Navigating the internationalization process: Strategic resources for early internationalizing firms

Abstract

Despite an increasing number of studies identifying factors that influence the internationalization process for early internationalizing firms (EIFs), it remains unclear which of these numerous factors could play a strategic role and, more specifically, when. This paper develops a new conceptual framework anchored in the resource-based view to identify strategic resources that can explain EIFs’ internationalization process accurately over time. Building on a systematic literature review based on 102 papers covering a period of 29 years, we methodically present a phase-by-phase observation of EIFs’ internationalization process to identify the strategic relevance of different influential resources. The results highlight the importance of the shift from individual to organizational resources, which occurs at a critical phase of transition from the entry to the post-entry phase. Studying the evolution of strategic resources along four phases allows us to determine that the progress of EIFs through the phases of their internationalization process is closely linked to their resources’ development process. This study suggests some promising research avenues, at theoretical and methodological levels, and results in a series of concrete recommendations intended for entrepreneurs and/or managers of EIFs.

R&D alliances and SMEs post‐entry internationalization speed: The impact of alliance management capability and co‐innovation ambidexterity

“…Finally, our study makes a significant theoretical contribution to the internationalization literature by focusing on the intermediate stage and its associated complexities when firms engage in strategic alliances (Hashai & Zahra, 2022; Prashantham & Young, 2011). Our conceptual logic and empirical evidence complement the understanding of the ambidexterity construct in the alliance setting by focusing on “co‐innovation ambidexterity” (Ardito et al, 2019), as well as of the post‐entry phase of internationalization where the firm has managed its transition and needs to stabilize its presence in the given foreign market it has entered (Breuillot et al, 2022). More specifically, while the extant literature offers a detailed account of the factors that can be used to enact a dual exploitation–exploration strategy (Lin et al, 2013; Martin et al, 2017), its insights have hitherto remained limited to internal innovation ambidexterity.…”

“…Finally, most of the existing studies have focused on the “pre‐entry” (i.e., by examining market conditions, exploring the targeted countries' institutions, and identifying the firm‐level factors that all determine a firm's propensity to internationalize) and “late” stages (i.e., by investigating the effect of a firm's long‐term internationalization strategy and other institutional contingencies on its performance in a given market) of internationalization, while underestimating the complexity of what happens to firms during the intermediate ones (Hashai & Zahra, 2022; Prashantham & Young, 2011). Therefore, by focusing on the post‐entry phase, which begins when the firm has managed its transition and needs to stabilize its presence in the given foreign market it has entered (Breuillot et al, 2022), our study provides a more fine‐grained view of the ways in which different sets of capabilities can collectively contribute to the international growth of SMEs.…”

A Review of International Mode of Entry Strategies for SMEs in East Java

“…The decision to enter a foreign market must be based on weighing the risks and opportunities of this approach. However, there is evidence that it also depends on resource availability [4,5], control needs [6], marketing skills [7], innovation [8], and networks [9]. Internationalization not only brings opportunities but foreign risks and responsibilities must also be addressed, which can lead to increased costs of doing business abroad.…”

Mode of Entry Strategy on SMEs Internationalization in East Java: A Review of Literature

“…The decision to enter a foreign market should be based on: balancing the risks and benefits of this action. However, evidence suggests that it is also determined by the availability of resources [4,5], the need for control [6], marketing skills [7], innovation [8] and networking [9]. Internationalization not only triggers opportunities but must also address foreign risks and obligations, which refer to the increasing costs of business operations in unfamiliar domains.…”