Paper info

Exploring Inward-Outward Linkages in Firms' Internationalisation: A Knowledge and Network Perspective

Gabriel R. G. Benito, Lawrence S. Welch, Pål R. Silseth and Tore Karlsen

The paper was published at the 17th IMP-conference in Oslo, Norway in 2001.

Outward operations such as exports and foreign investment have received most of the attentionin international business research, but the internationalisation of businesses also includesactivities that are inwardly oriented. Inward activities like purchase of machinery andequipment, and procurement of raw materials and semi-finished goods provide manyopportunities for learning about international business and for building relations with foreignactors. Often such activities ? directly or indirectly ? also lead to the opening-up of outwardoperation possibilities for companies. Recent research shows that for many firms internationaloperations have evolved via various forms of inward activities, especially since such activitieshelp develop a range of potential links through which information relevant to outwardoperations might be transferred. This paper presents a case study of the Norwegian companyMoelven and its operations in the Russian market. Moelven's experience shows that inwardoperations should, at least, be considered as ways to initial entry and early development of aforeign market. Moelven was able to gain considerable benefits from its initial importingoperation, in what was perceived as being a high-risk market. The various import activities andtheir outcomes not only provided a springboard for later outward operations, but they alsohelped lowering the perceived risk and uncertainty of the extended operations. The findingsnevertheless show that the creation and utilization of knowledge through connecting inwardand outward operations are paved with many obstacles, and the full potential of suchconnections was hence seldom realized.