Abstract/Summary

Frequently conceptualised as asset-type firm-specific advantages (FSAs), a firm’s technological innovation, such as research and development (R&D), has been central to International Business (IB) scholarship, but important research gaps prevail. Drawing on the behavioural theory of the firm, organisational learning and evolutionary theory, this study is split into three empirical chapters which employ secondary panel data from 1,489 German manufacturing firms and interviews with practicing managers. Together, these chapters contribute to a more nuanced understanding of the relationship between a firm’s international activities and its innovation management: First, this study shows that firms can effectively use knowledge acquired from exporting to enhance innovation performance and thereby learn-by-exporting (LBE), whereby it is shown how and why (1) export market destination decisions serve mainly for international knowledge access and (2) organisational innovation (OI) for international knowledge integration. It follows that firms which export beyond their home region, i.e., Europe, experience greater LBE effects than those confined to European borders, and that firms which proactively amend their internal practices and routines through OI exhibit greater LBE effects. Second, acknowledging firms’ tendency of structural inertia, another research highlight of this study is the organisational learning potential regarding adopting OI that arises for firms engaged in international strategic alliances. This study shows that vertical international alliances (i.e., alliances with foreign customers and suppliers) are likely to foster OI in the focal firm, thereby enabling it to overcome inertia and internally evolve, whereby this effect becomes strengthened, when a firm also has vertical alliances with domestic partners. Third, in addition to pushing the research agenda of OI in IB, this study sheds light on the generation of technological innovations in highly innovative specialised supplier firms, whose technological advantages are relationship-specific, in addition to being firm-specific, which, in turn, has important implications for their international orientation.