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Capabilities as a mediator linking resources and the international performance of entrepreneurial firms in an emerging economy

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Abstract

This study investigates an under-researched topic: the relationships between capabilities, resources, and international performance among entrepreneurial firms in an emerging economy. We combine the resource-based view of the firm and the capability-building perspective of rent creation to shed light on the crucial role of firm-specific capabilities that transform key resources into performance outcomes. Employing a large sample of Chinese entrepreneurial firms, our investigation demonstrates that while the resources of institutional capital and managerial ties are important in the internationalization effort, their effects on international performance are channeled through each firm's adaptive capability. This adaptive capability is the firm's ability to coordinate, recombine, and allocate resources to meet the different requirements of foreign markets. Specifically, our research is able to demonstrate support for the mediating role of capabilities in the relationship between resources and international performance. The implications of these findings for theoretical development and future research are discussed.

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Acknowledgements

We would like to thank the editor of this special issue, Mike Peng, and three anonymous reviewers for their valuable comments and constructive suggestions. We also thank Editor-in-Chief Lorraine Eden and an Area Editor for helping us to improve the paper. Insightful comments from Shige Makino, Marshall Meyer, and C. M. Lau are greatly appreciated. The present research was sponsored by the Research Grant Council of Hong Kong (LU3107/03H).

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Authors and Affiliations

  1. Department of Management, Chinese University of Hong Kong, Hong Kong

    Yuan Lu & Weiwen Li

  2. Department of Marketing, International Business, and Strategy, Brock University, St Catharines, Ontario, Canada

    Lianxi Zhou

  3. M J Neeley School of Business, Texas Christian University, Fort Worth, USA

    Garry Bruton

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  1. Yuan Lu
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  2. Lianxi Zhou
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  4. Weiwen Li
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Correspondence to Yuan Lu.

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Accepted by Mike Peng, Guest Editor, 10 August 2009. This paper has been with the authors for three revisions.

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Lu, Y., Zhou, L., Bruton, G. et al. Capabilities as a mediator linking resources and the international performance of entrepreneurial firms in an emerging economy. J Int Bus Stud 41, 419–436 (2010). https://doi.org/10.1057/jibs.2009.73

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