Engaging in International Activities to Enhance Innovation Performance: The Perspective of Local SMEs in Emerging Markets

Yen Tran, Nhan Nguyen*, Babak Taheri

*Corresponding author for this work

Research output: Contribution to conferencePaperpeer-review

Abstract

Prior international business (IB) literature has emphasised on the benefits of outward international activities (export, FDI) for firms’ innovation enhancement from the perspective of multinational corporations. Our study of emerging marketing SMEs shows that it is the inward international activities (i.e., imports, in-licensing and acting as suppliers for foreign customers) which play important role in improving local SMEs’ innovation performance. Conducting cross-country analysis of 7 upcoming Asian emerging economies (Bangladesh, Indonesia, Malaysia, Pakistan, Philippines, Thailand, and Vietnam) followed by longitudinal analysis focusing on Vietnam, we provide the evidence that local SMEs can significantly increase their innovation performance simply by staying in their home country and engaging in "more receiving" activities of imports, in-licencing and acting as suppliers for foreign customers. This effect is further amplified if they strategically invest in R&D to develop their absorptive capacity. Additionally, this research makes a methodological contribution by overcoming self-selection bias (i.e., international companies already possess higher innovative capabilities before entering overseas markets) to show the positive impact of export intensity on subsequent new product innovation in the longitudinal analysis
Original languageEnglish
Publication statusPublished - 6 Jul 2022
EventAIB Annual Meeting 2022 - Miami, United States
Duration: 6 Jul 20229 Jul 2022

Conference

ConferenceAIB Annual Meeting 2022
Country/TerritoryUnited States
CityMiami
Period6/07/229/07/22

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