مقاله سال ۲۰۱۶

The hurdle of being a foreigner when expanding in international markets is one of the cornerstones in the international business. Extant literature on the resource-based view (RBV) offers a framework to explain how heterogeneous firm-internal resources and capabilities might generate a value-creating competitive strategy (Barney, 1991, 2014; Wernerfelt, 1984). If a firm’s resources and capabilities are valuable, rare, inimitable, and the firm’s organizational processes are able to exploit their potential (VRIO), they may provide firm with an advantage (Barney & Hesterly, 2012). Competitive advantage may compensate the liability of foreignness that especially small firms face when entering foreign markets (Hymer, 1976; Zaheer, 1995).

Many scholars in international business (internationalization process models, RBV, dynamic capabilities, international new ventures) quite simply assume that firms possess those strategically valuable resources and capabilities they need in international activities. However, in the first place, resources and capabilities in the home markets are often not suitable in operations in foreign markets (Kumar, 2009). Secondly, firms hardly can transfer highly specific resources and capabilities from one firm function to another (Lecerf, 2012). Thirdly, young and small firms with tight resource and capability constraints have to consider how to balance between domestic and foreign operations, growth and international expansion (Baker & Nelson, 2005). Separate discussions acknowledge the above-mentioned resource constraints and the key role of capabilities in international expansion, and therefore, this study is aiming at answering for calls to bring these scattered findings together (see Barney, 2014; Hewerdine, Rumyantseva, & Welch, 2014).

The authors suggest that small firms have a collection of key capabilities – a capability portfolio – that allows small firms to internationalize. These capabilities originate from firm’s activities and depend on firm’s financial resources. The purpose of this study is to reveal, under a limited resource endowment, how capabilities’ relative importance in this capability portfolio varies along with internationalization. As researchers call for new forms of gathering data besides the use of traditional methods, such as Likert scales (Woodside, 2014), the authors build a method to handle binary data from a questionnaire that consists of claims with only a Yes or No answer available. The authors use a datadriven but statistically acceptable technique called finite mixture structural equation modeling (FMSEM) to analyze the data. FMSEM is able to uncover unobservable behavioral segments and estimate segmentspecific path coefficients in a research model of each segment in the data simultaneously (Bart, Shankar, Sultan, & Urban, 2005), thereby revealing the existence of multiple realities (Woodside, 2014) and unobservable heterogeneity among respondents (Bart et al., 2005). Finally, this study contributes to an understanding of how small size firms exploit and allocate limited resources and capabilities between their key activities when growing and expanding on international markets, especially at the time of initial international entry.