Asian Business & Management

, Volume 16, Issue 3, pp 158–186 | Cite as

Innovation strategy and export intensity of Chinese SMEs: the moderating role of the home-country business environment

Research Article

Abstract

Drawing upon a contingency approach, the present study investigates which types of technological innovations are effective in increasing Chinese exporting SMEs’ degree of internationalization (measured as export intensity) within the Chinese institutional context. Our research highlights that the impact of their technological innovation inputs (external and internal R&D intensity) and outputs (product and process innovations) on their degree of export internationalization is contingent upon several home-specific business-environmental constraints. Thus, the better Chinese exporting SMEs align their technological-innovation strategy with the local institutional environment, the more they can increase their export intensity.

Keywords

Technological innovations Export internationalization Export intensity Transition economies Institutional environment Chinese exporting SMEs 

References

  1. Acs, Z. J., and Terjesen, S. 2006. Born local: Two views of internationalization. Working paper. Atlanta, GA: Academy of Management.Google Scholar
  2. Anokhin, S., and W.S. Schulze. 2009. Entrepreneurship, innovation and corruption. Journal of Business Venturing 24 (5): 465–476.CrossRefGoogle Scholar
  3. Aragón-Correa, J.A., and S. Sharma. 2003. A contingent resource-based view of proactive corporate environmental strategy. Academy of Management Review 28 (1): 71–88.Google Scholar
  4. Aulakh, P.S., and M. Kotabe. 1997. Antecedents and performance implications of channel integration in foreign markets. Journal of International Business Studies 28 (1): 145–175.CrossRefGoogle Scholar
  5. Azar, G., and F. Ciabuschi. 2017. Organizational innovation, technological innovation, and export performance: The effects of innovation radicalness and extensiveness. International Business Review 26 (2): 324–336.CrossRefGoogle Scholar
  6. Baker, T., E. Gedajlovic, and M. Lubatkin. 2005. A framework for comparing entrepreneurship processes across nations. Journal of International Business Studies 36: 492–504.CrossRefGoogle Scholar
  7. Barney, J.B. 1991. Firm resources and sustained competitive advantage. Journal of Management 17 (1): 99–120.CrossRefGoogle Scholar
  8. Barney, J.B. 1996. The resource-based theory of the firm. Organization Science 7 (5): 469–479.CrossRefGoogle Scholar
  9. Berry, A., E. Rodriguez, and H. Sandee. 2002. Firm and group dynamics in the small and medium enterprise sector in Indonesia. Small Business Economics 18 (1–3): 141–161.CrossRefGoogle Scholar
  10. Bishop, K. 2001. The first phase of the internationalisation process: export determinants in firms of the Former Soviet Union. http://discovery.ucl.ac.uk/17580/. Accessed 16 May 2017.
  11. Bruton, G.D., D. Ahlstrom, and H.L. Li. 2010. Institutional theory and entrepreneurship: Where are we now and where do we need to move in the future? Entrepreneurship Theory and Practice 34 (3): 421–440.CrossRefGoogle Scholar
  12. Bruton, G., D. Ahlstrom, and K.S. Yeh. 2004. Understanding venture capital in East Asia: The impact of institutions on the industry today and tomorrow. Journal of World Business 39 (1): 72–88.CrossRefGoogle Scholar
  13. Bruton, G.D., and D. Ahlstrom. 2003. An institutional view of China’s venture capital industry: Explaining the differences between China and the West. Journal of Business Venturing 18 (2): 233–259.CrossRefGoogle Scholar
  14. Cassiman, B., and E. Golovko. 2011. Innovation and internationalization through exports. Journal of International Business Studies 42 (1): 56–75.CrossRefGoogle Scholar
  15. Cassiman, B., and R. Veugelers. 2006. In search of complementarity in innovation strategy: Internal R&D and external knowledge acquisition. Management Science 52 (1): 68–82.CrossRefGoogle Scholar
  16. Cavusgil, S.T. 1980. On the internationalization process of firms. European Research 8 (6): 273–281.Google Scholar
  17. Chang, J. 2011. The early and rapid internationalization of Asian emerging MNEs. Competitiveness Review 21 (2): 171–187.CrossRefGoogle Scholar
  18. Chen, M.J. 2001. Inside Chinese business: A guide for managers worldwide. Boston: Harvard Business School Press.Google Scholar
  19. Chen, M.J. 2006. Development of Chinese small and medium-sized enterprises. Journal of Small Business and Enterprise Development 13 (2): 140–147.CrossRefGoogle Scholar
  20. Child, J., and S.B. Rodrigues. 2005. The internationalization of Chinese firms: A case for theoretical extension? Management and Organization Review 1 (3): 381–410.CrossRefGoogle Scholar
  21. Cho, H.J., and V. Pucik. 2005. Relationship between innovativeness, quality, growth, profitability and market value. Strategic Management Journal 26 (6): 555–575.CrossRefGoogle Scholar
  22. D’Angelo, A. 2012. Innovation and export performance: a study of Italian high-tech SMEs. Journal of Management and Governance 16 (3): 393–423.CrossRefGoogle Scholar
  23. Deng, P. 2012. The internationalization of Chinese firms: A critical review and future research. International Journal of Management Reviews 14 (4): 408–427.CrossRefGoogle Scholar
  24. Denicolai, S., B. Hagen, and A. Pisoni. 2015. Be international or be innovative? Be both? The role of the entrepreneurial profile. Journal of International Entrepreneurship 13 (4): 390–417.CrossRefGoogle Scholar
  25. Díaz, N.L., I. Aguiar, and P. De Saá. 2008. The effect of technological knowledge assets on performance: The innovative choice in Spanish firms. Research Policy 37 (9): 1515–1529.CrossRefGoogle Scholar
  26. Du, J., and S. Girma. 2007. Finance and firm export in China. Kyklos 60 (1): 37–54.CrossRefGoogle Scholar
  27. Efthyvoulou, G., and P. Vahter. 2016. Financial constraints, innovation perfomance and sectoral disaggregation. The Manchester School 84 (2): 125–158.CrossRefGoogle Scholar
  28. Fernández, A., and J. Alegre. 2015. Entrepreneurial orientation and export intensity: Examining the interplay of organizational learning and innovation. International Business Review 24: 148–156.CrossRefGoogle Scholar
  29. Fernández, Z., and M.J. Nieto. 2006. Impact of ownership on the international involvement of SMEs. Journal of International Business Studies 37 (3): 340–351.CrossRefGoogle Scholar
  30. Filatotchev, I., X. Liu, T. Buck, and M. Wright. 2009. The export orientation and export performance of high-technology SMEs in emerging markets: The effects of knowledge transfer by returnee entrepreneurs. Journal of International Business Studies 40 (6): 1005–1021.CrossRefGoogle Scholar
  31. Filipescu, D.A., S. Prashantham, A. Rialp, and J. Rialp. 2013. Technological innovation and exports: Unpacking their reciprocal causality. Journal of International Marketing 21 (1): 23–38.CrossRefGoogle Scholar
  32. Filipescu, D., A. Rialp, and J. Rialp. 2009. Internationalization and technological innovation: Empirical evidence on their mutual relationship. Advances in International Marketing 20: 125–154.Google Scholar
  33. Ganotakis, P., and J.H. Love. 2011. R&D, product innovation and exporting: Evidence from UK new technology based firms. Oxford Economic Papers 63 (2): 279–306.CrossRefGoogle Scholar
  34. Golovko, E., and G. Valentini. 2011. Exploring the complementarity between innovation and export for SMEs’ growth. Journal of International Business Studies 42 (3): 362–380.CrossRefGoogle Scholar
  35. Gorodnichenko, Y., J. Svejnar, and K. Terrell. 2010. Globalization and innovation in emerging markets. American Economic Journal: Macroeconomics 2 (2): 194–226.Google Scholar
  36. Gourlay, A., J. Seaton, and J. Suppakitjarak. 2005. The determinants of export behaviour in UK service firms. Service Industries Journal 25 (7): 879–889.CrossRefGoogle Scholar
  37. Grant, R.M. 1996a. Prospering in dynamically-competitive environments: Organizational capability as knowledge integration. Organization Science 7 (4): 375–387.CrossRefGoogle Scholar
  38. Grant, R.M. 1996b. Toward a knowledge-based theory of the firm. Strategic Management Journal 17 (2): 109–122.CrossRefGoogle Scholar
  39. Guan, J., and N. Ma. 2003. Innovative capability and export performance of Chinese firms. Technovation 23 (9): 737–747.CrossRefGoogle Scholar
  40. Harris, R.I.D., and Q.C. Li. 2009. Exporting, R&D and absorptive capacity in UK establishments. Oxford Economic Papers 61: 74–103.CrossRefGoogle Scholar
  41. He, X., K.D. Brouthers, and I. Filatotchev. 2013. Resource-based and institutional perspectives on export channel selection and export performance. Journal of Management 39 (1): 27–47.CrossRefGoogle Scholar
  42. Leone, M.I., and T. Reichstein. 2012. Licensing fosters rapid innovation! The effect of the grant-back-clause and technological unfamiliarity. Strategic Management Journal 33 (8): 965–985.CrossRefGoogle Scholar
  43. López, J., and R. García. 2005. Technology and export behavior: A Resource-Based View approach. International Business Review 14 (5): 539–557.CrossRefGoogle Scholar
  44. López, J., and J. López. 2005. Technological Resources and Export Intensity: A Microview. International Business and Economics Research Journal 4 (11): 55–63.Google Scholar
  45. Love, J.H., and M.A. Mansury. 2009. Exporting and productivity in business services: Evidence from the United States. International Business Review 18 (6): 630–642.CrossRefGoogle Scholar
  46. Lu, J., B. Xu, and X. Liu. 2009. The effects of corporate governance and institutional environments on export behaviour in emerging economies. Management International Review 49 (4): 455–478.CrossRefGoogle Scholar
  47. Majocchi, A., E. Bacchiocchi, and U. Mayrhofer. 2005. Firm size, business experience and export intensity in SMEs: A longitudinal approach to complex relationships. International Business Review 14 (6): 719–738.CrossRefGoogle Scholar
  48. North, D.C. 1990. A transaction-cost theory of politics. Journal of Theoretical Politics 2 (4): 355–367.CrossRefGoogle Scholar
  49. Oviatt, B.M., and P.P. McDougall. 1999. A framework for understanding accelerated international entrepreneurship. Research in Global Strategic Management 7 (1): 23–40.CrossRefGoogle Scholar
  50. Oviatt, B.M., and P.P. McDougall. 2005. Defining international entrepreneurship and modeling the speed of internationalization. Entrepreneurship Theory and Practice 29 (5): 537–554.CrossRefGoogle Scholar
  51. Pearson, M.M. 2005. The business of governing business in China: Institutions and norms of the emerging regulatory state. World Politics 57 (02): 296–322.CrossRefGoogle Scholar
  52. Peng, M.W. 1997. Firm growth in transitional economies: Three longitudinal cases from China, 1989-96. Organization Studies 18 (3): 385–413.CrossRefGoogle Scholar
  53. Peng, M.W. 2003. Institutional transitions and strategic choices. Academy of Management Review 28 (2): 275–296.Google Scholar
  54. Peng, M.W., and Y. Luo. 2000. Managerial ties and firm performance in a transition economy: The nature of a micro-macro link. Academy of Management Journal 43 (3): 486–501.CrossRefGoogle Scholar
  55. Peng, M.W., and A.S. York. 2001. Behind intermediary performance in export trade: Transactions, agents, and resources. Journal of International Business Studies 32 (2): 327–346.CrossRefGoogle Scholar
  56. Peng, M.W., D. Wang, and Y. Jiang. 2008. An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies 39 (5): 920–936.CrossRefGoogle Scholar
  57. Pla, J., and J. Alegre. 2007. Analysing the link between export intensity, innovation and firm size in a science-based industry. International Business Review 16 (3): 275–293.CrossRefGoogle Scholar
  58. Prange, C., and O. Bruyaka. 2016. Better at home, abroad, or both? How Chinese firms use ambidextrous internationalization strategies to drive innovation. Cross Cultural and Strategic Management 23 (2): 306–339.CrossRefGoogle Scholar
  59. Rialp, A., J. Rialp, and G.A. Knight. 2005. The phenomenon of early internationalizing firms: What do we know after a decade (1993–2003) of scientific inquiry? International Business Review 14 (2): 147–166.CrossRefGoogle Scholar
  60. Rigby, D., and C. Zook. 2002. Open-market innovation. Harvard Business Review 80 (10): 80–93.Google Scholar
  61. Roper, S., and J.H. Love. 2002. Innovation and export performance: evidence from UK and German manufacturing plants. Research Policy 31 (7): 1087–1102.CrossRefGoogle Scholar
  62. Rosenbusch, N., J. Brinckmann, and A. Bausch. 2011. Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs. Journal of Business Venturing 26 (4): 441–457.CrossRefGoogle Scholar
  63. Salomon, R.M., and J.M. Shaver. 2005. Learning by exporting: New insights from examining firm innovation. Journal of Economics and Management Strategy 14 (2): 431–460.CrossRefGoogle Scholar
  64. Scott, W.R. 2002. The Changing world of Chinese enterprise: An institutional perspective. In The management of enterprises in the People’s Republic of China, ed. A.S. Tsui, and C.M. Lau, 59–78. London: Kluwer Academic.CrossRefGoogle Scholar
  65. Scott, W.R. 1995. Institutions and organizations. Thousand Oaks: Sage.Google Scholar
  66. Shirokova, G., and P. McDougall-Covin. 2012. The role of social networks and institutions in the internationalization of Russian entrepreneurial firms: Do they matter? Journal of International Entrepreneurship 10 (3): 177–199.CrossRefGoogle Scholar
  67. Shirokova, G., and T. Tsukanova. 2013. Impact of the domestic institutional environment on the degree of internationalization of SMEs in transition economies. International Journal of Entrepreneurship and Innovation 14 (3): 193–204.CrossRefGoogle Scholar
  68. Smallbone, D., and F. Welter. 2001. The role of government in SME development in transition countries. International Small Business Journal 19 (4): 63–77.CrossRefGoogle Scholar
  69. Söderman, S., A. Jakobsson, and L. Soler. 2008. A quest for repositioning: The emerging internationalization of Chinese companies. Asian Business & Management 7 (1): 115–142.CrossRefGoogle Scholar
  70. Sousa, C.M. 2004. Export performance measurement: An evaluation of the empirical research in the literature. Academy of Marketing Science Review 9 (12): 1–23.Google Scholar
  71. Sousa, C.M., F.J. Martínez-López, and F. Coelho. 2008. The determinants of export performance: A review of the research in the literature between 1998 and 2005. International Journal of Management Reviews 10 (4): 343–374.CrossRefGoogle Scholar
  72. Sterlacchini, A. 1999. Do innovative activities matter to small firms in non-R&D-intensive industries? An application to export performance. Research Policy 28 (8): 819–832.CrossRefGoogle Scholar
  73. Sterlacchini, A. 2001. The determinants of export performance: A firm-level study of Italian manufacturing. Weltwirtschaftliches Archiv 137 (3): 450–472.CrossRefGoogle Scholar
  74. Terjesen, S., C. O’Gorman, and Z.J. Acs. 2008. Intermediated mode of internationalization: New software ventures in Ireland and India. Entrepreneurship and Regional Development 20 (1): 89–109.CrossRefGoogle Scholar
  75. Thornhill, S. 2006. Knowledge, innovation and firm performance in high-and low-technology regimes. Journal of Business Venturing 21 (5): 687–703.CrossRefGoogle Scholar
  76. Venkatraman, N. 1989. The concept of fit in strategy research: Toward verbal and statistical correspondence. Academy of Management Review 14 (3): 423–444.Google Scholar
  77. Venkatraman, N., and J.E. Prescott. 1990. Environment-strategy coalignment: An empirical test of its performance implications. Strategic Management Journal 11 (1): 1–23.CrossRefGoogle Scholar
  78. Verspagen, B., and Wakelin, K. 1993. International competitiveness and its determinants. Working paper 93-008. Maastricht: MERIT.Google Scholar
  79. Vila, N., and I. Kuster. 2007. The importance of innovation in international textile firms. European Journal of Marketing 41 (1/2): 17–36.CrossRefGoogle Scholar
  80. Wakelin, K. 1998. Innovation and export behaviour at the firm level. Research Policy 26 (7): 829–841.CrossRefGoogle Scholar
  81. Wang, Y., W. Cao, Z. Zhou, and L. Ning. 2013. Does external technology acquisition determine export performance? Evidence from Chinese manufacturing firms. International Business Review 22 (6): 1079–1091.CrossRefGoogle Scholar
  82. Wolf, J.A., and T.L. Pett. 2000. Internationalization of small firms: An examination of export competitive patterns, firm size, and export performance. Journal of Small Business Management 38 (2): 34–47.Google Scholar
  83. World Bank. 2012. Enterprise Surveys. http://www.enterprisesurveys.org/. Accessed 15 May 2017.
  84. Yamakawa, Y., M.W. Peng, and D.L. Deeds. 2008. What drives new ventures to internationalize from emerging to developed economies? Entrepreneurship Theory and Practice 32 (1): 59–82.CrossRefGoogle Scholar
  85. Yi, J., C. Wang, and M. Kafouros. 2013. The effects of innovative capabilities on exporting: Do institutional forces matter? International Business Review 22 (2): 392–406.CrossRefGoogle Scholar
  86. Yiu, D.W., C.M. Lau, and G.D. Bruton. 2007. International venturing by emerging-economy firms. Journal of International Business Studies 38: 519–540.CrossRefGoogle Scholar
  87. Yuan, X., S. Shin, X. He, and S.Y. Kim. 2016. Innovation capability, marketing capability and firm performance: A two-nation study of China and Korea. Asian Business & Management 15 (1): 32–56.CrossRefGoogle Scholar
  88. Zahra, S., and G. George. 2002. International entrepreneurship: The current status of the field and future research agenda. In Strategic entrepreneurship: Creating a new mindset, ed. M.A. Hitt, R.D. Ireland, S.M. Camp, and D.L. Sexton, 255–288. Oxford: Blackwell.Google Scholar
  89. Zahra, S.A., R.D. Ireland, and M.A. Hitt. 2000. International expansion by new venture firms: International diversity, mode of market entry, technological learning, and performance. Academy of Management Journal 43 (5): 925–950.CrossRefGoogle Scholar
  90. Zhao, H., and S. Zou. 2002. The impact of industry concentration and firm location on export propensity and intensity: An empirical analysis of Chinese manufacturing firms. Journal of International Marketing 10 (1): 52–71.CrossRefGoogle Scholar
  91. Zhao, H., and H. Li. 1997. R&D and export: An empirical analysis of Chinese manufacturing firms. Journal of High Technology Management Research 8 (1): 89–105.CrossRefGoogle Scholar
  92. Zhou, L. 2007. The effects of entrepreneurial proclivity and foreign market knowledge on early internationalization. Journal of World Business 42 (3): 281–293.CrossRefGoogle Scholar
  93. Zhu, H., M.A. Hitt, and L. Tihanyi. 2007. The internationalization of SMEs in emerging economies: Institutional embeddedness and absorptive capacities. Journal of Small Business Strategy 17 (2): 1–26.Google Scholar
  94. Zucchella, A., G. Palamara, and S. Denicolai. 2007. The drivers of the early internationalization of the firm. Journal of World Business 42 (3): 268–280.CrossRefGoogle Scholar

Copyright information

© Macmillan Publishers Ltd 2017

Authors and Affiliations

  1. 1.Departamento de Empresa, Facultad de Economía y Empresa (Edificio B)Universitat Autònoma de BarcelonaBarcelonaSpain

Personalised recommendations