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Modelling the effects of institutional support and international knowledge on competitive capabilities and international performance: Evidence from an emerging economy

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  • Falahat, Mohammad
  • Lee, Yan Yin
  • Ramayah, T.
  • Soto-Acosta, Pedro

Abstract

This paper explores the process through which institutional support initiatives contribute to the international performance of firms from the small open economy of Malaysia. We examine both direct and indirect causal effects of institutional support (informational, training, trade mobility and financial aid-related support) on internationalization. We develop a model to address how institutional support initiatives affect the performance of export-oriented or so-called born global firms. From a survey of 250 firms from Malaysia, an emerging Southeast Asian market, we find that government support initiatives do not have significant impacts on firm performance unless examined based on processes of government support initiatives, international knowledge, commitment, competitive capabilities, and international performance. Government support initiatives play a critical role in export-oriented firms from small open economies (SMOPECs) in emerging markets by contributing to a number of contextual deficits that determine the international performance of a firm. This study provides guidelines for policy makers and business owners on how institutional support can facilitate the accumulation of knowledge about international markets, enhance commitment to exports and help firms gain competitive capabilities in the export market for greater success in international markets.

Suggested Citation

  • Falahat, Mohammad & Lee, Yan Yin & Ramayah, T. & Soto-Acosta, Pedro, 2020. "Modelling the effects of institutional support and international knowledge on competitive capabilities and international performance: Evidence from an emerging economy," Journal of International Management, Elsevier, vol. 26(4).
    • Handle: RePEc:eee:intman:v:26:y:2020:i:4:s1075425320301071
    DOI: 10.1016/j.intman.2020.100779
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    2. Thurasamy Ramayah & Mohammad Falahat & Pedro Soto‐Acosta, 2022. "Effects of corporate social responsibility on employee commitment and corporate reputation: Evidence from a transitional economy," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(6), pages 2006-2015, November.
    3. Freixanet, Joan, 2022. "Export promotion programs: A system-based systematic review and agenda for future research," Journal of World Business, Elsevier, vol. 57(4).
    4. Donbesuur, Francis & Zahoor, Nadia & Al-Tabbaa, Omar & Adomako, Samuel & Tarba, Shlomo Y., 2023. "On the performance of platform-based international new ventures: The roles of non-market strategies and managerial competencies," Journal of International Management, Elsevier, vol. 29(2).
    5. Wenli Zhao & Guangyu Ye & Guangyi Xu & Chong Liu & Dandan Deng & Ming Huang, 2022. "CSR and Long-Term Corporate Performance: The Moderating Effects of Government Subsidies and Peer Firm’s CSR," Sustainability, MDPI, vol. 14(9), pages 1-13, May.
    6. Martín Martín, Oscar & Chetty, Sylvie & Bai, Wensong, 2022. "Foreign market entry knowledge and international performance: The mediating role of international market selection and network capability," Journal of World Business, Elsevier, vol. 57(2).
    7. Nadia Zahoor & Yong Kyu Lew, 2022. "Sustaining superior international performance: Strategic orientations and dynamic capability of environmentally concerned small‐ and medium‐sized enterprises," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 1002-1017, March.
    8. Mohammad Falahat & Yan-Yin Lee & Pedro Soto-Acosta & T. Ramayah, 2021. "Entrepreneurial, market, learning and networking orientations as determinants of business capability and international performance: the contingent role of government support," International Entrepreneurship and Management Journal, Springer, vol. 17(4), pages 1759-1780, December.
    9. Nicole F. Richter & Sven Hauff & Christian M. Ringle & Siegfried P. Gudergan, 2022. "The Use of Partial Least Squares Structural Equation Modeling and Complementary Methods in International Management Research," Management International Review, Springer, vol. 62(4), pages 449-470, August.
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    11. Mário Nuno Mata & Mohammad Falahat & Anabela Batista Correia & João Xavier Rita, 2021. "Impact of Institutional Support on Export Performance," Economies, MDPI, vol. 9(3), pages 1-13, July.

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