A reputation transfer perspective on the internationalization of emerging market firms

The rapidly growing literature on the internationalization strategies of emerging market firms (EMFs) has not paid adequate attention to the role that reputation may play in an EMF’s internationalization. This is an important limitation, as reputation’s tacitness and embeddedness mean that EMFs will likely face significant challenges in transferring it overseas. Using the literature on location-bound advantages and resource transfer, we argue that whether an EMF is known more for its capabilities or its character will likely affect the firm’s location choice, and whether it has a greater desire to exploit or to augment its reputation will likely affect its entry mode strategy. Finally, we offer a typology of EMF internationalization patterns based on the interaction of the different reputation types and motives held by these firms. Thus, we shed light on how the nuances of EMFs’ reputation influence their internationalization strategies.