Internationalization motives, location advantages and performance: the case of Indian firms from knowledge-intensive industries
Cross Cultural & Strategic Management
ISSN: 2059-5794
Article publication date: 2 March 2022
Issue publication date: 18 July 2022
Abstract
Purpose
Recent empirical findings on the relationship between internationalization and firm performance (I–P) suggest a significant role of firm's context. Extending this line of argument, the authors study the effect of internationalization on firm's performance for emerging market firms from knowledge-intensive industries, taking into account the firm's motive of internationalization and host country’s location-based advantages.
Design/methodology/approach
The authors link host country-specific advantages (CSAs) with firm-specific advantages (FSAs) to identify three distinct settings of internationalization for emerging economy firms – (1) asset-exploitative internationalization in developing or least developed countries, (2) asset-exploitative internationalization in developed countries and (3) strategic asset-seeking internationalization. The authors test this study’s hypotheses on a sample of 415 Indian firms from knowledge-intensive industries.
Findings
The authors find that firm's performance upon internationalization is non-linear in each of the three different settings. The nature of the non-linear relationship depends upon location-based advantages of the host country and the motive of internationalization.
Originality/value
The motive of internationalization and the location-based advantages sought during internationalization are unique for emerging economy firms. Hence, the study extends understanding of the I–P linkage in an emerging economy context.
Keywords
Citation
Ahsan, F.M. and Sinha, A.K. (2022), "Internationalization motives, location advantages and performance: the case of Indian firms from knowledge-intensive industries", Cross Cultural & Strategic Management, Vol. 29 No. 3, pp. 516-551. https://doi.org/10.1108/CCSM-07-2021-0119
Publisher
:Emerald Publishing Limited
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