Explaining performance determinants: A knowledge based view of international new ventures

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Explaining performance determinants: A knowledge based view of international new ventures ⁎

Silvia L. Martina, , Rajshekhar (Raj) G. Javalgib a b

California State University Los Angeles, 5151 State University Drive, Los Angeles, CA 90032-8121, United States of America Walsh University, 2020 E Maple St, North Canton, OH 44720, United States of America

A R T I C LE I N FO

A B S T R A C T

Keywords: Entrepreneurial orientation Knowledge-based resources Marketing capabilities International new ventures Export venture performance

From the standpoint of the knowledge-based view (KBV), the attainment and deployment of relevant knowledge is essential to firm performance. Nevertheless, there is little empirical evidence supporting KBV explanations of international new ventures' (INVs') export venture performance. This paper examines a KBV framework of INVs' export venture performance to assess the role of knowledge-based resources within the entrepreneurial orientation (EO) performance paradigm. The results show that EO is a common antecedent to knowledge-based resources, marketing capabilities, and export venture performance. Knowledge-based resources impact marketing capabilities, which, in turn, influence export venture performance. The findings show that EO interacts with knowledge-based resources to shape marketing capabilities. The implication for managers is that INVs require EO to develop knowledge-based resources that are sufficient to perform effectively and efficiently and to adapt to the environments in which these firms find themselves.

1. Introduction Research issues in the international marketing field emerge and fade in response to continuous changes taking place in global markets (Samiee & Chabowski, 2012). One exception is firms' knowledge resources and capabilities. Based on seminal management theory (Grant, 1996), knowledge resources and capabilities have become increasingly prominent in framing international marketing issues (Ju, Zhou, Gao, & Lu, 2013; Prange & Verdier, 2011; Zhou, Wu, & Barnes, 2012). The knowledge-based view (KBV) of the firm leverages strategic and operations management (Foss, Lyngsie, & Zahra, 2013), marketing strategy research (Ning, Boulding, & Staelin, 2010), and knowledge management work (Gardner, Gino, & Staats, 2012). The KBV emphasizes the study of knowledge-based resources, which refer to mechanisms that firms use to combine and transform tangible resource inputs (Gassmann & Keupp, 2007). In the current era of globalization and advanced technologies, scholars have highlighted the importance of KBV influences on internationalization theory (Sapienza, De Clercq, & Sandberg, 2005). During the past two decades, a new breed of small and medium-sized enterprises (SMEs) initiated exporting shortly after formation. This breed of firms has become crucial for the diffusion of product-market innovations and the economic development of nations. These are hightech firms that, from inception, endeavored to gain advantage from the ⁎

use and deployment of knowledge-based resources for the international sale of outputs. Various studies refer to them as international new ventures (INVs) (Oviatt & McDougall, 2005). Despite academic interest in KBV theory and its relevance to firms' international performance, four limitations are found in the existing literature. First, while a fundamental KBV premise is that a firm's knowledge base is linked with performance as it relates to competition (Morgan, Zou, Vorhies, & Katsikeas, 2003), there have been few direct attempts to empirically examine this proposition among INVs. KBV posits that knowledge-based resources are critical determinants of the firm's capacity to generate substantial competitive advantage. In empirical studies, the knowledge-based framework has proven useful for explaining internationalization, such as issues of knowledge intensity and international expansion (Autio, Sapienza, & Almeida, 2000), or venture capitalist knowledge and new venture internationalization (Fernhaber & McDougall-Covin, 2009). However, there is virtually no empirical evidence of the efficacy of knowledge-based resources in enhancing the performance of INVs relative to competition. Failure to empirically examine such a fundamental KBV proposition leads to questions concerning the utility of the theory in the case of INVs. Second, given the purported relevance of entrepreneurship to firm performance (Wiklund & Shepherd, 2005), it is surprising that empirical studies have produced mixed results for the entrepreneurial orientation (EO)–performance relationship (e.g. Martin & Javalgi,

Corresponding author. E-mail addresses: [email protected] (S.L. Martin), [email protected] (R.R.G. Javalgi).

https://doi.org/10.1016/j.jbusres.2019.02.041 Received 13 June 2018; Received in revised form 14 February 2019; Accepted 16 February 2019 0148-2963/ © 2019 Elsevier Inc. All rights reserved.

Please cite this article as: Silvia L. Martin and Rajshekhar (Raj) G. Javalgi, Journal of Business Research, https://doi.org/10.1016/j.jbusres.2019.02.041

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et al., 2008) is appropriate for testing the impact of knowledge-based resources and marketing capabilities on the EO–performance framework. This paper is organized as follows. Section 2 integrates insights from established KBV theory into the EO-performance paradigm of INVs to develop a conceptual model. Section 3 describes the data, sample and measurement. The measures are validated, and the structural model estimated in Section 4. Section 5 discusses the results on the predicted relationships and explores the theoretical and managerial implications. Section 6 presents findings and the paper's contributions. Finally, Section 7 discusses the paper's limitations and makes suggestions for future research.

2016; Rauch, Wiklund, Lumpkin, & Frese, 2009). While a number of studies have confirmed a strong positive connection between EO and performance (e.g. Hult, Tomas, Snow, & Kandemir, 2003; Lee, Lee, & Penning, 2001; Wiklund & Shepherd, 2005), several others report a weak or non-significant link (e.g., Dimitratos, Lioukas, & Carter, 2004; Lumpkin & Dess, 2001). Such inconsistent evidence on the connection between EO and performance indicates the necessity for additional research. The third limitation concerns a need to understand whether characteristics of the firm affect the connection between EO and performance (Renko, Carsrud, & Brännback, 2009)—that is, serve as mediators or boundary conditions of the EO-to-performance relationship (Baker & Sinkula, 2009). The literature includes empirical attempts to explain performance by investigating the performance effect of a firm's EO and its contingent relationship with the external environment (e.g., Wang, 2008); however, it has largely disregarded the call from Lyon, Thomas Lumpkin, and Dess (2000) for studies to analyze the role of the internal characteristics as contingent mechanisms determining the EO–performance relationship. Indeed, little research exists on the causal mechanisms connecting EO, knowledge-based resources, marketing capabilities, and performance. Some studies show that EO functions as a moderator of the link between knowledge-based resources and performance (e.g. Wiklund & Shepherd, 2003), whereas others demonstrate that EO is a strong predictor of market information in highly entrepreneurial firms (e.g. Keh, Nguyen, & Ng, 2007). The KBV literature reveals that market information is an important component of knowledge-based resources (Morgan et al., 2003). Whether EO acts as a predictor of knowledge-based resources and/or as a boundary condition to their performance relevance is unknown in international marketing, generally, and in the INV context, specifically. Fourth, the EO–performance relationship has been widely studied in developed countries. The literature offers examples of Fortune 500 firms (Hult et al., 2003), Swedish firms (Wiklund & Shepherd, 2005), and Greek firms (Dimitratos et al., 2004), among others. In contrast, the literature stream has devoted little attention to emerging economies, despite the rapid pace of economic activity occurring in such markets. The accelerating rate of new venture internationalization from emerging markets (Bruton, Ahlstrom, & Obloj, 2008; Luo & Tung, 2007) presents a compelling context within which to refine the understanding of how EO and knowledge-based resources impact performance. Based on the identified gaps in the KBV literature, this study seeks to answer the following question: What is the nature of the contingent relationship between EO and knowledge-based resources in determining the performance of INVs? This study makes four main contributions to the literature. First, it integrates the EO–performance paradigm into the KBV literature to develop and test a novel model of INVs' export venture performance. The relationships examined draw on entrepreneurship research, with knowledge as a resource endowment, to theorize the performance of international, highly entrepreneurial firms. This study extends the KBV literature into the increasingly important domain of INVs and offers new insights for researchers and managers in this area. Second, this study provides new empirical insights connecting direct and mediated effects of EO on the performance of INVs. Entrepreneurial activity within the firm fosters the emergence of INVs and their accelerated internationalization. Yet this study is novel in showing the pervasive role of EO in affecting performance not only directly—but also indirectly through marketing capabilities and knowledge-based resources—in these highly entrepreneurial firms that challenge conventional theories of incremental internationalization. Third, this study not only demonstrates that EO drives knowledgebased resources, but also unveils greater complexity in the form of the interaction between EO and knowledge-based resources affecting the marketing capabilities, but not the performance, of INVs. Finally, the empirical study is conducted on INVs from an emerging market. This setting's higher emphasis on constrained resources (Bruton

2. Theoretical background and hypotheses The complexity of the relationship between EO and performance involves more than just a direct effect. Recent EO scholarship suggests that a promising direction is to explore the interaction of EO with related variables (Slevin & Terjesen, 2011). However, despite Lyon et al. (2000), there has been little progress on new approaches to EO (Covin & Wales, 2012). Given the strategic significance of knowledge-based resources as internal characteristics of the firm (Wiklund & Shepherd, 2003), there is scholarly and managerial interest in understanding the connection between knowledge-based resources and the firm's ability to be entrepreneurial (Gassmann & Keupp, 2007; Kedmenec & Strašek, 2017) and to improve performance (Gardner et al., 2012). Accordingly, this model theorizes EO in terms of its interplay with knowledge-based resources; this interplay potentially determines both the marketing capabilities and the performance outcomes at the export venture level (Krasnikov & Jayachandran, 2008; Lages, Jap, & Griffith, 2008). International marketing studies using the KBV have suggested that knowledge-based resources concern different components, including human capital knowledge, market information knowledge (Morgan et al., 2003), and customer relational knowledge (Johnson, Sohi, & Grewal, 2004), among others. Human capital knowledge refers to the accumulation of skills, experience, quality, and know-how from direct participation in international market operations. Such knowledge is fundamental to INV personnel's ability to accomplish tasks effectively and efficiently (Karra, Phillips, & Tracey, 2008). Market information knowledge concerns data from customers, competitors, and distributors within the export venture marketplace that have been derived and organized in a manner that gives them meaning (Morgan, Katsikeas, & Vorhies, 2012). Customer relational knowledge pertains to links to customers, who are the firm's reason for existing. It refers not just to the number of customers, but also to the closeness and strength of client relationships (Morgan, Vorhies, & Schlegelmilch, 2006). The KBV suggests interrelationships among human capital knowledge, market information knowledge, and customer relational knowledge. For instance, human capital knowledge is the experience and skills for task completion, while market information knowledge refers to gathering and organizing data in a manner that facilitates tasks. Market information knowledge influences human capital knowledge of the export venture because it impacts the selection and performance of required tasks. Likewise, human capital knowledge contributes to decision making through better choices and interpretations of information (Morgan et al., 2003). In addition, customer relational knowledge is related to market information and human capital knowledge; that is, firms need strong relationships with customers to provide knowledge for their personnel's continuous development of market data (Coviello & Joseph, 2012). 2.1. Marketing capabilities and performance The concept of capability development and its likely influence on business performance has been an important focus within the marketing and management fields (Murray, Gao, & Kotabe, 2011). 2

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According to the resource-based view (RBV), firms' capabilities are at the root of sustainable competitive advantage. Seminal studies have identified capabilities as a complex collection of skills and acquired knowledge that enable firms to coordinate activities and make use of their assets. This collection of skills and knowledge serves to bring together the different resources to be deployed to maximum advantage (Day, 1994). According to the KBV, capabilities can be viewed as integrative processes by which knowledge-based resources and tangible resources come together to create valuable outputs (McEvily & Chakravarthy, 2002). Different types of capabilities have been identified, including technological, marketing, and operational capability (Krasnikov & Jayachandran, 2008). Marketing capabilities, in particular, are integrative processes designed to apply necessary resources to the firm's market-related needs, enabling the firm to add value and meet competitive demands. Such capabilities are developed in order to gain advantage in the marketplace (Day, 2011). A firm's marketing capability is characterized by its ability to develop and deliver superior value to its customers by combining its available resources (Wiles, Morgan, & Rego, 2012). Marketing capability indicates the firm's ability to gather and disseminate information in order to develop proper responses to current and future needs, in line with changing competitive dynamics (Morgan et al., 2003). Specific capabilities allow the firm to deliver superior customer value relative to the competition. Marketing capabilities might be expected to influence firm performance because they are based on understanding customers' needs and the export market environment. Marketing capabilities have been recognized as important sources of competitive advantage (Morgan et al., 2012; Vorhies, Orr, & Bush, 2011), and their impact on performance among INVs has yet to be addressed in the international marketing literature. Given the heterogeneity of INV firms, when compared to incumbents in the export market, their marketing capabilities and ability to deliver superior value to customers are crucial to performance. Based on the assumption of heterogeneity among firms, Morgan et al. (2006) identify marketing capabilities as central to understanding performance at the export venture level of the firm. The current study argues that this assumption holds for the export venture of INVs and hypothesizes the following:

hypothesis is based on the above discussion: Hypothesis 2. Entrepreneurial orientation is positively related to performance at the export venture level of INVs. 2.3. Entrepreneurial orientation and marketing capabilities INVs are entrepreneurial firms that learn in foreign markets (Jones & Coviello, 2005). The development of market-specific knowledge and capabilities is crucial to INVs' learning process (De Clercq, Sapienza, Yavuz, & Zhou, 2012). The key notion behind marketing capabilities is a firm's ability to learn about its market environment and to use this knowledge to guide its actions toward external market changes efficiently and rapidly (Day, 2011). Early entry into foreign markets helps INVs to secure better positions in export market networks. As a result, early export market entry may be a source of entrepreneurial advantage for INVs. These firms develop the market-specific knowledge and capabilities required for successful internationalization, particularly in rapidly changing environments (Sapienza, Autio, George, & Zahara, 2006). The entrepreneurship business culture may foster a firm's entrance into new markets, along with the introduction of new and innovative products (Liu, Luo, & Shi, 2002; Olugbola, 2017). No matter where entrepreneurship exists in the firm (i.e., with the owner, the management, or the general culture), the firm will behave more creatively and with more initiative and will be braver in conducting the new business (Simon & Kim, 2017). Entrepreneurship also plays a critical role in developing new products and services (Ludovico, 2017). Prior studies underscore the influence of EO on INVs by combining entrepreneurship and the marketing paradigm in order to evaluate the behavior and performance of SMEs affected by globalization (Rasmussan, Madsen, & Evangelista, 2001). Conceptualized as a firm's strategic orientation, EO captures its decision-making activities, processes, and practices that lead to foreign market entry. The presence of EO in a firm implies that it will be more willing than others to continually search for opportunities and solutions outside the realm of its current activities. Marketing capabilities are deeply embedded in organizational routines and practices, and these cannot be traded or imitated easily (Martin & Javalgi, 2016). Firms with EO create and exploit opportunities, often well ahead of their rivals (Miller, 2011), by developing and applying different marketing capabilities (Lisboa, Skarmeas, & Lages, 2011; Zahra, 2006). This leads to the following hypothesis:

Hypothesis 1. The possession of marketing capabilities is positively related to performance at the export venture level of INVs. 2.2. Entrepreneurial orientation and performance Entrepreneurial Orientation (EO) has received a great deal of conceptual and empirical attention in the international marketing and management literature. Essentially, EO demonstrates how a firm operates rather than what it does or makes. According to work linking entrepreneurship to strategic management, entrepreneurially-oriented firms are more willing to assume risks, have more desire to innovate, and are more proactive than competitors toward new marketplace opportunities (Lumpkin & Dess, 2001). To respond to dynamic and competitive environments, new ventures strive to transform EO into feasible strategic actions to fulfil the firm's desired performance outcomes (e.g., in export markets). The importance of EO to the survival and growth of firms has been widely acknowledged in marketing and entrepreneurship studies (Wiklund & Shepherd, 2005; Zahra & Garvis, 2000). However, there is limited empirical evidence for this premise among INVs (Knight, 2000). Some studies present EO as an enabler for new ventures to perform better than rivals and improve firm performance; this argument is found in the literature on domestic new ventures (Ireland, Hitt, & Sirmon, 2003) and INVs (Martin & Javalgi, 2016). Research has shown, however, that domestic new ventures are often unsuccessful in translating EO into higher performance because of a lack of resources (Stam & Elfring, 2008). Little is known about the effect of INVs' lack of resources on EO and high-performance relationships. The following

Hypothesis 3. Entrepreneurial orientation is positively related to marketing capabilities at the export venture level of INVs. 2.4. Entrepreneurial orientation and knowledge-based resources According to the KBV literature, knowledge of export information is critical to success in the global exporting marketplace since firms use it to identify marketing opportunities and constraints within foreign markets and to target potential customers. According to the exporting literature, knowledge-based resources are crucial when they concern customers, competitors, and the business environment of the target export market (Morgan et al., 2003). INVs are young, flexible, and agile, and these characteristics permit them to adapt to diverse markets and to adjust to ongoing export market changes. Such characteristics are associated with a firm's EO, a type of firm culture which encourages innovation and risk taking at the export venture level (Knight, Madsen, & Servais, 2004). A firm with a culture that promotes innovation as well as the acquisition and dissemination of knowledge will continuously work to develop new products and improve business practices (Martin, Javalgi, & Cavusgil, 2017; Senet-Bailach & Rey-Martí, 2017). Similarly, INVs with cultures that encourage risk taking are more likely to be proactive in seeking 3

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knowledge-based resources and opportunities. Thus, firms' EO contributes to their ability to gain export market knowledge due to their proclivity for innovative actions and risk taking (Knight & Cavusgil, 2004). There is a natural and necessary complementarity between the firm's EO and its knowledge-based resources (Wiklund & Shepherd, 2003). In order to be competitive, an INV firm requires EO to feed its knowledge resources if these are then to be deployed in critical marketing capabilities and increase export performance (Miller, 2011). Underpinned by this line of reasoning, this study states the following hypothesis:

heterogeneous resources used to create value (Barney & Delwyn, 2007). While strategic marketing capabilities are always built upon multiple resources, there is literature suggesting that some resources can be so strategic and unique—irrespective of their being related to one or more marketing capabilities—that they directly impact performance (Grobler, 2007). This is usually the case when the mere possession of said resource makes a difference to competitive positioning or drives the firm's performance outcomes. The RBV literature considers information knowledge as a strategic resource (Morgan et al., 2003) and explores how firms develop reliable ways to harness knowledge-based resources to generate superior performance (Keh et al., 2007), even when INVs face dynamic environments (Sirmon, Hitt, & Ireland, 2007). Therefore, this study proposes the following hypothesis:

Hypothesis 4. Entrepreneurial orientation is positively related to knowledge-based resources at the export venture level of INVs.

Hypothesis 6. Knowledge-based resources are positively related to performance at the export venture level of INVs.

2.5. Knowledge-based resources and marketing capabilities

2.7. Entrepreneurial orientation and knowledge-based resources interactions

Knowledge is broadly recognized as a strategic resource, and organizations with better knowledge generation processes can link knowledge in novel ways to provide value to customers (McEvily & Chakravarthy, 2002). Some definitions of knowledge relate it closely to information. For instance, knowledge can be defined as information that contains value (Kearns & Sabherwal, 2006) or as “a clear understanding of information” (Bierly, Kessler, & Christensen, 2000; p. 598). Consistent with this view, the export marketing literature suggests two types of knowledge that are particularly important components of knowledge-based export ventures. The knowledge base consists of “informational” (also referred to as “know-what”) or “explicit” knowledge and “experiential” (also referred as “know-how”) or “tacit” knowledge. Studies suggest that experiential knowledge within an export venture is likely to impact the venture's informational knowledge base, and vice versa. An organization can convert a venture's knowledge base into functional-level (e.g., marketing) capabilities that organize effective and efficient tasks, thus allowing the venture to successfully adapt to its broader business environment (Morgan et al., 2003). A high-velocity competitive environment necessitates dynamic organizational processes since these can facilitate a firm's fast strategic decisions (Ghemawat & Pisano, 2001). Combining and recombining knowledge-based resources to deploy capabilities is one such dynamic process. Although an array of capabilities may need to intersect to achieve superior performance in the marketplace (Eisenhardt & Martin, 2000), organizational processes resulting from information acquisition typically play a crucial role insofar as these enable the firm to learn what customers want and what alternative offers are available in the market. Such timely information ensures an ongoing dialogue with the customer. The firm's acquisition of knowledge-based resources not only emphasizes two-way communication with customers and better listening, but also increases interactivity with the broader marketing environment. Knowledge-based resources are based on information interchange among the firm, customers, competitors, channel members, and the broader market environment (Day, 2011; Jaworski, Kohli, & Sahay, 2000). This dialogue allows the firm to incorporate customer needs into its new product development, as well as into its sales and distribution service capabilities (Ramaswami, Srivastrava, & Bhagrava, 2009). Therefore, the following hypothesis is proposed:

The EO–performance relationship is more complex than previously theorized. Indeed, studies now suggest that internal characteristics of the firm could condition this link. Heeding calls for new approaches to studying EO (Lyon et al., 2000), Slevin and Terjesen (2011) recommend that a promising direction is to investigate the interactions of EO with related variables in order to boost its performance relevance. The limited empirical evidence from the KBV literature maintains that EO can help explain why some firms have managerial processes that enable them to better utilize their resources and forecast changes in the market. A firm well-endowed with knowledge-based resources will perform better if it also possesses EO. That is, firms may derive advantage from managerial methods and practices based on a decisionmaking style that promotes willingness to capitalize on their knowledge-based resources by engaging in entrepreneurial activities. Findings show that firms' entrepreneurial activities can moderate the relationship between knowledge-based resources and performance (Wiklund & Shepherd, 2003). Specifically, these findings were obtained from SMEs operating domestically within the manufacturing, wholesale/retail, and service industries. While a few available studies propose that the relationship between knowledge and EO provide firms with particular advantages that facilitate foreign market entry operations (e.g., Knight, 2000), they all stop short of empirically examining the proposition. In this regard, there is a concomitant need to understand the interaction of EO and knowledge-based resources in highly entrepreneurial international firms, such as INVs. The pursuit of opportunities requires EO and knowledge-based resources to facilitate the firm's internationalization. There are more strategic options for a firm when more knowledge-based resources are available. Firms with considerable knowledge-based resources understand where to look for opportunities, can more accurately assess the value of potential opportunities, and have the ability to extract value from these opportunities (Chandra, Styles, & Wilkinson, 2009). Despite Slevin and Terjesen's call for further research (2011), there has been little progress on new approaches to understand the interaction of EO with related variables. The literature puts special emphasis on calls for EO scholarship with multiplicative interactions. This study maintains that INVs require the ability to use knowledge-based resources through an EO for these resources to become significant in explaining export venture performance. Furthermore, the study suggests that the interaction of knowledge-based resources and EO is based on their multiplicative effect. Therefore, the argument here is that human capital knowledge, market information knowledge and relational knowledge represent export venture knowledge-based resources applicable to an INV firm's ability to discover and exploit opportunities. Applying KBV logic to the international scenario, this study's

Hypothesis 5. The possession of knowledge-based resources is positively related to marketing capabilities of INVs. 2.6. Knowledge-based resources and performance Concurrent with the growing importance of firms' international activities, including exporting, there has been increasing interest in the RBV among researchers studying firms' performance overseas. The RBV suggests that firms are made up of unique combinations of 4

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Knowledge Based Resources (KBR)

H5 (+)

Marketing Capabilities

H6 (+)

H7a (+) EO & KBR interaction

H4 (+)

H7b (+)

H3 (+)

Entrepreneurial Orientation (EO)

H1 (+)

Export Venture Performance

H2 (+) Fig. 1. Conceptual framework.

open in the world, with a 2.2% average tariff rate. Mexico has actively pursued trade liberalization and has entered into 12 free-trade agreements with 44 countries (WTO, 2014). Notwithstanding this, in the prevailing literature, relatively few studies have focused on Mexico's INVs (Hughes, Martin, Morgan, & Robson, 2010). Based on Rennie's (1993) seminal argument that INVs begin exporting, on average, only two years after foundation, this study analyzes INVs that internationalize within this time frame. This reasoning is reinforced by studies suggesting that firms starting foreign operations in this two-year period perform better in foreign markets than those that internationalize later (Knight & Cavusgil, 2004).

theoretical model indicates that the interaction of knowledge-based resources and EO has a direct effect on the marketing capabilities of the INV. This assumption is based on previous discussions in the international marketing field emphasizing the pivotal role of marketing capabilities in the deployment of market-related resources to respond to the needs of the market (Morgan, Slotegraff, & Vorhies, 2009). Marketing capabilities determine the boundaries of the integrative processes configured to utilize significant firm resources that enable the firm to add value (Day, 2011); and EO can be seen as conducive to the refinement and extension of a firm's existing knowledge (Lisboa et al., 2011). Therefore, this study asserts that the interaction of EO and knowledge-based resources has a direct impact on marketing capabilities. Consider, for example, a firm with customer knowledge for the export venture market, as well as an EO that actively seeks innovative ideas, supports risky projects and proactively introduces new brands. Such a firm would seem more likely to generate successful new products. With this in mind, the following hypothesis is postulated:

3. Research methodology 3.1. Conceptual model KBV studies suggest that knowledge is context-specific (Ambrosini & Bowman, 2001). Considering that most high-tech INVs start their foreign operations in the exporting context (Cavusgil & Knight, 2015), their export ventures become essential. Similarly, the international marketing literature recognizes that the knowledge that the firm's human capital possesses about market information and customer relations exists at the export venture level (Morgan et al., 2003). The export venture is the firm's effort to export a single product of a product line to a specific overseas market (Morgan et al., 2012). Accordingly, this paper's conceptual model, illustrated in Fig. 1, examines the constructs of interest at the export venture level.

Hypothesis 7a. The interaction of entrepreneurial orientation and knowledge-based resources is positively related to marketing capabilities at the export venture level of INVs. According to the RBV, EO captures the firm's organization in order to discover and exploit opportunities and to enhance other firm resources (Barney, 2001). Managers that encourage entrepreneurial activities based on the firm's knowledge-based resources should perform better (De Clercq & Arenius, 2006). This study proposes that a firm well-endowed with knowledge-based resources will perform better if it has EO. It also suggests how the interaction of knowledge-based resources and EO could drive improvements in the INV's export venture performance. For example, personnel with export marketing knowledge plus innovative ideas, and risk taking major decisions proactively searching for businesses, may translate directly into a higher export venture margin. Therefore, the following hypothesis is suggested:

3.2. Data, sample and measurement In Mexican government databases, INV firms are not identified as such and are mixed with other exporting firms that have no youngventure or high-tech connotation. To enable identification of INVs, this study aimed to generate INV venture-level data from high-tech industries alone and, thus, incorporated only INVs from multiple hightech industries to strengthen the generalizability of the findings and increase observed variance (Autio et al., 2000). To do so, the study followed the classification of the TechAmerica website to identify Mexican high-tech firms. Compiling multiple Mexican government databases and creating one of just INVs resulted in a target population of 1422 cases. Each of the 1422 firms was initially contacted by telephone with three purposes: first, to ensure that the firm was still operating and that its contact details were accurate; second, to explain the importance of the study and to gauge the firm's ability and willingness to participate; and third, to identify the firm's key informant for the study by name, title, and contact details—simultaneously checking his or her

Hypothesis 7b. The interaction of entrepreneurial orientation and knowledge-based resources is positively related to export performance at the export venture level of INVs. In line with the increased attention on the role of INVs operating in Latin America (Lopez, Kundu, & Ciravegna, 2009), this study focuses on Mexican INVs. High-tech, manufacturing exports from emerging markets such as Mexico have grown substantially over the past decade, following an extensive program of trade liberalization (Aulakh, Kotabe, & Teengen, 2000). Indeed, Mexican INVs have extensive international operations in North America; growing operations in Central and South America, and Europe; and some, but fewer, operations in Asia, Eastern Europe, the Middle East, and Africa. Mexico's economic growth has been driven largely by NAFTA, and its trade policy is among the most 5

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level are human capital-based knowledge, market information knowledge and relational-based knowledge. This study measured human capital-based knowledge with items from Morgan et al. (2006), market information knowledge with items from Morgan et al. (2003), and relational-based knowledge items from Johnson et al. (2004). The dimensions of marketing capabilities at the export venture level are new product development, sales, promotion, and distribution. While items from Zou, Fang, and Zhao (2003) were used to capture new product and distribution capabilities, items from Katsikeas, Paparoidamis, and Katsikea (2004) were used to source sales capabilities. A Likert-type seven-point scale was employed to operationalize knowledge-based resources and marketing capabilities, ranging from (1) “much worse” to (7) “much better,” with a mid-point label of “about the same.” Performance at the export venture-level is conceptualized in this study in terms of three dimensions: effectiveness, efficiency, and adaptiveness (Martin, Javalgi, & Ciravegna, 2018). Effectiveness is the success of a venture's products and programs in relation to those of its competitors in the market. Efficiency is the outcome of a venture's products and programs in relation to the resources employed in implementing them. The items of these two dimensions were obtained from Vorhies and Morgan (2003). Adaptiveness is the venture's success in responding over time to changing conditions and opportunities in the environment. To measure adaptiveness, items were taken from and Morgan et al. (2003). The participating INV managers were asked to provide their own rating of their firm's export venture performance relative to major competitors using a Likert-type seven-point scale, ranging from (1) “much worse” to (7) “much better”, with a mid-point label of “about the same.” Table 1 shows the list of items for each construct used in this study.

experience with the INV's exporting activities. As a result of this screening, 111 firms were dropped. The final usable sample consisted of 1311 INVs, each with an export venture relevant to the study. Some of the firms had multiple export ventures. Therefore, the telephone calls enabled a discussion to identify a relevant export venture for this survey. The telephone calls also assured that the selected managers were directly involved in the export ventures examined and that the managers fully understood the purpose of the study and the exact measures requested by the interviewers. Considering the managerial preference, culture and resource limitations, it was concluded that the most effective way to obtain access to and produce venture- level data in Mexico was to approach managers using telephone interviews. The lead author undertook a process of computer-assisted random calling of the firms in the usable sample in order to obtain responses for the survey. Given the need to collect data at the export venture level, it was believed that the data collected through telephone interviews were more comprehensive, accurate, and reliable than data collected through a mail survey would have been. A total of 265 INVs participated in the study, yielding a response rate of 20.21%; such a sample is considered adequate for analysis purposes (Hair, Black, Babin, Anderson, & Tatham, 2006). To investigate potential non-response bias, participating firms were compared with a random sample of 77 non-participating firms for which there were data—derived from telephone interviews—on sales, number of employees, and venture age. A test using ANOVA indicated no significant differences between the two groups (p > .05). To enhance confidence in respondent competency, Kumar, Stern, and Anderson's (1993) post hoc check was adopted in the final part of the questionnaire. In two items, respondents were asked to rate their specific knowledge concerning the questionnaire items and the extent to which the responses given accurately reflected their degree of involvement in the venture. A seven-point scale was used for both, ranging from “low” (1) to “high” (7). The mean composite rating for informant competency in the sample was 6, indicating the significant knowledge informants possessed on the issues under investigation. The lower acceptable limit for this scale was set at 5, with those respondents scoring < 5 being rejected. Consequently, a total of 260 firms were used for data analysis. To improve confidence in the appropriateness of the data collection instrument, a systematic questionnaire development process was followed, combining fieldwork and literature-based insights to specify the domain of each of the constructs and develop multiple items to serve as indicators. The questionnaire was originally prepared in English and then translated into Spanish by an academic specialist in both languages with considerable research and work experience in Mexico. A back-translation revealed consistency and resulted in minor amendments. Then, the English and Spanish versions of the questionnaire were pre-tested in 25 in-depth pilot interviews with Mexican executives experienced in INVs. The final version of the questionnaire incorporated the modifications suggested in these pre-tests, and the data collection was administered in Spanish.

4. Analysis and results To ascertain the validity of the measures, a series of confirmatory factor analyses (CFAs) were estimated (Anderson & Gerbing, 1988). Each construct was considered to represent a higher-order factor, with the observed items originating from first-order factors that arise from a second-order factor. Given the number of parameters to be predicted, sample-sized constraints led us to divide our measures into four measurement models of the most theoretical related variables (Iacobucci, 2010). Four measurement models were estimated, one per each secondorder construct (see Table 1). The first and second measurement models contained ten and 15 items measuring knowledge-based resources and marketing capabilities, respectively. The third and fourth models included 11 items assessing export venture performance and 12 items to measure the EO construct. The measurement model analyses were performed using the maximum likelihood estimation procedure in AMOS. In spite of a significant chi-square (χ2 = 86.701; df = 32; p = .000) in the first measurement model—as might be expected given the sensitivity of the test statistic to sample size (Bagozzi & Yi, 1988)—all other diagnostics were supportive. The other fit indices (normed fit index [NFI] = 0.95, comparative fit index [CFI] = 0.97, and root mean square error of approximation [RMSEA] = 0.08) suggest that the model fit the data satisfactorily. First- and second-order factor loading had t-values > 6.72. This evidence supports our conceptualization of knowledge-based resources as a second-order construct. Likewise, the second measurement model exhibits a good overall fit to the data (NFI = 0.90, CFI = 0.93, RMSEA = 0.075), regardless of a significant chi-square (χ2 = 211.559; df = 86; p = .000), which again is understandable given the sample size (Bagozzi & Yi, 1988). The findings show large and significant first- and second-order factor loadings (t-values > 5.6). These indications reinforce the conceptualization of marketing capabilities as a second-order construct. The third measurement model, which corresponds to export venture performance, shows a good overall fit to the data (NFI = 0.92;

3.3. Measures All construct measures were retrieved from the existing literature. EO, knowledge-based resources, marketing capabilities, and export venture performance are second-order reflective constructs with three or more dimensions each. The three dimensions of EO at the export venture level are innovativeness, riskiness and proactiveness. While items from Morgan and Strong (2003) were used to measure riskiness and proactiveness, the research of Hult, Tomas, Hurley, and Knight (2004) provided the questions to capture innovativeness. For each EO dimension, a Likert-type seven-point scale was employed ranging from (1) “not at all” to (7) “to a great extent,” with a mid-point label of “to some extent.” The dimensions of knowledge-based resources at the export venture 6

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Table 1 Measurement models and measures. Measurement model 1: knowledge-based resources construct Factors and items

Standardized loading

Human capital knowledge (CR = 0.95, AVE = 0.84) Knowledge of export marketing personnel Experience of our export marketing personnel The skills of our export marketing people Number of people working in export marketing Market information knowledge (CR = 0.95, AVE = 0.87) Export venture market information Customer knowledge in this export venture market Knowledge of distributors in this export venture market Customer relational knowledge (CR = 0.77, AVE = 0.84) Closeness of existing customer relationships Strength of existing customer relationships in this export venture market Number of customers with whom we already have a relationship Goodness-of-fit statistics: χ2(d.f.) = 86.701 (32), p < .01; NFI = 0.95; CFI = 0.97; RMSEA = 0.08

0.56 0.75 0.96 0.95 0.42 0.99 0.83 0.87 0.62 0.92 0.84 0.56 0.76

t-Value

16.64 16.58 6.73 7.33 15.76 10.33 7.75 9.15 13.04

Measurement model 2: marketing capabilities construct Factors and items New product development (CR = 0.94, AVE = 0.83) Developing new export venture Successfully launching new export venture products Speedily developing and launching new export venture products Sales (CR = 0.89, AVE = 0.64) Using our pricing skills to respond quickly to any customer changes Delivering high quality after-sales service Attracting and retaining after-sales service personnel Promotion (CR = 0.90, AVE = 0.88) Marketing communication skills and processes Skillfully using marketing communications Developing effective export advertising and promotion Advertising and promotion creativity Distribution (CR = 0.82, AVE = 0.73) Providing high levels of support to distributors Closeness in working with distributors/retailers in this market Adding value to distributors' businesses Satisfying the needs of distributors Attracting and retaining the best distributors in the export venture market Goodness-of-fit statistics: χ2(d.f.) = 211.559(86), p < .01; NFI = 0.90; CFI = 0.93; RMSEA = 0.075

Standardized loading

t-Value

0.70 0.74 0.87 0.86 0.78 0.52 0.75 0.79 0.66 0.85 0.89 0.77 0.83 0.65 0.72 0.64 0.70 0.70 0.68

6.53 13.16 13.09 5.61 7.38 7.45

17.83 14.55 16.11 6.02 9.59 8.80 9.40 9.39

Measurement model 3: export venture performance construct Factors and items

Standardized loading

Efficiency (CR = 0.94, AVE = 0.80) Return on Investment (ROI) Return on Sales (ROS) Export Venture margin Reaching export venture financial goals Effectiveness (CR = 0.96, AVE = 0.90) Positive changes in market share Market share growth Growth in sales revenue Adaptiveness (CR = 0.88, AVE = 0.66) Overall export venture performance Number of successful new export venture products Time to market for new export venture products Responding to competitors product changes Goodness-of-fit statistics: χ2(d.f.) = 89.12(46), p < .01; NFI = 0.92; CFI = 0.94; RMSEA = 0.067

0.86 0.79 0.76 0.80 0.73 0.69 0.79 0.87 0.84 0.87 0.64 0.73 0.76 0.48

t-Value

12.50 13.31 12.01 7.60 14.57 14.11 5.92 6.56 6.95 7.05

Measurement model 4: entrepreneurial orientation construct Factors and items

Standardized loading

Innovativeness (CR = 0.98, AVE = 0.93) Technical innovation, based on research results, is readily accepted Management actively seeks innovative ideas

0.55 0.99 0.76

t-Value

17.92

(continued on next page) 7

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Table 1 (continued) Measurement model 4: entrepreneurial orientation construct Factors and items

Standardized loading

t-Value

0.94 0.98 0.63 0.50 0.50 0.52 0.96 0.77

33.50 4.22

(R) People are penalized for new ideas that don't work Riskiness (CR = 0.81, AVE = 0.59) (R) Conservative with major decision (R) New projects are approved stage by stage (R) Support projects where expected returns are certain Proactiveness (CR = 0.86, AVE = 0.76) Look out for business First to introduce new brands Goodness-of-fit statistics: χ2(d.f.) = 38.203(17), p < .01; NFI = 0.97; CFI = 0.98; RMSEA = 0.069

5.44 5.40 5.08 7.54

Notes: CR = composite reliability, AVE = average variance extracted. Items marked with a superscript “a” are anchored by 1 = “not at all” and 7 = “to a great extent”; items marked with a superscript “b” are anchored by 1 = “not important” and 7 = “very important”; items marked with a superscript “c” are anchored by 1 = “much worse” and 7 = “much better”; items marked with a superscript “d” are second-order constructs; and items marked with a superscript “e” are fixed to set the scale.

CFI = 0.94; RMSEA = 0.067) with large and significant first- and second-order factor loadings (t-values > 5.91). As noted before, the significant chi-square (χ2 = 89.12; df = 46; p = .000) is not surprising (Bagozzi & Yi, 1988). These results underpin the conceptualization of export venture performance as a second-order construct. Even though the chi-square of the fourth measurement model is significant (χ2 = 38.203; df = 17; p = .000), the other fit indices suggest that the model provides a good fit to the data (NFI = 0.97; CFI = 0.98; RMSEA = 0.069). The first- and second-order factor loadings are large and significant (t-values > 5.07). Therefore, the revised conceptualization of EO is supported as a second-order construct. Taken together, the measurement models themselves offer support for convergent validity, as the overall goodness-of-fit indices demonstrate a good fit of the hypothesized relationships to the data, and all factor and item loadings are high and significant at p < .01(Anderson & Gerbing, 1988). Further, average variance extracted (AVE) estimates for the measures range from 0.59 to 0.93 (see Table 1). Composite reliability coefficients for all scales range from 0.77 to 0.98, suggesting satisfactory internal consistency. Fornell and Larcker's (1981) test of discriminant validity was applied. This procedure involves assessing whether the AVE for every construct's measure is larger than the squared phi correlation of that construct with all other constructs in the model. All AVE estimates compare favorably with the corresponding squared phi correlations. Table 2 presents the Pearson's correlations and descriptive statistics of the measures. Discriminant validity exists if the items share more common variance with their respective construct than any variance that construct shares with other constructs. Therefore, the AVE for a construct should be higher than the squared

correlation (R2) between that construct and all other constructs (Koufteros, 1999). Common method bias (CMB) is a potential problem in any study using key informant data. To diminish the effect of such bias, Podsakoff, MacKenzie, Lee, and Podsakoff (2003) procedures were adopted (i.e., construct items were placed within general topic categories; different response formats were used in the questionnaire; and all items were carefully crafted). The possibility of CMB was assessed by using two statistical tests. In the first of these, if CMB accounted for the observed relationships between the variables, a measurement model containing the main study constructs should have yielded a single factor (Podsakoff et al., 2003). The fit indices (χ2 = 2229.59(859), p < .01; NFI = 0.70; NNFI = 0.76; CFI = 0.78; and RMSEA = 0.80) suggest a poor fit of this model to the data. However, because of the perceived leniency of the single factor test (Malhotra, Kim, & Ashutosh, 2006), the more advanced marker variable test (Lindell & Whitney, 2001) was employed. Specifically, the variable export venture duration, which is theoretically unrelated to the main study constructs, was included in the data. Using this marker variable, this study computed the CMB-adjusted correlations between all the main study variables using the following equation:

rA = (ru − rM)/(1 − rM), where rA is the CMB-adjusted correlation; ru is the original correlation; and rM is a marker variable. The findings display that the small differences between the original and the CMB-adjusted correlations (Δr ≤ 0.04) made no difference to the statistical significance of correlations between the main study variables. This second statistical test next involved estimating an overall measurement model (parsimonious

Table 2 Descriptives and correlations of latent variables and sqrt(AVE). Measure

M

SD

1

2

3

4

5

6

7

8

9

10

11

12

1. New product 2. Sales 3. Distribution 4. Promotion 5. Efficiency 6. Effectiveness 7. Adaptiveness 8. Human 9. Informational 10. Relational 11. Riskiness 12. Proactiveness 13. Innovativeness

4.85 5.16 4.77 4.73 4.68 5.43 4.77 4.89 5.76 5.82 5.24 5.54 5.36

1.61 1.31 1.33 1.45 1.50 1.23 1.44 1.47 1.21 1.16 1.16 1.48 1.47

0.91 0.44 0.36 0.48 0.27 0.22 0.44 0.37 0.36 0.31 0.16 0.13 0.22

0.80 0.48 0.45 0.36 0.40 0.46 0.34 0.49 0.46 0.28 0.22 0.24

0.86 0.30 0.37 0.28 0.33 0.16 0.50 0.28 0.12 0.08 0.20

0.94 0.28 0.29 0.37 0.39 0.39 0.41 0.19 0.12 0.05

0.90 0.52 0.59 0.22 0.24 0.28 0.31 0.28 0.28

0.95 0.48 0.31 0.38 0.44 0.23 0.32 0.25

0.81 0.25 0.30 0.37 0.43 0.29 0.29

0.92 0.44 0.50 0.05 0.00 0.06

0.93 0.72 0.14 0.00 0.16

0.92 0.18 0.13 0.20

0.77 0.34 0.43

0.87 0.30

Notes: Correlations ≥0.12 or ≤0.12 are significant at p = .05 (two-tailed). Bold diagonal elements are the square root of AVE. Off diagonal elements are the correlations at the dimensional level. AVE for a construct should be higher than the squared correlation (R2) between that construct and all other constructs. 8

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p < .01). Knowledge-based resources prove unrelated to export venture performance, failing to support H6 (β = 0.04, p < .05). By contrast, the results support the hypothesized positive relationship between the interaction term of EO and knowledge-based resources with marketing capabilities H7a (β = 0.15, p < .05). The interaction term of EO and knowledge-based resources yields no link to export venture performance, rejecting H7b (β = 0.05, p < .05).

estimation; see below) using the original and CMB-adjusted correlations. Substitution of the CMB-adjusted matrix did not deteriorate fit (Δχ2 < 0.10). Taken together, these procedures and analyses suggest that CMB is not the likely explanation for the relationships between the study constructs (Podsakoff et al., 2003). 4.1. Structural model The parsimonious structural model estimation procedure, which was used to test the study's hypotheses, entails averaging the indicators for each construct to form manifest composites. Since all constructs in this study are second-order, they are presented in the model as composites of their dimensions (i.e., the subscales). The number of parameters estimated relative to sample size is a key determinant of convergence, standard errors, and model fit. The method was critical in achieving a ratio of sample size to estimated parameter greater than five, which is necessary to attain reliable parameter estimates (Bentler, 1995). Ping's (1995) procedure was used for estimating interaction terms to test the role of the interaction effects of EO and knowledgebased resources within the structural model. To reduce multicollinearity and provide unbiased parameter estimates, EO and knowledge-based resources were mean-centered before the use of the cross-product of the overall scale composites. Competitive turbulence, from Cadogan, Cui, and Yeung (2003), is the control variable in the structural model, which measures the changes taking place in the export venture rather than in domestic markets.

6. Findings and contributions The findings of this study offer novel insights from the KBV, entrepreneurship, international business research, and fieldwork interviews to develop a knowledge-based resource framework for INVs. The study's findings support six of the eight hypotheses and signify the efficacy of the measurement approaches used to capture the focal constructs. This research offers important contributions to KBV theory development. The first contribution is the integration of the KBV literature with the EO-performance paradigm to develop and test a novel model of the export venture performance of INVs. This study provides empirical evidence of the importance of EO and knowledge-based resources in improving performance. Also, the set of connections analyzed in this framework extends the KBV literature into the rapidly growing scholarship on INVs and offers new insights for both researchers and managers. Further, the results of this study help to fill the gaps in Lyon et al.'s (2000) proposition about the relationship between EO and performance and proves to be more complicated than only a direct effect. The findings provide new empirical insights into how EO acts as a predictor of knowledge-based resources and as a boundary condition to the export venture performance of INVs. This framework draws on EO and knowledge-based resources as enablers of the firm's commitment to foreign markets to increase export venture performance. The findings demonstrate that, to the extent that knowledge-based resources are critical for INVs, EO is an important driver of such resources to enhance export venture performance, and entrepreneurship appears to be an important orientation for INV managers to foster. EO and knowledge-based resources seem to be fundamental to INVs' ability to acquire and deploy marketing capabilities in ways that impact export venture performance. More significantly, there has been almost no empirical research that examines this relationship in INVs. The results provide an interesting addition to the existing theory on the strategic importance of INVs' need to deploy marketing capabilities when EO either precedes or interacts with knowledge-based resources. Previous studies tested the moderating effect of EO on the interaction between knowledge-based resources and performance. By using SMEs operating domestically, the literature reports that the interaction of EO and knowledge-based resources directly improves performance (Wiklund & Shepherd, 2003). This study reveals that the interaction of EO and knowledge-based resources is not sufficient to improve the export venture performance of INVs; instead, this interaction must be transformed into distinct combinations or composites to improve marketing capabilities before it can enhance export venture performance. As international markets become more globally integrated, INVs need to adapt to and exploit changes in their business environments, while seeking opportunities to create change. Indeed, INVs require marketing capabilities to purposefully develop, combine, and transform the available knowledge-based resources. Creating, adapting to, and exploiting change is inherently entrepreneurial (Markin, Gabrielle Swab, & Marshall, 2017). The interaction of EO and knowledge-based resources fosters marketing capabilities to develop new export ventures in a successful and timely manner, with an effective export advertising promotion to enhance performance. This study extends the traditional literature by supporting the notion that INVs with innovativeness, riskiness and proactiveness discover and exploit opportunities to advance

5. Discussion Given the relatively large sample, a significant chi-square was expected (χ2 = 219.58; df = 94; p = .000). At the same time, the other fit indices (NFI = 0.82; CFI = 0.89; RMSEA = 0.072) suggest that the structural model demonstrates a good fit to the data (see Table 3). Empirical assessment of the relationships predicted in the theoretical model (Fig. 1) indicates support for six of the eight hypotheses. In support of H1, the results reveal that marketing capabilities are a predictor of export venture performance at the export venture level (β = 0.46, p < .01) (Fig. 2). The results also show that, at the export venture level of INVs, EO is an antecedent of three constructs: export venture performance, supporting H2 (β = 0.51, p < .01); marketing capabilities, as per H3 (β = 0.3, p < .01); and knowledge-based resources, confirming H4 (β = 0.33, p < .01). In support of H5, knowledge-based resources are positively linked to export venture marketing capabilities (β = 0.6, Table 3 Structural model. Structural relationships

Hypothesized links H1 Marketing Capabilities → Export Venture Performance H2 Entrepreneurial Orientation (EO) → Export Venture Performance H3 EO → Marketing Capabilities H4 EO → Knowledge-Based Resources (KBR) H5 KBR → Marketing Capabilities H6 KBR → Export Venture Performance H7a EO × KBR → Marketing Capabilities H7b EO × KBR → Export Venture Performance Control links Competitive Turbulence → Export Venture Performance Goodness-of-fit statistics: 2 χ (d.f.) = 168.810 (69), p = .000; NFI = 0.86; CFI = 0.91; RMSEA = 0.075 ⁎⁎

Standardized loading

t-Value

0.45

2.96⁎⁎

0.45

4.14⁎⁎

0.37 0.25 0.57 0.07 0.23 0.03

3.99⁎⁎ 2.92⁎⁎ 6.39⁎⁎ 0.68 3.64⁎⁎ 0.50

0.04

0.69

p ≤ .01 (one-tailed as we hypothesize directionality). 9

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Knowledge Based Resources (KBR)

H5 (+) 0.57

Marketing Capabilities

H6 (+) 0.07

H7a (+) 0.23 EO & KBR interaction

H4 (+) 0.25

H7b (+) 0.03

H3 (+) 0.37

Entrepreneurial Orientation (EO)

H1 (+) 0.45

Export Venture Performance

H2 (+) 0.45 Fig. 2. Conceptual framework with the loads.

the second with an interaction term of knowledge-based resources and EO. While the former shows a stronger connection between knowledgebased resources and marketing capabilities, both exhibit positive and significant relationships with marketing capabilities. Therefore, managers should consider the inherent mobility of knowledge in INVs, which allows for the earlier and more rapid internationalization of firms. The entrepreneurial vision and marketing capabilities of the management team allow INVs to perform effectively and efficiently. This study's findings are not definite; nor are they intended to be. Rather, it is an attempt to integrate a knowledge-resource framework in INVs to offer valuable theoretical and managerial insights in this important KBV domain; and to extend theory into the increasing important context of INVs to guard against the constant maneuvering of competitors.

competitors. They do so by applying marketing capabilities based on new product development, sales, promotion, and distribution. Moreover, our research contributes to the growing literature on firms in emerging markets and responds to the calls for studies in these regions. Mexico's INVs confront the challenging issue of responding to international competitive pressures. Emerging markets have become the new battleground for international marketing competition. This unique resource constrained setting emphasizes the need for INVs to deploy marketing capabilities to offer high quality sales service, respond quickly to any customer change, with creative advertising and promotion and high level of distribution. The findings in this study offer a novel extension to the understanding of how knowledge-based resources come about in the EOperformance paradigm and how INV firms can gain from them. Managers of INVs should consider that knowledge-based resources require EO to be successful. The possession of information related to doing business in the export market and knowledge of competitors would lead to an effective response using marketing capabilities focused on new product development and service activities in terms of sales, promotion and distribution. Firms may use these superior qualities to produce differentiated products. Specifically, practitioners should emphasize knowledge-based resources. These should be based on different factors—including the experience and skills of the export marketing personnel, the customer knowledge in the export venture, and the closeness of the existing customer relationships—that will help INVs to speedily develop and launch new products in the export market, using pricing skills to respond quickly to any customer changes and to deliver high-quality after-sale service. Moreover, although the bulk of KBV studies suggest that previous experience in specific foreign markets is required to increase participation in those markets (Filatotchev, Liu, Buck, & Wright, 2009), our findings suggest that the accumulated internationalization experience of export marketing personnel is also required for growth in other foreign markets. Notably, practitioners should take into consideration that general export knowledge, experience, and skills and quality of the marketing personnel could be applied to certain export ventures when these are combined with specific cognition about the market and the relations with customers. The firm should gain both the general and specific knowledge through its internal resources in order to recognize the causal mechanism that helps explain how marketing capabilities affect performance at the export venture level of INVs. Furthermore, this study brings together the KBV and the EO-performance paradigms to evolve and test an integrative model and set of relationships with extant studies that focus mainly on knowledge architecture. The findings exhibit that knowledge-based resources are strongly positively related to EO in two different ways—the first with knowledge-based resources between EO and marketing capabilities and

7. The paper's limitations and suggestions for further research The first limitation of this study is the cross-sectional research design, which prohibits causal inference. In addition, temporal effects that exist among marketing capabilities, knowledge-based resources, and performance are not accommodated within this empirical framework. Further research should be aimed at generating longitudinal data to capture dynamic influences. However, it should be noted that this limitation is common in studies conducted within the area of accelerated internationalization (Freeman & Cavusgil, 2007). Second, that stated, reverse causation cannot be ruled out in the theoretical framework of this study. Third, the unit of analysis in the study is the export venture of the INV firm, identified by the respondent. Though necessary to delimit the study, a loss of richness occurs as a result. Fourth, these data were generated among the INVs of a single country, limiting the results to this particular country's framework, and caution should be exercised in attempting to apply generalizations to other contexts. Fifth, this study uses a multi-industry sample to increase generalizability, but in doing so, the sample becomes heterogeneous, and the ability to represent a single industry closely is lost. Nevertheless, these multiple industries are all high-tech-oriented. Therefore, the findings are limited by these sample features, and thoughtful consideration must be given in extending generalizations of these findings. Largely absent from the literature is the influence of knowledgebased resources on the EO-performance paradigm at the export venture level of INVs. Additional research is needed to determine how these constituencies come together to define how an INV should be organized in order to generate and capitalize on EO and knowledge-based resources and enhance performance. Further research oriented toward distilling knowledge-based resources with the EO-performance complex phenomena would be of great value to international marketing scholars and practitioners alike. Moreover, considering the little research 10

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conducted on the EO-performance relationship in emerging regions, future research should expand to other emerging economies.

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