Internationalisation motives, enablers and paths of location-intensive services SMEs from emerging markets
Abdel Khalik, Mahmoud Ahmed Farid
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Current theoretical insights into firm internationalisation have mainly been established from research on firms originating from developed countries, with a strong focus on the manufacturing sector. Studies have recently begun to examine the internationalisation of emerging market firms, the international growth of SMEs, and service firm internationalisation, and a range of theories have been employed to gain understanding in these areas. This study examines internationalising small service frims from an emerging market, whose location-intensity makes them a rare type of firm for whom internationalisation might appear to be a counter-intuitive strategy. This study seeks to understand the internationalisation motives, enablers, and paths of location-intensive food service SMEs from the emerging Middle East and North Africa (MENA) region. It asks why, what and how to location-intensive food service SMEs from emerging markets internationalise? The aims is to provide a deeper understanding of firm internationalisation by examining a group for whom the purpose and methods of internationalisation appears to be obscure. To do this, the thesis introduces a more comprehensive account of firm internationalisation by identifying the three interrelated aspects of internationalisation, which are presented as motives, enablers and paths. This is followed by a review of the mainstream internationalisation theories and perspectives, before revealing important findings that have emerged from previous internationalisation research separately on the emerging markets, SMEs and services and these are drawn together into an overall research framework. The research method balances deductive and inductive approaches. It recognises existing research an theoretical frameworks, but allows for new themes to emerge inductively from the data. A multiple case study was adopted, with qualitative data collected through interviews with owners and top managers of purposefully selected case firms. Industry experts were also interviewed and relevant documents were reviewed to achieve triangulation and minimise bias. Data was explored and thematically analysed by coding into the pre-existing categories suggested by the conceptual framework, and this allowed new findings and themes to emerge. This exploratory study revealed a number of concepts that shaped a coherent approach to the interrelated aspects of internationalisation. Perspectives found in emerging market MNE literature are extended and offer useful insights for location-intensive service SMEs from emerging markets but other important themes emerged from the findings itself. the study suggests that asset augmenting motives, strategic and entrepreneurial enablers and outward and inward linked paths are important when explaining the internationalisation of these firms. These firms have strategic motives of increasing their organisational legitimacy in their home market primarily due to the entrance of well-established MNEs and consumer perceptions. The strategic entrepreneurship paradigm captures many of the internationalisation enablers of the case study firms, specifically the entrepreneurs' role in simultaneous opportunity seeking (either recognition or creation), and advantage seeking behaviour through research building. The paths pursued by the firms are found to be both outwardly and inwardly linked, in a way closely associated with Luo and Tung's (2007) springboard perspective. Finally, the case firms' internationalisation paths reflect a deviation from the born-again global viewpoint first presented by Bell et al (2001). This study advocates that emerging market service firms need to implement and coordinate a number of strategies simultaneously to upgrade their resources, due to the entrance of established foreign MNEs. This implies that foreign MNEs should recognise their own resource combinations that represent real value to local firms, and therefore re-examine whether further standardisation over adaption is better suited when entering certain host markets. This thesis highlights the importance of impression management to complement legitimacy in consumer-centred industries, and this is suggested as a rich avenue for future enquiry. Future research might also test the theoretical contributions made her, especially concerning the new motives, enablers and paths identified in this study.