KOREASCHOLAR

The growing pace of market globalization has enabled firms to find it increasingly attractive to exploit growth opportunities abroad. To this end, predicting firms’ success and growth in foreign markets has become an important issue to international business researchers and managers. The international business literature suggests that different internal firm and foreign market specific environment factors drive internationalization of firms including firms’ structure, strategy, orientations, capabilities and nature of foreign market competition. Researchers interested in the field of international entrepreneurship have also given attention to firms’ international entrepreneurial orientation (IEO) as a potential driver of firms’ internationalization behavior, with few recent studies reporting investigations into the relationship between IEO and internationalization scope. The entrepreneurship literature suggests that variations in entrepreneurial behaviors may lead to exploitation of “new entry” (Oviatt & McDougall, 2005; Cavusgil & Knight, 2015). Within the international entrepreneurship discipline, international new entry is construed to entail identification and exploitation of new product-market opportunities abroad, or a pursuit of internationalization scope (Dai et al., 2014). Internationalization scope is defined as the process of seeking new market opportunities across multiple foreign markets, and is operationalized variously with indicators that tap the percentage of overseas revenue to total revenue, and the number of foreign countries and geographic regions from which a firm receives its sales. Thus, internationalization scope is viewed to be inherent and essential to the exhibition of an IEO, and may be driven by firms’ entrepreneurial proclivity. While a few studies have looked at how IEO impacts percentage of revenue firms obtain from foreign markets (Dai et al., 2014), little studies have studied how and when IEO drives regional expansion. This is notwithstanding the fact that traditional internationalization theory points to regional expansion as an antecedent to global expansion. Indeed, international business scholars have argued that a combination of increasing informal exporting activities, rising liberalization of regional economies, colonial bias, regional economic blocs and the emergence of middle class in many regional markets has created opportunities for firms to internationalize within neighboring geographical regions. Additionally, it has been argued that the benefits and costs of regional protection can motivate firms to pursue regionalization strategy as an antecedent or an alternative to globalization strategy. In drawing insights from earlier works, therefore, the present study focuses on the regional expansion of exporting firms in a Sub-Sahara African economy – Ghana, and examines how international entrepreneurial-oriented behaviors drive the firms’ intra-Africa expansion. African markets are noted for their diversity in national laws, cultures, geography, and infrastructural development. Particularly relevant to internationalizing African firms is the diversity and imperfection of marketing channels across African markets. An important implication for African firms, therefore, is how they can leverage their comparative advantage of handling diversity and imperfection of marketing channels in their home African market to successfully compete in overseas host markets with similar conditions. Accordingly, we further empirically examine how a firm’s ability to manage heterogeneous and imperfect marketing channels moderates the effect of IEO behaviors on regional expansion. We posit that the extent to which firms develop managerial and organizational capabilities to successfully compete in conditions of high market channel diversity and imperfection is a major contingency factor that can help explain when entrepreneurial behaviors influence regional expansion. By empirically examining these questions, this study brings new insights to IEO research by showing that IEO behaviors are differentially related to regionalization strategy depending on firms’ capability to manage heterogeneous and imperfect regional marketing channels. Specifically, findings from our study of small and medium sized firms in Ghana doing business in regional African markets show that regional expansion increases when levels of product innovation intensity, competitive aggressiveness and autonomous behavior are high and when regional channel management capability increases in magnitude. Additionally, the study provides evidence to show that increases in risking-taking behavior decrease regional expansion when regional channel management capability is high. Furthermore, the study demonstrates that although product innovation novelty and proactiveness are directly related to regional expansion their effects are cancelled out when levels of regional channel management capability are high.

• Nathaniel Boso(University of Leeds, UK)
• Magnus Hultman(University of Leeds, UK)
• Pejvak Oghazi(Linnaeus University, Sweden)