.B. (2005), The internationalization of Chinese firms: a case for theoretical presence of
extension?, Management and Organization Review, Vol. 1 No. 3, pp. 381-410.
foreign equity
Contractor, F.J. (2007), Is international business good for companies? The evolutionary or multi-stage
theory of internationalization vs the transaction cost perspective, Management International
Review, Vol. 47 No. 3, pp. 453-475. 121
Contractor, F.J., Kundu, S.K. and Hsu, C.C. (2003), A three-stage theory of international expansion: the
link between multinationality and performance in the service sector, Journal of International
Business Studies, Vol. 34 No. 1, pp. 5-18.
Contractor, F.J., Kumar, V. and Kundu, S.K. (2007), Nature of the relationship between international
expansion and performance: the case of emerging market firms, Journal of World Business,
Vol. 42 No. 4, pp. 401-417.
Coviello, N.E. and Munro, H. (1995), Growing the entrepreneurial firm: networking for international
Downloaded by University of Newcastle At 21:41 14 January 2017 (PT)
in pharma (OTC), media (print) and food (flavors) industry. His current areas of interest are
internationalization, intellectual capital, born globals, and entrepreneurship. Manish B. Ganvir is the
corresponding author and can be contacted at: fpm10008@iiml.ac.in
Neeraj Dwivedi is a Faculty at the Indian Institute of Management (IIM) Lucknow in the Strategic
Management area. He is a Fellow of the Indian Institute of Management Lucknow and Master in
Engineering from the Indian Institute of Technology Kharagpur. Apart from having about 14 years
of experience in management research and teaching, he has also spent about seven years in the
corporate sector, mainly in the food processing industry, in various capacities. His current areas of
interest are M&A, international business and corporate governance.
For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com