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Internationalization of Small Indian Family-Firms: An Emergent Theory

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The Palgrave Handbook of Family Firm Internationalization

Abstract

Fast-growing emerging economies like India present interesting contexts to study internationalization of small family-firms faced with lucrative domestic opportunities of high growth rates, amidst global challenges posed by protectionism and adverse geopolitical factors. Based on a case study of eight small Indian family-firms, we present an integrated model of small family-firm internationalization in fast-growing emerging economies, incorporating environmental state and change variables and family factors (family capabilities and liabilities and economic and non-economic goals), which together shape the family-firm’s ability and willingness to internationalize. The ‘ability-willingness’ framework is used to explain various internationalization pathways, as also internationalization decisions following a processual approach. We find evidence of two additional internationalization pathways to those found in extant theory. ‘Cohesive’ pathways involve a planned and structured concurrent expansion of these small family-firms in domestic and international markets in a manner that leads to limited internationalization. The strong home-country pull, compared to host-country pull, together with specific family-firm characteristics and goals, shapes such pathways. Other small family-firms, even erstwhile ‘born global’, when faced with strong host-country push and specific family factors, may reverse their internationalization journey leading to de-internationalization pathways. Finally, ethnic nationalism as a non-economic family factor may affect sustainability of internationalization.

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Notes

  1. 1.

    We use the term ‘small’ in a generic sense to mean the small and medium enterprises (SMEs) throughout the chapter, although some of the case firms considered were ‘micro enterprises’ at the time of internationalization.

  2. 2.

    See Gaur and Kumar (2010, pp. 607–609), for a summary of such studies on emerging economy firm internationalization.

  3. 3.

    These dimensions include family control and influence, identification of the family members with the company, binding social ties, emotional attachment of family members and renewal of family bonds with the company through dynastic succession

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Authors and Affiliations

  1. S.P. Jain Institute of Management and Research, Mumbai, India

    Tulsi Jayakumar

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  1. Tulsi Jayakumar
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  1. LUT University, Lappeenranta, Finland

    Tanja Leppäaho

  2. House of Innovation, Stockholm School of Economics, Stockholm, Sweden

    Sarah Jack

  3. Lancaster University Management School, Lancaster, UK

    Sarah Jack

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Jayakumar, T. (2021). Internationalization of Small Indian Family-Firms: An Emergent Theory. In: Leppäaho, T., Jack, S. (eds) The Palgrave Handbook of Family Firm Internationalization. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-66737-5_15

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