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Journal of International Business Studies

, Volume 38, Issue 4, pp 519–540 | Cite as

International venturing by emerging economy firms: the effects of firm capabilities, home country networks, and corporate entrepreneurship

  • Daphne W YiuEmail author
  • ChungMing Lau
  • Garry D Bruton
Article
Part of the following topical collections:
  1. Part Focused Issue – International Expansion of Emerging Market Businesses

Abstract

Past literature on foreign direct investment generally supports an economics perspective that there is a direct relationship between firm-specific ownership advantages and international expansion. However, in emerging economies, with their institutional environment context characterized by low resource munificence and continuous economic liberalization, a theoretical extension of the current perspective is needed. This paper introduces new parameters by focusing on specific ownership advantages and strategic actions that firms have to develop in response to the institutional characteristics of the emerging economies when they decide to pursue outward FDI. The focus here is on international venturing that requires a firm to engage in activities for new business creation in a foreign country rather than simply seek to distribute a product in another nation. It is shown empirically that the relationship between firm-specific ownership advantages and international venturing is moderated by the degree of home industry competition and export intensity. In addition, such a relationship is mediated by the intensity of corporate entrepreneurial transformation in the form of innovation, new business creation, and strategic renewal.

Keywords

firm capabilities international venturing networks corporate entrepreneurship China 

Notes

Acknowledgements

This study is supported by a research grant (CERG4310/01H) extended to the second author.

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© Academy of International Business 2007

Authors and Affiliations

  1. 1.Department of ManagementChinese University of Hong KongShatinHong Kong
  2. 2.The Neeley School of Business, Texas Christian UniversityFort WorthUSA

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