New Challenges to International Marketing: Volume 20

The first chapter by Pieter Pauwels, Paul G. Patterson, Ko de Ruyter, and Martin Wetzels is entitled “The Propensity to Continue Internationalization: A Study of Australian Service Firms”. The authors build on the process theory of internationalization and the theory of planned behavior and investigate a firm's propensity to continue internationalization. They develop a theoretical model and test this using structural equation modeling using a sample of international service providers using partial least square (PLS). Their model confirms the pivotal role of attitudes towards internationalization, relevant behavioral norms, and behavioral control factors as contributors to the propensity to continue internationalization.

To investigate a firm's propensity to continue internationalization, the so-called Uppsala internationalization process model is a logical point of departure (Johanson & Vahlne, 1977, 1990). Building upon a behavioral theory of the firm (Cyert & March, 1963) and Penrose's (1959) theory of the growth of the firm, the basic logic of the Uppsala or U-model is quite straightforward: The allocation of resources to foreign activities holds a certain risk yet induces experiential learning, which results in market-specific knowledge. The increasing stock of market-specific knowledge reduces this risk and stimulates additional allocation of resources (Eriksson, Johanson, Majkgård, & Sharma, 1997).

Internationalisation leads to a radical process of change through which an organisation modifies the focus of its operations, value system and cognitive framework so as to achieve a more internationally responsive structure (Whitehead, 1992). Earlier studies have investigated the internationalisation process considering the internal and external factors of the company and its market (Cavusgil et al., 2002; McGoldrick, 1998, 2002; McGoldrick & Davies, 1995; Treadgold & Davies, 1988). The internationalisation literature based on Uppsala studies about the internationalisation process of Swedish firms, (Johanson & Wiedersheim-Paul, 1975; Johanson & Vahlne, 1977) identified four different internationalisation stages called the “establishment chain”, which also applied to the retail context (Davies & Fergusson, 1995, p. 99). The results show that different stages demand different resource commitment from the company (Johanson & Vahlne, 1977). It is assumed that a company initially lacks knowledge of the local market. The level of local market knowledge affects the company's commitment decisions and its activities. The network approach (Johanson & Mattsson, 1988) could be applied to the study of vertical international relationships. It is, therefore, useful for the international sourcing activities of retailers (Dawson, 1994, p. 270) and provides a competitive advantage as well as flexibility, in which each of the organisations in the network is working towards a common objective (McGoldrick, 2002, p. 571). In the past 20 years, many researchers have paid more attention to network relationships, which have become the main marketing strategy. They agree that the study of network relationships between companies, suppliers and customers is more important than the marketing mix (Ghauri, 1999).

Large-scale incoming tourism potentially creates a multinational market within the domestic economy of the recipient countries. More specifically, in a number of countries, there is a large influx of ‘foreign’ consumers, or tourists, from many countries and for a significant part of the year. As can be seen from Table 1, for countries such as France, Spain, Austria, or Greece the annual influx of tourists exceeds the population of these countries by very large margins.

A common weakness of most growth models is the assumption that growth is a desired objective for entrepreneurs (see, e.g. Bird, 1989). However, not all entrepreneurial firms seek growth as their primary objective (Covin, Slevin, & Covin, 1990; Porter, 1996), and further there is no reason to expect that all entrepreneurs want their businesses to grow in similar ways (Liao & Welsch, 2003). Thus, in many cases researchers have separated growth orientation from actual growth. In previous studies growth orientation has been defined as precondition to growth (see, e.g. Autio et al., 2000). Growth orientation is an attitudinal concept based on subjective evaluation (Nummela, Puumalainen, & Saarenketo, 2005) and is considered to be particularly important for international growth (Yli-Renko et al., 2002). IGO is thought to be a useful construct for differentiating companies according to their motivation to seek growth in international markets, and also for identifying the factors behind the chosen growth strategies (Nummela et al., 2005).

Broadly speaking, internationalisation means the entry to new-country markets. It may, therefore, be described as a process of innovation (Bilkey & Tesar, 1977; Andersen, 1993; Casson, 2000). Faced with increasing international competition, innovation has become a central focus in firms’ long-term strategies. Firms competing in global markets face the challenges and opportunities of change in markets and technologies. One important aspect within innovation management is the optimal integration of external knowledge, since innovation increasingly is derived from a network of companies interacting in a variety of ways (Veugelers & Cassiman, 1999).

The study is based on reviews of the relevant parts of the IM and IE literatures. We only selected articles for review that explicitly deal with innovative or entrepreneurial behavior.

The concept of brand image has received considerable attention in marketing (Batra & Homer, 2004; Dhar & Wertenbroch, 2000; Roth, 1992; Thompson, Rindfleisch, & Arsel, 2006; van Reijmersdal, Neijens, & Smith, 2007; van Rekom, Jacobs, & Verlegh, 2006), yet there is still little agreement on its definition and operationalisation in the literature. As Dobni and Zinkhan (1990) observed, despite the frequent use by scholars of the term “brand image,” its definitions in the literature tend to focus on different elements. It is possible to group definitions of brand image into different categories. For example, brand image has been defined as (a) an attitude extending its meaning beyond the physical product (e.g., Reynolds & Gutman, 1984) and (b) perception, relating brand image to psychological aspects of a product's tangible attributes (e.g., Keller, 1998). One generally accepted view is that brand image can be defined as perceptions regarding a brand as reflected by the cluster of associations that consumers connect to the brand name in memory (Herzog, 1963). This is consistent with an associative network memory model. Thus, “brand associations are the other informational nodes linked to the brand node in memory and contain the meaning of the brand for consumers” (Keller, 2003, p. 66).

Intent refers to a firm's initial propensity to view collaboration as an opportunity to learn (Hamel, 1991, p. 90). Comparing the intent to form alliances between Western and Japanese firms, Hamel indicates that most Western firms possess substitution intent to substitute their competitiveness in a specific area for their own lack of skills, whereas the Japanese partners seem to have explicit learning intent to actually internalize their partners’ skills. When the internalization intent is strong in a company, the skills and knowledge acquired from the partner are important to the growth of the whole company (Hamel, 1991). However, if both partners possess equal intent to internalize the other's skill, distrust and conflict may occur to threaten the stability of alliances (Hamel, Doz, & Prahalad, 1989; Madhok, 2006).

In tandem with the drastic increase of IJVs, the academic research regarding various issues about them has also augmented. Myriad of studies examining the antecedents and outcomes of partner/location selection, different control and safeguarding mechanisms, performance, and stability of IJVs have appeared in revered scholarly outlets. A review of the previous research on IJVs reveals that a vast amount of these studies is focused on their formation (e.g., Kogut, 1988) and the advantages of them as governance structures (e.g., Hennart, 1988).

To explain why international market diversification is a viable strategy, a substantial portion of the past literature hinges its conclusions on mainstay perspectives. Some authors utilize internalization theory and transaction cost analysis (e.g., Teece). Others draw from the resource-based explanation of the firm (e.g., Chang, 1995), institutional theory (e.g., Davis, Desai, & Francis, 2000), organizational learning (Ruigrok & Wagner, 2003); a combination approach (e.g., Madhok, 1997) or eclectic paradigm (Dunning, 1988). These perspectives are widely discussed in the literature. For that reason we present the earlier work only in a brief summary.

In order to determine the status quo of PLS path modeling in international marketing research, we conducted an exhaustive literature review. An evaluation of double-blind reviewed journals through important academic publishing databases (e.g., ABI/Inform, Elsevier ScienceDirect, Emerald Insight, Google Scholar, PsycINFO, Swetswise) revealed that more than 30 academic articles in the domain of international marketing (in a broad sense) used PLS path modeling as means of statistical analysis. We assessed what the main motivation for the use of PLS was in respect of each article. Moreover, we checked for applications of PLS in combination with one or more additional methods, and whether the main reason for conducting any additional method(s) was mentioned.

Measures are comparable if and only if measurement equivalence has been demonstrated. Although comparability and equivalence of measures are sometimes used interchangeably, we advocate a subtle but important difference in meaning. Comparability implies that measures from one group can be compared with measures from another group. It is a property of the measures, which is given or not. In particular, comparability presumes valid measures within each group compared. Measurement equivalence, by contrast, refers to the way measures are derived and estimated. It is intrinsically tied to the underlying theory of measurement. Thus, measurement equivalence cannot be dealt with in isolation. Its assessment has to be incorporated into the theoretical framework of measurement. Measurement equivalence is closely connected to construct validity for it refers to the way manifest indicators are related to the latent variable, within a particular culture and across different cultures. From this it follows that equivalence cannot, or should not, be treated as a separate issue but as a constitutive element of validity. A discussion of measurement equivalence without addressing validity would be incomplete.

Technology is often defined as a valuable firm resource particularly relative to marketing functions in the organization (Barua, Kriebel, & Mukhopadhyay, 1995; Bharadwaj, 2000; Christensen, Johnson, & Rigby, 2002). When resources are customized to match a marketing strategy, they become firm specific, and thus central to firm performance. Marketing employees also may be defined as an essential resource, in the context of key marketing activities that need to be accomplished (Barney, 1986, 2001; Coff, 2002; Dess & Picken, 1999). Because both employees and technology play key roles, we ground this study in the resource-based view (RBV) of the firm (Barney, 1991, 2001; Peteraf, 1993; Wernerfelt, 1984).

We searched JM from 1990 to 2005 to identify all studies that employed OLS regression.¹ The search resulted in 83 articles with 147 OLS regressions. Many authors specifically state that they used OLS and these were promptly included in the sample. Other authors acknowledged regression as a methodological procedure without explicitly specifying an estimation technique. To inquire whether OLS was used, we communicated with all of these authors. In all, 51 authors were contacted, with 44 responding. Of the 44 that responded 43 had used OLS; the only exception was subsequently excluded from the analysis. The remaining seven articles were checked once more, and consensus was reached that OLS had most likely been used. Therefore, they were also included in the study.