IDEAS home Printed from https://ideas.repec.org/a/spr/manint/v49y2009i1d10.1007_s11575-008-0128-3.html
   My bibliography  Save this article

How well do Traditional Theories Explain the Internationalisation of Service MNEs from Small and Open Economies? – Case: National Telecommunication Companies

Author

Listed:
  • Riku Laanti

    (University of Adelaide)

  • Fred McDougall

    (University of Adelaide)

  • Georges Baume

    (University of Adelaide)

Abstract

This paper discusses international market and operation strategies of service MNEs from small and open economies (SMOPECs). The focus in the analysis will be on the special challenges that these type of companies face in their internationalisation process. A conceptual framework and propositions are developed based on earlier research of internationalisation of manufacturing companies and companies in different service sectors. A multicase study of four service MNEs, which are telecommunications operators (telcos), is used to illustrate and test the propositions. International processes of the case companies deviate in many areas from those suggested by traditional theories, especially their market strategies. Several industry specific characteristics played an important part in this, as they further enhanced many challenges common to internationalising companies from smaller countries.

Suggested Citation

  • Riku Laanti & Fred McDougall & Georges Baume, 2009. "How well do Traditional Theories Explain the Internationalisation of Service MNEs from Small and Open Economies? – Case: National Telecommunication Companies," Management International Review, Springer, vol. 49(1), pages 121-144, February.
  • Handle: RePEc:spr:manint:v:49:y:2009:i:1:d:10.1007_s11575-008-0128-3
    DOI: 10.1007/s11575-008-0128-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11575-008-0128-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s11575-008-0128-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Erin Anderson & Hubert Gatignon, 1986. "Modes of Foreign Entry: A Transaction Cost Analysis and Propositions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(3), pages 1-26, September.
    2. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    3. Cavusgil, S. Tamer, 1984. "Differences among exporting firms based on their degree of internationalization," Journal of Business Research, Elsevier, vol. 12(2), pages 195-208, June.
    4. Elizabeth Maitland & Stephen Nicholas, 2002. "Modeling Multinationals from Small, Open Economies," International Studies of Management & Organization, Taylor & Francis Journals, vol. 32(1), pages 3-15, January.
    5. Brouthers, Lance Eliot & Wilkinson, Timothy J., 2002. "Is the EU destroying European competitiveness?," Business Horizons, Elsevier, vol. 45(4), pages 37-42.
    6. Jan Johanson & Jan-Erik Vahlne, 1977. "The Internationalization Process of the Firm—A Model of Knowledge Development and Increasing Foreign Market Commitments," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 23-32, March.
    7. Fjeldstad, Øystein D. & Becerra, Manuel & Narayanan, Sathya, 0. "Strategic action in network industries: an empirical analysis of the European mobile phone industry," Scandinavian Journal of Management, Elsevier, vol. 20(1-2), pages 173-196, March.
    8. Warren J Bilkey & George Tesar, 1977. "The Export Behavior of Smaller-Sized Wisconsin Manufacturing Firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 8(1), pages 93-98, March.
    9. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
    10. Paul Westhead & Mike Wright & Deniz Ucbasaran & Frank Martin, 2001. "International market selection strategies of manufacturing and services firms," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 13(1), pages 17-46, January.
    11. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    12. Heng, Toh Mun & Low, Linda, 1990. "Towards greater competition in Singapore's telecommunications," Telecommunications Policy, Elsevier, vol. 14(4), pages 303-314, August.
    13. Crystal, Jonathan, 1999. "Globalization, International Corporate Alliances, and Political Conflict: The Experience of the US Airline and Telecommunication Industries," Business and Politics, Cambridge University Press, vol. 1(3), pages 343-373, November.
    14. Rugman, Alan & Girod, Stéphane, 2003. "Retail Multinationals and Globalization:: The Evidence is Regional," European Management Journal, Elsevier, vol. 21(1), pages 24-37, February.
    15. Laszlo Tihanyi & David A Griffith & Craig J Russell, 2005. "The effect of cultural distance on entry mode choice, international diversification, and MNE performance: a meta-analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 270-283, May.
    16. Sharma, D. Deo & Blomstermo, Anders, 2003. "The internationalization process of Born Globals: a network view," International Business Review, Elsevier, vol. 12(6), pages 739-753, December.
    17. Jan Johanson & Jan-Erik Vahlne, 2006. "Commitment and opportunity development in the internationalization process: A note on the Uppsala internationalization process model," Management International Review, Springer, vol. 46(2), pages 165-178, March.
    18. Stienstra, Marten & Baaij, Marc & Van den Bosch, Frans & Volberda, Henk, 2004. "Strategic Renewal of Europe's Largest Telecom Operators (1992-2001):: From Herd Behaviour Towards Strategic Choice?," European Management Journal, Elsevier, vol. 22(3), pages 273-280, June.
    19. Joanne Roberts, 1999. "The Internationalisation of Business Service Firms: A Stages Approach," The Service Industries Journal, Taylor & Francis Journals, vol. 19(4), pages 68-88, October.
    20. MB Sarkar & S Tamer Cavusgil & Preet S Aulakh, 1999. "International Expansion of Telecommunication Carriers: The Influence of Market Structure, Network Characteristics, and Entry Imperfections," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 30(2), pages 361-381, June.
    21. Bouquet, Cyril & Hebert, Louis & Delios, Andrew, 2004. "Foreign expansion in service industries: Separability and human capital intensity," Journal of Business Research, Elsevier, vol. 57(1), pages 35-46, January.
    22. Ramamurti, Ravi, 2000. "Risks and rewards in the globalization of telecommunications in emerging economies," Journal of World Business, Elsevier, vol. 35(2), pages 149-170, July.
    23. Peter J. Buckley & Mark Casson, 1991. "The Future of the Multinational Enterprise," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-21204-0.
    24. van den Bosch, Frans A.J. & Volberda, Henk & Stienstra, Marten & Baaij, Marc, 2004. "Strategic Renewal of Europe's Largest Telecom Operators (1992-2001):: A Reply to Curwen," European Management Journal, Elsevier, vol. 22(5), pages 600-604, October.
    25. Luostarinen, Reijo, 1994. "Internationalization of Finnish Firms and their Response to Global Challenges," WIDER Working Papers 295309, United Nations University, World Institute for Development Economic Research (UNU-WIDER).
    26. Carr, Chris & Garcia, Clara-Eugenia, 2003. "Globalisation and Strategic Choice: How Multinational and Local Company Perspectives Differ:: A Spanish Case Study," European Management Journal, Elsevier, vol. 21(6), pages 671-685, December.
    27. Forsgren, M., 2002. "The concept of learning in the Uppsala internationalization process model: a critical review," International Business Review, Elsevier, vol. 11(3), pages 257-277, June.
    28. Larimo, Jorma, 1995. "The foreign direct investment decision process: Case studies of different types of decision processes in finnish firms," Journal of Business Research, Elsevier, vol. 33(1), pages 25-55, May.
    29. Larimo, Jorma, 2003. "Form of investment by Nordic firms in world markets," Journal of Business Research, Elsevier, vol. 56(10), pages 791-803, October.
    30. Gabrielsson, P. & Gabrielsson, M., 2004. "Globalizing internationals: business portfolio and marketing strategies in the ICT field," International Business Review, Elsevier, vol. 13(6), pages 661-684, December.
    31. Joseph A Clougherty, 2001. "Globalization and the Autonomy of Domestic Competition Policy: An Empirical Test on the World Airline Industry," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(3), pages 459-478, September.
    32. John H Dunning, 1995. "Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(3), pages 461-491, September.
    33. Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, vol. 9(2), pages 163-190, April.
    34. J-M- Glachant, 2002. "Why regulate deregulated network industries?," Competition and Regulation in Network Industries, Intersentia, vol. 3(3), pages 297-312, September.
    35. J J Boddewyn & Marsha Baldwin Halbrich & A C Perry, 1986. "Service Multinationals: Conceptualization, Measurement and Theory," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 17(3), pages 41-57, September.
    36. Rugman, Alan & Hodgetts, Richard, 2001. "The end of global strategy," European Management Journal, Elsevier, vol. 19(4), pages 333-343, August.
    37. Yair Aharoni, 1996. "The Organization of Global Service MNEs," International Studies of Management & Organization, Taylor & Francis Journals, vol. 26(2), pages 6-23, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tao Bai & Stephen Chen & Xiao He, 2019. "How Home-Country Political Connections Influence the Internationalization of Service Firms," Management International Review, Springer, vol. 59(4), pages 541-560, August.
    2. Scott-Kennel, Joanna & Saittakari, Iiris, 2020. "Sourcing or sharing in MNE networks? National headquarters and foreign subsidiaries as knowledge conduits in SMOPECs," International Business Review, Elsevier, vol. 29(1).
    3. Wang, Yi & Larimo, Jorma, 2020. "Survival of full versus partial acquisitions: The moderating role of firm’s internationalization experience, cultural distance, and host country context characteristics," International Business Review, Elsevier, vol. 29(1).
    4. Emre Şahin Dölarslan & Akin Koçak & Alper Özer, 2017. "“Bats Are Blind?” Cognitive Biases In Risk Perception Of Entrepreneurs," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-13, September.
    5. Geoffrey Desa, 2012. "Resource Mobilization in International Social Entrepreneurship: Bricolage as a Mechanism of Institutional Transformation," Entrepreneurship Theory and Practice, , vol. 36(4), pages 727-751, July.
    6. Xiaohui Yuan & Jiayan Yan, 2022. "Reverse Efficiency Spillovers from Host Country Banks to Foreign Banks: Evidence from Emerging Market Bank Subsidiaries in Developed Markets," Management International Review, Springer, vol. 62(6), pages 915-946, December.
    7. Marjorie Lecerf & Nessrine Omrani, 2020. "SME Internationalization: the Impact of Information Technology and Innovation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 805-824, June.
    8. Elitsa R. Banalieva & Ravi Sarathy, 2011. "A Contingency Theory of Internationalization," Management International Review, Springer, vol. 51(5), pages 593-634, October.
    9. Lai-Yin Cheah, Sarah & Ho, Yuen-Ping & Li, Shiyu, 2021. "Search strategy, innovation and financial performance of firms in process industries," Technovation, Elsevier, vol. 105(C).
    10. George O. White & Orhun Guldiken & Thomas A. Hemphill & Wu He & Mehdi Sharifi Khoobdeh, 2016. "Trends in International Strategic Management Research From 2000 to 2013: Text Mining and Bibliometric Analyses," Management International Review, Springer, vol. 56(1), pages 35-65, February.
    11. Fletcher, Margaret & Zhao, Yang & Plakoyiannaki, Emmanuella & Buck, Trevor, 2018. "Three Pathways to Case Selection in International Business: A Twenty–Year Review, Analysis and Synthesis," International Business Review, Elsevier, vol. 27(4), pages 755-766.
    12. Helena Turunen & Niina Nummela, 2017. "Internationalisation at home: The internationalisation of location-bound service SMEs," Journal of International Entrepreneurship, Springer, vol. 15(1), pages 36-54, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tao Bai & Stephen Chen & Xiao He, 2019. "How Home-Country Political Connections Influence the Internationalization of Service Firms," Management International Review, Springer, vol. 59(4), pages 541-560, August.
    2. Robert-Nicoud, Frédéric & Olarreaga, Marcelo & Carrère, Céline & Fugazza, Marco, 2016. "On the heterogeneous effect of trade on unemployment," CEPR Discussion Papers 11540, C.E.P.R. Discussion Papers.
    3. Reddy, Kotapati Srinivasa, 2016. "Institutional Voids and Tax litigation in Emerging Economies: The verdict of Vodafone cross-border acquisition of Hutchison," MPRA Paper 74264, University Library of Munich, Germany, revised 2016.
    4. Surdu, Irina & Mellahi, Kamel, 2016. "Theoretical foundations of equity based foreign market entry decisions: A review of the literature and recommendations for future research," International Business Review, Elsevier, vol. 25(5), pages 1169-1184.
    5. Drogendijk, H.J., 2001. "Expansion patterns of Dutch firms in Central and Eastern Europe : Learning to internationalize," Other publications TiSEM 18571cef-0dd0-46ff-82aa-3, Tilburg University, School of Economics and Management.
    6. Wrona, Thomas & Trąpczyński, Piotr, 2012. "Re-explaining international entry modes – Interaction and moderating effects on entry modes of pharmaceutical companies into transition economies," European Management Journal, Elsevier, vol. 30(4), pages 295-315.
    7. Björn Röber, 2020. "Escalating internationalization decisions: intendedly rational, but only limitedly so?," Business Research, Springer;German Academic Association for Business Research, vol. 13(2), pages 455-484, July.
    8. Bell, J.H.J., 1996. "Joint or Single Venturing? : An Electric Approach to Foreign Entry Mode Choice," Other publications TiSEM 06f84735-3cf5-432f-8bc8-c, Tilburg University, School of Economics and Management.
    9. Pease, Stephanie & Paliwoda, Stanley & Slater, Jim, 2006. "The erosion of stable shareholder practice in Japan ("Anteikabunushi Kosaku")," International Business Review, Elsevier, vol. 15(6), pages 618-640, December.
    10. Tamar Almor & Niron Hashai & Seev Hirsch, 2006. "The product cycle revisited: Knowledge intensity and firm internationalization," Management International Review, Springer, vol. 46(5), pages 507-528, September.
    11. Pattnaik, Chinmay & Singh, Deeksha & Gaur, Ajai S., 2021. "Home country learning and international expansion of emerging market multinationals," Journal of International Management, Elsevier, vol. 27(3).
    12. Sjoerd Beugelsdijk & Tatiana Kostova & Vincent E. Kunst & Ettore Spadafora & Marc van Essen, 2018. "Cultural Distance and Firm Internationalization," Post-Print hal-02312065, HAL.
    13. David de Matías Batalla, 2014. "ICT impact on internationalization. A critical review of the eclectic paradigm," Journal of Socioeconomic Engineering, Instituto Universitario de Análisis Económico y Social, issue 2, pages 16-24, December.
    14. Saeed Samiee & Constantine S. Katsikeas & G. Tomas M. Hult, 2021. "The overarching role of international marketing: Relevance and centrality in research and practice," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(8), pages 1429-1444, October.
    15. Xanthippe Adamoglou & Dimitris Kyrkilis, 2020. "MNEs Entry Strategies through a Distance Framework: A New Perspective," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 70(3-4), pages 83-105, July-Dece.
    16. Lo, Fang-Yi, 2015. "Transaction cost determinants and advantage transferability's effect on international ownership strategy," Journal of Business Research, Elsevier, vol. 68(11), pages 2312-2316.
    17. Kahiya, Eldrede T., 2018. "Five decades of research on export barriers: Review and future directions," International Business Review, Elsevier, vol. 27(6), pages 1172-1188.
    18. Mary Han, 2006. "Developing social capital to achieve superior internationalization: A conceptual model," Journal of International Entrepreneurship, Springer, vol. 4(2), pages 99-112, September.
    19. Oxelheim, Lars & Randøy, Trond & Stonehill, Arthur, 2001. "On the treatment of finance-specific factors within the OLI paradigm," International Business Review, Elsevier, vol. 10(4), pages 381-398, August.
    20. Marian Gorynia & Barbara Jankowska, 2007. "Teorie internacjonalizacji," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 10, pages 21-44.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:manint:v:49:y:2009:i:1:d:10.1007_s11575-008-0128-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.