Speed of International Expansion: The Mediating Role of Network Resources Mobilisation.

Date01 Agosto 2022
AuthorBolivar, Luis Miguel

1 Introduction

Even though internationalisation is conceptualised as a dynamic process, its "time" factor has either been considered in an implicit way or it has barely been studied in an explicit way, in comparison with other factors such as location and entry mode decisions (Casillas and Moreno-Menendez 2014). Likewise, the literature that was previously centred on the time factor has, since the move towards international entrepreneurship, shifted its focus onto the analysis of "speed of entry", whose fundamental focus has been on SMEs and born-global firms. Consequently, Autio et al. (2000, p. 909) noted that 'research has not sufficiently distinguished between two closely related but distinct issues: first, the time lag between the founding of a firm and its initiation of international operations; and second, the speed of a firm's subsequent international growth'. Thus, the postentry speed of the internationalisation process is conceptualised as the relationship between the internationalisation process and time (Casillas and Acedo 2013; Jones and Coviello 2005). In the analysis of post-entry speed, it is more habitual to employ Multinational Enterprises (MNEs) as the unit of analysis (Casillas and Moreno-Menendez 2014; Jain et al. 2019; Mohr and Batsakis 2017), whereby a fundamental question remains regarding how to analyse the factors that determine the different speeds of internationalisation of a firm.

The reasons for the differing post-entry speeds of internationalisation among Multinational Enterprises remain highly debated, in view of the multiplicity of determinants (Cheng et al. 2020; Chetty et al. 2014). The central idea proposes that firms expand internationally to the extent that they learn and accumulate knowledge to understand market peculiarities and to overcome distances and/or the liability of foreignness/outsidership (Yamin and Kurt 2018). Nevertheless, a higher speed of international expansion is commonly associated with mixed performance outcomes: there is evidence that speed has a sigmoidal relationship with performance (Contractor et al. 2003; Garcia-Garcia et al. 2017); rapid internationalisation will have a positive impact on firm performance by increasing the scope of first-mover advantages and the speed with which they exploit and acquire valuable resources (Mohr and Batsakis 2017); and the international expansion process is subject to time-compression diseconomies (Jiang et al. 2014). Multinational Enterprises face continual pressure to achieve rapid growth and are expected to implement actions, such as increasing their international presence for market-related growth and business relocation, to raise efficiency levels (Tan et al. 2020). They are therefore often on the lookout for alternatives to expand their international business activities at the fastest speed whilst avoiding risks of diminishing performance. For this reason, the international-business-network theory argues that firms may overcome their expansion constraints by embedding into networks of relationships with insiders from target markets (Johanson and Vahlne 2009; Yamin and Kurt 2018). Accordingly, Vahlne and Johanson (2020) pointed to the importance of networks in international industrial markets to overcome such obstacles as the liability of foreignness.

However, there remain certain limitations in the study of the relationship between alliance networks and the speed of international expansion. On the one hand, from a theoretical perspective, ties with insider partners are often seen as the source of resources and learning, but recent evidence has shown that ties also involve resources mobilisation and not just access, which provides benefits for performance (Casanueva et al. 2014; Chou 2016). It also holds true that, while the structural properties of an alliance network signify the creation of value for the firm, in terms of access to resources, information and opportunities (Iurkov and Benito 2018), the firm's ability to capture such value is essential through mobilisation for experimentation in foreign markets and thus also for learning for further growth (Casillas and Moreno-Menendez 2014; Johanson 2003).

However, from a methodological perspective, MNE networks other than dyadic networks are often difficult to observe and measure. Hence, the underlying process is seldom studied at the MNE level using indicators of the structural properties of a network of interorganisational alliances, but instead research has remained limited to case studies and egocentric networks (Cuypers et al. 2020). For this reason, most of the internationalisation literature on networks has been limited to the study of Small and Medium-sized Enterprises (SMEs) (Musteen et al. 2010), International New Ventures (INVs), and Born-Globals (Bembom and Schwens 2018; Coviello 2006), whereby the pre-internationalisation period is considered more than the internationalisation growth process, that is post-entry speed (Casillas and Acedo 2013), which has resulted in a gap in the understanding of network effects on MNE expansion speeds operating in mature markets. Therefore, the remaining question is whether access to and mobilisation of resources through a network of interorganisational alliances constitute determining factors of increased international expansion speed at the MNE level. This knowledge carries major implications for international strategic management of the interorganisational relations of MNEs, because it contributes towards our understanding of the ways in which higher speeds of internationalisation are achieved, which, as certain studies have pointed out, is converted into more efficient business performance; and this has proved critical for the survival and indeed the success of the business (Jain et al. 2019; Mohr and Batsakis 2017). International business operators may especially consider that, if network centrality is not accompanied by an actual mobilisation of network resources, then the simple establishment of cooperative agreements may be insufficient to increase speed.

The objective of this study is, therefore, to understand how both the structural embeddedness of firms within a network of international alliances and the network resources mobilisation of firms impact the speed of international expansion at the MNE level. In particular, the direct relation between MNE alliance network position and internationalisation speed is analysed, as is the mediating role of network resources mobilisation on the decision of MNEs to expand into new international markets, to commit further resources to foreign countries, and to intensify their commercial activity (Casillas and Acedo 2013; Chetty et al. 2014). It is also analysed how the embeddedness of firms in a network of interorganisational relations and the prominence of their alliance portfolios provide access to partner resources and learning, which in turn influence the speed of MNE international expansion. Furthermore, at the same time, we study how such access is achieved through a mediating mechanism. Hence, the mediating role of network resources mobilisation is studied as a mechanism for experimentation and engagement that materialises through knowledge and resource utilisation to secure a faster pace of internationalisation.

A sample of 131 multinational airline-industry enterprises was used to achieve these objectives, through the application of Partial-Least-Squares Structural-Equation Modelling (PLS-SEM), to capture the multidimensionality of the constructs, together with a Necessary Condition Analysis (NCA) technique to identify the necessary antecedent variables in the research model. As a consequence, this work provides multiple contributions. First, it extends a recent theoretical claim from the interorganisational networks literature (Bolivar et al. 2021; Capaldo et al. 2015) by presenting access and mobilisation of network resources as constructs that have separate, yet complementary roles on firm internationalisation, and in particular in the post-entry speed of internationalisation. The role of mobilisation is clarified accordingly as the theoretical mechanism through which the alliance-network embeddedness of an MNE generates international expansion at a greater speed. Second, the uniqueness of the secondary data, along with the PLS-SEM technique used in this study, contribute towards an analysis of the multidimensionality of interrelated constructs that might otherwise remain unexplored in an integrated fashion (Casillas and Acedo 2013; Chetty et al. 2014). Examples are provided by the structural properties of the position of a firm in the entire network of alliances and the formative construct of internationalisation speed, which have hitherto not been empirically amalgamated. It is therefore hypothesised that a more prominent position in an alliance network is likely to provide access to network resources, which, in turn, increase internationalisation speed, a construct comprising the foreign commercial intensities of a firm, its foreign resource commitment, and the breadth of its international markets. Third, since post-entry rapid internationalisation of MNEs is analysed in contrast to early internationalisation of SMEs, light is shed on a common concern among practitioners (Zhao et al. 2021) in already internationalised organisations that has been overlooked in recent literature.

2 Theory and Hypotheses

2.1 Speed of International Expansion

Internationalisation speed has been defined as the rate at which firms adopt internationalisation behaviours (Chetty et al. 2014). There are different ways in which the speed of international expansion may be observed, since it has been conceptualised as a formative construct composed of at least three dimensions based on how firms change or expand their international presence. These result from the following aspects: (1) commitment of resources abroad; (2) international commercial intensity; and...

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