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Paper info: International orientation and innovation capabilities of Japanese industrial firms

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International orientation and innovation capabilities of Japanese industrial firms

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The paper was published at the 35th IMP-conference in Paris, France in 2019.

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Abstract


The geographical boundaries ofthe business world are becoming less important, prompting Japanese industrial firms to develop the relationship ofinternational customers and performance based an extensive international presence (Lin et al., 2011; Moen et al., 2016).Therefore, it is a growing consensus that understandingthe role of international orientation (IO) to firms’ international customer engagement strategies and firms’ performanceis necessary. Some studies have indicated that IO is linked to producing competitive advantages at the firm level and to superior financial success (e.g.,Knight and Kim, 2009; Lin et al., 2011; Bagheri et al., 2019). However, other researchers have indicatedthat the expansion of foreign operations makes both costs and benefitsand have recognized that internationalization can entail risk and failure (Mohr and Batsakis, 2017). Consequently, the literature contains mixed results. The aim of this paper is to explore the relationship between IO and performance of industrial firms. In special, we focus on the effect of IO oncustomer engagement strategies. For our research purpose, our study focuses on the Japanese context, a context that has received less attention in the relevant literature. Many of the Japanese industrial firms have been challenged in turbulent international markets based upon high technological products so that they perceive high potentialrisks which may leaddifferent degree of IOamong firms.Moreover, we examine the moderating effectsof firms’ innovation capabilities drawing on the organizational learning theory(Crossan et al., 1999). Innovation capabilityisa core resource of firmsbecauseit can pushfirms’NPD performance (Salomo et al., 2008). Although different roles of two types of innovation capabilities are emphasized onprevious studies, only specific type of innovation (e.g., technological innovation) is tested as a prompter (Bagheri et al., 2018). Therefore, we also test the moderating role of two different typesof innovation capabilities -exploration and exploitation innovation-on the relationshipsbetween IO and customer engagement strategies.