I
Internetalisation: the Internet’s influence on international
market growth in the firm’s outward internationalisation
process
Shane Mathews
Doctorate of Philosophy (International Marketing)
School of Advertising, Marketing & Public Relations
Queensland University of Technology
Thesis
IF49 PhD (International Marketing)
Shane Mathews, n2408601
Queensland University of Technology
Faculty of Business
School of Advertising, Marketing & Public Relations
II
Internetalisation: the Internet’s influence on international market growth in the firm’s
outward internationalisation process
Supervisors:
Principal
Dr Marilyn Healy, Queensland University of Technology, School of Advertising, Marketing
and Public Relations
Associate
Dr Rumintha Wickramasekera, Queensland University of Technology, School of Advertising,
Marketing and Public Relations
Associate
Dr Steven Pike, Queensland University of Technology, School of Advertising, Marketing and
Public Relations
Associate
Professor Gordon Boyce, University of Newcastle, Faculty of Business and Law
III
Acknowledgements
I would like to sincerely thank my primary supervisor, Dr. Marilyn Healy, for all her
support and guidance throughout this journey. The high level of professionalism and rigour
set by Dr. Healy assisted my development as a researcher. Her integrity will last with me
for the rest of my life. I truly appreciate the enormous amount of time and effort Marilyn
spent helping me to achieve my personal goals. I would like to thank her from the bottom
of my heart. No words could capture the appreciation and gratitude that I feel for Dr. Healy.
Dr. Rumintha Wickramasekera was an invaluable support through the technical and
statistical sections of the research, which were very stressful. I would like to thank Dr.
Wickramasekera for his skill as a researcher in highlighting deficiencies and suggesting
amendments that allowed greater levels of rigour and validity.
Dr. Steven Pike was a great support through the research sections in the later stages of the
PhD. I would like to thank Dr. Pike for his time, experience and honesty in giving critical
feedback that assisted the research. I appreciated Dr. Pike‘s integrity and honest approach.
Thank you, Dr. Pike.
Thanks to Professor Gordon Boyce for his moral support, encouragement and leadership.
These were invaluable to me as an early researcher, as was Prof. Boyce‘s support to attend
conferences, research colloquiums and SEM training courses that were essential for the
research.
I would like to thank Dr. Stephen Cox for his patience and expertise in assisting with the
lengthy and arduous iterative process of survey development. Upon completion, he
encouraged me to ‗just do it‘. Thank you, Dr. Cox, for giving me that push, and for your
expertise and guidance.
Thanks to Dr. Len Coote for his insight and kindness. Even though I was not a student at
UQ, Dr. Coote kindly helped me develop a proposed model with a fantastic insight into
interrelationships within SEM.
IV
Dr. Meredith Lawley assisted with developing the survey and proposed SEM model. Even
though I was not a student at USC, Dr. Lawley was very kind and insightful. Thank you for
your experience and generosity.
Thanks to Dr. Richard Fletcher, Dr. Chris Styles, Dr. Nick Lee, Dr. Elizabeth Rose and
other academics at the multiple PhD colloquiums I attended. These colleagues provided
generous feedback, which helped form my thoughts and ideas, process and literature, which
underpins the research.
To the 250 international companies that assisted with data: these companies were fantastic.
They were generous in supplying information (sometimes very sensitive information),
generous with their time and compassionate. Thank you kindly to all the companies that
assisted with this research.
Further, I would like to sincerely thank my wife and son for their unwavering support and love
throughout this difficult journey. The endeavour of a PhD is for the most part a selfish one
where a spouse also feels the stress. I wholeheartedly thank my wife for her encouragement,
support and love.
V
Statement of original authorship
The work contained in this thesis has not been previously submitted for a degree or diploma
at any other higher education institute. To the best of my knowledge and beliefs the thesis
contains no material previously published or written by another person except where due
referencing is made.
Signed:……………………………..
Dated:………………………………
VI
ABSTRACT
It has been suggested that the Internet is the most significant driver of international trade in
recent years to the extent that the term ‗internetalisation‘ has been coined (Bell, Deans,
Ibbotson & Sinkovics, 2001; Buttriss & Wilkinson, 2003). This term is used to describe the
Internet‘s affect on the internationalisation process of the firm. Consequently, researchers
have argued that the internationalisation process of the firm has altered due to the Internet,
hence is in need of further investigation. However, as there is limited research and
understanding, ambiguity remains in how the Internet has influenced international market
growth. Thus, the purpose of this study was to explore how the Internet influences firms‘
internationalisation process, specifically, international market growth. To this end, Internet
marketing and international market growth theories are used to illuminate this ambiguity in
the body of knowledge. Thus, the research problem ‗How and why does the Internet
influence international market growth of the firm’ is justified for investigation. To
explore the research question a two-stage approach is used.
Firstly, twelve case studies were used to evaluate key concepts, generate hypotheses and to
develop a model of Internetalisation for testing. The participants held key positions within
their firm, so that rich data could be drawn from international market growth decision
makers. Secondly, a quantitative confirmation process analysed the identified themes or
constructs, using two hundred and twenty four valid responses. Constructs were evaluated
through an exploratory factor analysis, confirmatory factor analysis and structural equation
modelling process. Structural equation modelling was used to test the model of
‗internetalisation‘ to examine the interrelationships between the internationalisation process
components: information availability, information usage, interaction communication,
international mindset, business relationship usage, psychic distance, the Internet intensity of
the firm and international market growth.
This study found that the Internet intensity of the firm mediates information availability,
information usage, international mindset, and business relationships when firms grow in
international markets. Therefore, these results provide empirical evidence that the Internet
has a positive influence on international information, knowledge, entrepreneurship and
networks and these in turn influence international market growth.
VII
The theoretical contributions are three fold. Firstly, the study identifies a holistic model of
the impact the Internet has had on the outward internationalisation of the firm. This
contribution extends the body of knowledge pertaining to Internet international marketing
by mapping and confirming interrelationships between the Internet, internationalisation and
growth concepts. Secondly, the study highlights the broad scope and accelerated rate of
international market growth of firms. Evidence that the Internet influences the traditional
and virtual networks for the pursuit of international market growth extends the current
understanding. Thirdly, this study confirms that international information, knowledge,
entrepreneurship and network concepts are valid in a single model. Thus, these three
contributions identify constructs, measure constructs in a multi-item capacity, map
interrelationships and confirm single holistic model of ‗internetalisation‘.
The main practical contribution is that the findings identified information, knowledge and
entrepreneurial opportunities for firms wishing to maximise international market growth.
To capitalise on these opportunities suggestions are offered to assist firms to develop
greater Internet intensity and internationalisation capabilities. From a policy perspective,
educational institutions and government bodies need to promote more applied programs for
Internet international marketing.
The study provides future researchers with a platform of identified constructs and
interrelationships related to internetalisation, with which to investigate. However, a single
study has limitations of generalisability; thus, future research should replicate this study.
Such replication or cross validation will assist in the verification of scales used in this
research and enhance the validity of causal predications. Furthermore, this study was
undertaken in the Australian outward-bound context. Research in other nations, as well as
research into inbound internationalisation would be fruitful.
VIII
Publications and presentations
Journal articles:
Mathews, S. & Healy, M. 2008 ‗From garage to global‘ The Internet & international market
growth, an SME perspective, International Journal of Internet Marketing and Advertising
(IJIMA) Vol. 4. (2/3), pp.179-196: Special Issue on Breaking the Barriers: the Role of the
Internet in the International Marketing of SMEs
Mathews, S. & Healy, M. 2007 ‗The Internet and information capability reduces perceived risk
of internationalisation: an Australian SME perspective, International Journal of Organisational
Behaviour (IJOB), Vol.12 (1), pp. 71-87: Special Issue: Issues in Small and Medium Enterprises -
Enhancing Their Capabilities
Wickramasekera, R. & Mathews, S. 2007 ‗Wotif.com: An online success story‘, International
Journal of e-Business Management, Vol. 1 (1), pp. 50-52
Moore, S. & Mathews, S. 2006. ‗An exploration of Abandonment Cart Syndrome (ACS)‘,
Journal of Website Promotions, Vol. 1/2 pp. 77-88.
Book section:
Healy, M. & Mathews, S. 2005. Lustythreads.com, Case study in, Fletcher, R. & Brown, L.
International marketing, an Asian-Pacific perspective, 3rd edition, Pearson Education Australia
Conference papers:
Mathews, S. & Healy, M. 2006. ‗From garage to global. The Internet‘s influence on
international market growth. An Australian SME perspective‘, International Council for Small
Business world conference (ICSB), Melbourne. (Best Paper-World conference)
Mathews, S. & Moore, S. 2006. ‗The Internet‘s influence on internationalisation-reducing
perceived risks. An Australian SME perspective.‘ Internet Research 7.0, Brisbane.
Mathews, S. Healy, M. & Ali, Y. 2006. A comparative evaluation of the Internet‘s influence on
international market penetration and development growth strategies of Australian SME‘s,
Australia & New Zealand Marketing Academy Annual conference, Brisbane.
Manin, S. & Mathews, S. 2006. The global importance of values in brand choice, Australia &
New Zealand Marketing Academy Annual conference, Brisbane.
Mathews, S. Healy, M. & Wickramasekera, R. 2005. ‗From garage to global. An exploration of
the Internets influence on international market growth strategies; An Australian small firm
perspective‘, Asia Pacific Science Decisions Institute (APSDI) Taipei, Taiwan.
Mathews, S. & Healy, M. 2005. ‗A comparative evaluation of the Internet‘s influence on
international market penetration and development strategies of Australian SME‘s‘ Australia &
New Zealand International Business Academy, ANZIBA, Melbourne.
IX
Mathews, S. & Healy, M. 2004. ‗Internetalisation: International market growth strategies in a
digital environment‘, Australia & New Zealand Marketing Academy Conference, ANZMAC,
Wellington, New Zealand
Doctoral colloquiums:
Mathews, S. 2006. ‗A comparative evaluation of the Internet‘s influence on international
market penetration and development growth strategies of Australian SME‘s‘, Australia & New
Zealand Marketing Academy, Brisbane
Mathews, S. 2006, ‗A comparative evaluation of the Internet‘s influence on international
market penetration and development strategies for Australian SME‘s‘, Queensland University
of Technology, Faculty of Business research colloquium
Mathews, S. 2004. ‗Internetalisation: An Evaluation of International market growth strategies
in a digital environment; From an Australian perspective‘, PhD Paper at Australia & New
Zealand Marketing Academy, ANZMAC, Wellington, New Zealand
Mathews, S. 2004. ‗Internetalisation: International market growth strategies in a digital
environment‘, PhD Paper at Australia & New Zealand International Business Academy
Conference, ANZIBA, Canberra
Mathews, S. 2003. ‗The effectiveness of the Internet as a means of international market
penetration in Asian markets‘, PhD Paper at Australia & New Zealand International Business
Academy Conference, ANZIBA, Dunedin, New Zealand
Other presentations:
Mathews, S. 2005, ‗A comparative evaluation of the Internet‘s influence on international
market penetration and development strategies for Australian SME‘s‘, Queensland University
of Technology, School of International Business seminars
Mathews, S. 2005, ‗From garage to global: An evaluation of the Internets influence on
international market growth strategies; an Australian SME perspective‘, Queensland University
of Technology, School of International Business seminars
Mathews, S. 2004, ‗Internetalisation: International market growth strategies in a digital
environment‘, Queensland University of Technology, School of International Business seminars
Mathews, S. 2003, ‗The effectiveness of the Internet as a means of international market
penetration in Asian markets‘, Queensland University of Technology, Faculty of Business
Research symposium
X
CONTENTS
ABSTRACT ........................................................................................................................ VI
CONTENTS .......................................................................................................................... X
LIST OF FIGURES ........................................................................................................ XIV
LIST OF TABLES .......................................................................................................... XVI
1.0 CHAPTER 1: OVERVIEW ................................................................................. 1
1.1 Introduction ........................................................................................................... 1
1.2 Background to research ........................................................................................ 2
1.3 Research problem.................................................................................................. 3
1.4 Justification for research ...................................................................................... 4
1.5 Methodology .......................................................................................................... 9
1.6 Outline of the report ........................................................................................... 10
1.7 Definitions ............................................................................................................ 13
1.8 Delimitations ........................................................................................................ 16
1.9 Conclusion ............................................................................................................ 17
2.0 CHAPTER 2: LITERATURE REVIEW .......................................................... 18
2.1 Introduction ......................................................................................................... 18
2.2 Growth ................................................................................................................. 19
2.3 Internet Marketing.............................................................................................. 25
2.4 Internationalisation process theory ................................................................... 32
2.5 Internetalisation .................................................................................................. 38
2.6 Conclusion ............................................................................................................ 46
3.0 CHAPTER 3: CASE STUDY METHODOLOGY: STAGE I ........................ 48
3.1 Introduction ......................................................................................................... 48
3.2 Paradigm justification ........................................................................................ 51
3.3 Case study methodology justification: Stage I ................................................. 57
3.3.1 Validity and reliability of case study method ................................................... 59
3.3.2 Case selection ....................................................................................................... 63
XI
3.3.3 Data collection method ....................................................................................... 65
3.3.4 Pilot case study .................................................................................................... 68
3.3.5 Analysis procedure of data from case studies .................................................. 69
3.4 Limitations ........................................................................................................... 70
3.5 Ethical considerations ......................................................................................... 73
3.6 Conclusion ............................................................................................................ 74
4.0 CHAPTER 4: ANALYSIS OF CASE STUDY DATA .................................... 76
4.1 Introduction ......................................................................................................... 76
4.2 Within-case analysis ............................................................................................ 77
4.3 Cross-case analysis .............................................................................................. 85
4.4 Cross-case evaluation (hypotheses and model development) ........................ 109
5.0 CHAPTER 5: QUANTITATIVE METHOD: STAGE II ............................. 119
5.1 Introduction ....................................................................................................... 119
5.2 Quantitative research design ............................................................................ 120
5.2.1 Population and sample of study ....................................................................... 121
5.2.2 Unit of analysis .................................................................................................. 123
5.2.3 Selection of key informants .............................................................................. 123
5.2.4 Pre-testing instrument ...................................................................................... 123
5.2.5 Data collection procedure and response rate.................................................. 124
5.2.6 Addressing potential non-response bias .......................................................... 137
5.3 Exploratory factor analysis .............................................................................. 138
5.4 Structural equation modelling ......................................................................... 141
5.4.1 Analytical technique ......................................................................................... 142
5.5 Summary ............................................................................................................ 144
6.0 CHAPTER 6: QUANTITATIVE ANALYSIS AND EVALUATION.......... 145
6.1 Introduction ....................................................................................................... 145
6.2 Examining and preparation of data ................................................................ 146
6.2.1 Respondent profile ............................................................................................ 146
6.2.2 Missing data ....................................................................................................... 149
XII
6.2.3 Normality of data .............................................................................................. 150
6.2.4 Outliers ............................................................................................................... 150
6.3 Measurement model .......................................................................................... 151
6.3.1 Confirmatory factor analysis (CFA) ............................................................... 151
6.4 Full structural model evaluation...................................................................... 162
6.5 Model hypotheses interrelationship evaluation .............................................. 171
7.0 CHAPTER 7: DISCUSSION AND CONCLUSION ...................................... 179
7.1 Introduction ....................................................................................................... 179
7.2 Research Issue 1 discussion: ............................................................................. 181
7.2.1 Information availability, information usage and interaction ........................ 181
7.2.2 International mindset and business relationship use ..................................... 185
7.3 Research Issue 2 discussion: ............................................................................. 188
7.4 Research question discussion ........................................................................... 192
7.5 Implications for internationalisation theory ................................................... 193
7.5.1 Internationalisation process/ stages theory ..................................................... 194
7.5.2 Born global concept .......................................................................................... 195
7.5.3 Firm capabilities theory and perceived risk ................................................... 196
7.5.4 International entrepreneurship ....................................................................... 198
7.5.5 Network theory .................................................................................................. 199
7.6 Contributions ..................................................................................................... 201
7.6.1 Theoretical contributions ................................................................................. 202
7.6.2 Contributions to practice and policy ............................................................... 205
7.7 Limitations ......................................................................................................... 206
7.8 Future directions for research ......................................................................... 207
8.0 REFERENCES .................................................................................................. 210
APPENDICES ................................................................................................................... 233
Appendix A: Interview protocol ...................................................................................... 233
Appendix B Interview information package................................................................... 249
Appendix C survey questionnaire ................................................................................... 251
XIII
Appendix D Phone screening script ................................................................................ 259
Appendix E e-mail ............................................................................................................. 260
Appendix F: Education in SEM ....................................................................................... 261
Appendix G: SEM experts review ................................................................................... 261
Appendix H: Expert guidance in SEM ........................................................................... 263
Appendix I Descriptive Statistics ..................................................................................... 264
Appendix J Saturated models .......................................................................................... 266
Appendix K: Model 1 English market growth matrices................................................ 267
Appendix L: Model 2 non-English market growth matrices ........................................ 270
Appendix M Country markets summary ........................................................................ 273
Appendix N: 1st Country market ..................................................................................... 274
XIV
LIST OF FIGURES
Figure 1.1 Chapter 1 overview …..1
Figure 1.2 Research design and sequence …..10
Figure 1.3 Research project overview …..11
Figure 2.1 Chapter 2 literature review overview …..18
Figure 2.2 Ansoff’s product/market growth vector …..20
Figure 2.3 The product market matrix: Ansoff’s growth vector …..23
Figure 2.4 Unique influential variables of the Internet …..26
Figure 2.5 Internationalisation process online …..40
Figure 2.6 Theoretical framework …..45
Figure 3.1 Chapter 3 overview …..48
Figure 3.2 Research design and method of investigation …..56
Figure 3.3 Types of design for case studies …..63
Figure 4.1 Overview for Chapter 4, data analysis …..76
Figure 4.2 Digitalisation of the product offering …..99
Figure 4.3 Internetalisation and networks …..99
Figure 4.4 Proposed model: information, knowledge and interaction …..113
Figure 4.5 Proposed model: international entrepreneurship …..116
Figure 4.6 Proposed model: Internetalisation …..117
Figure 5.1 Chapter 5 overview …..119
Figure 5.2 Four-step processes in questionnaire development …..125
Figure 5.3 Internet intensity: mediation model that is moderated …..128
Figure 6.1 Chapter 6 overview …..145
Figure 6.2 Proposed model (English speaking-Model 1) …..164
Figure 6.3 Proposed model (non English-Model 2) …..165
Figure 6.4 Competing model (English speaking markets-Model 1) …..167
Figure 6.5 Competing model (non-English speaking markets-Model 2) …..168
XV
Figure 6.6 Internetalisation model: significant and non-significant paths …..174
Figure 6.7 Final model: theoretical interrelationships …..178
Figure 7.1 Chapter 7 overview …..180
Figure 7.2 RI 1: information availability, information usage & interaction …..182
Figure 7.3 RI 1: International mindset and business relationship use …..186
Figure 7.4 Internetalisation and networks …..200
Figure 7.5 Internetalisation framework …..201
Figure 7.6 Final Internetalisation model: theoretical interrelationships …..202
XVI
LIST OF TABLES
Table 1.1 International broadband consumers’ online activities …..5
Table 1.2 Main SME Internet and internationalisation themes …..8
Table 1.3 Element of research …..17
Table 2.1 Use of product market matrix …..21
Table 2.2 Literature evaluation summary …..47
Table 3.1 Internet international marketing research methods …..50
Table 3.2 Basic belief systems of alternative enquiry paradigms …..51
Table 3.3 Summary of mixed approach …..55
Table 3.4 Relevant situations for different research strategies …..59
Table 3.5 Validity and reliability of case study research …..60
Table 3.6 Case research design: replication logic …..64
Table 3.7 Literal and theoretical replication of case selection …..65
Table 3.8 Developed protocol question for research issues …..67
Table 3.9 Limitations and criticisms of case study methodology research …..71
Table 4.1 Within-case study analysis matrix …..78
Table 4.2 Cross-case analysis …..86
Table 4.3 Internet usage/importance identified …..87
Table 4.4 Internet - information components of internationalisation …..90
Table 4.5 Internet’s- international information/knowledge …..91
Table 4.6 Interactive levels online …..92
Table 4.7 Website marketing elements and trust issues …..95
Table 4.8 Website localisation integration …..96
Table 4.9 Digitalisation capacities of product offerings …..98
Table 4.10 Elements influencing internationalisation of the firm …..100
Table 4.11 Internationalisation path and pace …..102
Table 4.12 International market growth through penetration …..104
Table 4.13 International market growth and evaluation of potential …..107
Table 4.14 Research issues: variable identification and hypotheses …..110
XVII
Table 5.1 Sample selection pool: Austrade database …..121
Table 5.2 Questionnaire draft/scale …..125
Table 5.3 Measures …..133
Table 5.4 Postcode characteristics of the sample …..137
Table 5.5 Industry representative proportions …..138
Table 5.6 Significance two-tail test for non-response bias …..138
Table 5.7 Reliability and internal consistency tests …..139
Table 5.8 EFA measurement model …..141
Table 5.9 Research design …..142
Table 6.1 Respondent profile characteristic size, position and location …..146
Table 6.2 Respondents’ profile international market characteristic …..147
Table 6.3 Respondents profile age and experience characteristic …..148
Table 6.4 Respondent profiles Internet usage characteristic …..149
Table 6.5 Model fit indicators …..152
Table 6.6 Summary of initial findings (CFA): information availability …..155
Table 6.7 Summary of initial findings (CFA): information usage …..156
Table 6.8 Summary of initial findings (CFA): Interactive communication …..157
Table 6.9 Summary of initial findings (CFA): International mindset …..158
Table 6.10 Summary of initial findings (CFA): business relationship usage …..158
Table 6.11 Summary of initial findings (CFA): psychic distance …..159
Table 6.12 Summary of initial findings (CFA): Internet intensity …..160
Table 6.13 International market growth: English speaking markets …..161
Table 6.14 Summary of measurement model fit statistics …..162
Table 6.15 Summary of full-saturated model fit statistics …..163
Table 6.16 Summary of proposed structural model fit statistics …..164
Table 6.17 Summary of competing model structural model fit statistics …..167
Table 6.18 Final model measurement table summary …..169
Table 6.19 Evaluated hypotheses table …..171
Table 6.20 Model 1 and 2 correlation matrices estimates …..175
Table 6.21 Discriminant validity chi-squared test (final modified model) …..176
XVIII
Table 7.1 Information availability, information usage and interaction …..184
Table 7.2 International mindset and business relationships …..187
Table 7.3 The Internet and international market growth …..189
Table 7.4 Research Issue 1, 2 and research question conclusions …..191
Table 7.5 Contribution summary …..203
1
1.0 CHAPTER 1: OVERVIEW
1.1 Introduction
This thesis dissertation presents the theoretical underpinnings for the study pertinent to
the effects of the Internet on the internationalisation process and international market
growth of the firm. In the introduction a brief background to the research (Section 1.2),
research issues and the overarching research problem (Section 1.3), justification for the
research (Section 1.4), the methodologies used (Section 1.5), an outline of the thesis
(Section 1.6), definitions (Section 1.7) and delimitations of scope (Section 1.8) are
presented, as advocated by Perry (1998), and outlined in Figure 1.1. Consequently, in
Chapter 1 the key elements of the thesis are presented.
Figure 1.1 Chapter 1 overview
Source: adapted structure from Perry (1998)
Introduction (1.1)
Practical
Internet & the web
Localisation
Pure player
Glocal
Market space
Virtual network
Intermediaries
Virtual social networks
Research issues
Research question
Background (1.2)
Research problem (1.3)
Contributions (1.4)
Chapter 1-7
Elements of research
Theoretical
Research design & sequence Methodology (1.5)
Outline of report (1.6)
Definitions (1.7)
Conclusion (1.9)
Delimitations (1.8)
2
1.2 Background to research
Transcending traditional physical national borders, the Internet is an evolving technology
that has opened up new market opportunities (Rayport & Sviokla, 1994; Quelch & Klein,
1996; Bennett, 1997; Palumba & Herbig, 1998; Porter, 2001; Petersen, Welch & Liesch,
2002; Tian & Emery, 2002; Kotabe & Helsen, 2004; Loane, McNaughton & Bell, 2004).
Consequently, the Internet has altered the dynamics of international business
environments and the internationalisation process (Hamill, 1997; Petersen, et al., 2002).
Currently, internationalisation models that attempt to explain the effects of the Internet
on the internationalisation process are general in nature, relying predominantly on
traditional theories to explain a contemporary phenomenon (Quelch & Klein, 1996;
Bennett, 1997; Hamill, 1997; Petersen, et al., 2002). These few models form the
foundation for this research project and highlight the need for more exploratory
investigation into the Internet‘s impact on the internationalisation process. Current
Internet internationalisation models have a general focus on internationalisation theory
and neglect an explicit strategic approach to internationalisation. As, there are ‗many
research opportunities that exist with respect to international marketing online‘
(Harrison-Walker, 2002, p.19). To date, little attention has been paid to the Internet‘s
influence on international marketing strategy and its effect on international market
growth. Therefore, the body of knowledge in this field is considered relatively immature,
and previously referred to as in ‗an embryonic stage‘ (Hamill & Gregory, 1997 p. 23).
Recent research has attempted to identify the current and future effects of the Internet on
key internationalisation paths in the process of foreign market expansion (Petersen, et al.,
2002). There is a growing body of work focused on integrating the Internet in the
internationalisation process of the firm, also referred to as Internetalisation (Buttriss &
Wilkinson, 2003). However, with the exception of a few studies, the current research is
based on frameworks focusing on peripheral macro-environmental factors that affect
internationalisation, as opposed to specific internationalisation elements. Further, no
attempt has been made to reveal the precise impact of the Internet on directional
international market growth within the internationalisation of the firm. International
market growth is not a primary focus within an Internet internationalisation literature.
Using a model that identifies and explains the Internet‘s impact on international market
3
growth and the internationalisation process, this PhD study brings both a precise focus on
international market growth and a holistic framework of the Internet‘s impact on the
internationalisation process to the literature.
1.3 Research problem
An ever-increasing emphasis has been placed on the potential importance of the Internet
in international market expansion (Bennett, 1997; Hamill, 1997; Moen, 2002b; Petersen,
et al., 2002; Moen, Endresen & Gavlen, 2003; Aspelund & Moen, 2004). This is due to
the Internet becoming a standard medium used by international marketers (Okazaki,
2004) and potentially the most significant advancement in global strategy in recent years
(Melewar & Stead, 2002). However, the current literature pertaining to the Internet‘s
influence on international expansion is general in nature. For example, studies have
indicated that firms perceive the Internet to be a mechanism that can benefit the company
to grow in new business and grow in existing markets (Gibbs & Kraemer, 2004), but not
actual growth or international market growth. If international growth is advocated as a
major advantage, then there is a need for a more precise investigation of this
phenomenon.
It has been suggested that the Internet provides an arena for new research in
internationalisation and for testing extant internationalisation theories in a new context
(Kotha, Rindova & Rothaermel, 2001). Currently, no theoretical framework or model has
been developed that attempts to evaluate the Internet‘s influence on international market
growth in the context of the internationalisation process. More specifically, market
growth is relatively unexplored as a focus for research on internationalisation and the
Internet. Thus, the research problem ‗How and why does the Internet influence
international market growth of the firm,’ was justified for investigation. Moreover, two
research issues were developed to address the research question:
Research Issue 1: How and why has the Internet influenced the internationalisation
process of the firm?
Research Issue 2: How and why has the Internet influenced international market
penetration and development for the firm?
4
1.4 Justification for research
Significance of original contribution to body of knowledge
This research advances current internationalisation theory with respect to the Internet‘s
influence on international market growth. The Internet was found to be an important
mediator between the internationalisation process and international market growth. More
specifically, the Internet positively influences internationalisation components of
information, knowledge, international mindset and business relationships. This is an
important contribution, as growth is an integral element of the capitalisation of new
market opportunities (Peters, 1993; Aaker, 1998, 2001). Thus, the contributions found in
this study extend outward internationalisation theory.
Academic justification
The academic justification is twofold. Firstly, scant attention has been paid to research in
the area of the Internet and internationalisation within international marketing literature.
With the evolution of the Internet and its impact on international marketing, it is prudent
to investigate this growing body of work in greater depth. That is, ‗there remains
considerable opportunity for future exploration into international e-marketing‘(Harrison-
Walker, 2002, p.19).
Secondly, and more specifically, this research aims to diminish the current gap in the
literature by extending the theoretical understanding of the Internet‘s impact on
international market growth. This research provides a holistic model of the Internet‘s
influence on outward internationalisation. Beyond providing a holistic model, the
research identifies specific internationalisation components that have been affected by
the Internet intensity of the firm. Thus, the academic justification of this research project
identifies components of the internationalisation process and maps the complex
interrelationships between the Internet and international market growth within a holistic
model.
Practical justification
There are three practical justifications for this study. Firstly, the level of Internet
adoption by the firm and customers has an important role in the implementation of
5
Internet marketing. Thus, a broader evaluation of the adoption of the Internet by firms
and customers helps to highlight the importance of the technology. Secondly, the research
illustrates the impact of the Internet on SEM‘s internationalisation. That is, the Internet is
an evolving technology that has been proven to increase the internationalisation of
SME‘s. Thus, this research highlights the impact of the Internet on the international
market growth opportunities of SME‘s. Thirdly, the industries selected for the study have
a significant impact on the broader export impetus for the Australian economy. Thus,
these industries are assessed for their justification or importance for this study. The
Internet evolution will be assessed next.
Currently, there are nearly one and a half billion Internet users world wide (Internet
World Stats, 2008). The Asian region has been the largest and fastest growing region in
the world (Internet World Stats, 2008). Further, there is growing evidence that fast
Internet connections such as broadband Internet is having a positive impact on Internet
consumer activities (Forrester, 2006). These Internet activities include, e-mail, instant
messaging, stock market, purchasing, listening to the radio, playing games and
downloading music and movies, as illustrated in Table1.1. These consumer activities
online generate new Internet opportunities for firms to exploit when internationalising.
Table 1.1 International broadband consumers’ online activities
6
As a consequence of the rapid increase in global Internet consumers, firms are also
increasing their online activities. The percentage of Australian firms that used the
Internet in 2006 was:
77.6% for firms with 0-4 employees
86.3% with 5-19 employees
94.9% with 20-199 employees
99.9 % for firms with 200+ employees (Australian Bureau of Statistics, 2007a)
Further, 72.6% of all firms use the Internet for their marketing (Australian Bureau of
Statistics, 2007a). The impetus for the increased Internet adoption was the recent
introduction of broadband Internet connections in Australia. For example, in 2006 the
adoption of broadband in Australia was:
79.2% for firms with 0-4 employees
86.6% with 5-19 employees
91.4% with 20-199 employees
97.7% with 200+ employees (Australian Bureau of Statistics, 2007a)
The proportion of businesses in Australia receiving sales orders via the Internet increased
from 12% in 2004-05 to 21% in 2005-06 (Australian Bureau of Statistics, 2007a). During
7
this period the value of Internet based income has grown by approximately 40% from
$40 billion to $57 billion. The Internet has become a significant mechanism for the
delivery of revenue for Australian firms.
Secondly, it has been suggested that the Internet has a more dramatic impact on SME‘s
internationalisation (Poon & Swatman, 1997; Arnott & Bridgewater, 2002; Koh &
Maguire, 2004). For example, advances in Internet technologies have been shown to alter
the international market growth path of the small and medium firms (SME), to be more
globally focused from inception (Loane, et al., 2004). SME‘s play a significant role in
the Australian economy, with an estimated 1.6 million small business operators
(Australian Bureau of Statistics, 2004). Small business in Australia accounts for more
than 97% of private business and employs more than 50% of the private sector
(Australian Bureau of Statistics, 2002).
Therefore, not only do large firms with sizable capital capabilities have the ability to
internationalise through the Internet but also small and medium companies with only
moderate investment and infrastructure (Arnott & Bridgewater, 2002). It has been well
established that the Internet gives SME‘s the capabilities of internationalising where this
may not have been possible in the old economy (Bennett, 1997; Hamill, 1997; Aspelund
& Moen, 2004; Simpson & Docherty, 2004). In addition, the Internet is of strategic
significance for smaller sized firms as it increases internationalisation levels (Lituchy &
Rail, 2000). However, it has also been proposed that the capital capability of the firm
may perhaps be a barrier to the implementation of the Internet for SME‘s (Taylor &
Murphy, 2004), although, in recent research in the United Kingdom this argument has
been refuted (Simpson & Docherty, 2004).
Further, the Internet‘s influence on small and medium firms internationalising has
progressively become a focal point for researchers in the area of international marketing,
as seen in Table 1.2 (Quelch & Klein, 1996; Hamill & Gregory, 1997; Poon & Swatman,
1997; Kotha, et al., 2001; Arnott & Bridgewater, 2002; Moen, 2002b; Moen, et al., 2003;
Aspelund & Moen, 2004; Gabrielsson & Manek Kirpalani, 2004; Loane, et al., 2004).
Research over recent years has emphasised SME‘s with particular reference to the main
8
themes of; the barrier to Internet adoption, the Internet benefits for SME‘s, acceleration
of internationalisation, the niche focus online, the resource capacity, ICT (information
communication technology) firms, international experience, industry specificity, Internet
start-up firms, standardisation and the Internet‘s ability to give SME‘s a global strategy.
Research into SMEs and the Internet has increased, as illustrated in Table 1.2. SME‘s
make up the vast majority of firms in this study (99%) and the Australian economy.
Table1.2 Main SME Internet and internationalisation themes
Year Author/ construct
Barrie
rs
Ben
efi
ts
Accel
era
tio
n
Reso
urc
e c
ap
acit
y
Nic
he f
ocu
s
ICT
fir
ms
En
trep
ren
eu
ria
l
Inte
rn
ati
on
al
ori
en
tati
on
Ind
ust
ry
sp
ecif
ic
Sta
rt-
up
s
Sta
nd
ard
ise
pro
du
ct
Glo
bal
str
ate
gy
1996 Quelch & Klein X X X
1997 Hamill & Gregory X X X
1997 Poon & Swatman X X X
2001 Kotha, Rindova & Rothaermel X X X
2001 Tettah & Burn X
2002 Arnott & Bridgewater X X X
2002 Moen X X X X
2003 Moen, Endresen & Gavlen X X X
2004 Aspelund & Moen X X X X
2004 Gabrielsson & Kirpalani X X X X
2004 Loane, McNaughton & Bell X X X X
Total 4 4 5 2 2 4 4 2 2 3 1 2
Source: developed for this research
Lastly, this study has a cross sectional focus including sources from agribusiness,
business and financial services, consumer goods, and information communication
technology (ICT) industries, for Stage II of the research. These industries were selected
as they represent four out of the top nine industries of Australian exporters, accounting
for A$93.2 billion in export for 2006-2007 (ABS, 2008). Further, these industries
account for 20,393 of the possible 44,310 total Australian export firms in 2006-2007
(ABS, 2008). For example, the agriculture industry generates A$30 billion in value for
the Australian economy and employs 385,000 people. In 2005-2006 the industry
accounted for a quarter of the merchandise exports with A$26 billion, as 60% of what is
produced on Australian farms is exported (Austrade, 2008). The value the export of
services is estimated to be A$46 billion (ABS, 2008), with business services valued at
9
A$9 billion and financial/insurance accounting for A$3.8 billion in 2006-2007 (ABS,
2008). Exports of information communications technology in 2005 accounted for A$5.2
billion (Australian Bureau of Statistics, 2006). Finally, the manufacturing industry with
A$51 billion and retail trade A$2 billion (ABS, 2008) form the majority of what would
be considered consumer goods. Collectively, apart from the mining industry these four
industries represent the majority of outward internationalisation for Australia.
1.5 Methodology
This project used a mixed approach of qualitative and quantitative methodologies in
order to identify and verify theoretical constructs, as outlined in Figure 1.2 (Eisenhardt,
1989; Chetty, 1996; Poon & Swatman, 1997; Burgess-Limerick & Burgess-Limerick,
1998). Currently, little emphasis has been placed on empirical research within the
literature, as existing theoretical models are limited in an Internet internationalisation
context (Moen, 2002b; Moen, et al., 2003).
In Stage I, a qualitative methodology was used to ascertain specific theoretical constructs
(Yin, 1994; Chetty, 1996; Perry, Riege & Brown, 1999; Hastings & Perry, 2000;
Amaratunga & Baldry, 2001; Amaratunga, Baldry, Sarshar & Newton, 2002), as there
was a limited understanding of the influence of the Internet on international market
growth. Firstly, Stage I is a multiple-case study method for qualitative exploration, as
this yielded exploratory, empirical evidence concerning the Internet‘s influence on
international market growth in the internationalisation process. The findings have given
rich accounts of the interrelationships between events and factors in the research
(Gummesson, 2004).
Once an evaluation of the qualitative case studies data was conducted, a quantitative
analysis helped to verify the identified theoretical constructs (Eisenhardt, 1989; Chetty,
1996; Burgess-Limerick & Burgess-Limerick, 1998). By confirming or disconfirming the
initial qualitative study, a quantitative modelling process gave statistical verification and
generalisability to the findings that can be used by academics and practitioners
(Eisenhardt, 1989).
10
Figure 1.2 Research design and sequence
Source: developed for this research project
Stage II was a statistical evaluation using structural equation modelling (SEM). SEM was
used to test a model for the multiple interrelationships between the internationalisation
process, Internet intensity and international market growth. This multivariate structural
equation model (SEM) approach was a vehicle in which the researcher constructed
theory through direct and indirect relationships in a holistic manner (Bagozzi, 1994).
That is, SEM provided a higher level of complexity than more traditional means of
multiple variate analysis (Chin, 1998; Steenkamp & Baumgartner, 2000).
1.6 Outline of the report
This thesis was developed in accordance with Perry‘s (1998) overview, which outlined
the sequence for a research thesis, as shown in Figure 1.3. This outline includes:
an introductory chapter (Chapter 1)
a literature review (Chapter 2)
a case study methodology chapter (Chapter 3)
an case study analytical chapter (Chapter 4)
a data collection method (Chapter 5)
an analysis of the proposed model and competing models in a structural equation
model (SEM) evaluation (Chapter 6)
an implications and conclusion chapter (Chapter 7)
Theoretical
framework
Research issues
Adjusted theoretical
framework
Stage I- case studies Hypothesis formulation Structural equation
modelling analysis
Case study analysis Conceptual model
formulation
Revised theoretical
framework Stage II- Surveys
Discussion of findings
11
Figure 1.3 Research project overview
Source: developed for this PhD research
In the introductory chapter (Chapter 1), the background to the research, the evaluation of
the research problem and identified issues, a brief overview of the data collection
methods and a justification of the choice of case study methodology and structural
equation modeling are presented. Within this chapter relevant definitions and
delimitations are set as are the research boundaries for the investigation.
Within Chapter 2 an evaluation of the relevant existing literature pertinent to the research
problem is provided. This literature was drawn from the parent disciplines of growth,
Internet marketing and internationalisation. The effects of the Internet on
internationalisation components were investigated in order to identify the impact on
Chapter 2:
Literature review
Parent discipline 1
Growth strategy
Chapter 1
Introduction
Chapters 3 & 4:
Qualitative methodology
Immediate discipline
Internet internationalisation
Theoretical
framework
Research issues
Case selection Data collection
In-depth interviews
Case study analysis
Chapters 5 & 6:
Quantitative methodology, data
analysis (SEM)
Sample technique Statistical analysis
Structure equation
modelling
New theoretical
framework
Evaluation of
construct
Data collection method
Mixed-mode surveys
Chapter 7: Discussion &
conclusion
Discussion: research
issues & question
Implications for theory &
practice
Hypothesis formulation
& model development
Limitations &
future research
Stage I
Stage II
Parent discipline 2
Internet marketing
Parent discipline 3
Internationalisation
12
international market growth, as this focus is underrepresented in the literature. Although
some research has investigated the Internet‘s influence on internationalisation, no study
known to the researcher has explored:
a. the components of the internationalisation perspective in a holistic and statistical
manner; and
b. the internationalisation components with a primary focus on international market
growth.
Subsequently, a number of research issues and theoretical concepts were identified to
help explore the research problem, as seen in Section 1.3.
An evaluation and justification of the choice of methodology used for case study research
is given in Chapter 3. This research methodology adopted is thoroughly investigated to
ascertain the appropriateness of the methodology for this study project.
In the analytical chapter, Chapter 4, the data from the twelve data rich cases are managed
and the findings presented. Further, within this chapter a proposed model of
‗Internetalisation‘ is developed and highlighted. That is, the analysis of the case studies
helped to identify a series of hypotheses and proposed models for statistical testing.
The use of a quantitative collection method is evaluated and justified in Chapter 5. Both
reliability and validity issues are investigated. The ability to evaluate both manifest and
latent variables with multiple multi-item constructs in a simultaneous modelling process
highlights the strength of using SEM. Further, SEM enables the identification of complex
interrelationships, which were presented in the study.
In Chapter 6 analyses of the normality of data, missing data, reliability, and measurement
models, using exploratory factor analysis and confirmatory factor analysis are presented.
Structural models (fully saturated models, proposed models and competing models) are
presented and evaluated. Thus, in Chapter 6 an evaluation of the model fit relevant to the
interrelationships between the identified internationalisation components, Internet
intensity and international market growth is presented. The models are assessed for
validity, reliability and model fit using normed Chi-squared, p value, Goodness of Fit
13
Index (GFI), Tucker Lewis Index (TLI), Comparative Fit Index (CFI), Standardised Root
Mean-Square Residual (SRMR) and Root Mean Squared Error Approximate (RMSEA)
for rigour. Competing models and construct interrelationships are also assessed, using a
bootstrap test for robustness.
The potential theoretical and practical implications from the findings are evaluated in
Chapter 7. These findings concluded that the Internet intensity is an integral part of the
internationalisation process for the firm. More specifically, Internet intensity mediates
the information and knowledge components of internationalisation, as well as
international entrepreneurial elements. Thus, when firms develop internationalisation
capabilities, the Internet should be considered to be one of the key elements of their
international market growth endeavours. The holistic model extends current
understanding by providing empirical evidence of constructs and interrelationships.
Additionally, the primary focus on international market growth fills the current gap
pertaining to the Internet‘s impact on international market growth.
1.7 Definitions
Definitions adopted by researchers are not always uniform and often depend on the
project‘s purpose (Perry & Pyatt, 1995). Thus, key and/or controversial terms are defined
to establish the positions taken in this study. The key terms used in this thesis are defined
next.
Born global
Born globals are firms that have an accelerated path toward internationalisation. A
phenomenon of the 1990‘s, the born global perspective is where a firm creates a new
venture that undertakes market expansion in multiple markets within a short timeframe
(Knight & Cavusgil, 1996; Rasmussan, Madsen & Evangelista, 2001; Moen, 2002a;
Moen & Servais, 2002). The born global firm internationalises within a six-year time
frame from inception (Oviatt & McDougall, 1997; Wickramasekera & Bamberry, 2003).
The concept of a born global firm is contrary to the normal internationalisation path that
follows traditional internationalisation theories such as the stages or process theory
and/or network theory (Knight & Cavusgil, 1996).
14
Glocal
An Internet glocal strategy adapts international marketing activities online to suit the
specific needs of a particular target market in an international market destination
(Melewar & Stead, 2002; Siegel, 2004). That is, local content and cultural adaptation
give a customised perception for international consumers (Steinfield & Klien, 1999;
Melewar & Stead, 2002; Siegel, 2004). As distinct from a global strategy, the glocal
strategy goes beyond standardised universal offerings online by tailoring those offerings,
content and services to the specific target market.
Internet
The Internet is the global logical interconnection of unique addresses through a protocol
and a complex array of communication infrastructures (Dann & Dann, 2001). The
complex digital nature of the Internet lends itself to being known as a digital
environment (Hanson, 2000). Within this thesis the terms ‗Internet‘ or ‗digital
environment‘ are used interchangeably, as both terms define the medium as the
commercial and communicational tool of the World Wide Web. This usage is distinct
from the terms ‗intranets‘ and ‗extranets‘. Intranets are Internets specifically designed for
firms to use internally. Extranets although internal to the firm, are designed for the
interaction between suppliers and the firm. Although there is a minor overlap with
intranets there is no premeditated focus. However, where applicable and appropriate,
these terms will be used explicitly.
Internetalisation
The term Internetalization coined by Bell, Deans, Ibbotson, and Sinkovics, (2001, p. 69)
indicates internationalisation, due to the digital capabilities of the Internet. Buttriss and
Wilkinson (2003, p. 1) suggest that Internetalisation is ‗the process of a firm committing
resources to Internet commerce and Internet mediated transactions; including
communication and coordination of internal and external relations,‘ in the context of the
internationalisation process. Thus, Internetalisation is the process of integrating the
Internet into the internationalisation process of the firm.
15
Localisation
To localise a website is to tailor elements to the web presence of the firm. That is, a firm
uses local customs, information, services and offerings to the target market to localise a
website for a specific region (Siegel, 2004). By customising the offerings of a website,
specific needs, wants and preferences of the local market are satisfied (Siegel, 2004).
Localising a website is the implementation phase of a glocal strategy.
Pure player
A firm with a sole online focus is considered a pure online firm or pure player.
Sometimes also known as Internet start ups, the pure player differs from that of
traditional bricks and mortar companies that have dual online and offline focuses (Strauss
& Frost, 2001). The pure player exists for the sole purpose of Internet transactions, even
if the firm has some elements of a business in a physical form.
Marketspace
Information systems on the Internet lessen the importance of the physical location,
inventory and the actual site for buying and selling (Rayport & Sviokla, 1994). The
traditional marketplace interaction between physical seller and physical buyer is
minimised, and replaced in part with a virtual marketspace business environment online
(Rayport & Sviokla, 1994). The frictionless market space is purely online as opposed to
the physical market place with its physical barriers (Rayport & Sviokla, 1994).
Outward internationalisation
Internationalisation has been widely used to describe the outward movement in the firm‘s
international operations (Calof & Beamish, 1995). Outward internationalisation is the
seeking to exploit and/or selling in foreign markets (Welch & Luostrarinen, 1993). That
is, the outward internationalisation of the firm is focused on the outward growth of the
firm into international markets.
SME
Small and medium enterprises (SME) are those firms classified with between 1-200
employees (Australian Bureau of Statistics, 2002). Small firms are between 1-19
16
employees (Australian Bureau of Statistics, 2002), and medium firms between 20-200
(Australian Bureau of Statistics, 2002). A broader definition of SME within a global
context is 1-500 employees (OECD, 2002) or 1-250 within the marketing and
international marketing literature (Hamill & Gregory, 1997; Moen, 2002b; Koh &
Maguire, 2004; Simpson & Docherty, 2004). However, as this is an Australian study the
Australian Bureau of Statistics (2002) classification was adopted, unless specified.
Virtual network intermediaries (VNI)
Virtual network intermediaries are firms that act as conduits between the firms and
customers, such as, wotif.com, a firm that is an accommodation retailer. These virtual
intermediaries can be either directory informational-based networks such as
yellowpages.com.au, or virtual networks that act as a buyer-seller market space, for
example, eBay.com, tenders.com, wotif.com.
Virtual social networks (VSN)
These social networks are conduits between Internet citizens who have platforms that
enable virtual social engagement beyond what is provided by a standard corporate
website, for example, secondlife.com, youtube.com, myspace.com and facebook.com.
1.8 Delimitations
It is important to state the parameters of the study. Although this is primarily an
exploratory study, the researcher has used parameters to limit the scope of the study, as
seen in Table 1.3. These delimitations include the use of only Australian firms, a
geographical limitation. Further, the focus of the study is international market growth, an
outward internationalisation pathway in the context of Australian firms. That is, although
inward internationalisation may overlap with the study subject, it is not the focus and
falls outside the scope of this study. Outward internationalisation is the seeking to exploit
and/or sell in foreign markets (Welch & Luostrarinen, 1993). The parent disciplines of
growth, Internet marketing, internationalisation and the immediate discipline of
internetalisation were the theoretical parameters set for this study. Further, the level of
informant was a top decision maker within firms. Any focus outside of these parameters
falls beyond the scope of this research.
17
Table 1.3 Element of research
Element of Research project Consequence Relevant Section
Growth strategy Parent discipline Chapter 2, Section 2.
Internet Marketing Parent discipline Chapter 2, Section 3
Internationalisation Parent discipline Chapter 2, Section 4
Internetalisation Immediate discipline Chapter 2, Section 4
Marketing/ International
Managers
Level of decision makers Chapter 1, Section 5
Chapter 3, Section 3
Australian Firms Geographical delimitations Chapter 1, Section 1.8
Restrictions Outward internationalisation Chapter 1, Section 1.8
Source: developed for this research
1.9 Conclusion
In this first chapter the key components of the research were highlighted and outlined.
The research problem and issues were introduced to help ascertain the impact of the
Internet on the outward internationalisation process of the firm. Additionally, an
evaluation of the mixed methodology established a justification for an exploratory case
study methodology and a confirmatory structural equation modelling process. Further,
the research study was outlined with definitions and delimitations discussed. Thus, a
foundation has been established upon which an investigation can proceed into a more
detailed description of the research and findings. More specifically, this research
diminishes the current gap in the literature by extending the theoretical understanding of
the Internet‘s impact on international market growth. This study has confirmed the
elements, interrelationships and paths within the internationalisation process influenced
by the Internet. That is, information availability, information usage, interaction,
international mindset, business relationships and psychic distance are modelled with
respect to the Internet and international market growth. Thus, this research provides a
holistic model of the Internet‘s influence on outward internationalisation. Beyond
providing a holistic model, the research identifies specific internationalisation
components that have been affected by the Internet intensity of the firm, such as
information availability, information usage and international mindset and business
relationships. Thus, the academic contributions of this research project are the
identification of the components of the internationalisation process and the mapping of
the complex interrelationships between the Internet and international market growth
within a holistic model.
18
2.0 CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
This chapter presents: a literature synthesis pertaining to the parent disciplines of growth
strategy (Section 2.2), Internet marketing (Section 2.3) and internationalisation (Section
2.4), which underpin the research with a theoretical framework that evaluates the
potential implications for the study. Further, theoretical frameworks are evaluated for
their implications in the immediate discipline of Internet international marketing
(discussed in detail in Section 2.5), as seen in Figure 2.1.
Figure 2.1 Chapter 2 literature review overview
Immediate discipline Parent discipline Parent discipline Concepts
Source: developed for the research from the literature
Finally, the immediate discipline evaluates the literature pertaining to the research focus
of Internet internationalisation in the pursuit of international market growth. Thus, these
parent and immediate disciplines of literature assist research by underpinning the study
with a framework of theory, as seen in Figure 2.1. Growth will be assessed first.
Internationalisation (2.4)
components
information/knowledge
stages, networks and
born global
Information
Internet international
marketing (2.5)
Internet
marketing (2.3)
Growth
strategy (2.2) Alternative
Product/market
Growth strategy
Control
Integration
Interactivity
Trust
Internal
19
2.2 Growth
The primary focus of this research is to evaluate the Internet‘s influence on the firm‘s
growth in international markets. Traditionally, strategic choice in international markets
and the features of internationalisation are determined in part by managers, especially in
relation to the development new of international markets (O'Farrell, Wood & Zheng,
1998). The strategic focus of the firm may take a purist economic standpoint, a
resources-based view, a knowledge-based view and/or a strategic leadership perspective
or a strategic decision-making viewpoint (Hoskisson, Hitt, Wan & Yiu, 1999). This
thesis does not aim to advocate one strategic perspective over another competing
perspective to justify a dominant viewpoint. However, all avenues are investigated to
identify possible constructs pertinent to the research problem in order to better
understand the phenomenon. Due to the use of multiple strategic perspectives, each
viewpoint is integrated where appropriate throughout the literature review.
The research incorporates multiple theoretical frameworks to evaluate a complex
international research problem within a strategic perspective (Hoskisson, et al., 1999).
Recently the incorporation of a multiple-theoretical framework in complex international
research projects has become a more prudent, sophisticated mechanism for investigation
(Hoskisson, et al., 1999). Evaluating the Internet‘s influence on growth strategy in
international markets falls into this complex category.
Market growth as a strategic option is considered to be the cornerstone of strategic
marketing theory (Ansoff, 1957, 1965; Ansoff & McDonnell, 1988; Kotler, 1998, 2001)
including, more recently, in the Internet marketing environment (Murphy & Bruce,
2003). This is because it has been suggested generic strategic marketing concepts can be
equally applied in an Internet context (Merrilees, 2001). Further, the Internet medium has
had a profound impact on corporate strategy (Booz-Allen & Hamilton, 1999). Ansoff‘s
market growth theory is used as an analytical framework for this research, in an Internet
and internationalisation context.
The strategic direction of the firm can follow two distinct paths: rationalism or expansion
(Peters, 1993; Murphy & Bruce, 2003). Rationalist strategies focus on internal firm
20
efficiencies such as retrenchments, restructuring, and cost cutting, whereas expansionary
strategies focus on opportunities outside the current vision that are formulated to grow
the firm (Ansoff, 1965, 1969; Ansoff & McDonnell, 1988; Aaker, 1998, 2001).
Expansionary strategies are also commonly known as growth strategies (Aaker, 1998,
2001). Market expansion or growth has been a topic of particular focus for authors in
contemporary literature concerning the Internet (Petersen, et al., 2002). The market
development and market penetration of a firm‘s product is considered to be a growth
strategy (Ansoff, 1965; Ansoff & McDonnell, 1988; Aaker, 1998, 2001), and has also
been used in an international market context by researchers (Gronhaug & Kvitastein,
1992; Lim, Sharkey & Kim, 1993). Therefore, these market growth choices of direction
and other alternative growth strategies will be explored further.
Market growth objectives
Most growth strategies have similar objectives, such as increased market share, sales,
profit and improved return on investment (ROI). An overriding strategy gives a
directional marketing path for the firm contemplating an optimistic strategic path (Quinn,
Mintzberg & James, 1988). The product market matrix is a way in which a firm can
choose a direction for growth. Although extensions to the product/market strategic theory
are evident in the literature (Miles & Snow, 1978), the growth vector or product/market
matrix with its fundamental four quadrants of growth strategy typology, remains the core
of contemporary marketing growth strategies (Evans & Berman, 1985; Harper, 1992;
Kotler & Armstrong, 1994; Pride & Ferrell, 1997; Aaker, 1998; Kotler, 1998; Watts,
Cope & Hulme, 1998; Aaker, 2001; Kotler, 2001). These fundamental directions of
growth strategy include market penetration, market development, product development,
and diversification, as seen in Figure 2.2.
Figure 2.2 Ansoff’s product/market growth vector
Product/
mission
Present New
Present Market
penetration
Product
development
New Market
development
Diversification
Source: Ansoff (1965, p.109)
21
This matrix still dominates strategic marketing texts, as seen in Table 2.1 (Ansoff, 1965,
1968, 1969; Evans & Berman, 1985; Perry, 1987; Ansoff & McDonnell, 1988; Aaker,
1998; Watts, et al., 1998; Aaker, 2001; Kotler, Brown, Adam & Armstrong, 2004;
Kotler, Keller, Ang, Leong & Tan, 2006). Thus, these four main strategic directions
pertaining to marketing growth will be discussed and evaluated in an international market
growth context.
Table 2.1 Use of product market matrix
1950s-1970 1970s-1990 1990s-2006
1957 Ansoff
1965 Ansoff
1968 Ansoff
1985 Brownlie & Bart
1985 Evans & Berman
1987 Perry
1988 Quinn, Minzberg & James
1988 Ansoff & McDonnell
1990 Brown
1993 Peters
1994 Kotler & Armstrong
1997 Pride & Ferrell
1998 Aaker
1998 Kotler
1998 Watts, Cope, & Hulme
2001 Aaker
2003 Murphy & Bruce (online)
2004 Kotler, Brown, Adam & Armstrong
2006 Kotler, Keller, Ang, Leong, & Tan
Source: developed for this research
Firstly, market penetration is the exploitation of current established markets with the
same product (Ansoff, 1965; Aaker, 1998). That is, the firm attempts to increase market
share and/or increase product use in the firm‘s current international markets. The
increase in product usage can be achieved in several ways; increasing frequency of use of
the product, increasing the quantity being used, or finding new ways and applications for
existing consumer to use the product (Ansoff, 1965; Aaker, 1998, 2001). However,
market penetration, although significant in an international context, does not look to
exploit new markets.
The second quadrant of the product market growth matrix is market development. Market
development is particularly important in international marketing as it is embedded within
foreign market expansion of the firm. The firm is actively looking to capitalise on new
market opportunities outside existing markets. The market development growth strategy
22
not only identifies new segments within markets, but also identifies new markets to
develop and new channels to exploit (Evans & Berman, 1985).
The third quadrant, product development, is a growth strategy used to differentiate the
product from those of other competitors in the market (Ansoff, 1965; Aaker, 1998,
2001). Product development can be used to add to the current product or to redefine the
product, to develop a new contemporary product, or to simply create a new product for
the established market (Aaker, 1998). Although product development is a worthy
strategic choice it fails to give market direction for the firm. Consequently, this strategy
is not the focus of this research.
The fourth vector or quadrant of the theory is diversification. The diversification strategy
is the most difficult to implement. The strategic direction attempts to take advantage of
new products with related and unrelated product and market offerings, moving away
entirely from the firm‘s knowledge and experience curve (Kotler, 1998; Aaker, 2001;
Kotler, 2001). Thus, this vector is not the focus of this research.
Researchers have used the growth vector as a platform for extensions to corporate
strategy. For example, Aaker (1998, 2001) uses the fundamentals of Ansoff‘s (1965)
growth vector (the four quadrants) and adds a fifth quadrant, vertical integration, as seen
in Figure 2.3. This fifth quadrant views backward and forward integration as a growth
strategy that recognises benefits in acquiring intermediaries up or down the supply chain
(Aaker, 1998, 2001). This extension to the fundamental product/market matrix is more a
goal for firms than a core directional path. For example, a firm could use either a market
development or market penetration strategy to integrate vertically. The proposed
inclusion of the fifth vector is actually part of the market growth vector and should not be
incorporated as a new quadrant. Thus, its inclusion as a separate quadrant is not
warranted. Rather, vertical integration is the development of a new channel. Thus,
conceptually, vertical integration is consistent with market development, as illustrated in
Figure 2.3.
23
Figure 2.3 The product market matrix: an adaptation of Ansoff’s growth vector
Product/
markets
Established product New product
Established
markets
Market penetration
Increased market share
Increase frequency
Increase quantity
Create new applications
Product development
Product refinement
New generation product
New product, same market
New markets Market development
Expand geographically
Target new segments
Develop new channel
(Vertically integrate)
Forward integration
Backward integration
Diversification
Related
Unrelated
Source: adapted from Aaker (1998, 2001) & Kotler (1998, 2001)
Criticism of Ansoff’s product/market matrix
Ansoff‘s growth matrix is, however, not without its critics. The product/market matrix is
seen to be a strategic ideology more applicable to an environment of rapid global
economic growth, but its use in turbulent environments has been questioned (Harper,
1992). The strategic model in this project is in its directional capacity. In other words,
the model is used in this research for the simplicity, yet solid, theoretical basis for the
directional choices for firms in relation to market growth. Thus, the question of economic
stability when applying the product market matrix is moot as Ansoff‘s growth theory is
used in a market-directional capacity.
Market focus as opposed to product focus
To reduce the complexity further, this research project focuses on market growth for
existing products. This focus does not suggest product development and diversification
are not influenced by the Internet, as postulated by Murphy & Bruce (2003). However,
the focus of this study is the market aspect, as opposed to the product focus. Therefore,
the two strategic directions of product development and diversification are deemed to be
beyond the parameters of this study.
Alternative growth strategies
Product/market strategies are essentially a strategic direction for the firm‘s long term
profit endeavours (Quinn, et al., 1988). However, not all growth strategies follow the
24
parameters set out by Ansoff (1957, 1965). Two other major forms of growth include,
growth by acquisition and growth through a portfolio matrix (Aaker, 1998, 2001).
Firstly, acquisition strategies focus on acquiring a competitive company to strengthen the
firm‘s market position (Thompson & Strickland, 1996). An example of an acquisition
strategy is purchasing a weaker competitor in the market. Secondly, portfolio growth
strategies focus on market share and a portfolio of strategic business units (Schnaars,
1991; Kotler, 1998, 2001). The emphasis on growth-share strategies is an analytical tool
for the direction of the firm. However, it is assumed that the firm has multiple strategic
business units when in reality this is not the case. Therefore, the directional strategies of
market development and penetration growth are more appropriate, as a theoretical
framework tool for analysis in this research.
The Internet and marketing strategy
Murphy and Bruce (2003) evaluated all vectors of Ansoff‘s directional growth strategies
in a domestic e-retail context. However, Murphy and Bruce (2003) misinterpret Ansoff‘s
strategic directional product/market option in their comparison with value creation
strategies. That is, the product market matrix is an overall directional strategic option,
while a value creation strategy is how the firm will implement that direction, not the
actual directional path as stated by Murphy & Bruce (2003). That is, the interpretation by
Murphy & Bruce (2003) of Ansoff‘s product/market model findings may be misleading.
This critique does not argue that Murphy and Bruce‘s (2003) research is without merit.
On the contrary, this limitation illustrates the importance of the Internet and growth path
vectors, and the need for further investigation.
The limited focus on strategy with Internet implementation has lead to suggestions for a
strategic emphasis in the body of knowledge (Simeon, 1999; Porter, 2001; Simeon, 2001;
Murphy & Bruce, 2003). Research has indicated that the higher the level of Internet
intensity, the greater the propensity of a firm to have international ambitions (Moen,
2002b). That is, there is a relationship between a firm‘s rate of Internet implementation
and its level of international growth ambition. However, explanations for or
understanding of these interrelationships between international growth ambition and the
Internet remain limited.
25
New technological innovations online are creating opportunities beyond basic marketing
and communications (Simeon, 2001). To take advantage of these Internet innovations,
firms with a strategic perspective will capitalise on long-term value creation for current
and potential customers (Murphy & Bruce, 2003). Although some might argue that the
Internet is a source of advantage, the Internet has neutralised this advantage to some
extent, as a competing company can duplicate a competitive advantage online with
relative ease (Porter, 2001). Traditional firm-based competitive advantages can be
transferred online as core competencies and can form a platform for marketing strategy
(Porter, 2001; Murphy & Bruce, 2003). Current corporate trends however tend to ignore
the need for strategy, because short-term price-setting strategies are the predominant
focus. Thus, a long-term profit focus is being eroded (Porter, 2001). Subsequently, long-
term strategy online needs evaluating. Further, the Internet is a powerful tool in the
execution of marketing in international markets (Aspelund & Moen, 2004). Therefore,
Internet marketing elements affecting strategy will be evaluated accordingly.
2.3 Internet Marketing
Although it has been suggested the Internet is the ubiquitous solution for international
trade (Rayport & Sviokla, 1994), its capacity to enhance firms‘ abilities to facilitate
foreign market expansion is more moderate (Melewar & Stead, 2002) and certainly more
complex than has been suggested. It is now recognised that the Internet far exceeds initial
propositions of basic communication (Simeon, 2001). Because of the Internet‘s influence
many commentators, authors and researchers have argued for a new paradigm in both
marketing and international marketing (Hamill, 1997; Hamill & Gregory, 1997; Hoffman
& Novak, 1997; Samiee, 1998b, a; Prasad, Ramamurthy & Naidu, 2001; Darby, Jones &
Madani, 2003). Some have even gone as far as to name this new paradigm ‗Internet
international marketing‘ (IIM) (Eid & Trueman, 2002). As a consequence of these
alterations due to the Internet there have been changes to; information search for
consumers, information control for the firm, interactive capabilities, trust,
disintermediation and internal firm issues. These changes identified emphasise the
impact the Internet has had on marketing, as illustrated in Figure 2.4. Thus, these issues
will be assessed next.
26
Figure 2.4 Unique influential variables of the Internet
Source: developed for the research from the literature
Information search
The Internet lowers the perceived cost of the information search in the purchasing
process of the consumer (Mathur, Mathur & Gleason, 1998; Kolesar & Galbraith, 2000;
Rowley, 2000). For example, the amount of time spent searching for product or firm
information is reduced. Conversely, when evaluating supplier information in a business-
to-business context, the Internet was found to be less relevant to consumers (Deeter-
Schmelz & Kennedy, 2004).
With the advent of new intermediaries such as comparison sites (for example
pricescan.com, a site that gives consumers comparison prices on desired products) comes
increased pricing transparency (de Chernatony, 2001). However, it has been suggested
that there are distinction between goods and services online, as services are less likely to
be looked upon as commodities than physical goods (Bergstrom, 2000). The Internet
benefits some product orientations as a conduit for transactions (Bergstrom, 2000;
Reynolds, 2000). Service (such as travel) firms have some advantages over firms with
physical goods as some service and digitally-orientated products have no physical
elements to impede the Internet transition (Mitra, Reiss & Capella, 1999). That is, brand
associations linked to experience, such as service-orientated and information-based
products, will have an advantage in the differentiation of their product online. Thus,
firms that do not want their products to be perceived as a commodity must find
something other than price or features alone to help differentiate their product
Information
search
Internet
marketing Control
Interactivity
Trust
Internal
Disintermediation
27
(Bergstrom, 2000). Firms that satisfy customer expectations through creating a level of
credibility alleviate customers‘ perceptions of transactional risk (Kolesar & Galbraith,
2000). The Internet has the capacity to provide information to establish this credibility.
Control
Traditional media assume that audience members are passive recipients of the marketing
message. Control of building a brand perception online involves not only the website
content but also the surrounding context (Aaker & Joachimsthaler, 2000). The Internet is
a recognised forum whose imbalance is in favour of the consumer (de Chernatony,
2001). That is, passive offline consumer involvement follows the classical media model
where the firm controls communication. Conversely, in a digital environment, blogs, chat
rooms, digital noticeboards and feedback facilities are all forums that enhance active
participation, and the process of interaction is a co-production of the firm‘s brand online
(de Chernatony, 2001). As consumers take a more active role in producing value online
through the website, they are initially more forgiving of the firm‘s mistakes, believing
they are partially responsible (de Chernatony, 2001). Offline there is a tighter level of
control compared to online. This variance in control is due to the interactive nature of the
Internet. Looser levels of control may produce a more desirable online perception,
because the website is a co-production element of the firm‘s product offerings (de
Chernatony, 2001). Hence, the issue of marketing communication online is a significant
shift from the traditional perception of tight interactive communication.
Interaction
Online perceptions are based on a new business model that creates an increased level of
interaction, giving an enhanced consumer experience (Davis & Buchanan-Oliver, 1999;
de Chernatony, 2001). A website‘s ability to generate interaction can yield emotional
arousal and longevity of the actual purchase beyond that of a site without interactivity
capabilities (Raney, Arpan, Pashupati & Brill, 2003). That is, an interactive website has a
positive influence on purchase behaviour as the perceived decision-making process may
become a more emotionally intense experience, and hence a more involved experience
for the consumer. It has been argued that the perception of interactivity of a firm‘s
website is the most important factor above that of actual interactive capability (Raney, et
28
al., 2003). Thus, the online purchase experience, with its perception of interactivity, has
the propensity to generate greater revenues. For example, firms with personalised and
speedy responses can generate a significantly improved value equation (de Chernatony,
2001). Further, the need for quick, quality interaction is essential for market growth
endeavours of the firm as the associations created from these interactive experiences are
more powerful than those of a traditionally controlled broadcast advertisement (Aaker &
Joachimsthaler, 2000).
In an online environment, consumer interaction with the firm and the website community
can generate a bond (de Chernatony, 2001). The unique property of the Internet needs to
be incorporated into the marketing program to help build these bonds. Interactive
properties such as e-mail, digital noticeboards, opportunities for suggestion and feedback
can lead to a richer, more personalised experience for the consumer (Aaker &
Joachimsthaler, 2000), especially if the customers are geographically isolated in
international markets. This level of interaction within the website can create strong
experiential associations that give the consumer a sense of community thereby
encouraging loyalty and a return visit (Aaker & Joachimsthaler, 2000; de Chernatony,
2001). These interactions and sense of community which generates trust will be assessed
next.
Trust
Trust is the belief that a person or thing may be relied upon (Ang & Lee, 2000). Trust is
an essential element in creating a business online, especially in international transactions,
as these are considered to be high risk. Trust is related to environmental uncertainty
(Jevons & Gabbott, 2000). With a lack of faith and trust online, perceived credibility is
vital for firms (Hoffman, Novak & Peralta, 1999). As Jevons and Gabbott (2000) argue,
brands are a surrogate for trust and therefore are a reliable indicator of a specific cluster
of values for the consumer. Furthermore, the trust of a firm can reduce the perceived risk
associated with transacting online (Davis & Buchanan-Oliver, 1999). It has become clear
that trust acts as an important element in building an online presence (Reynolds, 2000).
This perception has been reinforced by research in Switzerland, which found trust to be
pivotal in online transactions (Reynolds, 2000; Rudolph, Rosenbloom & Tillmann,
29
2004). Research has shown that 64% of online customers do not trust website operators
or online transactions (Ang & Lee, 2000). Additionally, consumers‘ confidence and the
perceived quality of the website can add to or detract from the level of consumer trust.
For example, having confirming transactions, feedback, answering e-mails, and security
in a website can assist in creating trust (Jevons & Gabbott, 2000). Moreover, Ang and
Lee (2000) found firms having a guarantee on the website and communicating that they
also had a physical office dramatically increased the level of trust, correlating with a
large increase in sales. Disintermediation will be assessed next.
Disintermediation
The nature of the Internet has already changed correctional fixed pricing of some firms as
new entrants take intermediary positions not seen previously. Evidence of significant
disintermediation is seen in industries such as banking, finance, travel and tourism and in
dissemination information intense industries such as media and entertainment.
Disintermediation is the reduction of intermediaries in the supply chain which creates a
shorter transactional link between the principle and the end-user (Quelch & Klein, 1996;
Hamill, 1997). An example of these changes in distribution is the airline industry, where
principals now transact directly with customers. In addition, consumers can circumvent
intermediary travel agents, wholesalers and consolidators, thus expanding the principal
firm‘s profit margins (de Chernatony, 2001).
Internet-based intermediaries have a unique role in distributing information to the target
markets (Reynolds, 2000). Pure players are able to enter the supply chain through a re-
intermediation process (as a new intermediary), as wotif.com has done in the travel
industry in Australia. That is, efficiencies can be gained by having a virtual presence as
opposed to a physical presence that incurs the higher cost burden (Quelch & Klein, 1996;
Petersen, et al., 2002; Murphy & Bruce, 2003). Real-time trading in the virtual
environment is creating an unprecedented level of convenience for trade. Examples of
this include Internet banking and Internet travel bookings, which are changing traditional
means of supply chain distribution (Bauer & Colgan, 2001; Overby & Min, 2001). As
previously discussed, service and information-based firms have seen more significant
30
disintermediation and re-intermediation in the supply chains of those industries (Bauer &
Colgan, 2001; Overby & Min, 2001).
Internal influences
Internal micro-environmental influences, such as human and capital resources,
international readiness of firms, company capabilities and other managerial
characteristics, are considered significant to marketing efforts when entering the
international online arena (Quelch & Klein, 1996; Freeman, 1998; Palumba & Herbig,
1998; Arnott & Bridgewater, 2002; Harrison-Walker, 2002). Internal influences are also
known and referred to as firm-based characteristics in the literature (Julian & Liesch,
2004; Morgan-Thomas & Bridgewater, 2004). Not only do large firms with sizeable
capital capabilities have the ability to internationalise through the Internet, but small and
medium companies may also do so with only moderate investment (Arnott &
Bridgewater, 2002). However, these internal issues may also depend upon industry-
specific elements, such as information-based products and services. For example, the
banking, music, publishing, computer software and travel industries have an advantage in
a digital environment, as opposed to a physical one (Arnott & Bridgewater, 2002).
It has been suggested that the Internet gives small and medium firms the capabilities of
internationalising, where this may not have been possible in the old economy (Bennett,
1997; Hamill, 1997; Aspelund & Moen, 2004; Simpson & Docherty, 2004). Further,
small, technology-intensive firms are able to create competitive advantages in
international markets only if they have a strong customer orientation (Aspelund & Moen,
2004). It has also been hypothesised that the firm‘s capital capability may be a barrier to
the implementation of the Internet to SMEs (Taylor & Murphy, 2004). However, recent
research in the United Kingdom has contested this viewpoint (Simpson & Docherty,
2004). Thus, some clarification is still needed in reference to barriers to e-commerce
adoption and internationalisation in small and medium firms.
Managerial orientation issues also affect the implementation of strategies in an Internet
international environment. This is because individuals‘ specific characteristics and
behaviours affect the firm‘s degree of internationalisation (Kotha, et al., 2001; Moen,
31
2002b; Aspelund & Moen, 2004). These marketing decisions include those involving
activities such as market intelligence gathering, marketing communications, brand
awareness, promotions, distribution and pricing elements of the marketing program
(Quelch & Klein, 1996; Hamill, 1997; Freeman, 1998; Palumba & Herbig, 1998; Samiee,
1998b; Davis, 1999; Arnott & Bridgewater, 2002; Harrison-Walker, 2002). However,
Moen (2002) highlights that the age of the firm and positive international orientation
significantly influences export firm‘s active integration of Internet technology in
international markets.
Marketing managers influence the implementation process of international market
growth strategy. Strategic orientation profile becomes a determinant in the
internationalisation of the firm online. Managers can take either a strategic proactive or
reactive internationalisation stance (Moen, 2002b; Aspelund & Moen, 2004). This
orientation toward internationalising is generally based on the experience and knowledge
of the manager, as seen in more traditional internationalisation theory (Aspelund &
Moen, 2004; Siegel, 2004). Further, the manager‘s experience level in international
situations and markets may have a bearing on the mindset of the manager, even in a
digital environment (Aspelund & Moen, 2004; Morgan-Thomas & Bridgewater, 2004).
Findings by Morgan-Thomas and Bridgewater in 2004 suggest that not only does
international experience but also Internet experience influence the acceptance of
integration of website and Internet use in international markets. It has been suggested that
if the decision-maker in an export firm has little international experience, the firm relies
more intensely on Internet technology (Morgan-Thomas & Bridgewater, 2004).
Integration
Internet marketing involves integrating online and offline tactics that will complement
and reinforce each other (Harvin, 2000). New models of strategic thinking are required to
integrate the unique elements of Internet marketing (de Chernatony, 2001). As the
Internet emerges, new types of enterprises are evolving and old economy enterprises are
forced to alter their strategy and organisational structure (Torre & Moxon, 2001).
Classical models recognise the dynamic role that consumers play in the strategic
decision-making process (de Chernatony, 2001). That is, more than ever customers have
32
power over what the firm delivers in respect to information in an online environment.
With interactive abilities, customers can instantaneously inform the company of their
feelings about the product. Furthermore, with information availability, customers are
given more power of choice. Committed firms will have a significant advantage in
developing long-term foundations that underpin the established firm (de Chernatony,
2001). However, the integration of the firms online and offline marketing may not mean
a consistent strategy. On the contrary, integrating strategy implies that the firm commits
to the Internet as part of its total strategic approach. That is, the Internet should not be
isolated as separate from the firm.
2.4 Internationalisation process theory
The first two parent disciplines of growth strategy and Internet marketing have been
evaluated. Now it is prudent to focus on the third parent discipline of this study.
Internationalisation process theory will be assessed next:
Internationalisation stages theory. Internationalisation process theories are well
established, with early work being drawn from a broad range of international business
perspectives (Rogers, 1962; Vernon, 1966; Johanson & Weidersheim-Paul, 1975;
Cavusgil, 1980). According to Welch and Luostarinen (1998b) internationalisation is the
process of increasing involvement in international operations. The underlying
assumptions of these conceptual models of internationalisation involves logical
incremental sequential processes by the firm toward international development (Bell &
Young, 1998). Predominantly, internationalisation of the firm has been influenced by
conceptualisations drawn from the Uppsala school in the 1970‘s (Bell & Young, 1998),
specifically, the ‗establishment chain‘ theory of internetalisation by Johanson and
Weidersheim-Paul (1975), commonly referred to as the Uppsala model or U model
(Andersen, 1993). For example, in the first stage, the firm has no exporting while
developing the domestic market; in the second stage exports are conducted via agents; in
the third stage overseas sales subsidiaries are used; and, finally in the4 last stage overseas
production manufacturing is employed (Johanson & Weidersheim-Paul, 1975). That is,
the pattern of internationalisation for the firm is a sequential, stepwise process (Welch &
Luostarinen, 1988b). The stages thesis of gradual internationalisation can be considered a
33
healthy step in the clarification of internationalisation theory (Welch & Luostarinen,
1988b). The Uppsala model of internationalisation is primarily a market seeking
international activity as opposed to natural resource seeking, efficiency seeking or
strategic asset seeking process (Bell & Young, 1998).
Subsequent studies by Johanson and Valhne (1977, 1990) and Luostarinen and Welch
(1988, 1990) build upon this platform to include increased commitment due to greater
knowledge and experience, as the internationalisation process proceeds. International
operations require both general and specific knowledge (Andersen, 1993). Market
specific knowledge is gained mainly through experience, whereas operational knowledge
can be transferred from one country to another. Johanson and Valhne (1990) argue
additional market commitment is made through small incremental steps and based on
knowledge. The need to acquire foreign market knowledge in the process of
organisational learning for expansion into international markets has been well
established, for example, (Andersen, 1993; Calof & Beamish, 1995; Inkpen & Beamish,
1997; Luo, 1997; Barkema & Vermeulen, 1998; Lord & Ranft, 2000; Zahra & Ireland,
2000). Thus, knowledge perspectives of internationalisation are based on ‗an orderly and
sequential process in which there is a shift from one stage to the next based on the
learning and accumulation of experience within the proceeding stage‘ (Kuada &
Sørensen, 2000 p. 13).
Innovation model. Others have argued that internationalisation happens as a
consequence of a learning curve, which is influenced by external stimuli such as
unsolicited orders and internal influences such as managerial ambition or excess capacity
(Bilkey & Tesar, 1977; Cavusgil, 1980; Czinkota, 1982). That is, internationalisation
processes are stimulated by managerial orientation and serendipitous international orders
(Bilkey & Tesar, 1977), pre-export activities, experience, psychic distance and the level
of involvement (Cavusgil, 1980). Further, internationalisation stages also involves the
interest in exporting by the firm, experience of exporting and size of the export
endeavours (Czinkota, 1982). These stages perspectives start to place an emphasise on
the management orientation on the learning sequence of the internationalisation process
and the subsequent adoption of export. That is, the adoption of export activities happens
34
due to the innovation adoption cycle (Lee & Brasch, 1978) based on the model proposed
by Rogers (1962). The innovation related internationalisation models focus on
internationalisation as an innovation of the firm, also referred to as the I model
(Andersen, 1993). Internationalisation studies that have followed the innovation adoption
models explicitly include stages of; export awareness, export intension, export trial,
export evaluation and finally export acceptance (Reid, 1981; Lim, et al., 1993). However,
as with the U-Model stages internationalisation theory, the I-models fail to account for
firms not following the sequential stages (Andersen, 1993).
Criticisms of stages models. These stages theories have been criticised on the basis that
firms do not progress strictly through a sequence of stages (Turnbull & Valla, 1986;
Turnbull, 1987) and that all organisations do not take a similar approach to
internationalisation (Buckley, Newbould & Thurwell, 1979). Turnbull and Villa (1996)
contradict the concept of the Uppsala stages model as a different entry mode and pattern
is chosen by the firm for each specific country. Firms reversing the sequential movement
through the internationalisation process, also referred to as de-internationalisation, also
referred to as de-internationalisation (Luostarinen & Welch, 1990), highlight another
deficiency in the stages theory (Rosson, 1984). The stages models fail to delineate the
movement between stages adequately (Andersen, 1993), limiting the theory as an
explanation of the internationalisation process. These stages models do not account for
firms that do not follow the linear path or logical stepwise progression of
internationalisation (Bell & Young, 1998), which may result in the leapfrogging of
intermediary sequences of stages (Welch & Luostarinen, 1988b).
Further, these early internationalisation stages perspectives appear to segregate
international entrepreneurial elements such as global vision, foreign market experience
and the use of networks to facilitate internationalisation (Oviatt & McDougall, 1995;
McDougall & Oviatt, 1996) and fail to encompass these elements adequately in an
integrated framework of entrepreneurship (Young, Dimitratos & Dana, 2003). However,
as Andersen (1993, p.9) highlights ‗the difference between models reflects semantic
differences rather than real differences about the nature of the Internationalization
35
process‘. Thus, there is little difference between the sequential incremental stages models
of internationalisation.
Psychic distance. In addition to the stages models another pattern of internationalisation
is the movement or targeting of nearby countries and the subsequent entering of foreign
markets with greater psychic distance. That is, the firm enters international market based
on the similarity of the market in relation to their own, based on culture, economics,
political differences and geographical proximity, a concept also known as psychic
distance (Vahlne & Weidersheim-Paul, 1973; Andersen, 1993; O'Grady & Lane, 1996).
All of these models (U model and I model) propose an incremental stages approach to
internationalisation and generally support the proposition of psychic distance (Bell &
Young, 1998). Further, Bell (1995) argues that developing domestic markets first is not
always the case, as evidenced by Irish and Scandinavian software firms that were
established with exporting in mind. The size of the domestic market and the distinct
nature of the software industry may have a bearing on these findings (Bell & Young,
1998). That is, in the software industry rapid internationalisation is common (Young,
1987; Bell, 1995). Internationalisation may also include the inward movements (Welch
& Luostarinen, 1988b) or licensing agreements, joint ventures or green field investment,
which are not accounted for in the internationalisation stages models.
Networks. Developed from international industrial marketing, network theory focuses
upon interaction, relationships and networks (Bell & Young, 1998). That is, networks are
based on exchange relationships which evolve in less structured ways with mutual
knowledge and trust, which leads to greater international market action (Turnbull &
Valla, 1986; Johanson & Mattsson, 1988). Thus, the internationalisation process is not
based on the focal firm alone (Bell & Young, 1998). The network approach of
internationalisation is seen as the process in which relationships are continually
established, developed, maintained and resolved to achieve the objectives of the firm
(Johanson & Mattsson, 1988). Networks are also influenced by the firm‘s choice of
foreign markets and entry modes (Coviello & Munro, 1997). Personal contact networks
and social interaction play an important role in the development of international markets
(Welch & Luostarinen, 1988b). With experience, a deeper and longer lasting
36
relationships evolve, forming the basis for deeper commitment (Ford, 1980). Networks
between the buyer and seller form the basis of effective communication assisting where
there is an initial lack of knowledge of each other in the network, a situation which can
be exacerbated by physical and cultural distance barriers (Welch & Luostarinen, 1988b).
However, network theory on its own does not explain internationalisation, as firms have
been shown to internationalise without networks (Bell & Young, 1998). Johanson and
Valhne (1992) acknowledge network theory should be integrated into the stages model of
internationalisation for a more fruitful understanding.
Contingency theory. A contingency view of internationalisation is where the firm reacts
to international market opportunities and subsequent strategies, which reflects
circumstances and existing resource capabilities (Reid, 1983). This contingency
behavioural view highlights the process of internationalisation and is more complex than
what the stages models portray, as a firm‘s decisions depend on idiosyncratic firm factors
(Reid, 1981). Contingency models of internationalisation are dependent on the
environment, especially in relation to demand conditions, industry structure and
government policy (Kuada & Sørensen, 2000). No standardised pattern for
internationalisation of the firm is expected as the internationalisation process is
idiosyncratic for each industry and firm, as there is no one best process (Kuada &
Sørensen, 2000). Contingency models are based primarily on management adapting to
the environmental circumstances (Lawrence & Lorsch, 1967). One such contingency
model, Dunning‘s eclectic paradigm includes ownership, location specific factors and
internationalisation incentive advantages (Dunning, 1988; Hill, Hwang & Kim, 1990;
Dunning, 1993). This eclectic paradigm recognises the importance of both internal and
external environmental variables within internationalisation of the firm (Bell & Young,
1998). However, Dunning‘s view of environmental influences was predominantly
designed for multi national firms.
Integrated framework. Bell and Young (1998) argue for a more integrated framework
of internationalisation that incorporates differing perspectives of internationalisation
beyond the criticised stages theory of internationalisation. That is, an integrated model
for evaluating the internationalisation process would include entrepreneurship
37
characteristics, networks, knowledge marketing management decisions and performance
(Bell & Young, 1998). Kuada and Sørensen (2000) argued that companies strive to be
unique, therefore it is unlikely that there would be a common pattern to describe the
internationalisation of firms. A similar argument was espoused by (Yip, Biscarri &
Monti, 2000), that internationalising firms do not follow a strict single systematic
approach to internationalisation. Thus, an integrated model approach is adopted in this
study, not a narrow single model, so as to highlight the Internet‘s influence on pertinent
internationalisation theory,. Further, considering this PhD research is primarily
exploratory, it would be premature to exclude theoretical frameworks that are deemed
important within the investigation.
To summaries, there are a multitude of empirical and theoretical models that attempt to
explain the internationalisation process of the firm. The major contributions can be
classified as;
the stage models of internationalisation
network Theory
contingency theories
integrated model
These frameworks and other studies, such as the eclectic paradigm (Dunning, 1988), the
U-stages model (Johanson & Weidersheim-Paul, 1975) and I-model (Lee & Brasch,
1978) are for the most part considered largely outside the scope of this study as they
concentrate on well-established ―large‖ MNEs. As Bilkey and Tesar (1977) conclude the
stages models are meaningless in examining SME export behaviour. However, overall,
these theoretical frameworks have provided very useful insights into why firms consider
internationalisation. The aim of the current study is to understand the Internet‘s influence
on the international market expansion by Australian firms that are predominantly SMEs.
Thus, frameworks in this study are used where relevant. Internet and internationalisation
or internetalisation literature will be analysed next.
38
2.5 Internetalisation
Having addressed each of the parent disciplines, the focus is now on the immediate
discipline, that of Internet international marketing. The powerful global reach of the
Internet is altering the international trade landscape (Melewar & Stead, 2002). Because
of the Internet‘s influence, the theory of internationalisation needs re-examination
(Petersen, et al., 2002). It has been proposed that the Internet has the capability to
generate foreign market expansion (Petersen, et al., 2002; Kotabe & Helsen, 2004).
However, how much or at what level the Internet influences internationalisation is yet to
be determined (Petersen, et al., 2002).
The Internet has become a recognised means of internationalisation (Melewar & Stead,
2002). Consequently, the nature of internationalisation has enhanced the international
networks (Overby & Min, 2001; Petersen, et al., 2002) and subsequently the components
of internationalisation theory have altered (Petersen, et al., 2002; Buttriss & Wilkinson,
2003) due to the Internet. This has occurred to such an extent that some have referred to
post-Internet internationalisation as Internetalisation, rather than internationalisation
(Bell, et al., 2001; Buttriss & Wilkinson, 2003).
Aspelund and Moen (2004) confirm that the Internet intensity influences the firm‘s
international vision, niche strategy and technology advantage, in small Norwegian high
technology exporters. However, industry specific constructs relating to technology
advantage and niche focus although important may be limited to high technology
industries, as these industries tend to export from inception (Bell, 1995). These findings
from the only structural equation model in the Internetalisation literature identify the
impact of the Internet intensity on the international orientation of the firm through the
construct known as international vision, a behavioural element of the internationalisation
process. The construct of international vision is measured through items relating to a
global perspective of the firm, for example the firm views the world as a single market.
This study is a seminal work in the literature as findings move the body of knowledge
beyond conceptualisations and descriptive based statistics to a process of analysis
indicating the richness of multivariate perspectives. The work by these researchers
39
highlights the impact of the Internet on internationalisation process components, albeit a
single behavioural component of international vision (Aspelund & Moen, 2004).
Notwithstanding the above, conjecture is present in the literature as to which model of
internationalisation depicts the Internet‘s effects on internationalisation. For example,
research has focused predominantly on network theory when interpreting the Internet‘s
influence on internationalisation theory (Hamill, 1997; Buttriss & Wilkinson, 2003).
However, these assumptions have not been explored extensively, and not all researchers
subscribe to the parameters of network theory. Some advocate more conservative
internationalisation theories, such as stages theory commonly referred to as the Uppsala
model (Johanson & Weidersheim-Paul, 1975) or a transactional cost model (Bennett,
1997) (both theories are discussed in section 2.4) . In the new Internet economy,
alternative theories are being proposed for evaluation. These alternative theories of
internationalisation post-Internet stem from supply chain management and knowledge-
based theory (Overby & Min, 2001; Petersen, et al., 2002).
It has been suggested that international supply chain management (ISCM) is a framework
for explaining internationalisation in an Internet environment (Overby & Min, 2001).
The premise founding ISCM theory questions the traditional stages internationalisation
theory, as the stages theory advocates an ultimate goal of vertical integration (Overby &
Min, 2001). However, the ISCM explanation neglects to explain the significant
disintermediation caused by the Internet. That is, the Internet has altered industries
crucially, such as the airline industry. This change in the supply chain caused by the
Internet highlights the significant emphasis firms place on vertical integration,
contradicting the foundation of ISCM. This is not to suggest that ISCM is not without
merit. However, there are limitations within this proposed ISCM theory for explaining
internationalisation post-Internet.
Further, Petersen, Welch and Liesch (2002) propose rethinking internationalisation
theory in light of significant changes to information due to the Internet. Information and
knowledge internationalisation components have altered due to the Internet, enough to
warrant a new examination of internationalisation theory (Petersen, et al., 2002). Learned
40
knowledge of foreign market expansion is traditionally perceived as a slow and
cumbersome process (Petersen, et al., 2002). However, the Internet has enhanced the
normally difficulty to obtain international information and learned knowledge. These
components of internationalisation will be assessed next.
Internationalisation components
It has been suggested that the Internet has a positive effect of foreign market expansion,
including, transactional efficiencies, information availability, and knowledge learning
process of internationalisation (Petersen, et al., 2002) , as seen in Figure 2.5.
Figure 2.5 Internationalisation process online
Source: adapted from Petersen, B. Welch, L. and Liesch, P. (2002)
Transactional efficiencies
The Internet as a marketspace, as opposed to a traditional marketplace, facilitates the
creation of a borderless environment for international trade (Ryans, 1999; Kotha, et al.,
2001). The virtual environment created online contrasts with the traditional physical
environment of international trade. That is, a marketspace environment may bring
millions of buyers and sellers into a single space, beyond that which can be achieved in a
physical space. Therefore, efficiencies can be gained because of the lowering of
transactional costs related to the searching and purchasing of product for both buyer and
seller. The Internet reduces the need for physical elements and therefore has the benefit
of gaining transactional efficiencies in the process of internationalisation (Quelch &
Information
analysis
Knowledge
building
Internationalisation
process (Internet as
an accelerator)
Transactional efficiencies
Foreign market expansion
41
Klein, 1996; Petersen, et al., 2002; Murphy & Bruce, 2003). One of the greatest benefits
for the international marketer is the transactional efficiencies due to the Internet for both
the customer and the firm (Petersen, et al., 2002; Murphy & Bruce, 2003). Thus, each
transaction between customer and company has a reduced transactional cost. However,
not only do the efficiencies require infrastructure but sunk costs are also incurred by all
parties (Petersen, et al., 2002; Murphy & Bruce, 2003). One such efficiency from a
marketing perspective is branding.
The Internet enables firms to create international and global awareness at relatively
minimal cost (Palumba & Herbig, 1998). This unprecedented global reach of a firm‘s
brand not only creates awareness, but also helps to create association towards the brand.
These associations of a brand—positive or negative—are reflections of a firm and its
capacity to meet customers‘ needs and wants (Aaker, 1998, 2001). Primarily, in a foreign
market the website may become the sole image used by a consumer to make a purchasing
decision. International online branding has been highlighted as a key research area of the
Internet international marketing literature, as seen in the work of Johar and Quint (1999),
Simeon (1999), Tan (1999), Carpenter (2000), Clark (2000), Dayal, Landesberg and
Zeisser (2000), DeChernatony (2000), Harvin (2000), O‘Keefe (2000) Reynolds (2000),
Ward and Lee (2000), Yan (2000), Ries and Ries (2001), Upshaw (2001), Melewar and
Stead (2002), and Tian and Emery (2002). Now, firm information will be assessed in the
context of Internet internationalisation.
Information
The term ‗information super highway‘ is an apt description when evaluating the ability of
the Internet to store and generate large amounts of information, but the Internet‘s
capabilities go well beyond simple information dissemination (Dann & Dann, 2001). The
Internet‘s powerful informational capability can be used not only for market evaluation
but also information can be shared easily within the firm (Warkentin, Bapna &
Sugumaran, 2001). Effective analysis of an international market requires as much
information as possible in order to get the best forecast possible for the firm.
International transactions are complex and filled with uncertainty (Welch & Luostarinen,
1988a). Information about a market can reduce this level of uncertainty (Petersen, et al.,
42
2002). The Internet has a positive effect on International market information (Aspelund
& Moen, 2004) reducing the perceived risk associated with international growth for the
firm.
Knowledge-based learning
The concept of knowledge within the internationalisation process is a well-developed
area of the literature (Welch & Luostarinen, 1988a). However, as the Internet evolves, it
remains to be seen whether knowledge can be learned in the same way as it is in the
traditional internationalisation process (Petersen, et al., 2002). Two types of knowledge
are important in market expansion and the internationalisation process: objective
knowledge and experiential knowledge (Petersen, et al., 2002). Objective knowledge is
information collected and stored in long-term memory through standard forms. As such,
the capabilities of the Internet to deliver objective knowledge within a firm are quite
significant (Petersen, et al., 2002). Recently, research has shown that firms can use the
Internet through knowledge management tools such as supply chain management (SCM)
or customer relationship management (CRM) systems to capture explicit objective
knowledge for use (Koh & Maguire, 2004). However, knowledge management tools are
highly dependent on experience, training and capital investment; thus, firm size is an
influential variable. As a consequence, there is a higher economic commitment needed
and a heightened risk associated with the implementation of such integrated knowledge
management technology (Koh & Maguire, 2004). Conversely, experiential knowledge,
knowledge learned through action, is more difficult to duplicate, as it is not easily
expressed: a challenge for the Internet. That is, experiential knowledge is predominantly
action-based learning. Thus, the Internet as a medium is limited in its capacity to transfer
experiential knowledge to others within the firm (Petersen, et al., 2002).
Born global-rapidly international
An important contemporary phenomenon in internationalisation theory is that of the born
global concept. Born globals are firms that have an accelerated path towards
internationalisation. A phenomenon of the 1990‘s, the born global perspective is where a
firm creates a new venture that undertakes market expansion in multiple markets rapidly
(Knight & Cavusgil, 1996; Rasmussan, et al., 2001; Moen, 2002a; Moen & Servais,
43
2002). The concept of a born global firm is contrary to the normal internationalisation
path that follows traditional internationalisation theories such as stages or process theory
(Bell, 1995; Knight & Cavusgil, 1996). These theories reflect a slow international path
that uses an incremental stages or networks to facilitate internationalisation. Born global
firms do not necessarily follow the traditional path associated with internationalisation as
they become rapidly international (Knight & Cavusgil, 1996; Rasmussan, et al., 2001). It
has been suggested that the Internet has a positive effect on the firm‘s ability to rapidly
internationalise (Torre & Moxon, 2001; Wickramasekera & Bamberry, 2003). Further,
Gabrielsson & Manek Kirpalani (2004) found that born global software firms are
influenced by the Internet in the collaboration and management of relationships for
international business networks.
The born global concept borrows elements from both stages and network
internationalisation theory; however, conjecture still remains as to the best explanation of
this phenomenon (Hashai 2004). There is still no clear theory explaining the born global
concept (Hashai 2004). This raises the question as to whether using a firm website
constitutes being international and hence born global (Kotha, et al., 2001). That is, are
online firms de facto born global firms? It has been suggested that if firms choose to
develop country-specific websites and incur costs by adapting the site for local content,
culture and demand trends, they then forfeit born global status as they localise product
offerings (Kotha, et al., 2001).
The distinction between a born global firm and a born global Internet start-up is crucial.
The body of knowledge thus far has mostly neglected to make this distinction. However,
Gabrielsson and Manek Kirpalani (2004) and Moen (2002), attempted to clarify this area.
For example, launching a website might give customers access to a firm‘s product, but
this does not necessarily constitute internationalisation (Kotha, et al., 2001). That is, the
firm must attempt to target customers of an international market outside of the firm‘s
domestic market or have international customers purchase from the firm, for their actions
to have constituted internationalisation. Thus, to argue that any firm can fall into the
category of born global just because of launching a website is misleading. Therefore, the
theoretical concept of born global in relationship to the Internet is currently in a state of
44
flux, as ambiguity exists. This argument does not consider the debate of whether the born
global concept is an apt evaluation of rapid internationalisation. However, considering
the possible impact of instantaneous opportunities for international market expansion
online, new emphasis has been given to this area of research.
Further, the concept of managerial entrepreneurship, although not evaluated in an
Internet context, may be an extrapolated research pathway from the more traditional
analysis of the born global concept of internationalisation (Gabrielsson & Manek
Kirpalani, 2004). That is, the born global concept indicates the possible influence of
managerial entrepreneurship affecting the strategic choices made by managers in
international marketing roles. Thus, further exploration is warranted in this important but
underdeveloped area.
Research question
From the evaluation of the literature surrounding Internet international marketing, growth
strategy has been identified as lacking depth, as illustrated in Table 2.2. That is, the
following table highlights that the bulk of the research is based on broad macro-
environmental factors, such as: political environments (Rose & Feldman, 1996; Samiee,
1998a; Zugelder, Flaherty & Johnson, 2000; Torre & Moxon, 2001; Gutmann, 2002;
Harrison-Walker, 2002; Hiebert, 2002), legal environments (Samiee, 1998a; Zugelder, et
al., 2000; Liu, 2001; Deibert, 2002; Einhorn, 2002; Harrison-Walker, 2002; Hiebert,
2002; Gibbs & Kraemer, 2004) culture environments (Quelch & Klein, 1996; Palumba &
Herbig, 1998; Samiee, 1998a; Davis, 1999; Lynch & Beck, 2001; Harrison-Walker,
2002; Blake & Neuendorf, 2004; Cullen & Parboteeah, 2004; Hill, 2004; Kotabe &
Helsen, 2004; Okazaki, 2004; Shiu & Dawson, 2004; Singh & Baack, 2004) and
technology infrastructure environments (Bennett, 1997; Palumba & Herbig, 1998;
Samiee, 1998b, a; Zongying, Haoming & Qiaoying, 1998; Davis, 1999; Tang, 2000;
Javalgi & Ramsey, 2001; Ling, 2001; Wilhelm, 2001; Abas, 2002; Harrison-Walker,
2002; Chao, Samiee & Yip, 2003; Ward, 2003; Siegel, 2004).
In contrast, there has been a limited emphasis on a strategic focus, as presented in Table
2.2 on the Internet‘s influence on international marketing. More specifically, there has
45
Growth Internet Internet
strategy marketing
been no focus in the research on growth strategies in international markets in an Internet
context. Thus, from this evaluation of the theoretical framework seen in Figure 2.6, an
overall research question developed to address this deficiency is: ‘How and why does
the Internet influence the international market growth of the firm?’
Figure 2.6 Theoretical framework
Source: developed for this research
Internetalisation
International
foreign market Internet
growth internationalisation
Internationalisation
components
Current limited:
research problem
Parent discipline:
literature drawn from
growth & Internet
marketing &
internationalisation
Surrounding
literature: foreign
market growth and
Internet
internationalisation
Parent discipline: literature drawn from internationalisation
theory and transaction cost perspectives:
internationalisation components: information, knowledge,
international orientation
Internet marketing elements: Information
search, information control, interaction,
trust, disintermediation, internal firm
Internet orientation. Product orientation:
Digital, services and goods
Growth paths: international market
penetration, market development, Internet
& strategy. Reactive versus proactive
46
Further, from the literature review two research issues are developed for exploration of
the research question:
RI.1 How and why has the Internet influenced the internationalisation process of the
firm?
RI.2 How and why has the Internet influenced international market penetration and
development of the firm?
2.6 Conclusion
Chapter two presents a synthesis of the literature, which assists in giving a theoretical
platform for this research. Additionally, research issues have been developed from the
limited literature. An evaluation of the literature has identified research opportunities for
further investigation pertaining to the impact of the Internet on the internationalisation
process and international market growth. The new digital environment is altering the
traditional perceptions of internationalisation. This review of Internet marketing and
internationalisation literature helps to bring a better understanding of the Internet‘s
impact on international market growth. Few authors have attempted similar research in
the area of Internet and internationalisation. Thus, an initial qualitative exploratory was
prudent. Accordingly, the qualitative methodology will be assessed next.
47
Table 2.2 Literature evaluation summary
Main Author/
construct O
ver
all
per
spec
tiv
e
Ch
alle
ng
es
Op
po
rtu
nit
ies
Mac
ro f
acto
r in
flu
ence
s
Po
liti
cal
issu
es
Leg
al i
ssu
es
Tec
hn
olo
gy
Infr
astr
uct
ure
Cu
ltu
re
Eco
no
mic
Inte
rnal
fac
tor
infl
uen
ces
Inte
rnal
Fac
tors
Ind
ust
ry/p
rod
uct
ty
pe
Ed
uca
tio
n
Ser
vic
es
Fir
m s
ize,
SM
E‘s
B-t
o-B
Web
sit
es t
yp
e
Mar
ket
ing
ele
men
ts
Mar
ket
ing
dec
isio
ns
Mar
ket
in
tell
igen
ce
Ad
ver
tisi
ng
Co
mm
un
icat
ion
s
Tra
nsa
ctio
ns
Ind
ust
ry i
nfl
uen
ce
Co
nsu
mer
beh
avio
ur
Mar
ket
ing
Mix
Inte
rnat
ion
alis
atio
n
Inte
rnat
ion
alis
atio
n t
heo
ry
Su
pp
ly c
hai
n,
log
isti
cs
Ex
po
rtin
g
Inte
rnat
ion
al m
ark
etin
g
Mar
ket
ing
str
ateg
y
Bra
nd
ing
Seg
men
tati
on
Glo
bal
str
ateg
y
1. Quelch & Klein, 1996 X X X X X X X X X X X X X X X X
2. Angelides, 1997 X X X X X X X
3. Bennett, 1997 X X X X X X X X X X X X
4. Hamill, 1997 X X X X X X X X X X
5. White 1997 X X X X X
6. Fish, Martinez, Santillan, &
Brazell, 1998
X X X
7. Freeman, 1998 X X X X X X X X
8. Palumba & Herbig, 1998 X X X X X X X X X
9. Samiee, 1998a, 1998b X X X X X X X X X X X X X X X
10. Berthon, Pitt, Katsikeas &
Berthon, 1999
X X X X X X
11. Davis, 1999 X X X X X X X X X
12. Steinfield & Klein, 1999 X X X
13. Javalgi & Ramsey, 2000 X X X X X X X X X X X X
14. Jevons, 2000 X X X X X X
15. Lazer & Shaw, 2000 X X X X X X X
16. Lituchy & Rail, 2000 X X X X X
17. Salcedo & Grackin, 2000 X X X
18. Stottinger, 2000 X X X X X
19. Zugelder, Flaherty & Johnson
2000
X X X X X
20. Bell, Deans, Ibbotson &
Sinkovics, 2001
X X X
21. Garau, Ranchhod & Hackney,
2001
X X X X X X
22. Lynch & Beck, 2001 X X X X X X X X X
23. Overby & Min, 2001 X X X X X X
24. Prasad, Ramamurthy &
Naidu, 2001
X X X X X X X X
25. Sparkes & Thomas, 2001 X X X X X
26. Arnott, & Bridgewater, 2002 X X X X X
27. Dou, Nielsen & Tan, 2002 X X X X X X X
28. Harrison-Walker, 2002 X X X X X X X X X X X X X X X
29. Melawar & Stead, 2002 X X X X X X X X X X X
30. Moen, 2002 X X X X
31. Petersen, Welch & Liesch,
2002
X X X X X X
32. Warden, Lai & Wu, 2002 X X X X X X
33. Aspelund & Moen, 2004 X X X X X X X
34. Javalgi, Martin & Todd 2004 X X X X X X X X X X
35. Julian & Liesch, 2004 X X X X X X X X
36. Morgan-Thomas &
Bridgewater, 2004
X X X X
37. Okazaki, 2004 X X X X
Aggregate concentration of
research
18 28 10 17 10 9 16 6 8 3 3 9 2 4 12 4 1 13 12 10 5 6 4 11 7 3 4 2 11
Source: developed for this research
48
3.0 CHAPTER 3: CASE STUDY METHODOLOGY: STAGE I
3.1 Introduction
In Chapter 2, the literature surrounding the research question was evaluated. In Chapter 3
the epistemological ideology, ontological viewpoint of reality and methodology used to
collect data are explored. Figure 3.1 diagrammatically represents the structure of this
chapter showing the direction or path of the methodology. That is, the realism paradigm
(Section 3.2) and case study methodology will be justified (Section 3.3). Further,
limitations are presented (Section 3.4), ethics considerations outlined (Section 3.5) and a
conclusion drawn (Section 3.6), as illustrated in Figure 3.1.
Figure 3.1 Chapter 3 overview
Source: adapted from Perry (1998) for the purpose of this study
This project adopted a mixed approach of qualitative and quantitative methodologies to
identify a theoretical construct and then to achieve some verification in an area where
research is presently limited (Eisenhardt, 1989; Chetty, 1996; Poon & Swatman, 1997;
Burgess-Limerick & Burgess-Limerick, 1998). There is a lack of emphasis placed on
empirical research within academia as existing research models are limited in capturing
Justification of paradigm (3.2)
Justification of case study
methodology (3.3)
Validity and reliability of
case study research (3.3.1)
Case study design (3.3.2)
Data collection (3.3.3)
Pilot case study (3.3.4)
Analysis of case study
research (3.3.5)
Limitation of case study
research (3.4)
Ethical considerations (3.5)
Selection of cases
Number of cases
Construct validity
Internal validity
External validity
Reliability
Protocol
Design of protocol
Conclusion (3.6)
Introduction (3.1)
49
the theoretical impact the Internet has had on international marketing (Moen, 2002b).
Thus, empirical evidence contributes toward the Internet internationalisation literature
(Moen, 2002b; Moen, et al., 2003), with respect to the Internet and international market
growth.
Research in Internet international marketing is predominantly conceptual in nature
(54%), as seen in Table 3.1 (noted as A in the last row). Exploratory qualitative research
contributes 8% to the body of knowledge. Thus, these combined forms of research
account for 62% of research into Internet international marketing, compared with the
38% of quantitative research in the area. However, as this area of research evolves,
empirically based research is becoming more reliable and accepted. As many questions
remain unanswered in the area of Internet international marketing, an initial exploration
of the research question is justified prior to attempting quantitative approaches.
Therefore, the most prudent choice for this study is a mixed qualitative and quantitative
methodology, to best address the research problem and to contribute more reliable
findings to an area that currently lacks depth and verification. Further, in recent years a
growing number of authors have used case study techniques in evaluating phenomenon
concerning the Internet and theory (Klein & Quelch, 1997; Poon & Swatman, 1997;
Chan & Swatman, 2000; Raisinghani, Vinaja & Frank, 2001; Al-Mashari, 2002; Hughes,
2002; Moen, et al., 2003). Case study interviews represent the first stage of data
collection for this research. Prior to data collection it is important to set the paradigm
ideology of the researcher, which is presented next.
50
Table 3.1 Internet international marketing research methods
Main author/methodology
Co
nce
ptu
ali
sati
on
, op
inio
n
Co
nce
ptu
ali
sati
on
via
seco
nd
ary
co
nve
rgen
ce
Pro
po
siti
on
s vi
a s
eco
nd
ary
da
ta
con
verg
ence
Qu
ali
tati
ve
met
ho
ds
Qu
an
tita
tive
met
hod
s
1. Angelides, 1997
2. Arnott, & Bridgewater, 2002
3. Aspelund & Moen, 2004
4. Bell, Deans, Ibbotson & Sinkovics, 2001
5. Bennett, 1997
6. Berthon, Pitt, Katsikeas & Berthon, 1999
7. Davis, 1999
8. Dou, Nielsen & Tan, 2002
9. Fish, Martinez, Santillan, & Brazell, 1998
10. Freeman, 1998
11. Garau, Ranchhod & Hackney, 2001
12. Hamill, 1997
13. Harrison-Walker, 2002
14. Javalgi & Ramsey, 2000
15. Javalgi, Martin & Todd, 2004
16. Jevons, 2000
17. Julian & Liesch, 2004
18. Lazer & Shaw 2000
19. Lituchy & Rail, 2000
20. Lynch & Beck, 2001
21. Melawar & Stead, 2002
22. Moen, 2002
23. Morgan-Thomas & Bridgewater, 2004
24. Okazaki, 2004
25. Overby & Min, 2001
26. Palumba & Herbig, 1998
27. Petersen, Welch & Liesch 2002
28. Prasad, Ramamurthy & Naidu, 2001
29. Quelch & Klein, 1996
30. Salcedo & Grackin, 2000
31. Samiee, 1998a, 1998b
32. Steinfield & Klein, 1999
33. Stottinger, 2000
34. Sparkes & Thomas, 2001
35. Warden, Lai & Wu, 2002
36. White 1997
37. Zugelder, Flaherty & Johnson 2000
Aggregate choice of methodology 6/37
16.2%
11/37
29.7%
3/37
8.1%
3/37
8.1%
14/37
37.8%
Proportions: (A) CONCEPTUALISATION, (B) QUALITATIVE, (C)
QUANTITATIVE METHODOLOGIES (A)
54%
(B)
8.1%
(C)
37.8%
Source: developed for this research
51
3.2 Paradigm justification
It is pertinent to give an ideological perspective or viewpoint for the research to make an
ideological stand or to comprehend the particular paradigm upon which the research is
founded. A paradigmatic ideology is a conceptual psychological framework within which
the research functions and is the belief system of the researcher that guides the
investigator‘s activities (Guba & Lincoln, 1989; Guba, 1990; Milliken, 2001). In this
context, a paradigm or viewpoint of reality is solely independent of any other paradigm
(Perry, 1998). The researcher‘s beliefs concerning the nature of reality (ontology) and
how knowledge about reality is gained from within the paradigm (epistemology) drive
the research techniques (methodology) (Perry, et al., 1999; Healy & Perry, 2000; Guba &
Lincoln, 2004; Thompson & Perry, 2004). That is, ‗ontology is reality, epistemology is
the relationship between that reality and the researcher, methodology is the technique
which is to be used in investigating the reality‘ (Thompson & Perry, 2004, p. 404). It has
been argued that questions of method are secondary and peripheral to the question of
paradigm perspective (Guba & Lincoln, 1994; Guba & Lincoln, 2004). Thus, the
paradigm tends to drive the research in this respect. The selection of the most appropriate
paradigm guided the researcher‘s opinion or view of reality, the relationship between the
researcher and reality, and the methodology used by the investigator, as seen in Table 3.2
(Gummesson, 2000; Healy & Perry, 2000). Therefore, the justification of the research
paradigm for this study is an essential stage, setting the scene prior to the investigation
itself.
Table 3.2 Basic belief systems of alternative enquiry paradigms
Item Positivism
paradigm
Critical theory
paradigm
Constructivism
paradigm
Realism paradigm
Ontology
(Reality)
Naïve realism:
Reality is real and
apprehensible
Historical realism:
Virtual reality shaped
by social, economical,
ethical, political,
cultural, and gender
values crystallised over
time
Critical relativism:
Multiple local and
specific ‗constructed‘
realities
Critical realism: Reality is
real but only imperfectly
and probabilistically
apprehensible and thus
triangulation from many
sources is required to try to
know it
Epistemology (Relationship between
researcher and that
reality)
Objective: Finding
the truth
Subjective:
Value- mediated
findings
Subjectivist:
Creating findings
Modified objectivist:
Findings probably true
Methodology
(Technique used to
discover that reality)
Experiments/
Surveys:
Verification of
hypothesis:
Dialogic/ dialectical:
Researcher is a
‗transformative
intellectual‘ who
Hermeneutical/
dialectical:
Researcher is a
‗passionate
Case studies/ convergent
interviewing:
Triangulation, interpretation
of research issues by
52
primarily
quantitative
methods
changes the social
world within which
participants live
participant‘ within
the world being
investigated
qualitative and quantitative methods such as structural
equation modelling
Source: Perry, Riege and Brown (1999, p.17); and Thomas and Perry (2004, p. 404),
based on Guba and Lincoln (1994, p.109)
Further, a mixed inductive and deductive approach to the research is used, as it is
impossible to separate the two approaches and as both prior theory and theory emerging
from the data are involved simultaneously (Perry, 1998). That is, it is very difficult for
the researcher to separate the two processes of inductive and deductive approaches for a
researcher as it is almost impossible to go into a study theory-free (Perry, 1998). In this
study, protocol questions are generated from the researcher‘s understanding of current
theories of Internet marketing, international marketing and internationalisation. Although
in the following analysis paradigms are labelled either inductive or deductive, this is a
categorisation for the most part. A paradigm should be considered inductive or deductive
in nature as opposed to being exclusively inductive or deductive (Perry, 1998).
The first paradigm to be investigated is the positivist paradigm. A positivist reaches for
causal explanations and inferred relationships through variables (Amaratunga & Baldry,
2001; Thompson & Perry, 2004). The whole is reduced to its simplest elements to
facilitate analysis (Perry, et al., 1999). Two major implications of the positivist approach
require the independence of the observer and the need to formulate a hypothesis for
verification (Perry, 1998; Perry, et al., 1999; Amaratunga & Baldry, 2001; Amaratunga,
et al., 2002). The positivist paradigm is quantitative with deductive objectives measuring
only a single reality (Tsoukas, 1989; Patton, 1990; Perry, et al., 1999).
For the researcher conducting this study, a positivist approach is an inappropriate
viewpoint. This study investigates the impact of the Internet on international market
growth. The investigator of this phenomenon must participate in the real world situation
so as to better understand the pertinent issues (Perry, 1998). In contrast to the
independence required by the positivist approach, it is imperative that the researcher in
this PhD research uses their unique understanding and is able to reflect on the knowledge
about the phenomenon (Perry, 1998; Perry, et al., 1999; Healy & Perry, 2000). This is
why the positivist paradigm is inappropriate for social science phenomena in marketing
53
with limited prior research (Healy & Perry, 2000). As no research has been undertaken
concerning the Internet‘s impact on market growth in international marketing, it is
prudent to explore the research gap before confirming variables. Thus, a positivist
deductive ideology attempts to verify identified established variables (Thompson &
Perry, 2004). However, these established variables are not evident in the current body of
knowledge. Thus, a positivist ideology does not fit the research approach, as it is
necessary to explore the research question initially.
The second of the paradigms is that of critical theory, a form of historical realism
whereby reality is shaped by social, economic, political, cultural, and gender values or
standards that have been crystallised over a period of time (Perry, et al., 1999).
Assumptions by researchers are subjective and therefore grounded‘ social historical
knowledge is routine and thus value-dependent (Guba & Lincoln, 1994; Perry, et al.,
1999). The critical theorist‘s aim is to transform values, as the researcher is an
intellectual who participates in a transformative capacity (Thompson & Perry, 2004).
This paradigm is assessed on individuals‘ perspectives, beliefs and variables, as reality
consists of multiple internal subjectively constructed realities (Thompson & Perry,
2004). Thus, this paradigm is inappropriate, as the research in this case does not try to
liberate respondents from their historical, mental, emotional or social structures (Perry, et
al., 1999).
The third paradigm is the constructivism paradigm. A constructivist would view the truth
as a construct of belief systems in each particular context (Perry, et al., 1999). That is,
reality is multiple realities that are distinct and intangible for individuals founded socially
and experientially (Perry, et al., 1999). The researcher in this paradigm constructs
realities through the passionate participation of the interviewer during the field work
(Healy & Perry, 2000; Thompson & Perry, 2004). Constructivism would be an
inappropriate paradigm for this study, as technological dimensions of business, as is the
case in this project, do not align with the parameters of this paradigm (Perry, et al.,
1999). Further, constructivism is rarely used in marketing management research, as this
approach excludes concerns of the economic and technological dimensions of business
(Healy & Perry, 2000).
54
The final paradigm to be discussed is the realism paradigm. This form of research
attempts to understand a common reality in which many individuals operate
independently and is also referred to as post-positivism (Perry, et al., 1999; Guba &
Lincoln, 2004). The realist believes that there exists a real world to discover, even if it is
an imperfect one (Tsoukas, 1989; Perry, et al., 1999; Guba & Lincoln, 2004; Thompson
& Perry, 2004). Perceptions for realists are viewpoints of reality. That is, perceptions
give a picture of reality that is then triangulated with other perceptions (Perry, et al.,
1999; Thompson & Perry, 2004). Discovery of structures and mechanisms of experiences
and events are a particular goal of this paradigm (Tsoukas, 1989; Perry, et al., 1999). In
contrast to constructivists and critical theorists who consider there are many realities, a
realist considers there to be only one reality (Perry, et al., 1999; Thompson & Perry,
2004). These many perceptions of reality are triangulated to paint a better picture of that
one reality (Perry, et al., 1999; Thompson & Perry, 2004).
The realism paradigm is the appropriate paradigm for this research, as it attempts to
explore and explain the phenomenon as opposed to strictly confirm (Healy & Perry,
2000). For example, in this case the research attempts to explore and explain the impact
of the Internet on the firm‘s growth in international markets. That is, this research
explores how, if at all, firms are using the Internet for international market growth. The
contemporary phenomenon of the Internet has no established principles or constructs
with reference to international marketing and therefore is not of a positivist deductive
paradigm (Perry, 1998; Perry, et al., 1999). Thus, in-depth interviews will draw internal
viewpoints (Guba & Lincoln, 2004) on the Internet‘s influence on international growth
through the evaluation of the Internet‘s influence on the internationalisation process.
Realism is predominantly inductive in nature and is the appropriate paradigm for new
areas of research (Tsoukas, 1989; Perry, et al., 1999) such as in this study. Therefore, the
realism inductive paradigm is the most appropriate of the four paradigms discussed in
this section, as it has the best fit. Furthermore, given that the realism paradigm is the
most suitable framework, both the case study and the structural equation model
methodology can be used for this research study. Initially, multiple-case study interviews
55
with expert data-rich sources will be conducted, as these individuals understand
international marketing. Thus, the data will provide a window into reality that can be
triangulated with other expert perceptions (Perry, et al., 1999). Further, these initial
multiple-case studies will help to define constructs that can then be modelled and tested
in a structural equation modelling evaluation.
Mixed methods approach
By employing qualitative and quantitative methods (seen in Section 3.3), each approach
gives different dimensions of the same phenomenon (Das, 1983; Amaratunga, et al.,
2002). Further, it has been argued that these methods are not mutually exclusive, as a
combination of approaches can be used to help give an improved holistic exploration of
organisational behaviours (Das, 1983). The emphasis of a mixed methodology is founded
on the concept of triangulation (Amaratunga, et al., 2002). That is, by combining
methods, the researcher can triangulate theoretical understandings about a phenomenon
(as illustrated in Figure 3.2) giving a better understanding of the research problem. By
confirming or corroborating theoretical constructs through a linking method,
triangulation helps to develop analysis and provide a deeper richer detail of the research
topic (Amaratunga, et al., 2002). In this research project, structural equation modelling is
combined with case study analysis, as this is consistent with the realism paradigm
ideology held by this researcher and this method can give confirmatory verification for
the research (Guba & Lincoln, 1994; Healy & Perry, 2000; Thompson & Perry, 2004).
Thus, using a mixed approach gives a more accurate understanding of the phenomenon.
Table 3.3 Summary of mixed approach
Source: developed for this research
Stage I: Qualitative study
*Multiple in-depth case studies
*12 cases
Stage II: Quantitative study
*Survey
*Structural equation model
* 224 respondents
56
Although the aim of this project is to firstly identify constructs, some would argue that
the true purpose of case studies is to tell a story, rather than the development of
hypotheses (Dyer, Wilkins & Eisenhardt, 1991). That is, one criticism of the multiple-
case study method is that it does not give enough depth to generate constructs relating to
the research (Dyer, et al., 1991). However, the premise supporting this criticism assumes
that the researcher will not delve deeply enough into each case and that the researcher
will not take into account a priori research. This possible limitation of shallow analysis is
acknowledged and overcome by using in-depth interviews with experts in the area of
research, which are based on and analysed in the context of this a priori theory. Further,
the more conservative perception of the single in-depth case study method has evolved
into multiple-case analysis, specifically used to generate constructs as opposed to simply
describing a good story. As a consequence, the Stage I multiple-case study method will
now be explored, while Chapter 4 subsequently analyses these multiple-cases.
Figure 3.2 Research design and method of investigation funnelling process
Broader literature
The gap
Protocol questions
Better understanding
Model development
Analysis of SEM
Confirmation
Source: developed for this research
Synthesis of literature
Identification research gap in literature
Development of research question & issues
Case studies (12)
In-depth interviews
Proposed-model development
Confirmation of the model
Good model fit (SEM)
Development of research protocol
Hypothesis formulation
57
3.3 Case study methodology justification: Stage I
Stage I of the study extracted pertinent theoretical constructs using multiple in-depth case
studies (Yin, 1994; Sylvie, 1996; Perry, et al., 1999; Hastings & Perry, 2000;
Amaratunga & Baldry, 2001; Amaratunga, et al., 2002). Case study methodology has
become an acceptable form of methodology within marketing for example, in the area of
Internet marketing and Internet international marketing (Klein & Quelch, 1997; Poon &
Swatman, 1997; Broussard, 2000; Raisinghani, et al., 2001; Raisinghani, 2001; Wynne,
Berthon, Pitt, Ewing & Napoli, 2001; Al-Mashari, 2002; Moen, et al., 2003). A case
study strategy can be qualitative and/or quantitative, a single or multiple-cases, which is
an empirical inquiry of a ‗contemporary phenomenon within a real life context,
especially when boundaries between phenomenon and context are not clearly evident‘
(Yin, 1994, p. 13). Further, the case inquiry moves beyond a single data point to rely on
multiple sources of evidence in a data convergence process, which benefits from the prior
development of theoretical propositions to guide the data collection and analysis (Yin,
1994).
The justification of case study methodology for the investigation of the Internet and
international market growth is founded on a myriad of analytical arguments. The major
arguments are: firstly, that no significant focus has been given to growth strategy in
Internet international marketing. Thus, this study will help to construct, extend and build
theoretical concepts (Perry, 1998; Perry, et al., 1999).
Secondly, due to the inadequacy of the literature concerning Internet international
marketing with a specific focus on growth strategy, no set standards or procedures are set
in the body of knowledge (Perry, 1998). Thirdly, the topic area is contemporary in
nature, it is a phenomenon, and not an historical phenomenon, but a contemporary
phenomenon about which little is currently known (Perry, 1998; Perry, et al., 1999;
Amaratunga & Baldry, 2001; Amaratunga, et al., 2002). This third argument could be
considered to be an extension of the above-mentioned second justification. Fourthly, case
study methodology can give the study a holistic view of the pertinent issues concerning
the research problem (Miles & Huberman, 1994; Gummesson, 2000, 2004). Finally,
58
using case study methodology is appropriate for a complex situation in the social
sciences, as is the case in this study.
In some quarters of marketing research, case study methodology has been considered an
inappropriate form of methodology for postgraduate students where there is already
substantive theory, as highlighted by Chad Perry (1998). However, case study
methodology has become more prevalent in academic research in management and
marketing disciplines in recent years (Perry, 1998; Gummesson, 2000). A major reason
for the increased acceptance of case study methodology in marketing research allows a
holistic view of a contemporary topic to be gained (Amaratunga & Baldry, 2001;
Amaratunga, et al., 2002). This holistic view is in contrast to a reductionist path where
the components of the study are broken down into a small number of fragmented parts
(Gummesson, 2000). That is, a holistic view of the study does not consider the whole as
the sum of the parts (Gummesson, 2000).
Primarily, a case study method of collecting data attempts to understand a particular
situation as opposed to one isolated component of the situation (Bouma, 1996). In this
project, using multiple-cases gives the research a better view of the total environment in
relation to the Internet and international marketing growth. This research used in-depth
interviews though multiple-case studies to draw an understanding of the issues (Patton,
1990; Gummesson, 2000). The individual respondents bring informed, knowledgeable
and experienced information to the project that gives a holistic view of a complex issue
(Patton, 1990; Gummesson, 2000). Decisions concerning international market growth are
complex, as they revolve around strategic decisions in both a highly technical
environment and an international environment.
When formulating a methodological strategy, several characteristics and philosophies
underpin each chosen method (Yin, 1994). These characteristics and philosophy,
including the form of research question, the lack of control over that event and the focus
on a contemporary issue, all support the chosen methodology of case studies, as seen in
Table 3.4 (Yin, 1989; Amaratunga & Baldry, 2001; de Weerd-Nederhof, 2001;
Amaratunga, et al., 2002).
59
Table 3.4 Relevant situations for different research strategies
Strategy Form of research
question
Requires control over
behavioural events
Focuses on contemporary
events
Experiment How, why Yes Yes
Survey Who, what, where
How many
How much
No Yes
Archival analysis (e.g.
economic study
Who, what, where
How many
How much
No
Yes/no
History How, why No No
Case study How, why No Yes
Sources: Yin (1989 p. 17)
These characteristics and philosophies can be directly linked to the research to help
justify the chosen methodological strategy (Yin, 1989; Amaratunga & Baldry, 2001; de
Weerd-Nederhof, 2001; Amaratunga, et al., 2002). That is, the contemporary event is the
Internet‘s impact on international market growth, there is a lack of control over
individuals in the study, and the how and why question needed to address the research
problem. These characteristics of the research problem also lend themselves to the
justification for the initial qualitative methodology needed for this investigation. That is,
the research problem is specifically a ‗how‘ and ‗why‘ exploratory question.
Although the use of case study methodology has been justified, a significant level of
credibility is needed for qualitative research. The internal validity, external validity and
reliability of the case study project are analysed in Section 3.3.1.
3.3.1 Validity and reliability of case study method
A set of criteria is employed in order to gain the desired level of acceptable research
validity and to achieve credibility (Parkhe, 1993; Yin, 1994; Amaratunga & Baldry,
2001). The study‘s validity and reliability are evaluated on the ability of the researcher to
abide by a number of key design checks and to adhere to good academic research
practices (Amaratunga & Baldry, 2001). Although terms such as validity and reliability
are derived from a quantitative and scientific research foundation, they can still be
flexibly incorporated to evaluate the credibility of a qualitative research study striving for
reliability (Carter, 1999). For the most part, validity and reliability are evaluated in
accordance with Yin‘s (1994) proposed qualitative case study design tests of construct
validity, internal validity, external validity and reliability to establish a level of research
60
quality needed to gain reliability and overall credibility, as seen in Table 3.5 (Parkhe,
1993; Yin, 1994; Amaratunga & Baldry, 2001).
Table 3.5 Validity and reliability of case study research
Tests Case study tactics Phase of research in which
tactics occurs
Construct validity Use multiple sources of evidence
and triangulate these sources
Establish chain of evidence
Ask key informants review draft
Develop case study report
Data collection
Data collection
Composition
Internal validity Perform within-case study analysis,
then pattern matching
Perform explanation building,
searching for the ‗why‘ behind the
relationship
Conduct time-series analysis
Data analysis
Data analysis
Data analysis
External validity Use replication logic (not
sampling) in multiple-case studies
Research design
Reliability Use case study protocol
Develop case study database
Data collection
Data collection
Source: adapted from Parkhe (1993) and Yin (1994)
Construct validity
The first quality measure is that of realism construct validity. This measurement is
similar to construct validity of a positivism study, as it reviews the information within the
construct of a particular theory. For this study, prior theory from parent disciplines
including international marketing, growth, and Internet marketing literature is
triangulated (Healy & Perry, 2000). However, no construct should be guaranteed in the
development of a theory, as the researcher should attempt to leave behind any bias of
preordained theoretical perspectives behind them (Eisenhardt, 1989). The researcher
must identify and evaluate the possible important issues pertaining to the research
problem. Therefore, the mindset of openness limits bias as much as is possible
(Eisenhardt, 1989). To achieve this level of construct validity, the research establishes
the appropriate operational measures for the pertinent issues within the study
(Amaratunga & Baldry, 2001). These measures are produced by using multiple sources
of information, establishing a chain of evidence through data collection, and triangulating
the data (Parkhe, 1993; Yin, 1994; Amaratunga & Baldry, 2001). This research project
obtains construct validity by incorporating all evidence concerning international market
61
growth from secondary sources (literature) and from the analysis of primary sources
(case studies interviews) then triangulating the evidence convergence through a Stage II
structural equation modelling process (Parkhe, 1993; Yin, 1994; Amaratunga & Baldry,
2001).
Internal validity
The second of the criteria for research quality is that of internal validity (Parkhe, 1993;
Yin, 1994; Amaratunga & Baldry, 2001). Internal validity verifies that a true and correct
relationship has been established, rather than fake or untrue effects (Yin, 1994; Carter,
1999; Amaratunga & Baldry, 2001; Amaratunga, et al., 2002). If the research
investigator draws incorrect conclusions about relationships that do not truly exist, then
the built or constructed theory is inappropriate and flawed (Yin 1994). In case study
methodology, however, this logic is not as important as in a quantifiable study.
Exploratory studies such as case studies are not necessarily concerned with a causal
statement (Yin, 1994; Amaratunga & Baldry, 2001). To address incorrect conclusions,
this investigator will question the correct influences, consider rival explanations and
possibilities, and converge all evidence with a high level of precision (Yin, 1994;
Amaratunga & Baldry, 2001). Questions of low internal validity are overcome by the
tactics of data analysis pattern matching and explanation building, which will essentially
weed out weak explanation, as illustrated in Table 3.5 (Parkhe, 1993; Yin, 1994;
Amaratunga & Baldry, 2001).
External validity
The third measure of quality in this Stage I is external validity, which concerns itself
with the ability of the research to be generalisable and applicable to an external
environment (Parkhe, 1993; Yin, 1994; Carter, 1999). Therefore, the findings from this
study may be applicable to other settings and situations. External validity can be
achieved by identifying theoretical relationships (Amaratunga, et al., 2002). It is not the
argued that theoretical generalisability can be applied to all international marketing
situations; however, applications may be generalisable to Internet international growth
decisions.
62
Higher external validity is achieved by using the research tactic of replication logic in
multiple-case study data collection (Parkhe, 1993; Yin, 1994; Amaratunga & Baldry,
2001). Replication logic includes both literal replication (predictions of similar results)
and theoretical replication (predicted contrasting results for predicted reasons) (Parkhe,
1993; Yin, 1994; Healy & Perry, 2000).
These factors aid in giving analytical generalisability to the study over that of statistical
generalisability objectives. A selection criteria is used to conform to the replication logic
ideology which in turn ensures better external validity and greater analytical
generalisability. Cases were chosen using standard criteria. These criteria included:
companies with the same product orientation
companies with the same customer orientation and
companies of the same size.
Reliability
The final measure of quality in social science research in the study‘s reliability (Parkhe,
1993; Yin, 1994; Amaratunga & Baldry, 2001; Amaratunga, et al., 2002). The reliability
of the research is measured by the dependability of the findings. That is, all questions
from the protocol about the Internet and international market growth are used to focus
the study, whilst allowing relevant unanticipated issues to be drawn from the interviews
(Carter, 1999). Thus, the study has a level of reliability if, in similar circumstances the
same results and conclusions would have been found by another investigator
(Amaratunga & Baldry, 2001). Further, a certain level of saturation is needed to draw out
all issues from respondents about the research problem (Gummesson, 2004). As many
cases as needed are used to gain redundancy. That is, redundant constructs are identified
at the point of saturation, whereby any more cases would yield little or no better
understanding (Gummesson, 2004). This research overcomes these reliability issues by
using a case study protocol for the in-depth interviews and by developing a database of
information in the data collection stage, as outlined in Table 3.5 (Parkhe, 1993; Yin,
1994; Amaratunga & Baldry, 2001).
63
With appropriate levels of appropriate validity and reliability established it is essential to
elaborate and expand on the case study design chosen for this research study Section
3.3.7 outlines further case selection criteria used in this research.
3.3.2 Case selection
This study incorporates multiple-case study methodology to aid in a holistic perspective
of the identified research problem (Gummesson, 2000). Rather than using a single
embedded case study, this study uses multiple-case study method (Yin, 1994) to better
understanding of the Internet‘s influence on international market growth. Thus, the
multiple-case study design illustrated in Figure 3.3 is used for this study.
Figure 3.3 Types of design for case studies
Single-case designs Multiple-case design
Holistic (single unit of
analysis)
Embedded (multiple
units of analysis)
Source: Yin (1994, p. 39)
Although a single case can give valuable data-rich information it struggles to generate
analytical generalisability, which is the desire in this study for the creation of theory
(Parkhe, 1993; Yin, 1994; Healy & Perry, 2000). This theory is underpinned by
replication logic within the multiple-case methodology to substantiate the constructed
theory, as previously discussed in Section 3.3.1 (Eisenhardt, 1989).
Initial case selection draws cases that provide data-rich evidence and both literal and
theoretical replication as seen in Tables 3.6 and 3.7, and as discussed in Section 3.3.1.
Stage I case selection draws from a similar and an opposing product orientation (physical
goods, and intangible services), customer orientation (business-to-business and business-
to-customer), and size of firm, small or medium sized firms, (measured by number of
employees), as seen in Table 3.6.
Type 1
Type 3
Type 2
Type 4
64
It has been suggested that the Internet would be less relevant in a business-to-business
(B-to-B) orientated firms context from an information search perspective (Deeter-
Schmelz & Kennedy, 2004) (theoretical replication). B-to B firms focus on relationship-
based aspects of the transaction; as such, Internet technologies implementation is used to
enhance the client relationship, for example, the use of customer relationship
management systems (CRM) (literal replication). Whereas, business-to-consumer (B-to-
C) focused firms use Internet technologies to facilitate traffic or the volume of customers,
for example with the use of e-commerce (literal replication). The size of the firm has
been shown to have a bearing on the depth of Internet technology used (Taylor &
Murphy, 2004). Thus, smaller firms may not have the capability to implement more
capital-intensive Internet systems such as e-commerce or CRM systems (theoretical
replication). Further, the product orientation of the firm has an impact on the ability to
use Internet technologies, for example, primarily service firms do not have physical
components that impede implementation of taking the product online (Bergstrom, 2000)
(literal replication), as discussed earlier in Chapter 2, Section 2.3.
Table 3.6 Case research design: replication logic
Note: G =physical good oriented product, S=service oriented product
Source: developed for this research
Thus, case selection conformed to the replication logic selection process set out by Yin
(1994), as seen in Table 3.7. That is, the selection of start-ups (1, 2), small firms (3, 4, 5,
6) and medium firms (7, 8, 9, 10, 11, 12) ensured contrasting and similar-sized cases
were selected. Further, firms with a business-to-customer focus (1, 3, 4, 7, 8, 9) and
business-to-business focus (2, 5, 6, 10, 11, 12) were chosen, to achieve predicted similar
and contrasting results.
Firm size/
customer orientation
Business-to-
consumer (6)
Business-to-
business (6)
Start-ups
Small firms (1-19 employees) (6)
1 (Alpha) (G)
3 (Gamma) (G)
4 (Delta) (G)
2 (Beta) (S)
5 (Epsilon) (G & S)
6 (Zeta) (S)
Medium (20-200 employees) (6)
7 (Eta) (G)
8 (Theta) (G & S)
9 (Iota) (G & S)
10 (Kappa) (S)
11 (Upsilon) (S)
12 (Omega) (S)
65
Table 3.7 Literal and theoretical replication of case selection
Literal replication: predicted similar results
(Parkhe 1993; Yin 1994; Perry 1998; Healy
& Perry 2000)
Theoretical replication: contrasting results
for predicted reasons (Parkhe 1993; Yin
1994; Perry 1998; Healy & Perry 2000)
Cases 1, 3, 4, 5, 7, 11: All physical products Cases 1-12:All individually firms
Cases 2, 6, 8, 9, 10, 12: All service products Cases 1, 3, 4, 5, 7, 11 (goods) vs
2, 6, 8, 9, 10, 12 (services)
Cases 7-12:( medium firms) Cases 7-12 (medium) Vs
1-6 (small-medium)
Case 1-6: (small firms) Cases 2, 5, 6, 10, 11, 12 (B-to-B) vs
1, 3, 4, 7, 8, 9 (B-to-C)
Cases 2, 5, 6, 10, 11, 12 (B-to-B)
Cases 1, 3, 4, 7, 8, 9 (B-to-C)
Source: developed for this research
Number of cases
In an ideal situation for case study methodology as many cases are chosen as to give
theoretical saturation (Eisenhardt, 1989). That is, the number of cases should fully
explain the situation. Further, all pertinent issues concerning the situation should be
uncovered. A researcher knows saturation of the situation and issues have been reached
when redundancy is achieved. Although there is no set specific ideal number of cases
that should be chosen (Patton, 1990), some authors advocate that there should be no less
than four cases selected, as selecting fewer than four can create difficulties in generating
the appropriate level of credibility when constructing theory (Eisenhardt, 1989; Perry,
1998). This PhD dissertation needed twelve cases for saturation.
3.3.3 Data collection method
In each of the twelve cases, a taped in-depth interview was conducted with an
international manager or marketer who had experience in the development of the Internet
and international markets. Each in-depth interview in this research took no less than 1.5
hours. Some interviews lasted three hours, but the average was over two hours. Due to its
in-depth nature, this type of interview can be classified as a single case study and is
recognised within the literature (Yin, 1994). Cases were drawn from contacts, including
government organisations such as Queensland State Development and industry
organisations such as Commerce Queensland and international business associations.
Once the findings from Stage I had helped to refine the constructs and multiple
66
hypotheses, a survey and preliminary model are developed (Chapter 4) from the
evaluation of the data (Yin, 1994; Perry, 1998; Carter, 1999).
Protocol
The convergence of evidence helps to focus the protocol into a more precise instrument
for obtaining rich data (Eisenhardt, 1989; Hastings & Perry, 2000). Reinforcement of the
protocol can be achieved through a pilot study to narrow the focus of the questions (de
Weerd-Nederhof, 2001). That is, a practice-type situation is used to explore the identified
research issues and the overall research question. Information is directed and extracted
through a semi-structured interview protocol. A concerted effort is made to avoid
phrasing questions in a leading way (Carter, 1999). The use of a protocol in this research
study allowed a level of control over the contextual environment (Yin, 1994; Perry,
1998). That is, even though literal and theoretical replication has been established, the
project needs direction for those respondents to best address the research problem.
However, a semi-structured protocol should not be a ‗straitjacket‘, as exploration is the
primary focus of the study (Hughes, 2002). That is, probing and the adaptation of
questions in the protocol is common as unpredicted responses help to refine construct
relationships about the research problem. Furthermore, a protocol allows for increased
reliability and credibility in data collection (Perry, 1998). Therefore, the protocol for this
research project is outlined next, and is also inserted in Appendix A.
Design of interview protocol
The protocol used in this study helped to focus respondents‘ answers to issues pertaining
to the research area (Perry, 1998). These questions are of particular importance to the
credibility of the research; thus, an outline of the interview protocol is shown in
Appendix A of this thesis and evaluated in this section. Each open-ended question in the
interview protocol is derived from elements of the literature and focused on the
exploration of a particular research issue, whilst still allowing for unpredicted or
unexpected responses, as seen in Table 3.8 (Yin, 1994).
67
Table 3.8 Developed protocol question for research issues
Part B C C C D D D E E E E F F F F F F G G G G
Question Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q5 Q6 Q1 Q2 Q3 Q4
R. issue 1 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √
R. issue 2a √ √ √ √ √ √ √ √ √ √ √
R. issue 2b √ √ √ √ √ √ √
Note: RI.1 How has the Internet influenced the internationalisation process of the firm?
RI.2 How has he Internet influenced international a) market penetration and b) market development of the firm?
Source: developed for this research
Part A is the introduction that gives participants information pertaining to the research,
the institution and the ethical considerations. The interview protocol, Part B, uses
probing questions to draw prior experience and knowledge about theoretical concepts
from respondents (Patton, 1990; Perry, 1998). Thus, at the start of the interview protocol,
preliminary questions invite the respondents to describe their experience, whatever the
research problem (Perry, 1998). These questions, seen in Part B, attempt to capture the
interviewee‘s perceptions as distinct from those of the researcher (Perry, 1998). Part B,
questions 1, 2 and 3, source information about the particular business environment and
the experiential perspectives of the interviewee pertaining to international marketing
strategy. Further, questions 4 and 5 probe the respondent about current product offerings
and international markets. All other major parts of the interview protocol use probing
questions that not only assist data analysis, but are also a framework for coding to be
constructed, as illustrated in Appendix A (Yin, 1994; Perry, 1998; de Weerd-Nederhof,
2001). Part C seeks to draw an understanding of issues relating to the Internet usage and
intensity of the firm. Part D, uses probing questions relating to current international
customers and country markets to seek a better understanding of past, present and future
international endeavours. These questions in Part D along with questions from Part E, F
and G, help to address the second research issue (as illustrated in Table 3.8).
Part E explores questions investigating critical events and the importance of
internationalisation along with the overall marketing elements used by the firm. Pivotal
to this research is the interaction or relationships between the Internet,
internationalisation and growth path of the firm, which is explored in Part F. Part G
investigates the path of internationalisation focusing strictly on the internationalisation
68
process. However, all major questions in Part C, D, E and F also evaluate the Internet‘s
impact on the internationalisation process for the firm to address Research Issue 1.
Conversely, Part E used questions that ask respondents about probable issues that they
perceive may be important to the research. These questions in Part E can sometimes draw
issues from respondents that may not be in the literature. ‗Why‘ questions are vital in the
exploration of the research areas, because they allow for the unexpected response (Perry,
1998). Thus, all questions apart from demographic questions are open-ended.
The last section of the interview protocol, Part H, is used to identify demographic
information about the individual respondent and the company in question. This Section is
incorporated to give the study pertinent information about the case‘s position within the
business environment. This research used a pilot study to help refine the exploration
through open-ended questions, which is outlined in Section 3.3.4.
3.3.4 Pilot case study
The pilot study used in this research project helped to refine the relevant issues needed to
explore the research problem (Perry, 1998). A pilot study is distinct from a pre-test study
and is used to develop relevant questions, to identify irrelevant questions (Yin, 1994; de
Weerd-Nederhof, 2001) and to identify ambiguous questions or academic terminology
that might be misconstrued (Yin, 1994). These inadequacies include probing questions
with involved technical academic jargon about international markets that interviewees
found confusing and ambiguous. Redesigning the protocol simplified these technical
questions without altering their meaning. Furthermore, using a pilot can give the
analytical procedure a greater level of reliability and credibility as it helps the study focus
on the research area, as long as this process does not restrict unpredicted responses. If
limited alterations are needed for the interview protocol, the pilot case and subsequent
data can be used as another source of evidence for the study. As only minor adjustments
were needed for the interview protocol and the essence of the protocol remained intact,
this study project used the pilot as an extra data source.
69
3.3.5 Analysis procedure of data from case studies
Once the pilot study has helped to refine the interview questions, greater analytical
reliability can be gained from the actual analytical method (Perry, 1998; de Weerd-
Nederhof, 2001; Amaratunga, et al., 2002). Data collected from the selected data-rich
sources formulate the essence of foundation for the constructed theory. That is, the
greater the reliability of the data the more credible the theory constructed (Eisenhardt,
1989; Amaratunga & Baldry, 2001). Furthermore, the exploration of data drawn from the
case studies is evaluated through a number of analytical techniques. The data analysis of
the cases uses within-case analysis, cross-case analysis or pattern matching and
explanation building (Eisenhardt, 1989; Amaratunga & Baldry, 2001; Amaratunga, et al.,
2002). These techniques help to identify, examine and illuminate the research problem
(Patton, 1990; Yin, 1994; Perry, 1998).
Within-case analysis
The analysis of multiple-case studies is based on a comparison of the case evidence with
the initial propositions developed in the early stages of the study (Amaratunga & Baldry,
2001). The purpose of the within-case study analysis is to become familiar with each
individual case through a detailed case write-up (Eisenhardt, 1989; Perry, 1998;
Amaratunga & Baldry, 2001; de Weerd-Nederhof, 2001). That is, within-case analysis is
the process conducted to view each case as a stand-alone entity, identifying unique
patterns prior to the analysis of between cases (Amaratunga & Baldry, 2001). These
write-ups are usually descriptive in nature and help to generate insight, as they support in
coping with the overwhelming amount of data (Eisenhardt, 1989). The greater familiarity
of individual cases is conducive to the cross-case analysis that follows in the cross-case
analysis Section (Perry, 1998; Amaratunga & Baldry, 2001).
Cross-case analysis
The within-case analysis gives a very descriptive evaluation of each independent source
of information and could be considered descriptive analysis (Perry, 1998). Conversely, a
cross-case analysis gives the research a more analytical sophistication and forces the
investigation to look beyond initial impressions (Eisenhardt, 1989; Perry, 1998). Also
known as pattern matching (Yin, 1989; Yin, 1994; Chetty, 1996; Amaratunga, et al.,
70
2002) or cross-case patterns (Eisenhardt, 1989) cross-case analysis (Stake, 1995; Perry,
1998; Amaratunga & Baldry, 2001) endeavours to give cross-case comparisons (Larsson,
1993; Amaratunga & Baldry, 2001). The frequency of statements is used to justify
patterns or themes and conclude differences between cases, finding reasons why answers
varied to the same questions (Patton, 1990; Perry, 1998; Carter, 1999). As a consequence
of the analysis, hypotheses are formulated at this phase in the research. That is, from the
evaluation of the data a number of hypotheses will be developed for confirmation or
disconfirmation in Stage II of data collection.
Explanation
Although each case can be seen as an entity in its own right (Yin, 1994; Amaratunga &
Baldry, 2001), cross-case analysis and the identification of patterns within this analysis
can help to build an explanation and to formulate further propositions (Amaratunga &
Baldry, 2001). That is, the goal of this qualitative study is to analyse the data so as to
build an explanation of the particular situation (Amaratunga, et al., 2002). This better
understanding or new insight into the phenomenon yielded an empirical validity for the
constructed theory into strategy and the influence of the Internet on the choice of
international market growth (Eisenhardt, 1989).
3.4 Limitations
As illustrated previously, the case study methodology is justified as the most appropriate
methodological process. However, criticisms and limitations still exist, and must be
identified so they can be addressed. The identification of case study methodological
limitations is outlined in this section and focuses on human interaction and the lack of
statistical generalisability of the study research method as illustrated in Table 3.9.
Interpretive discrepancies may exist due to human interaction within the data analysis
process (Yin, 1994; Amaratunga, et al., 2002). Thus, the accuracy of overall cross-case
analysis could be improved upon by trying to quantify the process in future research
endeavours; in this study, Stage II of data collection (Amaratunga, et al., 2002). Thus,
limitations are overcome by using quantitative confirmatory structural equation
modelling analytical processes in Stage II of the research.
71
Table 3.9 Limitations and criticisms of case study methodology research
Limitations and criticisms of case study
methodology
Tactics to overcome limitations
Human interaction (Hastings & Perry
2000; Amaratunga & Baldry 2001)
Strong knowledge
Personal interaction kills
Interview techniques
Appropriate question-framing ability
Tape recording with note summarising
Triangulation techniques
(Hastings & Perry 2000)
Getting appropriate knowledge from
respondents (Hastings & Perry 2000)
Snowballing techniques
(Patton 1990; Hastings & Perry 2000)
Overly complex constructed theory (Eisenhardt 1989; Parkhe 1993)
Tight interview protocol
Cross-case analysis
Unsuitability for statistical generalisability (Tsoukas 1989)
Aim for analytical generalisability over that
of traditional scientific generalisability (Yin
1994; Tsoukas 1989; Amaratunga & Baldry
2001)
Credibility maintained through employing a
reliable construct and internal and external
validity (Amaratunga & Baldry 2001).
Lack of generalisability (Amaratunga &
Baldry 2001)
Replication logic through literal and
theoretical replication gives the findings of
the study a greater level of generalisability in
alternative situations
Source: Eisenhardt (1989); Tsoukas (1989); Patton (1990); Parkhe (1993); Hastings and
Perry (2000); Amaratunga and Baldry (2001).
Another criticisms of case study research is that it suffers from a lack of rigour, as human
interaction and judgment is present during the data collection stage, affecting the internal
validity of the data (Amaratunga & Baldry, 2001). Human interaction within the data
analysis can also open the door to inaccuracies and misrepresentation of the data
collected (Eisenhardt, 1989). That is, either human error or the researcher‘s emotional
feelings about a particular topic can bias the data and consequently the results may lack
reliability (Amaratunga & Baldry, 2001). Because the interview serves as the instrument
for the data collection, human error must be of concern (Hastings & Perry, 2000). By
having strong knowledge of the research subject, personal interactive skills, experience
in interview techniques and appropriate question-framing abilities, the interviewer
alleviated these limitations of human error for this study to the best of their ability
(Hastings & Perry, 2000). Furthermore, within the researcher used interview tape
recordings along with note-taking procedures to bolster the validity of the study and to
72
alleviate the possible human error factors that may have occurred (Hastings & Perry,
2000; Hughes, 2002).
Each chosen case study must also have a respondent with the appropriate knowledge and
experience pertaining to the subject matter for the purpose of addressing the research
problem (Hastings & Perry, 2000). Not only must the respondent have the ability to
contribute data-rich information about the research topic, but also they must be willing to
communicate the information in the interview, or otherwise the research findings may
not be meaningful (Patton, 1990; Hastings & Perry, 2000; Sekeran, 2000). Thus, the
selection of the case study respondent distinguished the international manager, marketing
managers, general managers or the CEO‘s who are willing, knowledgeable and
experienced in the research area from those who are not, prior to the interview stage of
the research. Snowballing interview techniques are used to identify respondents with
adequate knowledge and experience in the research area (Patton, 1990; Hastings & Perry,
2000).
Another perceived limitation of case study methodology is the over-complication of a
situation. That is, the formulation of theory from case study research can over justify data
from the particular situation under investigation, which may lead to a theory that is
overly complex and tries to incorporate everything (Eisenhardt, 1989; Parkhe, 1993).
With the overload of information in case study research there is a temptation to build or
construct theory that tries to include everything learned no matter how trivial
(Eisenhardt, 1989; Parkhe, 1993). This research project used a tight interview protocol
and cross-case analysis to focus the data toward the research problem and to identify only
the pertinent issues raised by decision makers. These tactical approaches channelled or
narrowed the focus of the data collected and helped to simplify an otherwise over-
complex constructed theory (Eisenhardt, 1989).
The final major criticism of case study methodology is that it cannot give traditional
scientific generalisability (Tsoukas, 1989; Yin, 1994; Amaratunga & Baldry, 2001). In
Stage I of this research project, an external validity of analytical generalisability is
established in contrast to statistical generalisability (Tsoukas, 1989; Amaratunga &
73
Baldry, 2001). The results gained from the study may not give definite global inferences
as they have been drawn from a complex unique situation, but they can help to
understand theoretical links and patterns that can be used as theoretical constructs for
similar situations (Amaratunga & Baldry, 2001). This case study project design abides by
the methodological tests for a reliable construct and internal and external validity as seen
in Table 3.5 of Section 3.2. Furthermore, the study uses triangulation techniques to
overcome limitations of validity and reliability to give the findings of this study the
desired credibility.
From case study research it is difficult to generalise findings in different settings as the
contemporary phenomenon and the context may be dependent on each other
(Amaratunga & Baldry, 2001). The external environmental conditions may produce
variations in the phenomenon that hinder the generalisability or external validity of the
study (Amaratunga & Baldry, 2001). Even though the results from multiple-case studies
can be considered more robust than those from a single case study, constructed theory
may depend on the complexity of external validity (Amaratunga & Baldry, 2001). Thus,
validity derived from replication logic assist in creating analytical generalisability outside
the current situation (Parkhe, 1993; Yin, 1994; Healy & Perry, 2000).
All forms of methodology suffer from limitations and criticism. Case study methodology
is no exception, as outlined in this section. Understanding and addressing these
limitations is essential to the credibility and reliability of any findings from this study.
Ethical considerations must also be investigated in order to understand and addressed any
limitations of ethical standards. These will be outlined in Section 3.5.
3.5 Ethical considerations
The researcher endeavoured to identify and alleviate any ethical considerations pertinent
to the investigation. Maintaining the confidentiality of respondents, misleading
interviewees and coercing individuals are identified as potential ethical issues and are
addressed in this section. More information on these issues appears in Appendix A, the
interview protocol and the information sheet.
74
The ethical or unethical conduct and behaviour used to undertake this research is
paramount to the moral ideology of contemporary business qualitative research (Sekeran,
2000). Ethical conduct applies to the individuals performing the research and to the
respondents who provide the necessary data (Sekeran, 2000). One of the most important
considerations in this project is confidentiality (Patton, 1990; Suzuki, 1999). The
information given by respondents must be dealt with in the strictest of confidence.
Confidentiality and anonymity of respondents and their data is paramount to the ethical
ideological considerations in this research (Suzuki, 1999). Even incidental identification
of the respondent and case firm is not be possible, as steps are made to disguise all
participants.
Other major ethical considerations identified in this study include possible coercion and
misleading conduct by the researcher (Sekeran, 2000). That is, participants of the study
participate on a voluntary basis and are not pressured in any way. Respondents are
advised that they can leave or withdraw from the study at any time without any loss of
benefit, and this will not affect future involvement with the university, as seen in
Appendix A, information package. Furthermore, misleading or misrepresenting the study
or facts about the research is avoided in this research project, as ethical standards are not
compromised (Sekeran, 2000). Ethical misrepresentation is rejected in this research
project as promises of delivery are honoured (Patton, 1990; Sekeran, 2000). An
illustration of the compliance with ethical considerations is the promise and delivery of
disguising the data from the interviews, thus maintaining the anonymity of firms in the
final report at the end of the study. Finally, this research adhered to those strict ethical
guidelines set by the Queensland University of Technology. Subsequently, the university
Human Research Ethics Committee granted ethical clearance to proceed with the study.
3.6 Conclusion
In Chapter 3, the appropriate paradigm for the ideological foundation of this research
study was identified. The realism paradigm guided the research with the correct
conceptual psychological framework needed for the investigation (Milliken, 2001). The
choice of paradigm is selected due to the belief systems of ontology (reality),
epistemology (the relationship between researcher and that reality), and methodology
75
(techniques used to discover that reality) that underpin the investigation (Guba &
Lincoln, 1994; Perry, et al., 1999). These same belief systems not only help to identify
the appropriate paradigm of realism but also help to eliminate positivist, critical theory
and constructivist paradigms, as they are not conducive to the ideological paradigms that
would be used in this investigation (Guba & Lincoln, 1994; Perry, et al., 1999).
The methodology of case studies used to investigate this reality of ‘the Internet’s
influence on international market growth’ has significant advantages that justify its
selection for this project. Case study methodology gives a holistic perspective to a
particular complex situation or phenomenon (Larsson, 1993; Miles & Huberman, 1994;
Gummesson, 2000). Furthermore this methodology of ascertaining reality helps to
construct theoretical concepts where no set standard or procedure existed before, due to
the limited research and lack of empirical confirmation in the area. Thus, case study
methodology lends itself to investigation of the Internet and international market growth.
This project identified two main dimensions of selection for cases in this research.
Firstly, cases had to fit the criteria addressing the research question: that is, firms had to
be Australian, use the Internet and trade internationally. Additionally, companies needed
to have a representative who dealt with international markets, so as to best address the
research issues. Secondly, the cases chosen from this pool fell within the boundaries of
replication logic, thus giving the literal and theoretical replication needed for analytical
generalisability to construct a credible theory (Yin, 1994).
To give the research a significant level of credibility this study used several tactics to
enhance the construct, external and internal validities, and reliability of the findings
(Amaratunga & Baldry, 2001). The level of credibility established within the research is
founded on the design of the case studies. Using replication logic and data-rich criteria to
select the cases, a semi structured interview protocol for internal accuracy and direction,
and cross-case and within-case analytical procedures, relevant information is drawn from
these data-rich sources to best investigate and illuminate the research question (Perry,
1998).
76
4.0 CHAPTER 4: ANALYSIS OF CASE STUDY DATA
4.1 Introduction
As discussed previously in Chapter 3, Section 3.3, the appropriate methodology of case
study in-depth interviews was employed to gather data for the research. The analysis and
presentation of the data was founded on the in-depth interviews conducted with
international managers and decision makers from twelve individual international firms.
The data analysis procedure for this research project evaluated the information in
accordance with both within-case analysis and cross-case analysis, as seen in Figure 4.1
(Eisenhardt 1989; Amaratunga & Baldry 2001; Amaratunga, Baldry, Sarshar & Newton
2002). These techniques of within-case analysis (Section 4.2) and cross-case analysis
(Section 4.3) helped identify and examine pertinent issues related to the research problem
(Patton 1990; Yin 1994; Perry 1998).
Figure 4.1 Overview for Chapter 4, data analysis
Source: developed for this research
Cross-case analysis (4.3)
Within-case analysis (4.2)
Introduction (4.1)
Conclusion (4.4) Research
Issues (4.3.3)
Systematic
coding (4.3.2)
Coding
techniques
(4.3.1)
Research Issue 2: How and why has the
Internet influenced international market
penetration and development growth?
Research Issue 1: How and why has
the Internet influenced the
internationalisation process of the firm?
77
4.2 Within-case analysis
Initially, the analytical process concentrated on a within-case analysis to formalise each
case through a succinct case write-up (Eisenhardt, 1989; Chetty, 1996; Perry, 1998;
Amaratunga & Baldry, 2001; de Weerd-Nederhof, 2001). The process of within-case
analysis was conducted so that each individual case could stand alone as an independent
entity prior to the cross-case analysis, shown in Section 4.3 (Perry, 1998; Amaratunga &
Baldry, 2001; Amaratunga, et al., 2002). Additionally, the within-case analysis gives
further credence to the richness of the data sources. These individual within-case
analyses were summarised into a number of categories including firm code, firm size,
product orientation, number of employees, customer type, regional focus, international
market proportion, turnover, age, number of outlets, position held by interviewee, and a
short description of the firm‘s business as shown in Table 4.1. However, in Table 4.1 and
in the within-case analysis information may have been altered slightly or omitted to
ensure the confidentiality of the firms involved. These changes or omissions do not,
however, affect the quality of the data or its interpretation and findings. Now that the
within-case summary table has been presented, an outline of each case will follow.
78
Table 4.1 Within-case study analysis matrix
Note: Each case has been given a Greek letter to represent the company, as the anonymity of firms is an imperative ethical consideration. ‗Start-up‘ denotes an Internet company
that started online. Conversely, if not indicated, the firm is not a start-up.
*A broader scope of SME definition was used for the first phase of exploration to get a better understanding of a range of key issues. For example, Case 9, Iota has 500 employees
(seasonal), and falls beyond the definition by the Australian Bureau of Statistics (ABS, 2002). However, this falls within the OECD definition of SME, as outlined earlier in
Chapter 1 (OECD, 2002).
Source: developed for this research
Company
case code
Company
type/size
Product
orientation
Number of
employees
Customer
type
Regional focus Proportion (%)
of total Business
is International
Turnover
per/ ann.
Age/ # of
outlets
Interviewee position Description of firm
Case 1:
Alpha
Start-up Goods
2 B-to-C Global
US/ UK
70% <$1 mill. 3 years
2 outlets
Managing Director Online bikini retailer
Case 2:
Beta
Start-up Service
Digital product
8 B-to-B US/ Europe 99% $15 mill. 5 years
3 outlets
CEO Adult entertainment online
Case 3:
Gamma
Small Goods
4 B-to-C US/ UK 35% $1.75 mill. 30 years
1 outlets
Owner Jewellery retailer
Case 4:
Delta
Small Goods
2 B-to-C UK/ US 100% <$1 mill. 2 years
1 outlets
Owner Specialised artwork and images
Case 5:
Epsilon
Small Good and Service/ digital
goods
7 B-to-B NZ/UK/ HKG 10% <$1 mill. 5 years 1 outlets
Managing Director Retail point of purchase software and hardware
Case 6:
Zeta
Small Services
13 B-to-B Asia/ South America
100% <$1 mill. 2 years 3 outlets
Marketing Manager Secondary education exporter
Case 7:
Eta
Medium Goods 38 B-to-B B-to-C
Asia/ US 75% $1–$2.5 mill. 4 years 4 outlets
Business Development Director
Stored value cards: financial payment solutions
Case 8:
Theta
Medium Service &
goods
140 B-to-C US/UK/ Asia/
Europe
40% $5–$10 mill. 90 years
1 outlets
Marketing Director Tourism destination/
accommodation
Case 9:
Iota
Medium Service &
goods
500 * B-to-C NZ/ Asia/ North
America
20% $10 mill. + 23 years
4 outlets
General Manager, Sales and
Marketing
Tourism attraction
Case 10:
Kappa
Medium Service
50 B-to-B Global 60% $10 mill. + 11 years
5 outlets
General Manager, Asia–
Pacific
Business services franchiser
Case 11:
Upsilon
Medium Service 150 B-to-B Global 7-70%
$10 mill. + 39 years
20 outlets
Business Development
management Australasia
Catering and hospitality contracts
Case 12
Omega:
Medium Services 49 B-to-B NZ/UK/ South Asia/ Middle
East/ UAE
10-20% $5–$10 mill. 18 years 5 outlets
Managing Director Asset management software
79
Case 1: Alpha
Alpha is an Internet start-up firm. This small online bikini retailer was established in
2002. The firm was pre-conceived as an international company, and thus was
instantly internationalised as it ‘went from garage to global’ (Alpha, 2004). Alpha
produces and designs bikinis, outsourcing the manufacturing to independent
contractors in Australia. The two founders had extensive experience in Internet
development. Designing bikinis and undergarments was assessed as a good venture as
the founders understood from their Internet experience that ‗sexy sells online’ (Alpha,
2004). That is, their primary target market is men purchasing sexy undergarments for
wives and girlfriends. The firm has a business-to-customer orientation. The company
distributes to more than 45 international markets including Alaska, Iceland, Russia,
Chile, United Arab Emirates, Nigeria and the Seychelles, within a three-year period.
However, the major international markets for Alpha were the United States (US) and
the United Kingdom (UK). The international component of the total business is 70%,
as shown in Table 4.1. Further, the Internet is the primary mechanism for
international sales. However, the online brand and public relationship success has
spawned new international market growth in the UK through more established
retailers, because of this success online success.
Case 2: Beta
Beta is also a Internet start-up firm. Beta is an adult entertainment company, which
focuses primarily on business-to-business transactions and has a turnover of more
than $15 million per annum. The firm has both a broad online multi-site strategy and
an affiliate program. That is, the firm not only creates an affiliate program for
intermediaries and producers of adult material, but also develops a broad range of
end-customer-focused products in the adult industry. From inception the firm was
international, as the domestic market was perceived to be somewhat less desirable.
The firm capitalises predominantly on international markets over domestic markets,
as the firm ‘don’t care if we don’t get another Australian customer’ (Beta, 2004).
Between 0–1% of revenue is generated in the domestic Australian market, with more
than 99% in international markets. More specifically, the US market makes up 75%,
Germany 5%, the UK 5% and others countries 15%. Beta uses the Internet as the sole
mechanism for international growth.
80
Case 3: Gamma
Gamma is a small retail jewellery firm. Gamma was an offline traditional jeweller
that entered the virtual world. Established more than thirty years ago, Gamma is a
jeweller with a niche product range. Thus, the firm has extensive industry experience.
The retail firm distributes jewellery all over the world, with an international
geographical focus that includes the US, the UK, Canada, Japan and France.
International distribution was direct to customers through postage. For example,
FedEx postage was chosen for postal distribution because of the domination of its US
customer development online, as FedEx is a well-known brand in the US. Pre-
Internet the firm had no international customers. As a consequence of the Internet
business, over the last five years revenue has increased 200 fold, with 35% of
business generated in international markets. The firm now turns over $1.75 million
annually. The firm had the capacity to internationalise only because of their Internet
and web presence, which Gamma affirms: ‘we had no international business other
than tourists before the Internet’.
Case 4: Delta
Delta is a retail art firm. The firm sells both the artwork and augmented products
developed from the artwork. Currently, Delta deals predominantly in international
markets, with the international component accounting for more than 80% of total
revenue. The owner-manager uses third-party virtual network intermediaries online
(eBay) as a conduit for international transactions. Further, email was the primary
mechanism used to facilitate international transactions and maintain customer
relationships, due to the vast geographical distances between company and customers.
However, growth is generated not only through virtual markets such as eBay, but also
primarily through more traditional methods of networks. The ability to digitalise the
artwork was perceived as a significant innovation that helps to accelerate and
facilitate internationalisation. For example, the firm not only has the ability to
digitalise the artwork, but also has the capacity to do so with a very high level of
image quality, which is seen as crucial for international customers. That is, the quality
of the representations of augmented images from the artwork was the most significant
advancement in capitalising on new customer markets. However, the firm‘s own
website was not used in the growth, as virtual network intermediaries such as e-bay
could generate a larger market than a firm-based website.
81
Case 5: Epsilon
Epsilon is a small retail technologies firm. The firm produces technologies for retail
point of purchase use for the client‘s offline and online retail. Consequently, Epsilon
is a business-to-business operator. The firm has been operating predominantly in the
domestic market. However, the firm does have international customers, which
account for more than 10% of its total revenue. The firm has international customers
in New Zealand, the UK, Japan, Sri Lanka and Hong Kong. The firm is still,
however, in its international infancy. Epsilon perceived international markets to be
their greatest chance for revenue, profit and growth: ‘We see future firm growth in
Hong Kong and the United Kingdom.‘ (Epsilon, 2005). The company has recently
adjusted the product to be more digital in nature. Digitalisation was used to support
international growth aspirations—for example, through the implementation of a self-
install system. Growth is generated predominantly through traditional networks and
marketing activities, such as trade shows and word of mouth. The firm uses e-mail,
website real-time support systems and digital automation of processes to satisfy
clients. In addition, the website gave the firm legitimacy in markets where the firm
does not have a physical presence.
Case 6: Zeta
Zeta is a small education exporter intermediary offering a service for international
students looking to study in Australia. Consequently, the firm generates 100% of its
business in international markets. The firm has grown international markets in Korea,
Japan, Taiwan, China, Indonesia, Thailand, Russia, and South America.
Predominantly, Zeta generates new business in international markets through
traditional means, such as personal networks, agents and other referral processes.
Thus, the firm has a business-to-business focus. Therefore, the Internet is not used as
a major source of growth in International markets. However, email was used
significantly with third parties in the network relationship-building process. The
Internet was also used as a source of legitimacy for the firm. That is, the firm may
develop initial leads through traditional networking methods, while the Internet was
used as a secondary source by both agents and students to check the legitimacy of the
firm. As Zeta states: ‗we have to have a web presence, otherwise you are not
considered real’ (Zeta, 2005).
82
Case 7: Eta
Eta is a medium-sized financial payment systems firm, which employs 38 staff and
has three offices: Singapore and the United States, in addition to their domestic
presence in Australia. Eta conducts business in the United States, New Zealand,
Malaysia, Hong Kong and Singapore. China was also being developed presently. The
firm generates between $1–2.5 million in revenue annually, with more than 75% of
total business from international markets. The product is a range of stored value cards
with both a physical and digital component that facilitates transactions in multiple
payment situations. The financial system product is a consumer good; however, the
firm generates the bulk of their revenue predominantly through business-to-business
transactions. Thus, the firm has a dual focus in product delivery. The firm uses
traditional mechanisms such as business networks to grow new international
customers. However, the Internet was used in all facets of the internationalisation
process, as ‗without the Internet our office would shut down‘ (Eta, 2004). For
example, Eta uses live website virtual helpdesks, email and a sophisticated website
with personalised financial payment systems.
Case 8: Theta
Theta is a medium-sized tourism service provider. The focus is on tourism
destinations, with an accommodation services export focus. Consequently, the firm
has predominantly a business–to-consumer product; however, operations tend to be
business-to-business focused through agents. The business was established 90 years
ago and now employs over 140 people, with an annual turnover of between $5–10
million. The international proportion of the total business turnover was 40%. The
bulk of business is in western international markets including North America, the
United Kingdom, and Europe, although Asia is a growing market. Consequently,
mature international markets can be developed online where travellers prepare their
own travel itineraries, e.g. in the US, the UK, Japan and Singapore. However, in non-
mature markets, such as China and Taiwan, group bookings are made through agents.
Networks remain the predominant form of marketing, as ‗aggressive marketing is
primarily done through the travel trade in all markets’ (Theta, 2005). That is, ‗we
promote through the travel trade by going into markets and participating in
marketing activities that may be led by body organisations such as tourism Australia‘
(Theta, 2005).
83
Case 9: Iota
Iota is a medium-sized tourist attraction. A significant proportion of profit is
generated through business-to-business. The firm relies on network mechanisms for
growth in non-mature international markets. Conversely, more contemporary virtual
network intermediaries were established for mature independent international
travellers. For example, online affiliate programs generate new growth in the
independent traveller market. The company has been established for more than 20
years. The firm has a well-known brand with multiple sub-brands and has a high level
of positive association in the domestic market. Currently, the firm generates more
than $10 million annually, with international markets accounting for more than 20%
of that figure. Presently, Iota has customers travelling from New Zealand, North
America, Europe, Japan, China, Korea, and Taiwan. Additionally, ‘China has the
greatest international market potential, as statistics indicate significantly more
Chinese travelling to Australia in the near future’ (Iota, 2005). The firm developed
the website in multiple languages—simple Chinese, traditional Chinese, Korean and
Japanese— in conjunction with the English website. The Internet presence in China is
not seen as being as important as relationship-based networks with agents.
Case 10: Kappa
Kappa is a medium-sized franchiser of business services. It was established 12 years
ago and currently employs 50 staff in five offices. With a turnover of over $10
million per annum, Kappa has established business in Australasia, Europe and the
United States. The international component is more than 60% of total revenue. Future
growth will be focused on Asia: more specifically, China. However, business in Asia
requires face-to-face relationship building. Kappa saw a larger risk of intellectual
property infringement in Asia. Predominantly trade shows were used to access new
international customers. However, approximately 23% of new business is generated
through the website: ‗The Internet currently equates for 90% of the success of the
firm. However, the Internet is limited in Asia’ (Kappa, 2005). The firm uses online
system support to maintain customer relationships and generate new business through
referrals. Kappa has invested a large amount of resources to integrate the business
online. All processes and procedures occur online. For example, customers have a
personalised web-space and can interact with each other, franchisee-to-franchisee, as
well as franchisor to franchisee.
84
Case 11: Upsilon
Upsilon is a medium-sized hospitality and catering services company. The firm
currently generates more than $10 million turnover per annum, with the international
proportion of that turnover ranging up to 70% depending on the contracts at the time.
Besides Australia, Upsilon has contracts in Papua New Guinea, the Middle East,
Russia, the United Arab Emirates, New Zealand, Africa, and China. The contracting
of tenders means the firm has a business-to-business customer orientation.
Established approximately 40 years ago, the firm employs 150 staff in 20 offices,
both domestic and international. The firm uses traditional methods of referrals and
networks to gain new international business. However, the Internet was used to grow
business in two ways: firstly, email was used extensively in the negotiation process of
the contract. Secondly, virtual intermediaries were used to access tenders in
international markets. The firm uses the Internet for the maintenance and facilitation
of contracts: ‘the Internet is like the provider of life to our business, just like
electricity’ (Upsilon, 2005). Further, as Upsilon explains, ‘the website is used as an
introductory tool and then we go into building relationships through e-mail.’
Case 12: Omega
Omega is a medium-sized asset management software firm. The product is both an
asset management software program and personal service provider. Thus, ‘the
company needs to have some level of physical presence or interaction with the client
in the international market’ (Omega, 2005). Established over 18 years ago, the firm
currently employs 49 staff and has five offices. Omega now generates between $5–10
million per annum, with the international proportion accounting for between 10–20%
of that turnover, depending on contractual agreements. Omega presently has
international markets in New Zealand, the United Kingdom, Malaysia, Indonesia, the
Middle East and the United Arab Emirates. Although a technologically based
business, the firm uses more traditional methods for development in international
markets. The website was used for clients to crosscheck the firm‘s credentials.
Indeed, the firm directs potential international clients to the website to check that the
company is legitimate. Thus, the firm uses the Internet as a mechanism to facilitate
international business, rather than to generate new market growth. That is, Omega
used more traditional methods, such as relationship-based networks through agents,
to pursue international clients.
85
4.3 Cross-case analysis
Cross-case analysis gives the research a more analytical sophistication and forces the
investigation to look beyond initial impressions, giving results more meaning
(Eisenhardt, 1989; Perry, 1998). The frequency or emphasis of statements can be used
to justify patterns or themes and to conclude similarities and differences between
cases (Patton, 1990; Perry, 1998; Carter, 1999). Cross-case comparisons are used to
counteract premature and untrue biases. Finally, the proposed model developed from
the cross-case analysis is presented in Figure 4.3. That is, the proposed model was
developed from the evaluation of the cross-case analysis, and will be examined next.
Due to the large amount of information accumulated from the in-depth interviews,
analytical coding techniques were used to manage the data (Strauss & Corbin, 1998).
A line-by-line and phrase-by-phrase open coding process was used to break down
each interview so it could be labelled and categorised (Strauss & Corbin, 1998). This
form of conceptualising or categorising analytically represented the information
obtained in the study (Marshall & Rossman, 1999). Additionally, content analysis
was used to examine frequency of themes on a question-by-question basis (Bouma,
1996). The process of content analysis includes; what are the concepts involved,
identification of variables, a devised way to measure these variables and a devised
way in which to summarise these variables (Bouma, 1996). Furthermore, protocol
questions are related to the pertinent research issues so as to help resolve the research
problem.
As seen in Table 4.2, Research Issue 1 (RI1) incorporates the concept of Internet
usage or intensity and the internationalisation process. Research Issues 2 (RI 2)
incorporates the concept of international market growth elements of market
penetration and market development. Research Issue 1 will be assessed next.
86
Table 4.2 Cross-case analysis
Research
issue
Protocol section
and question
Internationalisation
concept
Related section
RI 1
(Section
4.3.1)
Part B : Q4
Part C : Qs1,2,3
Internet technology
usage
Internet usage and intensity
Part D : Qs1,2,3
Part E : Qs1,2,3,
Part F : Q 3
Part G :
Qs1,2,3,4,5,6
Internationalisation
process
Internet use -
Internationalisation orientation
Information
Knowledge
Interaction—trust and branding
Psychic distance
Digitalisation—product
specificity
Networks
Pace and international mindset
RI 2
(Section
4.3.2)
Part B
Part C: Qs 2,3
Part D : Qs1,2
Part E : Qs3,4
Part F: Qs1,3,4,6
Part G: Q1
International market
growth
Market growth
Market penetration
Market development
Note: RI = research issue
Source: developed for this research
Research Issue 1: How and why has the Internet influenced the
internationalisation process of the firm?
Research Issue 1 incorporated two main concepts: Firstly, the concept of Internet
usage and intensity is assessed. Secondly, the impact of the Internet on the
internationalisation process is assessed—shown in Table 4.2 and outlined in the next
section. Each of these concepts will now be discussed.
Internet technology usage and Internet intensity. The first concept addressed was
that of Internet technology usage. To address this concept, all firms were asked two
questions: what Internet technology they used, and which Internet technology they
considered most important, even if they were not using that technology at the time of
interview. This is shown in Table 4.3.
87
Table 4.3 Internet usage/importance identified
Case Case
Used & level of
importance
Used or not used
Comment
e-m
ail
Web
site
in
form
ati
on
Ch
at
roo
ms
Dig
ita
l n
oti
ce b
oa
rds
e-m
ail
Web
site
in
form
ati
on
Intr
an
et
Tra
nsa
cti
on
on
lin
e
On
lin
e su
pp
ort
Cu
sto
mer
web
sp
ace
Ex
tra
net
Ch
at
roo
ms
Dig
ita
l n
oti
ce b
oa
rds
1. Alpha VSI VSI MI LI √ √ X √ √ X X X X Total dependency on the website
Personalised email support system
2. Beta VSI MI LI SI √ √ √ √ √ X X X X Trillion pro instant messaging
system- interaction with business
networks
3. Gamma VSI VSI VSI LI √ √ √ √ √ √ X X X Web-based support system, live
helpdesk
Personalised customer web-space
4. Delta VSI MI NI NI √ √ X X X X X X X Limited website usage. e-mail used
heavily in transaction/delivery of
product
5. Epsilon VSI VSI NI SI √ √ √ √ √ X X X X e-mail support system
Newsletters
6. Zeta VSI SI NI LI √ √ X X X X X X X Limited use of Internet technology
Agent-based network
7. Eta SI MI SI LI √ √ √ √ √ √ √ X X Live helpdesk
Newsletters
8. Theta VSI VSI NI LI √ √ √ √ X X X X X Sophisticated backend system that
assesses website efficiencies
9. Iota SI VSI LI LI √ √ √ √ X X X X X Heavy dependency on co. website
& third-party websites for
transaction
10. Kappa VSI VSI VSI VSI √ √ √ √ √ √ √ √ √ Intense dependency on Internet for
all business
11. Upsilon
SI MI NI LI √ √ √ X X X X X X Third-party online databases for
tenders
e-mails are used for negotiations
12. Omega
VSI MI NI NI √ √ √ X X X √ X X Extranet distributes product- e-
mail used in relationship with
agents
VSI SI MI LI NI
9
3
-
-
-
6
1
5
-
-
2
1
1
2
6
1
2
7
2
-
12 12 8 7 6 3 3 1 1
Notes:
VSI Very strong importance
SI Strong importance
MI Moderate importance
LI Low importance
NI No importance
√ use of this technology
X does not use
Source: developed for this research
All firms acknowledged that the Internet plays a vital role in the process of
internationalisation, although different firms used different technologies in
international market growth. Internet technologies, e-mail and websites were viewed
as important by all cases (12/12). Specifically, email was deemed to be of strong to
88
very strong importance (9 = VSI; 3 = SI). Websites were viewed as being of very
strong importance by six cases; one case viewed them as being of strong importance;
and five commented that they were of moderate importance. Other Internet tools,
such as customers‘ personalised web-spaces (B-B & B-C) and intranet systems, were
identified as important for internationalisation and thus helped to give a more specific
understanding of Internet technologies use in these firms. For the most part B-to-B
orientated firms use Internet technologies for the facilitation of client relationships,
for example, the use of extranets and intranets (as predicted in Section 3.3.2 case
selection, replication logic). Whereas, B-to-C orientated firms used e-commerce
Internet to facilitate traffic and sales. As argued by Taylor and Murphy (2004) the
size of the firm also has an impact on Internet adoption. In this PhD study, mainly
larger firms used more capital intense Internet technologies such as extranets (3/6)
and intranets (6/6), compared to the small firm use of extranets (0/6) and intranets
(3/6), as seen in Table 4.3.
Conversely, technologies such as digital noticeboards and, to a lesser extent, chat
rooms, were considered of limited importance to firms when internationalising. Other
forms of Internet technologies, such as online support systems, were evaluated as
important by some firms, but usage of these tools was product-specific. For example,
live help desks, instant messaging systems such as trillion pro (a customised instant
messaging software) and sophisticated automated and non-automated e-mail systems
were used by these firms in support system roles. Other technologies identified by
international firms as important included extranets (B-B), personal web-spaces (B-C)
and intranet systems, as highlighted previously. For the most part, the extensive use
of these Internet technologies in firm‘s highlights the importance of Internet usage for
the internationalisation process, which is assessed next.
Internationalisation process
Eight concepts were identified relating to the internationalisation process:
Internet/international orientation, information, knowledge, interaction, psychic
distance, digitalisation and networks, as outlined previously in Table 4.2. Each of
these concepts will be addressed, beginning with the concept of Internet/ international
orientation.
89
Internet/ Internationalisation orientation. The first concept addressed was the
orientation of the decision maker toward internationalisation. Orientation to Internet
usage is also an indicator of international orientation toward internationalisation
(Aspelund & Moen, 2004). That is, the more positive the Internet implementation, the
greater the propensity to implement a broader and deeper scope of
internationalisation. The data from this study found that the key personnel in the
firms Alpha (website consultant experience), Beta (IT education and experience),
Gamma (IT education staff), Eta (previous experience in web-based firm), Epsilon
(IT education), and Kappa (internal IT department) all had very strong Internet
orientations. These decision makers demonstrated high levels of Internet and
international orientation. In contrast, firms such as Omega, Upsilon, Zeta and Delta
had decision makers who thought the Internet was limited in its capacity to develop
business. However, these firms also displayed international orientation.
Information. Information was the second concept to be discussed. The Internet‘s
influence on obtaining information was found to be one of, if not the most, important
elements affecting the firm‘s internationalisation process. More specifically, nine
firms positively identified international market information as being the most
important Internet-based capability for internationalisation. Two firms rated it as of
less than moderate importance. Further, the ability to gain information about
competitors was also perceived as important, with 10 firms rating it as being of
moderate or higher importance. Conversely, information concerning customers in
international markets was viewed as being of moderate or higher importance by seven
of the twelve interviewees. The other five firms indicated two on the five-point scale
of importance. Of least importance was the use of the Internet to gain information
about resources, with only four of the twelve interviewees indicating a moderate or
higher level of importance. Thus, the data confirms the argument that firms
positively perceive the Internet‘s capacity to gain both information about customers
and competitors in international markets (Hamill & Gregory, 1997). Finally, the
ability to source information about resources in international markets was considered
of least importance by two-thirds of respondents, as seen in Table 4.4. However, this
is not to say these forms of information are not important, as interviewees were asked
to rank from most to least important. These findings indicate that the Internet has a
positive effect on the availability of information in the internationalisation process.
90
More specifically, information pertaining to the market, competitors and customers
was perceived as more important than suppliers and resources.
Table 4.4 Internet usages in information components of internationalisation
Source: developed for this research
Knowledge. Knowledge was the third concept identified. Interviewees were asked
about their firm‘s ability to use Internet technology in knowledge building within the
internationalisation process. Cases indicated formal and/or informal Internet process,
analyse and evaluate of information in knowledge building where the Internet was
used. All firms (12/12) identified that the Internet influenced knowledge transference
(refer to column F, Table 4.5), but only at a basic level.
Overall, the Internet was found to enhance internationalisation through the
proliferation of information and basic knowledge. Tacit or experiential knowledge
(transferred) was not evident. This finding confirmed suggestions by Petersen et al.
(2002) that the Internet has influenced objective knowledge, but not tacit knowledge.
That is, there was evidence that basic knowledge was positively influenced by
Internet use. Both formal and informal systems were used to transfer objective
knowledge, with varying effects. That is, not all firms (9/12—refer to column G,
Least
important
Most
important
Aggregate
Level of
importance
1 2 3 4 5
Gaining
information
about the
market
Beta (1)
Gamma (1)
Kappa (1)
Eta Theta
Omega
(3)
Alpha Delta
Epsilon
Zeta Iota
Upsilon
(6)
Most important (9) Moderately important (1)
Least important (2)
Information
about
competitors
Eta
Iota
(2)
Beta
Epsilon
Zeta Upsilon (4)
Alpha
Delta
Theta Kappa
Omega
(5)
Gamma
(1)
Most important (6)
Moderately important (4)
Least important (2)
Information
about customers
Gamma Delta
Zeta
Kappa Omega
(5)
Beta (1)
Epsilon Eta
Theta
Iota Upsilon
(5)
Alpha (1)
Most important (6) Moderately important (1)
Least important (5)
Information
about resources
Alpha Gamma
Delta
Zeta Eta
Theta
Iota (7)
Kappa (1)
Omega (1)
Beta Upsilon
(2)
Epsilon (1)
Most important (3) Moderately important (1)
Least important (8)
91
Table 4.5) used formal systems such as an intranet or database systems to generate
knowledge transference. The other three firms used more informal e-mail systems.
Informal systems were related to the firm‘s financial capability, limited awareness,
education and training of knowledge management. This has also been found in recent
SME knowledge management research (Koh & Maguire, 2004). More successful
knowledge transference within the internationalisation process requires a formal
integrated intranet system to capture more sophisticated information and knowledge
for transference within the firm (Poon & Swatman, 1997).
Table 4.5 Internet’s influence on international information/knowledge elements
Case
Information Knowledge orientation
J
K
Comments
A B C D E F G H I
Info
rm
ati
on
Ma
rk
et
info
rm
ati
on
Co
mp
etit
or
info
rma
tio
n
Cu
sto
mer
in
form
ati
on
Reso
urc
e i
nfo
rm
ati
on
Kn
ow
led
ge
tra
nsf
ere
nce
Fo
rmal
syst
em
Info
rm
al
syst
em
Pro
du
ct
orie
nta
tio
n
B-B
pred
om
ina
ntl
y
B-C
pred
om
ina
ntl
y
Alpha √ √ √ √ √ √ √ The Internet has driven all of the
internationalisation.
Beta √ √ √ √ √ Terminal servers and in-house networks that
can analyse conversion measurements
Gamma √ √ √ √ √ Backend website analytical system breaks down data for better conversion rates
Delta √ √ √ √ √ √ Simple intranet system
Epsilon √ √ √ √ √ √ √ In-house database. Communications tracked-patterns, conversion rates are
measured
Zeta √ √ √ √ √ E-mail system: an informal e-mailing system is used (limited)
Eta √ √ √ √ √ √ ‘Osmosis of information.’ It happens
through e-mail and our intranet.
Theta √ √ √ √ √ √ √ Formal system. e-mail (building a better
picture), keeping master files
Iota √ √ √ √ √ √ An integrated departmentalised intranet system. Integrates information technology,
international marketing in both in domestic
and international.
Kappa √ √ √ √ √ ‘It fundamentally changed the entire process
of internationalisation.’ Very sophisticated
system
Upsilon √ √ √ √ √ √ √ Product supplier information is kept on a server. Specific market particulars are
continually developed in an intranet system
Omega √ √ √ √ √ √ Feedback systems in-house reports and database profiling system
12 9 6 6 3 12 9 3
Source: developed for this research √= denotes positive importance to the firm
92
Interaction. The fourth concept was interaction. Interaction refers to how the Internet
is used as a method of engagement in the internationalisation process between the
company and stakeholders, as shown in table 4.6.
Table 4.6 Interactive levels online
Case Overall
interaction
A
Information
B
Transaction
capability
C
Website
collaboration
D
1. Alpha VSI VSI SI VSI
2. Beta MI MI VSI LI
3. Gamma VSI VSI VSI VSI
4. Delta VSI MI LI LI
5. Epsilon VSI VSI MI MI
6. Zeta SI VSI LI SI
7. Eta VSI VSI VSI SI
8. Theta MI VSI SI LI
9. Iota MI VSI SI VSI
10. Kappa VSI VSI VSI VSI
11. Upsilon LI MI NI NI
12. Omega VSI LI LI NI
VSI
SI
MI
LI
NI
7
1
3
1
-
8
-
3
1
-
4
3
1
3
1
4
2
1
3
2
Notes:
VSI Very strong importance
SI Strong importance
MI Moderate importance
LI Low importance
NI No importance
Source: developed for this research
Cases Beta, Gamma, Epsilon, Eta and Kappa (column A, Table 4.6) developed
sophisticated interactive systems to either support customers online or to provide
easier communication tools for client–company interaction. That is, business-to-
customer companies were at the sophisticated end of the interactivity spectrum. For
example, live help desks (Gamma and Eta) and e-mail help facilities (Alpha and
Epsilon) are used by firms for servicing customers. Conversely, business-to-business
firms at the sophisticated level used technologies such as trillion pro (instant
messaging system—Beta) and large high-tech extranets to facilitate company–client
and client–client interaction (Kappa).
However, most firms commented that they didn‘t necessarily want customer-to-
customer interaction and preferred to restrict communication and control the
93
dissemination of information pertaining to the company and product(s). The
exception was Kappa, as noted above, as this firm‘s strategy generates growth
through customer-to-customer interaction, as the business-to-business orientated firm
has high website intensity. Kappa therefore generates growth through business word
of mouth and reputation or through e-word of mouth as an integrated part of the
process. Thus, the interaction within the website was advantageous for growth
through new business from existing clients, through increased usage (penetration) and
through new clients (development) (Kappa, 2005).
Firms mostly did not embrace website collaboration. Only six of the twelve indicated
it to be either of strong importance or of very strong importance, as seen in Table 4.6.
Upsilon and Omega saw no importance in website collaboration with clients, as their
businesses tend to be based on the development of personal relationships and
personal trust between firm and client, but did concede that the Internet helped to
facilitate the process of relationship building.
Eight of the twelve cases used transactional facilities on the website, as seen in Table
4.6, column C. Firms dealing with multiple countries and customers indicated that the
Internet was influential, as international electronic transactions were commonplace.
Therefore, many different types of payment systems were identified. All firms using
transactional facilities online were firms that had consumer-based products, even if
they transacted with other businesses. The next concept examined was trust and its
effects on the internationalisation process.
Trust, legitimacy and branding issues. The fifth concept considered was trust.
Firms in this research identified seven issues relating to trust and the Internet: trust
itself, legitimacy, branding and the associated issues of brand awareness, brand
association, brand equity and brand consistency.
The existence of a website helped to create trust, as firms on the whole (7/12) found
the Internet to be essential in developing legitimacy in international markets, as seen
in Table 4.7. That is, without the website firms were not perceived to be legitimate, as
customers used the company website as a cross-checking tool to ascertain legitimacy:
‗without a website customers and agents would not believe that we are a real
94
company in international markets‘ (Zeta 2005). Firms were not specifically asked
about legitimacy. However, seven firms identified the concept of legitimacy and the
ability of customers to cross-check on the firm as pivotal tools for gaining the trust of
prospective clients. These findings confirm recent results that indicate firms perceive
the website as a mechanism that legitimises the firm for the outside world (Rudolph,
et al., 2004).
Interviewees also mentioned branding in the context of trust. Branding was perceived
to be pivotal to the development of customers‘ trust: 'people give us money that we
haven’t met before, so they are trusting the brand‘ (Eta 2004). More specifically,
branding consistency, awareness and overall equity helped to develop the firm‘s
reputation by reducing the risks customers perceived were involved in international
transactions. Overall, most firms viewed the website as an extension of the brand
offline. Nine of twelve firms viewed branding as important, and more than half (7/12)
of firms identified a consistent branding strategy online and offline as an optimal
position, as seen in Table 4.7. However, Eta and Upsilon differentiated between
online and offline brand. Further, Upsilon also differentiated between domestic and
international markets.
In addition, nine firms perceived brand awareness to be a beneficial element of the
Internet, as the Internet helped represent the firm internationally. Brand associations
were also considered important—six of the firms acknowledged that websites could
promote positive associations toward the brand and the firm, as seen in Table 4.7.
Four firms—Alpha, Gamma, Eta and Iota—perceived the Internet to be influential in
strengthening the brand equity or value of the firm. Overall, the Internet enhanced the
firm‘s brand awareness and associations through the firm‘s branding exposure to
potential customers beyond current geographical boundaries.
95
Table 4.7 Website marketing elements and trust issues Case code
Tru
st
Leg
itim
acy
Bra
nd
ing
Bra
nd
aw
are
nes
s
Bra
nd
ass
oci
ati
on
Bra
nd
eq
uit
y
Bra
nd
co
nsi
sten
cy
Comments
Alpha S S √ √ √ √ √ URL is the brand. .No physical catalogue exists; thus
online reputation is essential
Beta S S √ √ Reputation is pivotal.
Gamma √ √ √ √ √ √ X Differentiated branding
Use of FedEx hyperlink for brand recognition
Delta - √ √ Not really used for marketing of the firm
Epsilon √ √ √ √ √ Website is used as a follow-up from tradeshows
Website makes us a legitimate company
Zeta √ √ √ Website is limited for marketing. However, website is
pivotal for gaining legitimacy in international markets
Eta √ √ √ √ √ √ X The use of MasterCard logo for brand recognition
Brand is the key to reducing high perceptions of risk
Theta A
D
A
D √ √ √ √ Web-branding leads—everything else follows. Website
helps tell the story. Careful not to be seen as
circumventing agents
Iota A
D
A
D √ √ √ √ Representation of product. Brand reduces perceived risk
online. Must not be seen to circumvent agents
Kappa √ √ √ √ √ Website gives a call to action
Alleviates perceived risk
Upsilon √ √ √ X International customers are differentiated online
Omega √ √ √ Website gives clients a point of cross-checking
7 7 9 8 6 4 7(3)
Notes:
S Start-up
A Agent-dependent
D Destination
Source: developed for this research
The Internet enhanced trust through, ownership of a website legitimised firms,
providing brand awareness, brand association, and, in some cases, brand equity.
These findings highlight the importance of the Internet in building a platform of trust
for the internationalisation of the firm.
Psychic distance
The sixth component examined was psychic distance. All of the firms interviewed
operate in multiple non-English foreign markets (as seen in Table 4.11). However, it
was not evident that firms used multilingual websites for localisation, despite the
availability of multilingual website technology for adapting the website for the local
market. Only two firms, Kappa and, to a lesser degree, Iota, have multilingual
96
websites, as seen in Table 4.8, column C. Kappa has an in-house native Chinese
speaking staff member whose role is to ensure quality and to minimise errors, but this
case is an exception to the rule. Therefore, although Alpha, Gamma and Epsilon have
online currency conversion and advanced search engine optimisation strategies, only
Kappa had a multilingual websites approach to internationalising.
So why did firms, in the main, not adapt their websites to the local international
language of operations? Although not articulated explicitly, an appropriate
explanation is psychic distance, as it was suggested that there was no need to offer
any other language than English: ‗English is the universal language for business‘
(Upsilon, 2005). Further evidence of this attitude was apparent. For example, all firms
trade predominantly in English, despite 11 of the 12 firms having significant sales in
non-English markets. These firms felt more comfortable when operating in English-
speaking markets or with English-speaking clients in foreign markets. Firms also
perceived less risk associated with transacting or communicating in English,
compared to an unfamiliar language or culture. Thus, English markets are perceived
to be geographically neutral markets by firms. However, psychic distance remains an
impediment to the Internet‘s influence on the internationalisation of these firms, as
illustrated in Table 4.8.
Table 4.8 Website localisation integration
Case International
markets
Non-English
markets Website
language
Currencies
used
International
implementation
A B C D E
1. Alpha US/UK/ global Yes English AUD, USD,
YEN Global
2. Beta US/ Europe Yes English Global
3. Gamma US/ UK No English AUD, NZD,
Euro, YEN,
WON, GBP,
CAD
Global
4. Delta UK/ US Yes English Global
5. Epsilon NZ/UK/ HKG Yes English AUD, USD,
Euro Global
6. Zeta Asia/South
America
Yes English
(Asian images)
Passive
7. Eta US/Asia Yes English Global
8. Theta US/UK/Asia/
Europe
Yes English Global
9. Iota NZ/Asia/North
America
Yes English,
Minimal info:
Japanese,
Chinese,
AUD
Currency
converter
Global–glocal
97
Korean
10. Kappa Global Yes English,
Spanish,
Chinese,
German,
French,
Swedish
Glocal
11. Upsilon Global Yes English Passive
12. Omega NZ/UK/South
Asia/Middle
East/ UAE
Yes English Passive
Summary Markets Non-English:
11 English:
All
English: 12/12
Non-English:
2/12
Multiple
currencies:
4/12
Passive: 3/12
Global: 8/12
Glocal: 2/12
Source: developed for this research
Digitalisation: product specificity. Digitalisation was the seventh concept explored.
Digitalisation refers to the concept of transforming a product into an intangible
component: more specifically, a digital component. Digitalisation is used for
integration with the Internet. Differing levels of digitalisation existed: some firms
such as Beta, Kappa and Eta, digitalised their firm product offerings extensively,
whereas other firms, such as Zeta, with its simple e-mail and website implementation,
operated at a basic level. This is illustrated in Table 4.8. For example, the start-up
Alpha had digitalised its catalogue, transactional facilities, and service components of
the product offerings. However, Alpha was restricted in its ability to digitalise, as it
sells a physical product (bikinis). Further, the majority of the other firms digitalised
product offerings at a moderate level, such as; Delta, Upsilon, Iota, Epsilon, Theta,
Gamma and Alpha, as seen in Table 4.9. Epsilon was proactively developing
digitalised elements of product offerings to accelerate Internet internationalisation.
For example, Epsilon standardises product offerings by reducing human or physical
components of the product offerings, to facilitate an accelerated internationalisation
process through the Internet.
Product orientation was more complex than initially proposed in this study (Section
3.3.2 case selection, replication logic), as some firms had a dual product offering of
both a good and a service (5/12). Where services could be automated the Internet had
a dramatic impact on the service-orientated firm. Whereas, if services had a complex
component such as a human element to the product offering the Internet was limited.
Further, the more physical the product offering the less the Internet had an impact.
98
Thus, the more of the product that can be digitalised for the Internet, the greater role
the Internet will play in the internationalisation of the firm.
Table 4.9 Digitalisation capacities of product offerings
Case A B C D E F G Comment
Pro
du
ct o
rien
tati
on
Ph
ysi
cal
go
od
s
Ser
vic
es c
om
po
nen
t
Co
mb
ina
tio
n
Dig
ita
lisa
tio
n
No
dig
ita
lisa
tio
n
Lo
w d
igit
ali
sati
on
Med
ium
dig
ita
lisa
tio
n
Hig
h d
igit
ali
sati
on
Alpha √ √ Digitalised the catalogue online, pre- and post-
services
Beta √ √ High quality image digitalisation. All areas of
business are online.
Gamma √ √ High quality image representation of jeweller.
Online catalogue, services, personal web-space
and online helpdesk
Delta √ √ Artwork is converted into high level images in a
digital format for delivery
Epsilon √ √ √ √ ICT firm: software, and services are digitalised.
Software standardisation, pre- and post- services
Zeta √ √ Some information. Some forms have been
digitalised. Simple website: information
Eta √ √ √ √ Everything can be done online for customers.
Very small component is physical.
Theta √ √ √ √ Automation of services and information. Images
help tell the story. High-end transaction system.
Iota √ √ √ √ Mostly information-based digitalisation. Images
help add entertainment. Multimedia and low-
level transactions
Kappa √ √ Everything can be done online for customers.
Very sophisticated.
Upsilon √ √ √ √ Video caption helps prospective clients
understand and evaluate product. Customer
software is streamed to international customers.
Omega √ √ ICT firm: high-end data transference. Minimal
amount of service component digitalisation for
development
7 10 5 - 1 8 3
Note: Bolded names indicate a high level of digitalisation, as shown in column G.
Source: developed for this research.
Finally, those firms at the extreme end of the digitalisation spectrum digitalise most,
if not all of their product offerings. For example, Beta and Kappa have the total
product offerings digitalised, while Eta has the majority of the product offerings
digitalised. High Internet usage firms were more likely to use the Internet to facilitate
digitalisation for internationalisation, as illustrated in Figure 4.2.
99
Figure 4.2 Digitalisation of the product offering
High
ICT product (optimal position for Epsilon)
(Information Communication Technologies (e.g. software)
Digitalisation Standardised services
Personal service
Low Complex knowledge-intense product (Upsilon, Omega)
Slow Fast
Internationalisation acceleration
Source: developed for this research
Networks. The eighth concept identified was networks. The Internet plays a
fundamental role in creating growth, whether that growth is via the traditional
network, the virtual network, or both. The Internet‘s influence could not be separated
from the evolution of the relationships within the traditional networks of the firms.
That is, the Internet was used significantly to help create, maintain and develop
longevity within these business relationships. Thus, the Internet altered the
internationalisation process of the firm, primarily because of the role of business
network relationships and the evolution of virtual network intermediaries (VNI) for
many firms, as illustrated in Figure 4.3.
Figure 4.3 Internetalisation and networks
Business network intermediaries
= increased usage for international market growth
Source: developed for this research
Internet usage
Primary mechanism
Complimentary
mechanism
Trad
ition
al netw
ork
s
Virtu
al netw
ork
s
Cases:
Alpha, Beta, & Gamma
Cases:
Eta, Iota, Upsilon, & Kappa
Cases:
Delta, Epsilon & Theta
Cases:
Zeta & Omega
100
Notwithstanding the important role of the Internet, firms identified network
relationships as the most important element in the internationalisation process. For
example, 10 of the 12 cases indicated networks to be the most important element of
internationalisation, as seen in Table 4.10. Furthermore, all 12 cases indicated that
networks played some role in the internationalisation of the firm, though Alpha did
not view networks to be as important to the firm‘s international growth. Specifically,
the firms Epsilon, Kappa, Upsilon and Omega indicated that traditional networks
were the predominant pathways of internationalisation. More importantly, from an
international growth perspective, networks offered a richer explanation for
Internetalisation.
Table 4.10 Ranking of elements influencing internationalisation of the firm
Case code Network
relationships (a)
Relations with
supply chains (b)
Experience and
knowledge (c)
Sourcing of
resources (d)
Efficiencies in
production or
markets (e)
Alpha 4 5 1 3 2
Beta 2 4 1 3 5
Gamma 1 N/A N/A N/A N/A
Delta 1 2 4 3 5
Epsilon 1 3 2 4 5
Zeta 1 2 N/A N/A N/A
Eta 1 4 2 3 5
Theta 1 1 2 3 4
Iota 1 1 3 4 5
Kappa 1 N/A 2 N/A N/A
Upsilon 1 2 3 5 4
Omega 1 5 2 3 5
Importance level
Most 11
Neutral --
Least 1
Most 5
Neutral 3
Least 4
Most 7
Neutral 4
Least 1
Most --
Neutral 9
Least 3
Most 1
Neutral 3
Least 8
Notes:
Index ranking: 1 = most important element, 5 = least important element
N/A= not applicable: interviewee did not think this applied to them
Source: developed for this research
Virtual network intermediaries—for example, infomediaries such as portals, search
engines and electronic marketplaces such as eBay, tendermatch.com, tenderlink.com
or dgmarket.com—were identified for most firms (Alpha, Beta, Gamma, Delta,
Epsilon, Theta, Iota, Kappa and Upsilon) as the conduit for internationalisation.
These virtual network intermediaries are less relationship-based than traditional
network relationships, but are vital for the firm.
101
For example, the firm Alpha is a start-up that relies almost exclusively on website
sales. Further, although Gamma indicated that it found traditional networks to be the
most important elements for domestic business, this may be because the firm has
relied on traditional networks for almost 30 years for business growth. Gamma also
relies almost exclusively on its website for the international component of revenue.
Further, Gamma, like Alpha and Beta, relies heavily on virtual network intermediaries
such as search engines to generate markets (customers) through traffic. Thus, the
more these firms rely on their websites to generate sales in international markets, the
less they will rely on traditional networks and the more they will rely on virtual
network intermediaries. Moreover, Alpha, Beta, Gamma, Delta, Epsilon, Theta and
Iota all use virtual network intermediaries in their path to internationalisation.
Path of internationalisation. The traditional path of a series of stages or incremental
internationalisation (Johanson & Weidersheim-Paul, 1975; Johanson & Vahlne,
1977) has been replaced, in part, by a new rapid avenue of internationalisation
mediated by the Internet, a concept known as Internetalisation. Three alternative
paths for internationalisation were identified in this study: traditional networks,
virtual network intermediaries and incremental or staged internationalisation.
Similarly, three alternative paces of internationalisation were identified; instantly
international, rapidly international, or traditional slow, incremental evolution.
Some firms were totally dependent on the Internet for internationalisation. For
example, start-up Internet firms, Alpha and Beta as well as dot.coms Gamma and
Delta viewed the Internet as the ‗only‘ mechanism for internationalisation.
Conversely, other firms used the Internet either as an efficient conduit for
internationalisation or as an essential complement.
It is evident that firms use multiple paths for achieving internationalisation, as
illustrated in Table 4.11. However, personal relationships or business networks in
international markets were perceived as the vital element in the path towards
internationalisation. Notwithstanding the importance of traditional networks, the
Internet is still essential to developing and maintaining business relationships, even if
only as a complement to the traditional network.
102
Table 4.11 Internationalisation path and pace
Case Path
A
Path
B
Path
C
Pace
D
Pace
E
Pace
F
Comment
Inte
rn
ati
on
ali
sati
on
pa
th a
nd
pa
ce
Tra
dit
ion
al
netw
ork
s
Vir
tual
netw
ork
inte
rm
ed
iari
es
Increm
en
tal
or
stag
es
Inst
an
tly
inte
rn
ati
on
al
Ra
pid
ly i
nte
rn
ati
on
al
Tra
dit
ion
al
slo
w
incre
men
tal
evo
luti
on
Alpha
√ P
√
POST
√
Women‘s apparel start-up firm. Internationalised from inception
and through virtual network intermediaries. Recently developed
more traditional networks in more mainstream retail.
Beta √
P √
√
Adult entertainment start-up, business-to-business firm. Developed internationally from inception. Evolved
predominantly through international virtual networks.
Gamma P √
√
*
√
√ A well-established jewellery retailer (30 years). * However, once the firm developed a website, it became international
within six months. Physical firm non-international: web virtual
firm international.
Delta
√ P
√
√
Artwork and images. Rapid internationalisation path through
sales generated on e-Bay, also with traditional business network
creation through personal relationships.
Epsilon P √
√
√
Software/ hardware technology firm. Primarily uses traditional networks to generate sales in international market (tradeshows
and referrals). Also uses search engine optimisation to generate
web traffic.
Zeta S
√
√
√
Education export firm. 100% international through a key agent
system of networks in each country. International only, as firm
does not service domestic customers.
Eta P √
POST
√
Financial product. Traditional networks for internationalisation—lowers risk. Firm grew rapidly in
international markets, as it was conceived as an international
company.
Theta P
√
√
√
Tourism. Uses a myriad of networks: international agents,
government departments, and industry organisations. Also
developed an extended network in a virtual environment.
Iota P √
√
√
Tourism. Networks in international markets drive internationalisation (agents). Website is well developed and
search engine optimisation needed.
Kappa P √
√
√
Business service. Uses referrals and word of mouth to generate new international clients (franchisers). Heavily reliant on the
development of international network structures. Also took an
incremental stages-type process of internationalisation.
Upsilon P √
√
√
Catering and hospitality contracts (domestic & International.). Predominantly uses established traditional networks in the
industry. Internationalised as a consequence of a saturated domestic market.
Omega P
√
√
Software developer—relies primarily on traditional networks to
foster internationalisation and growth.
11 9 4 4 3 6
Note:
S = sole for internationalisation
P = primary for internationalisation
POST = after initially internationalising the firm incrementally moved into new international
markets
Source: developed for this research
Path of internationalisation and international mindset
Firms were also asked about the steps they took to internationalise, and whether these
steps were simultaneous or sequential (refer to Table 4.10, column C). The firms in
103
this study obtained knowledge about markets and then moved into new markets, so
subsequent international market growth could be considered to be incremental,
although at an accelerated rate. Thus, the international stages model still has
relevance, albeit a diminished relevance. However, firms have also acquired
customers in multiple international markets simultaneously.
Additional information was collected about the pace of the internationalisation (refer
to Table 4.9 columns D–F). The pace of internationalisation was influenced heavily
by the international mindset or orientation of the decision maker, as discussed
previously in this chapter. Firms Alpha, Beta, Zeta and Eta were all instantly
international. Alpha and Beta (start-up Internet firms) and Delta were instantly
international, specifically due to the Internet. Further, Gamma, after thirty years of
domestic trading rapidly internationalised (within 6 months) after integrating an
Internet website strategy. This finding affirms the ability of the firms to become
rapidly or instantly international if positively orientated toward the Internet and
internationalisation.
Conclusion
The Internet has positively affected the internationalisation process through
enhancing the information and knowledge capacities of the firm and through
enhancing the firm‘s ability to interact with stakeholders. A firm‘s website can reduce
the perceived risk associated with international transactions. Further, the level of
interaction that can be obtained through the Internet can also positively enhance the
level of trust. Lastly, the ability of the firm to digitalise product offerings helps to
accelerate the process of internationalisation. As the elements of international
orientation, information, knowledge, interactivity, trust, psychic distance,
digitalisation and networks within the internationalisation process have been
evaluated, the next component to be analysed is the international market growth of
the firm—specifically, market penetration and development.
104
Research Issue 2: How and why has the Internet influenced international market
growth?
This section analyses the data, which was collected to answer Research Issue 2.
Specifically, two key elements of market growth are addressed: market penetration
and market development. Each will be discussed in turn.
Market Penetration
Resource efficiencies can be gained by using a penetration strategy that capitalises on
the firm‘s existing international customers. That is, firms can increase the yield from
existing customers because of the Internet. International customers were seen to be
difficult to find, let alone evaluate.
All twelve interviewees identified the Internet as being crucial for market penetration
growth, as seen in Table 4.12. Therefore, the creation of value adding to retain
existing clientele was seen to be both efficient and prudent, as ‗the cost of acquiring
customers is much higher than keeping existing ones‘ (Alpha, 2004). Thus, keeping
customers satisfied and capitalising on the loyalty of international customers is a
cheaper and more efficient means of growth.
Table 4.12 International market growth through penetration
Case code Penetration (P)
Alpha ‘Everything is about the Internet for us.’
P: 10% of customers are coming from existing markets. That is, 10% are loyal return customers. The cost of acquiring customers is much higher than keeping existing ones.
Beta ‗We are in the business of traffic.‘
P: Retention is usually about 20% on average. However, ‗we were getting 31% retention and made some recent changes, which have yielded 37-38%; that is really good.‘
Gamma ‘We wouldn’t be international if it wasn’t for the Internet.’
P: Approximately 8% of customers are return. These customers are targeted not too frequently by direct marketing e-mails with new product information.
Delta ‘e-Bay.’
P: Relationships can be built up through e-mail, which can lead to purchases down the track.
Epsilon ‘Word of mouth through buying groups’
P: e-mail newsletters are distributed a few times a month. Most of the new business is generated from word of mouth
from existing customers.
Zeta ‘Long term relationships through agents’
P: Agents are the point of finding information for customers. Thus, e-mail as opposed to the website is used with
agents to generate a relationship and gain further growth. Totally agent-dependent.
Eta ‘It’s a tool.’ ‘The Internet on its own is not going to solve all of your issues for you’.
P: Internet backs up good customer service and branding. The website helps us to increase usage, which in turn increases commitment.
Theta ‘Geography really makes a difference here.’ ‘It’s market-dependent’
P: Usage of agents. Relationships are formulated with agents through e-mail and relied upon heavily.
105
Iota ‘It’s dependent on the market’. Independent or dependent travellers
P: Agents. Relationship building/ information through the website (also hyperlinks with the agents‘ websites). It is
used as a support for agents. Increased communications efficiencies with customers and agents. Helps to develop a better yield from agents.
Kappa ‘Everything is done on the web.’ P: Very sophisticated: integrated referral system, direct marketing-newsletter. Predominantly, the Internet is there for
existing clientele to recruit new clients due to incentives.
Upsilon ‘We do get a lot of new business from existing clientele.’ P: Work is commonly generated through current clients. This is significantly helped as a result of e-mail building
relationships.
Omega ‘Alliances are needed; the Internet has a support role for this.’ P: Current customers use Internet technologies extensively. However, this is more to develop existing customer rather
than find new customers.
Source: developed for this research
The most common method of market penetration for international customers was the
use of Internet technology such as e-mail and websites. Further, all firms viewed the
e-mail and website as excellent ways to penetrate existing customers in international
markets, either by servicing existing customers with information on the website or
through database direct marketing. The latter targets communications via e-mail to
generate a better yield and profit returns from customers, as illustrated in Table 4.13.
Some firms used information obtained through collecting client data to generate e-
mails, newsletters and direct marketing activities. That is, Internet interactivity gives
the firm the ability to solicit new business from existing clientele (Gibbs & Kraemer,
2004, p. 133). Firms Alpha, Beta, Gamma, Epsilon and Kappa used database
marketing to penetrate existing markets and maintain relationships with customers.
Gamma used mechanisms such as database marketing, e-mail and website strategies.
Five firms used database marketing to facilitate growth from existing customers:
Alpha, Beta, Gamma, Epsilon and Kappa. Firm database profiles and purchased
databases were considered by both the start-up firms (Alpha and Beta) as the best way
to generate growth. Conversely, most firms when asked did not view database
marketing as a way to generate new growth through existing customers. As the
website was the most-used mechanism for international market penetration, the firm‘s
Internet experience was linked to adopting database technologies.
International market development
International market development was perceived to be one of the greatest benefits of
the Internet for these firms, as shown in Table 4.13. Three firms used the Internet as
the sole mechanism for international market development: Alpha, Beta, and Gamma.
106
These firms found reputation and traffic generation to be pivotal in capitalising on
market development opportunities. Further, without generating Internet traffic,
market growth was seen as impossible. For example, the jewellery retailer Gamma
had 8% of customer turnover from returning customers (market penetration) through
a niche jewellery product such as a wedding ring. The other 92% of all customers
were new (market development growth). Thus, generating new customers through
website traffic is vital, considering the firm‘s international customers are obtained
solely from the website.
The use of search engine optimisation (SOE—the mathematical algorithms used by
search engines to manipulate product category listings) strategies helped generate the
necessary Internet traffic needed for sustainable international market growth through
a website strategy. Further, most firms (Alpha, Beta, Gamma, Epsilon, Theta, Iota
and Kappa) used SEO in some capacity so that potential clients could find the firm
website. However, Epsilon, Theta and Iota guided prospective customers to the
website only after a more traditional mechanism of introduction, such as a trade
show. The website gives the firm another level of legitimacy to support a platform of
trust for these prospective customers.
Conversely, Eta and Zeta firms did not see the Internet as the most important element
of their overall businesses. However, these firms viewed the Internet as an integral
part of international market development—as Eta stated, ‗Without the Internet we just
could not do what we do‘. Further, firms with service-orientated products trading in
Asia (Zeta, Eta, Theta and Iota) depended on more traditional networks to develop
international markets. For example, even though the Internet can reduce barriers to
trade, face-to-face or personally based international market development was seen as
necessary in the development of new international customers in Asia.
The more a firm used website strategies (for example, Alpha, Beta and Gamma), the
less dependence was placed on interpersonal interaction. That is, the more Internet-
intense the firm, the less reliance was placed on traditional personal relationships.
Overall, international market development for some firms was only possible due to
the Internet and all firms indicated that without the Internet as either the sole or
complimentary mechanism, they would either not be international or could not
107
develop as many international markets as they have. Further, all firms interviewed
saw their future international markets as those with the greatest growth opportunities.
More specifically, those firms using the Internet intensely saw the US market and
English-language-based European markets as having not only much larger customer
bases, but also as markets where consumers are willing to transact online. For
example, ‗US is such a big market we really don’t need to go anywhere else‘
(Gamma 2005).
Conversely, foreign markets such as Asian markets, although perceived to be
important for international development growth, were considered problematic and
difficult to cultivate through the Internet. That is, Asian markets online were simply
perceived as too foreign and costly, both intellectually and financially. The
exceptions to this view were Japan, Singapore and, to some extent Korea, all of which
were considered to have either mature consumers or sufficient market maturity (Iota
& Theta 2005). Overall, however, firms viewed the US and UK markets as desirable
and ample enough for the firms to gain sustainable growth for the foreseeable future.
This attitude reinforces the argument that psychic distance moderates the effect of
Internet use on international market growth.
Table 4.13 International market growth and evaluation of potential
Case code Development (D) and evolution (E) of potential customers
Alpha ‘Search engine optimisation.’
D: 90% of customers are new. Customers are predominantly generated through traffic from search engine optimisation (Google Ad words), strategies and affiliate programs. The key is publicity and positive brand exposure.
E: Cross-referencing key words helps calculate potential of online markets. For example, how many people are looking for
bikinis, sexy bikinis and bikinis for sale.
Beta ‗Traffic through affiliates and search engines.‘ D: Traffic: Development of new customers is generated through search engines and affiliate programs. ‗Search engine
optimisation through a better understanding of changing algorithms used by search engines is the key.‘
E: ‗We don‘t really do it. Our industry is a little unorthodox‘.
Gamma ‘100 000 visits per month.’
D: Traffic is the key for the company through search engine optimisation strategies (SEO). ‗It doesn‘t matter how good your site is if no one finds it‘. ‗However, if you haven‘t got what customers want, they just won‘t buy‘. The website
generates 100 000 new visits per month. Generating traffic generates revenue.
E: ‗Search engines can help evaluate demand by analysing what is out there‘.
Delta ‘Virtual market e-Bay.’
D: Development of new customers is done either through traditional relationships or through virtual network intermediaries
(e-Bay). E: ‗I can‘t do it, you just don‘t know who is out there and who wants your product. You can never exclude a market‘
Epsilon ‘The Internet is key to our international market expansion’
D: Search engine optimisation is used for markets such as the US and UK Word of mouth helped to establish sales in Japan
and UK More traditional mechanisms are used to develop new customers. E: Background information and competitors. ‗What buying groups are out there, what are they doing and what products are
they using.‘ ‗Otherwise you don‘t know what you are getting into‘.
Zeta ‘It makes us a real company’ D: The website helps to give a point for credibility: ‗it makes us a real company‘.
E: Government statistics and services are a good source for better understanding the possible market.
108
Eta ‘It’s not a sole mechanism’
D: The website attracts new customers looking for our type of product. It cannot be used as a sole mechanism for
development. E: ‗It is really hard to evaluate potential online markets. It is very hard to trust the data you get from the Internet—it‘s like
a blind situation‘. ‗You need to be on the ground.‘
Theta ‘A shift in power to online intermediaries.’ D: Intermediaries: agents (access to customer relationship systems—CRS). Independent markets (US and Europe).
Influences research. ‗It puts our product out there on the global marketplace shelf. Search engines have allowed us to generate traffic and potential customers (SEO)‘. Increased activity in markets. Shift in power to virtual network
intermediaries. Increased need to develop virtual network intermediaries. Reduction in yield. Needs to be an ROI online as
well. Niche products have a differentiation point; others are at the whim of virtual network intermediaries (a product is becoming a commodity).
E: Government statistics or organisational statistics (heavily uses these statistics). Very reliable.
Iota ‘Only independent travellers’
D: Not really. Networks with government and tourism organisations more important. Market development is evident, however, only with independent travellers and agents.
E: Tourism organisations websites. Government and tourism organisational websites.
Kappa ‘Our website generates 23% of new business.’ D: ‗We are constantly getting referrals either through the website or other clients. Our website generates 23% of sales. For
example, in Mexico once a relationship was established (from the website) with one person the market grew‘.
E: ‗Language barriers hinder evaluation‘.
Upsilon ‘Third-party websites are a great source for new business.’
D: Not really through the firm‘s website. However, the firm does access most jobs through third-party tender websites. This generates the majority of new business. The sourcing of new business through the Internet has become very easy, as
intermediaries pool jobs so they can be easily found and tendered for.
E: ‗One of the biggest advantages of the Internet is that we can find new contracts on tender websites‘.
Omega ‘Internet has a support role for new business.’ D: The product is agent-based. The website does help direct possible agents through to the company. However, they then
have to be evaluated accordingly. Thus, the Internet takes a support role.
E: ‗An e-mailing system helps us to evaluate potential agents in countries or markets as the product is specialised. This is done with relative ease and low cost‘.
Source: developed for this research
Conclusion
There is clear evidence from the research that the Internet accelerates the
internationalisation for firms. However, it was also evident that there are still
significant limitations for firms using a market development strategy online in
international markets. That is, limitations in Internet expertise, resource capabilities
and psychic distance inhibit Internetalisation.
Those goods and services with digital attributes significantly increase the efficiency
of the market transaction and therefore change the nature of the internationalisation
by accelerating the process. Hence, this qualitative stage of the data collection
confirmed that the ability to digitalise the firm product offering positively affects the
Internet‘s influence on the acceleration of international market growth.
Customers understand the virtual environment that now exists and are becoming more
trusting as they become more experienced. It was evident that firms view the Internet
as a primary mechanism for generating international market growth, now and in the
future. That is, even if the Internet was not the sole mechanism for international
109
market growth, it was used as a complement. Legitimacy in more traditional and
contemporary channels was essential in creating the trust needed to generate new
international customers. One way of achieving this trust is through affiliate virtual
network intermediaries. Therefore ‗if we build it they will come‘ was seen as an
inappropriate marketing philosophy for an Internet strategy, as traditional
perspectives of geography and store location are replaced by Internet traffic, search
engine optimisation and search engine marketing. Lastly, relationships through virtual
or traditional personal networks are key to accessing international growth, regardless
of the type of firm. Thus, the key issues of internationalisation, information,
knowledge, interaction, international mindset, networks and psychic distance in
relation to the Internet intensity of the firm and international marketing growth
identified in the cross-case analysis were incorporated into the full proposed model.
Evidence from this research highlighted the extent of Internet usage within the
internationalisation process. That is, Internet intensity, which is the implementation of
the Internet into marketing activities as opposed to simple usage, gives the research a
better understanding of the implications to the internationalisation process. RI1
identified and confirmed key internationalisation process components, which the
Internet affected: international orientation, information, knowledge, interaction,
psychic distance, and networks. Internet intensity is not argued as the sole measure or
explanation for internationalisation, but a partial explanation. That is, Internet
intensity is only partially responsible for the internationalisation process components
identified. Hence, Internet intensity is explained best as having a mediation role
between internationalisation components and the international market growth of the
firm. This will be evaluated next, together with the development of the relevant
hypotheses.
4.4 Cross-case evaluation (hypotheses and model development)
Based on the analyses in the previous section and in the context of the two research
issues, hypotheses were developed for the second-stage quantitative modelling, as
shown in Table 4.14. In addition, a pre-structural equation model (Figure 4.6) is
presented. The concepts relating to that model are incorporated into Table 4.14.
110
Table 4.14 Research issues: variable identification and hypotheses
Research issue Qualitative protocol
questions
Construct-factors
findings
Conclusions: hypotheses
RI1 How has the
Internet altered the
process of
internationalisation
for the firm?
Part B : Q4
Part C : Q1,2,3
Part D : Q1,2,3
Part E : Q1,2,3,4
Part F: Q3
Part G: Q 1,2,3,4,5,6
Internationalisation
process
Information available
(f1)
Information usage (f2)
Interaction
communication (f3)
International mindset
(f4)
Business relationships
(f5)
Psychic Distance (f6)
Internet intensity (f7)
H1. Information availability has a direct relationship with
international market growth.
H2. The information availability of the firm is mediated by
the Internet intensity of the firm.
H3. International information availability has a positive
relationship with perceived information usage of the firm.
H4. The usage of information has a direct relationship with
international market growth.
H5. International information usage is mediated by the
Internet intensity of the firm.
H6. The information usage of the firm has a positive
relationship with the interactive communication of the firm.
H7. Interactive communication has a direct relationship with
international market growth
H8. Interactive communication is mediated by the Internet
intensity of the firm.
H9. The perceived information availability of the firm has a
positive relationship with the interactive communication of
the firm.
H10. The international mindset of the firm has a direct
positive relationship with international market growth.
H11. The international mindset of the firm is mediated by the
Internet intensity of the firm.
H12. International mindset has a positive relationship with
the use of business relationships.
H13. Business relationships have a direct relationship with
international market growth.
H14. Business relationships are mediated by the Internet
intensity of the firm.
H15. Psychic distance has a negative direct relationship with
international market growth.
H16. The Internet intensity of the firm mediates the psychic
distance of the firm.
H17. Psychic distance of the firm has a negative relationship
with the usage of business networks for the firm.
H18. Psychic distance of the firm has a negative relationship
with the international mindset of the firm.
RI 2 How has the
Internet altered
international market
penetration and
development of the
firm?
Part B
Part C: Q2,3
Part D : Q1,2
Part E : Q3,4
Part F: Q1, 3, 4, 6
Part G: Q1
International growth
International market
growth (f8)
H19. Internet intensity has a positive relationship with
international market growth of the firm.
Source: developed for this research
Information
Identifying information in the internationalisation process is a well-established
concept (Johanson & Vahlne, 1977). A lack of information is assumed to be
responsible for perceived risk in internationalisation (Cavusgil, 1980). Thus, the more
a firm commits to internationalisation, the greater the international information search
behaviour of the firm (Ogbuehi & Longfellow, 1994). These findings were
corroborated in this research. As such ‘information availability has a direct
relationship with international market growth’, Hypothesis 1 (H1) can be
postulated, as presented in Figure 4.4.
111
In previous literature, the Internet‘s effects on international information has been
established, but is referred to in general terms (for example, Hamill 1997, Gibbs &
Kraemer 2004, Aspelund & Moen 2004, Berry & Brock 2004, Brock & Yu 2005).
The Internet has diluted the former asymmetry of information traditionally
experienced by firms in the internationalisation process (Samiee, 1998a) by creating a
range of information sources for the firms. Thus, Hypothesis 2 (H2) can also be
postulated. That is, ‘the information availability of the firm is mediated by the
Internet intensity of the firm’.
Information usage
The concept of usage of international information in the literature supports
information usage as a concept of knowledge theory of internationalisation, as firms
accumulated information through learning by doing (Ethiraj, Kale, Krishnan & Singh,
2005). Therefore, Hypothesis 3 can be postulated: ‘International information
availability has a positive relationship with perceived information usage of the
firm’ (H3).
Acquiring foreign market knowledge or using international information to expand
into foreign markets is well-established (Andersen, 1993; Inkpen & Beamish, 1997;
Luo, 1997; Barkema & Vermeulen, 1998; Lord & Ranft, 2000; Zahra & Ireland,
2000), and was evident in this study. That is, firms need to not only have the capacity
to access information, but also, more importantly, to analyse, evaluate and transfer
information internally. Therefore, ‘the usage of information has a direct
relationship with international market growth’, Hypothesis 4 (H4), can be
postulated.
The Internet has made information retrieval, storage and analysis much easier for the
firm, as discussed in RI1: information usage and knowledge transference within the
firm (Section 4.3). Thus, the level of Internet intensity mediates information usage in
the international market growth of the firm. Therefore, ‘International information
usage is mediated by the Internet intensity of the firm’ (H5), Hypothesis 5 can be
postulated.
112
Further, the perception of information usage has a correlating effect on the interaction
of the firm. That is, firms that have a propensity to use information, also have a
propensity to use interactive communication. Thus, Hypothesis 6 (H6) can be
postulate: ‘the information usage of the firm has a positive relationship with the
interactive communication of the firm’.
Interaction
Beyond information usage, the interactive communication with stakeholders is
pivotal in the process of internationalisation. This was evident in the importance of
usage of interactive communications with key stakeholders highlighted in Section
4.3, Chapter 4. On this foundation, Hypothesis 7 (H7) ‘interactive communication
has a direct relationship with international market growth’ can be postulated.
This study re-affirms the argument that the Internet influences the firm‘s ability to
enhance the interactions between company and customer, and company and
stakeholders. The interactive capabilities of the Internet have been established in the
literature as affecting business and marketing (for example, Rayport & Sviokla, 1994;
Hoffman & Novak, 1996; Sparkes & Thomas, 2001; Arnott & Bridgewater, 2002;
Jaworski & Jocz, 2002). That is, interactive communication is mediated by the firm‘s
Internet intensity in the internationalisation process. Therefore, Hypothesis 8 can be
postulated, ‘interactive communication is mediated by the Internet Intensity of the
firm’ (H8).
Further, the propensity of the firm to perceive information availability is positively
correlated to the propensity to use interactive communication Thus, Hypothesis 9 can
also be postulated: ‘the perceived information availability of the firm has a positive
relationship with the communication interaction of the firm.’(H9), as illustrated in
Figure 4.4.
113
Figure 4.4 Proposed model: information, knowledge and interaction components
Internationalisation
Components
H3 H1
Information H9
Knowledge H2 H4
H6 H5
H7
H8
Source: developed for this research
International mindset
A well-established area of research in internationalisation, international mindset can
either have a positive or negative impact on the firm‘s internationalisation process
(Nummela, Saarenketo & Puumalainen, 2004) a fact confirmed in Stage 1 of this
research (refer Section 4.3). Thus, Hypothesis 10 can also be postulated: ‘the
international mindset of the firm has a direct positive relationship with
international market growth’ (H10).
In an Internet context, the firm‘s international commitment, vision and overall
attitude towards international customers has a bearing on the firm‘s propensity to
expand or not expand into international markets and the speed at which a firm will
internationalise (Aspelund & Moen, 2004). It was evident in this study that firms that
were positively orientated towards internationalisation were driven toward
international expansion or growth. Further, Hamill & Gregory (1997) proposed that
Internet orientation has a positive effect on the international orientation of the firm.
Researchers have found that the Internet orientation of the international decision
maker has a positive relationship with the number of international markets in which a
firm operates (Moen, 2002b). The greater the Internet intensity the higher the
international mindset of the firm (Moen, 2002b; Aspelund & Moen, 2004).
International mindset is positively correlated with Internet intensity (Moen, 2002b,
p.36). Therefore, the greater the Internet intensity, the greater the international
mindset. Thus, Hypothesis 11 (H11), ‘the international mindset of the firm is
mediated by the Internet intensity of the firm’ can be postulated.
F1 Information
availability
F2 Information
usage
F8 International
market growth F7 Internet
intensity
F3 Communication
interactivity
114
Networks
An international network perspective highlights the role of cooperative activities in
internationalisation (Young, et al., 2003). As previously discussed the international
mindset of the firm affects international market growth positively. Therefore, as the
international mindset of the firm is a positive influence on the internationalisation
process, Hypothesis 12 (H12), ‘international mindset has a positive relationship
with the use of business relationships’, can be postulated.
It is evident that firms use multiple paths to achieve international market growth, as
illustrated in Table 4.11. However, in Stage I of this study 11 of the 12 firms
acknowledged the use of traditional networks or business relationships to foster
international market growth, as outlined in Section 4.3. That is, all firms saw the
importance of networks through business relationships as an important element in
driving international market growth. Further, the study also showed that the Internet
was seen to assist in the development of these networks. Thus, Hypothesis 13 (H13),
‘business relationships have a direct relationship with international market
growth’, can be postulated.
All firms saw the Internet as a direct or indirect way to develop international growth,
as relationships with networks in international markets were perceived to be the vital
element in the path towards internationalisation. More specifically, elements such as
business relationship maintenance, strength and longevity were identified as key
items (Wu, Mahajin & Balasubramania, 2003). That is, the greater the Internet
intensity, the greater the effects on international business relationships usage in the
internationalisation process. Thus, Hypothesis 14 (H14) ‗business relationships are
mediated by the Internet intensity of the firm’, can also be postulated.
Psychic distance
Psychological barriers in the form of psychic distance or aversion to foreignness can
impede international growth. There was evidence in this study as psychic distance
was mediating internationalisation. More specifically, language, culture, economic
and education differences are well established components of psychic distance
(Johanson & Vahlne, 1977; O'Grady & Lane, 1996; Torre & Moxon, 2001; Hallen &
Wiedersheim-Paul, 2004). The decision maker (respondent) within the firm acquires
115
knowledge and confidence in countries psychically close to the home country, the
firm moves to countries, which have greater psychic distance (Johanson &
Weidersheim-Paul, 1975). For simplicity, in this PhD research, the decision-maker is
referred to as the firm (as explained in Section 5.2; unit of analysis and key
informant). Thus, Hypothesis 15 (H15) ‘psychic distance has a negative direct
relationship with international market growth’, can be postulated.
Petersen et al. (2002) postulate that psychic distance remains evident even in an
Internet context. This conceptualisation confirms research investigating the
impediment of psychic distance on exporting firms in the UK (Bennett, 1997).
Further, as highlighted in Stage I of this study and presented in Chapter 4 (Section
4.3-Table 4.8) psychic distance was evident for many firms. That is, even though
firms had customers in psychically distance countries the firm did not have multi-
lingual websites. Thus, Hypothesis 16 (H16), ‘the Internet intensity of the firm is
mediated by the psychic distance of the firm’, can be postulated.
Moreover, there is a negative relationship between psychic distance and the
internationalisation process (O'Grady & Lane, 1996). Further, the psychic distance of
the firm leads to a negative impact on the usage of networks in the endeavours of
international market growth. Therefore, Hypotheses 17 (17) ‘psychic distance of the
firm has a negative relationship with the usage of business networks for the firm’,
can be postulated.
Further, psychic distance also has a negative impact on the mindset of the firm toward
international market growth. As demonstrated in Chapter 4 (Section 4.3-Table 4.8)
out of the eleven firms that transact in non-English country markets, only two alter
their marketing online to include a multi-lingual website. Further, firms also
commented that English was only language needed for business. Thus, Hypothesis 18
(H18) ‗psychic distance of the firm has a negative relationship with the
international mindset of the firm’, can be postulated, as illustrated in Figure 4.5.
116
Figure 4.5 Proposed model: international entrepreneurship
Internationalisation
Components
International H11 H10
Entrepreneurship H12
H14 H13
H18
H16
H17 H15
Source: developed for this research
International market growth
Because of the Internet, firms can increase the yield from existing customers in
international markets. Therefore, the creation of value-adding to retain existing
clientele was seen to be both efficient and prudent. Further, international market
development was perceived to be one of the greatest benefits of the Internet for these
firms. This finding confirms recent results by researchers that the firms perceived the
Internet‘s greatest perceived benefit as business and market growth (Gibbs &
Kraemer, 2004). Thus, as the Internet intensity of the firm mediates the international
market growth of the firm, Hypothesis 19 (H19), ‘Internet intensity has a positive
relationship with international market growth of the firm’, can be postulated, as
seen in Figure 4.6.
F4 International
mindset
F7 Internet
intensity
F5 International
networks
F6 Psychic
distance
F8 International
market growth
117
Figure 4.6 Proposed model: Internetalisation
Internationalisation
components
H3 H1
Information H9
Knowledge H2 H4 Mediating Performance outcome
H6 H5
H7
H8
H19
H11 H10
International H12
entrepreneurship H14 H13
H18
H16
H17 H15
Source: developed for this research
Conclusion
The analysis process was conducted systematically, in order to manage and present
the large amount of data in an easily understandable manner (Chetty 1996; Perry
1998). The process of within-case analysis was performed, so that each individual
case could be viewed as a stand-alone independent entity prior to the cross-case
analysis, seen in Section 4.2 (Perry 1998; Amaratunga & Baldry 2001; Amaratunga,
Baldry, Sarshar & Newton 2002). Furthermore, the cross-case analysis identified
subsequent issues, themes and patterns that were pertinent and frequent across the
multiple cases discussed in 4.3.3 (Stake 1995; Perry 1998; Amaratunga & Baldry
2001; Amaratunga, Baldry, Sarshar & Newton 2002).
There was clear evidence from the research that internationalisation was accelerated
for firms due to the Internet, clarifying the conceptual prediction by Petersen, Welch
and Liesch (2002) that this may be the case. However, it was also evident that the
Internet-intensity capabilities of the firm enhance internationalisation and hence
international market growth, with psychic distance negatively affecting international
market growth—as illustrated in Figure 4.6.
F1 Information
availability
F2 Information
usage
F8 International
market growth
F4 International
mindset
F7 Internet
intensity
F3 Communication
interactivity
F5 International
networks
F6 Psychic
distance
118
Further, to evaluate the model, 19 hypotheses that test the interrelationships between
factors were developed, as seen in Table 4.14. That is, a set of hypotheses was
developed to assess linear relationships between main constructs pertinent to the
components of internationalisation identified: Internet intensity and international
market growth. Now that the data has been presented, analysed and evaluated; the
proposed model developed; and hypotheses and measures established, an assessment
of the quantitative approach was presented in Chapter 5.
119
5.0 CHAPTER 5: QUANTITATIVE METHOD: STAGE II
5.1 Introduction
Chapter 5 justifies the quantitative methodology used to test the proposed model of
‗Internetalisation‘ established in Chapter 4. The research design and analytical
techniques are outlined and justified. That is, the quantitative design (section 5.2), an
exploratory factor analysis (Section 5.4), the structural equation modeling
justification and evaluation (Section 5.4) and conclusion (Section 5.5), as outlined in
Figure 5.1.
Figure 5.1 Chapter 5 overview
Source: developed for this research
Quantitative research design
(5.2)
Data collection procedure & response
rate (5.2.5)
Addressing non-response bias (5.2.6)
Introduction (5.1)
Conclusion (5.5)
Population & sample of study (5.2.1)
Unit of analysis (5.2.2)
Selection of key informants (5.2.3)
Pre-testing instrument (5.2.4)
Analysis of data (5.2.7)
Structural Equation
Modelling (SEM) (5.4) Analysis of data (5.3.1)
Exploratory factor analysis (5.3)
120
5.2 Quantitative research design
As previously discussed in Chapter 3 Section 3.2, this research falls within the
realism paradigm. In Stage II of the data collection, a quantitative evaluation was
used to test the initial interrelations identified and developed in Stage I of this
research. The conceptual framework developed sought to quantify the data (Malhotra,
Hall, Shaw & Oppenheim, 2002) to explain the interrelationships. For this
exploratory investigation, quantitative tools and techniques were used for
confirmation (Burns & Bush, 2003; Zikmund, 2003). From the model established at
the end of Chapter 4, interrelations were shown to represent a holistic perspective of
the Internet‘s mediation role in the international market growth of the firm. A
quantitative approach confirms these interrelationships identified. This deductive
approach sought to quantify specific relationships through statistical analysis, where
hypotheses are supported or not supported (Aaker, Kumar, Day & Lawley, 2005).
The body of knowledge in this area is still limited and research is primarily concerned
with exploration theory building and the confirmation of subsequent theories rather
than the identification of causal relationships which would be expected in the more
narrowly focused perspective of a positivist paradigm (Perry, Riege & Brown, 1998).
Thus, it is argued that use of a dual inductive (Stage I) and deductive (Stage II)
approach to theory development and the confirmation of the proposed theoretical
model, falls into a post-positivist paradigm, the realism paradigm (Perry, et al., 1998).
Further, the use of a methodology that also assumes measurement error and latent
unobserved variables for a complex phenomenon lends weight to the argument of a
realism paradigm perspective, as it assumes fallibility (Perry, et al., 1998). Moreover,
the realist believes that the unobservable can assist in the researcher building
knowledge, contrary to the strict logical positivist ideology (Godfrey & Hill, 1995). A
structural equation model confirmation process scrutinised the interactions and
covariance. This process illuminates the most accurate items and constructs in the
research and results in a more reliable holistic theoretical perspective of the Internet‘s
mediating effects on the internationalisation process of international market growth of
the firm.
Further, a deductive approach was chosen for Stage II of this research, as it provides
an effective means of testing hypotheses. Quantitative techniques can measure firm
121
respondent characteristics through data collection procedures (Malhotra, et al., 2002).
The tested findings from this study can be generalised to similar context and/or
settings (Saunders, Lewis & Thornhill, 2003; Liamputtong & Ezzy, 2005; Maylor &
Blackmon, 2005). In addition, the research design underpins the deductive model
‗Internetalisation‘ that confirms hypothesised interrelationships. The proposed model
‗Internetalisation‘ is tested in Chapter 6 and will be discussed in Chapter 7. The
following section outlines; the research design, including population and sample of
this study, unit of analysis, selection of key informants, measurement of constructs,
pre-testing procedure, data collection procedure and response rate, addressing non-
response bias, exploratory factor analysis results and SEM analytical techniques.
5.2.1 Population and sample of study
This research is focused on a single country study of Australian firms that have
engaged in international market expansion. Thus, the population parameters of the
study were limited to Australian firms that are outwardly international. Therefore, the
most comprehensive and current database available in Australia – the Austrade
database was used to identify the sample for this study. The Austrade website
database www.austrade.com.au is maintained by the Australian Government for the
Australian Trade and Investment development agency. Austrade is the Australian
Trade Commission. The Austrade database is creditable, comprehensive and current,
and its use is therefore justified for this study, as seen in Table 5.1.
Table 5.1 Sample selection pool: Austrade database
Source: developed for this research
The study includes respondents from agribusiness, business and finance services,
consumer goods, and information communication technology (ICT) industries. These
industries were chosen as they represent four out of the top five industries of
Australian exporters, accounting for A$93.2 billion in export for 2006-2007 (ABS,
Selected industry Contacted Eligible Responses
Agribusiness (879) Business & Finance services (2045) Consumer Goods (1572) Information Communication Technology (ICT) (1390) 5, 886
244 660 426 488 1,828 Called (1:3 approx.)
68 133 85 144 430 ‘yes’ 12 ‘no’
Eligible: 442 Not accepted: 12 Accepted: 430 Responses: 234 Data cleaning left 224 cases 52.9 % response rate with a 50.6 % usable response rate
122
2008). Further, these industries account for 20,393 of a possible 44,310 Australian
export firms, in 2006-2007 (ABS, 2008). That is, apart from the mining industry the
four industries of; agribusiness, business and finance services, consumer goods, and
information communication technology (ICT) are the next four largest industries of
Australian exporters (ABS, 2008). For example, the agriculture industry generates
A$30 billion in value for the Australian economy and employs 385,000 people. In
2005-2006 the industry accounted for a quarter of the merchandise exports with A$26
billion (Austrade, 2008), as 60% of what is produced on Australian farms is exported
(Austrade, 2008). The value placed on the export of services is estimated to be A$46
billion (ABS, 2008), with business services A$9 billion and financial/insurance
accounting for A$3.8 billion in 2006-2007 (ABS, 2008). Exports of information
communications technology in 2005 accounted for A$5.2 billion (Australian Bureau
of Statistics, 2006). Finally, the manufacturing industry with exports worth A$51
billion and a retail trade of almost A$2 billion (ABS, 2008), form the majority of
what would be considered consumer goods exported.
An extensive manual data retrieval processes for international firms within the
database was conducted. The total number of firms in the sample frame was 5,886.
Duplication in firm contact was avoided by a manual crosscheck of the 5,886 firms
through hardcopy printouts of company profiles. The Austrade database gave the
researcher; company name, international manager‘s name, role of individual, contact
details (address, phone number and email address) as well as product details and the
international history of the firm. Every third firm was phoned. That is, approximately
1,800 firms from the database were phoned to encourage participation and screened
for eligibility, as the objective of the researcher was to obtain as many rich-data
sources as possible. 1,358 firms were either not contactable, sources were not
available or the firm had no international customers, as seen in appendix D.
A total of 234 responses were received with a response rate of 52.9%. That is, out of
the 442 firms eligible (contactable firms with international customers), 234 firms
responded. Twelve firms declined to participate, leaving a final usable response rate
of 50.6%, which is an adequate response, considering international marketing
researchers consider 30% to be a reasonable rate (Llieva, Baron & Healey, 2002) and
123
given that business surveys normally have poor response rates (Frazer & Lawley,
2000).
5.2.2 Unit of analysis
The research explores the Internet intensity, internationalisation and international
market growth of the firm; therefore the unit of analysis for this study is the firm. This
is consistent with the literature surrounding Internet and internationalisation theory
where the firm is used as unit of analysis, as outlined in sections 2.4, 2.5 and
illustrated in table 2.10. (Melewar & Stead, 2002; Moen, 2002b; Moen, et al., 2003;
Aspelund & Moen, 2004; Morgan-Thomas & Bridgewater, 2004). For this research,
given the focus is predominantly SMEs the decision-maker(s) and the firm can be
used (interchangeably) as the unit of analysis.
5.2.3 Selection of key informants
It is necessary to select key informants that can bring appropriate knowledge to the
study (Malhotra, 1996), therefore, international marketers and international decision
makers were chosen (the key informant) either to fill out personally or directed to the
person most responsible for the firm‘s internationalisation decisions. Further,
informants were generally interested in the study, as there was a shared interest.
Selection of informants was vital. Only those with knowledge of the
internationalisation of the firm were eligible, as obtaining data-rich sources was
imperative. That is, individuals within the firm were targeted that had the capacity to
communicate/articulate the firm‘s perspective through a questionnaire, as high
ranking informants enable reliable standardised information concerning the firm
(Mitchell, 1994). Although some may argue for multiple respondents from the firm
(Podsakoff, MacKenzie, Lee & Podsakoff, 2003), this is not appropriate because the
majority of firm‘s in this study are SME‘s. Thus, for this PhD research, the
assumption is that a single informant is appropriate considering the role and
knowledge of the respondent.
5.2.4 Pre-testing instrument
Prior to administering the questionnaire, it was essential to pre-test the instrument in
order to ensure reliability (Hair, Bush & Ortinau, 2000). Using a pre-test minimises
124
problems associated with instruction and design, such as response fatigue and
misunderstanding (Zikmund, 2003). Zikmund advocates two main avenues of pre-
testing:
a. a review of the questionnaire by a panel of experts
b. a trial run with representatives from the population pool.
This research adopted both procedures.
Firstly, a panel of experts consisting of seven academics reviewed the questionnaire.
Four were experts in the area of international marketing, with the remainder experts
in research design, as illustrated in Appendix H. Secondly, twelve firms with
international operations were used to pre-test the questionnaire, resulting in minor
modifications.
5.2.5 Data collection procedure and response rate
The survey instrument was a structured questionnaire. Both web-based and mail-out
questionnaires were used in the collection process, enabling efficient distribution of
large numbers of surveys over a broad geographical area (Malhotra, 1996; Sekeran,
2000). This was considered important due to the large sample size needed for SEM
(Hulland, Chow & Lam, 1996). Researchers using SEM recommend at least 100
responses, although 200 responses are recommended for complex models (Hulland, et
al., 1996). However, in this PhD study the researcher attempted to obtain as many
responses as possible, as outlined in Section 5.2.1. Web-based and mail out surveys
are relatively inexpensive, with the advantages of easy administration of coding and
analysis (Sekeran, 2000). However, both web-based and mail-out surveys have the
potential disadvantage of low response rates, compared to methods such as personally
administered surveys (Sekeran, 2000).
Steps to questionnaire design
Figure 5.2 outlines the four steps that were followed to establish appropriate
questionnaire design and administration:
Step1—Pertinent information and content was established to develop
questions within the survey instrument.
Step 2—The method of delivering the questionnaire was evaluated.
Step 3—A draft questionnaire was developed.
125
Step 4—Issues relating to the reliability and validity of the questionnaire were
analysed (Frazer & Lawley, 2000).
Figure 5.2 Four-step processes in questionnaire development and administration
Step 1 Step 2 Step 3 Step 4
Source: adapted from Frazer and Lawley (2000)
Step 1: Determining pertinent information and source of data
The construct specification was drawn from the literature review and data
convergence from Stage I of the case study analysis (Chapter 4), in order to develop
the measures shown in Table 5.2 and Table 5.3. Primarily, Likert-type scales were
compiled from the literature, as these types of scales are generally considered more
reliable (Churchill & Peter, 1984).
Table 5.2 Questionnaire draft/scale
Questionnaire Construct Description Scale Comment
Part A Q1. Internet technology usage Descriptive data sought. Opening question to start respondents‘
cognition pertinent to the survey
Interval Usage of specific Internet technologies. Descriptive data
1 no usage – 7 extensive usage
Part A Q.2 Internet intensity Applied usage of the Internet in business processes of the firm
Interval
Application of the technology into the business processes of the firm. (Mediating factor 7).
Extensively discussed in Chapter 4. 1 no usage –
7-extensive usage
Part B Q.3 Product specificity Product specificity evaluates the
complexity of the product which might indicate a limitation for the
digitalisation of complex products in
the internationalisation process
Interval Not part of SEM, but might indicate some
interesting limitations and advantages for product types
1 strongly agree – 7 strongly disagree
Part B Q.4 Information available The perceived ability of the firm to source internationalisation information
such as markets, customer,
competitors, resources and suppliers
Interval Perceived importance of information pertaining to the internationalisation of the firm
(Independent variable: Factor 1) 1 no
information – 7 extensive information
Part B Q.5 Interaction Perceived interactive communication such as speed, frequency, efficiency
and distribution of communication
Interval Perceived level of interaction capability of the firm 1 strongly agree – 7 strongly disagree
(Independent variable: Factor 2)
Part B Q.6 Information usage The perceived ability of the firm to
source internationalisation information such as markets, customers,
competitors, resources and suppliers
Interval Usage of information pertaining to the
internationalisation of the firm (Independent variable: Factor 3)
1 no information – 7 extensive information
Part B Q.7a International market
growth
Performance measure for market
growth over the last 10 years. English-speaking market
Interval New customers in new countries, new customers
in existing countries, usage by existing customers. 1 significant decrease –7 significant
increase (dependent variable: Factor 7)
Part B Q.7b International market
growth
Performance measure for market
growth over the last 10 years. Non- English-speaking markets
Interval New customers in new countries, new customers
in existing countries, usage by existing customers. 1 significant decrease – 7 significant
increase (dependent variable: Factor 7)
Part B Q.8 Internet international
customer service usage
Perception sole/complimentary usage
of the Internet in servicing international customers
Interval No part of the SEM. However, this measure will
indicate on a 7-point scale where the firm views the dependence on the Internet for international
customers. Used as a descriptive measure. 1
complementary – 7 sole mechanism
Determine required
information
Determine delivery
method
Prepare draft Assess reliability
and validity
126
Part B Q.9 International mindset
The international orientation of the
firm. The mindset of the firm on
internationalisation. Viewing internationalisation as achievable.
Interval Emphasise, commitment managerial expertise
and positive or negative perspective on the
internationalisation. (Independent variable factor 4) 1strongly disagree 7 strongly agree
Part B Q.10 Business networks The usage of networks. A well-established internationalisation path.
Interval The acquisition, performance, development and maintenance of business networks. (Independent
variable factor 5) 1 no usage 7 extensive usage.
Part B Q.11 Psychic distance Psychological barrier of the firm. The negative viewpoint of foreign markets
that impedes internationalisation
Interval Elements of psychic distance include perceptions of education level, economics,
culture, language both business and national.
(Independent variable factor 6) 1 strongly disagree 7 strongly agree
Part C Q.12 Type of product
Number of employees
Classification descriptive
Number of full time/part time employees
Nominal
Nominal
Product classification descriptive
No. of employees will assist in indicating whether firm size might be an important variable
Part C Q.13 Year firm established
Post code Ind. Classification
First country
No. of countries Physical office
% of international
Annual turnover
When did the firm start to trade
Location of firm Industry classification
Initial internationalisation
The amount of countries listed Firms that have an office
Revenue from international
Total turnover last year
Nominal
Nominal Nominal
Nominal
Nominal Nominal
Nominal
Nominal
Descriptive. Indication if age of firm is
important. Shows response bias or not If know (not many knew this)
Starting point for internationalisation
Countries firm has customers/listed Physical offices Vs no office in country
% of international for total revenue
Australian dollars
Part C Q.14 Title
Experience
Years with firm Age
Position within the firm
Experience in industry
Employment with this firm Age of respondent
Nominal
Nominal
Nominal Nominal
These questions will show the average time with
the same co. years of experience and age. The
items will give descriptive analysis that will assist in understanding other data analysis
performed
Part C Q.15 Comments
Request for honest comments Open- ended
Open-ended question requesting feedback
Source: developed for this research
Independent variables
Six independent variables were identified in the ‗Internetalisation‘ model. The first
two variables concerned the information capabilities of the firm in the
internationalisation process. For example, questions were asked concerning
information availability and information usage. Explicit questions about the
availability and usage of information regarding markets, customers, competitors,
resources and suppliers were posed in questions 4 and 6, Part B. Measures for these
questions were derived from an informational internationalisation perspective using
seven-point Likert-type scales. Interval scale anchors were (1) ‗no information‘ and
(7) ‗extensive information‘ for information available, and (1) ‗no use‘ and (7)
‗extensive usage‘ for information usage (Hamill & Gregory, 1997; Torre & Moxon,
2001; Petersen, et al., 2002). The third independent variable related to firm capability
in relation to interactive communication (Question 5, Part B). For example, questions
were asked relating to speed, efficiency and frequency of communication. The
measures used for these questions were derived from website interaction research
with scales on a seven-point Likert interval scale anchored at (1) ‗strongly disagree‘
and (7) ‗strongly agree‘ (Yuping, 2003; Brock & Yu, 2005).
127
The three remaining independent variables related to the firm‘s entrepreneurial
capabilities and influences on Internet intensity. The fourth variable was international
mindset (Question 9, Part B)—the international entrepreneurship perception of
international country markets. This included whether international markets were
viewed as achievable, and the commitment and importance the firm placed on
international markets. Measures used for these questions were derived from an
internationalisation entrepreneurship perspective using a seven-point Likert interval
scale anchored at (1) ‗strongly disagree‘ and (7) ‗strongly agree‘ (Aspelund & Moen,
2004; Nummela, et al., 2004).
The fifth variable was network usage—the firm‘s usage of networks that have been
shown to facilitate international growth performance and efficiencies through
building relationships, establishing new relationships and maintaining existing
relationships (Question 10, Part B). Measures used for these questions were derived
from an internationalisation theory perspective using a seven-point Likert scale
anchored at (1) ‗no use‘ and (7) ‗extensive usage‘ (Wu, Mahajin & Balasubramanian,
2003).
The sixth and last independent variable was psychic distance. Psychic distance
(Question 11, Part B) is a well-established psychological barrier within the
internationalisation process and relates to the psychological impediments and
psychological accelerants of internationalisation due to understanding and acceptance
of language, cultural, knowledge, economic, educational and understanding issues
pertaining to international markets (O'Grady & Lane, 1996; Torre & Moxon, 2001;
Hallen & Wiedersheim-Paul, 2004). Measures used for these questions were drawn
from an internationalisation perspective using a seven-point Likert scale anchored at
(1) ‗strongly disagree‘ and (7) ‗strongly agree‘
The presence of a mediating variable in this study implies that the Internet intensity of
the firm is not the only reason for information, knowledge, interactive
communication, international mindset, networks and psychic distance relationships—
the independent variables discussed above. A model can have both a mediating and
moderating effect, as seen in Figure 5.3 (Baron & Kenny, 1986; Muller, Judd &
Yzerbyt, 2005). That is, a moderating effect implies the construct determines the level
128
of variance, whereas, a moderating effect partially explains the variance of the
construct.
Figure 5.3 Internet intensity: mediation model that is moderated
(Internet intensity)
Mediator (moderator effect) a b (moderator effect)
Independent Outcome variable Variable c
(Information, communication, networks, (International market growth)
international mindset, psychic distance)
Source adapted from (Baron & Kenny, 1986; Muller, et al., 2005)
Measures used for these questions were derived from Internet intensity literature
using a seven-point Likert scale anchored at (1) ‗no usage‘ and (7) ‗extensive usage‘
(Question 2, Part A). Internet intensity can best be measured through a seven-point
scale of application of the Internet. That is, Internet intensity is the application of
activities due to the Internet, such as marketing and advertising, sales to customers,
after-sales service and support, market research, management of international market
information, purchasing/procurement, exchange of operational data with suppliers
and exchange of operational data with business customers (Hamill, 1997; Aspelund &
Moen, 2004; Gibbs & Kraemer, 2004).
Dependent outcome variable
The last variable considered was a dependent variable, international market growth.
The international market growth variable is pivotal to the model, as it was the
construct used to measure output performance. That is, growth was measured by
performance in new country markets, new customers in existing country markets and
penetration of existing customers. A seven-point Likert scale was used, anchored at
(1) significantly decreased to (7) significantly increased. Although, these measures
were adapted from the traditional theoretical framework in corporate growth (Ansoff,
1965, 1968, 1969) many other researchers in internationalisation and the Internet
have also viewed growth as a pivotal variable in measurement (Hamill & Gregory,
1997; Prasad, et al., 2001; Torre & Moxon, 2001; Gibbs & Kraemer, 2004; Morgan-
Thomas & Bridgewater, 2004; Ryssell, Ritter & Gemunden, 2004).
129
Measurement of constructs
Common method variance can have a negative effect on observed relationships in
organisational research (Podsakoff, et al., 2003). To overcome common method
variance, a variety of scale anchors were used so that respondents did not simply
‗gloss over‘ questions. For example, different anchors such as ‗no use‘ (1) and
‗extensive use (7), and ‗strongly disagree‘ (1) and ‗strongly agree‘ (7) were used to
limit the potential for bias from common method variance. Further, dependent and
independent variables were separated and different types of questions asked for each
to stimulate a specific response for a particular item (Podsakoff, et al., 2003), as
outlined in Table 5.2.
The measures for the constructs identified in Chapter 4; information availability,
information usage, interaction communication, international mindset, business
relationship use, psychic distance, Internet intensity and international market growth
are evaluated next.
Information availability (Factor 1)
The measurement scales were drawn from research investigating information, the
Internet and internationalisation. More specially, the scales for information
availability were adapted from research by Hamill and Gregory‘s (1997) descriptive
analysis pertaining to information about the market, customers, competitors (Hamill
& Gregory, 1997) and information pertaining to resources and suppliers (Petersen et.
al. 2002 and Torre & Moxon 2002). Thus, beyond the general concept of
‗information‘ (Berry & Brock, 2004; Gibbs & Kraemer, 2004; Brock & Yu, 2005), a
single descriptive frequencies (Hamill & Gregory, 1997) or conceptual research
(Torre & Moxon, 2001; Petersen, et al., 2002) this study investigates a more accurate
multi item construct. Thus, items for the construct information relating to market,
competitors, customers, resources and suppliers were used to evaluate ‗information
availability‘.
Information usage (Factor 2)
The factor of information usage was underpinned by the concept of knowledge theory
of internationalisation, as firms accumulated information through learning by doing.
That is, information usage was evident in the knowledge transference act by firms
130
(Ethiraj, et al., 2005) and was influenced by the Internet (Petersen, et al., 2002). More
precisely, the Internet has made information retrieval, storage and analysis more
efficient. The Internet has given SME‘s information capabilities that traditionally
only multi-national companies have had. Information usage items were derived from
the theory relating to information and knowledge transactional efficiency including
information pertaining to market, customers, competitors (Hamill & Gregory, 1997)
and suppliers and resources knowledge, based on conceptualisations by Petersen et.
al. (2002) and Torre & Moxon (2001).
Interactive communication (Factor 3)
The interactive capabilities of the Internet have been highlighted in the literature as
affecting business and marketing in a profound way, as seen in the work of Rayport
and Sviokla (1994), Hoffman and Novak (1996), Sparkes and Thomas (2001), Arnott
and Bridgewater (2002) and Jaworski and Jocz (2002). It has been suggested that
measures for interactivity are currently inadequately articulated in the literature
(Yadav & Varadarajan Rajan, 2005, p. 585). Thus, measures in this PhD were
adapted from control, communication, and synchronicity elements of interaction
(Yuping, 2003). That is, interaction can be measured through communication; items
such as speed, frequency, efficiency, availability and the multiple functionality of the
Internet (Yuping, 2003; Brock & Yu, 2005).
International mindset (Factor 4)
A well-established area of research in internationalisation is international mindset
also known as international orientation (Nummela, et al., 2004). International mindset
is the firm‘s attitude toward internationalisation. Aspelund and Moen (2004) suggest
the Internet intensity of the firm positively effects the speed and propensity to expand
into international markets, by enhancing international commitment, vision and
international customer orientation. Further, international experiences and the
perceived achievability of rapid internationalisation (Nummela, et al., 2004) were
also used to measure international mindset of the firm.
Business Networks (Factor 5)
To date, the network concepts of business relationships in the Internet
internationalisation process have not been reported. That is, the present body of
131
knowledge does not identify business relationship networks as in the Internet
internationalisation literature. However, as identified in Chapter 4, Section 4.2,
respondents in this study perceived networks to be vital in the internationalisation of
the firm. Traditionally, an international network perspective highlights the role of
cooperative activities in internationalisation (Young, et al., 2003). Thus, elements
such as business relationship maintenance, strength and longevity were identified as
key items for measurement in this study (Wu, Mahajin & Balasubramania, 2003).
Psychic Distance (Factor 6)
Currently, conceptualisations within the body of knowledge suggest that psychic
distance affects Internet internationalisation (Petersen, et al., 2002). Traditionally,
psychic distance has been measured through language, culture, economic and
education differences (O'Grady & Lane, 1996; Torre & Moxon, 2001; Hallen &
Wiedersheim-Paul, 2004). In this study, these items are evaluated in the context of
Internet internationalisation.
Internet intensity (Factor 7)
Researchers have yet to reach a consensus concerning a consistent measurement for
Internet usage (Berry & Brock, 2004). As Berry and Brock (2004) conclude,
measuring Internet usage by the dichotomy of use/non-use limits the statistical
analysis potential of relationships between variables. These measures of Internet
usage were used to capture the digitalisation concept identified in Chapter 4.
Additionally, dimensions of Internet usage were measured in this study on an
intensity scale, which has been substantiated through factor analysis (Hamill, 1997;
Aspelund & Moen, 2004; Gibbs & Kraemer, 2004). That is, Internet intensity can
best be measured by evaluating applications such as marketing and advertising, online
sales to customers, after-sales service and support, market research, management of
international market information, online purchasing/procurement, exchange of
operational data with suppliers and exchange of operational data with business
customers (Hamill, 1997; Aspelund & Moen, 2004; Gibbs & Kraemer, 2004). Thus,
both Internet usage and Internet intensity are measured in this study.
132
International growth (Factor 8)
The Internet enables firms to solicit new business from existing clientele (market
penetration). This finding from Chapter 4, Section 4.2 confirms previous research in
which a factor analysis identified perceived benefits as being ‗to expand the market
for existing product/service‘ (Gibbs & Kraemer, 2004, p. 133). That is, Gibbs and
Kraemer (2004) found that perceived benefits to the firm of market penetration from
e-commerce were highly significant (.84). Thus, when measuring international market
growth, it is prudent to measure international market penetration as part of the growth
variable (Gibbs & Kraemer, 2004).
Further, firms perceived international market development as one of the greatest
benefits of the Internet (Chapter 4, Section 4.2). Further, Gibbs and Kraemer (2004)
also found that the perceived benefit of new business/market was highly significant
(.84). However, the current measurement of international market growth in the
literature fails to define international growth accurately. That is, Gibbs and Kraemer
(2004) refer to growth in domestic generic terms. Thus, a more accurate account of
international market growth items can be measured through:
1. international market penetration, capitalising on existing international
customers
2. international market development, which includes
a. new customers in existing countries
b. new customers in new countries.
These refinements to the measure of international market growth helped the research
to identify the construct more accurately. Thus, the scales used were adapted from
Ansoff (1957, 1965, 1968) and Gibbs and Kraemer (2004). That is, this measure
adapts perceived market penetration and new business/market from Gibbs and
Kraemer (2004) and Ansoff‘s (1957, 1965, 1968) market matrix vectors of market
penetration and market development.
133
Table 5.3 Measures
Factor-variable (label) and scale for
measurement Expected relationships Measures Adopted, adapted
or new item
Internationalisation process
Information availability (F1)
(Hamill & Gregory, 1997) (HG) (Petersen, et al., 2002) (PWL)
(Torre & Moxon, 2001) (TMX)
INFAVL MKTINF INFAVL COMINF
INFAVL CUSINF INFAVL RESINF
INFAVL SUPINF
1. Information about the market (HG)
2. Information about competitors (HG)
3. Information about international customers (HG) 4. Information about resources (TMX & PWL)
5. Information about international suppliers (TMX & PWL)
Adapted
Adapted
Adapted Adapted
Adapted
Information usage (F2) (Hamill & Gregory, 1997) (HG)
(Torre & Moxon, 2001) (TMX)
(Petersen, et al., 2002) (PWL) Based on generic knowledge concept-
of information items
INFUSE MKTINF INFUSE COMINF
INFUSE CUSINF INFUSE RESINF INFUSE SUPINF
1. Use of information about the market (HG) 2. Use of information about competitors (HG)
3. Use of information about international customers (HG)
4. Use of information about resources (TMX & PWL) 5. Use of information about international suppliers (TMX & PWL)
Adapted Adapted
Adapted
Adapted Adapted
Interaction (F3)
(Yuping, 2003) (YP) and (Brock &
Yu, 2005) (BY)
Adapted from principles of Yuping –website interaction
INTACT EFFINT
INTACT FREQCY
INTACT SPEED
INTACT FUNCTN INTACT TIMLESS
1. efficiency of communication assists with interaction (BY)
2. greater frequency of communication (YP)
3. enhanced speed of communication (YP)
4. multiple interactive functions (BY) 5. greater availability for communication (YP)
Adapted
Adapted
Adapted
Adapted Adapted
International mindset (F4) (Aspelund & Moen, 2004) (AM)
(Moen, 2002b) (MO)
(Nummela, et al., 2004) (NSP)
NTMND CUSTOM INTMND COMMIT
INTMND IMPEMP
INTMND EXPERC INTMND VISION
INTMND RAPID
1. Committed to servicing their International customers (MO) 2. Commits both financial and human resources (AM)
3. Emphasises importance growth to employees (AM)
4. Intern. experience is viewed as important (NSP) 5. Regards the world as the market (AM)
6. Views rapid internationalisation as achievable (NSP)
Adapted Adapted
Adopted
Adapted Adopted
Adapted
Traditional network usage (F5)
Use of traditional business
relationships (BR)
(Wu, Mahajin & Balasubramanian,
2003) (WMB)
BUSREL CUSREL
BUSREL STEREL
BUSREL LLAREL
BUSREL AQNCUS
BUSREL NEWMKT
BUSREL INTPRF
1. Maintaining international customer relationship (WMB)
2. Strengthening the existing relationships (WMB)
3. Developing longer lasting relationships (WMB)
4. Acquiring new international customers
5. Entering new international markets
6. Enhancing our international performance
Adapted
Adopted
Adopted
Adapted
Adapted
Adapted
Psychic Distance (F6)
Based on
(O'Grady & Lane, 1996) (OG) and (Torre & Moxon, 2001; Hallen &
Wiedersheim-Paul, 2004) (TM) (HW)
PSYDIS LMTFRN
PSYDIS NONATL
PSYDIS NOBUSL PSYDIS DIFCUL
PSYDIS CONEDU
PSYDIS ECODEV PSYDIS UNDERST
PSYDIS FRNKNO
1. in non English markets (OG)
2. national language (OG)
3. non-English business language (OG) 4. in countries with different culture (OG)
5. low education level (OG)
6. low economic development (OG) 7. no staff read, speak and understand languages of markets (TM) (HW)
8. Lack of knowledge of markets (TM) (HW)
Adapted
Adapted
Adapted Adapted
Adapted
Adapted Adapted
Adapted
INTINS (F7)
Internet intensity
(Gibbs & Kraemer, 2004) (GK) How
is the Internet used: for…
(Aspelund & Moen, 2004) (AM)
INTINS ADVMKT
INTINS ONLSAL INTINS AFTSAL
INTINS ONLPUR
INTINS MKTRES INTINS MKTMAN
INTINS EXCSUP
INTINS EXCBUS
1. Advertising and Marketing (GK)
2. Online sales (GK) 3. After sales service and support (GK)
4. Online purchasing (transactions –e-mail or website) (GK)
5. Market research (AM) 6. International market management (AM)
7. Exchange of operational data with suppliers (GK)
8. Exchange of operational data with business customers (GK)
Adopted
Adopted Adopted
Adopted
Adapted Adapted
Adopted
Adopted
International growth International
market growth (F8) Primary
(Ansoff, 1965) (AN) and (Hamill &
Gregory, 1997; Murphy & Bruce, 2003; Gibbs & Kraemer, 2004;
Morgan-Thomas & Bridgewater,
2004)
INTGRO DEVMKT INTGRO NEWCEX
INTGRO PENMKT
INTGRO DEVMKT
INTGRO NEWCEX
INTGRO PENMKT
English markets (increasing/decreasing)
1. New customers in new international markets (AN) 2. Acquiring new customers in existing international markets (AN)
3. Increases product usage of existing international customers (AN)
Non-English markets (increasing/decreasing) 1. New customers in new international markets (AN)
2. Acquiring new customers in existing international markets (AN)
3. Increases product usage of existing international customers (AN)
Adapted Adapted
Adapted
Adapted
Adapted
Adapted
Source: developed this research. Note: Adopted = adopted without change, adapted = changed, but core concept in tact and new
= developed from evaluation of case study analysis
134
Step 2: Delivery method and length of questionnaire
Internet delivery method was used as the primary method to collect data. A myriad of
data collection methods exist, including mail, telephone, face-to-face and Internet
survey (Frazer & Lawley, 2000; Burns & Bush, 2003; Zikmund, 2003). Internet
questionnaires are designed similarly to those mailed out, but are delivered
electronically (Llieva, et al., 2002; Burns & Bush, 2003). Internet questionnaires do
assume the existence of an e-mail database and population that can access the Internet
(Frazer & Lawley, 2000).
A telephone screening process identified those firms eligible for the study. Once
eligibility was established, participants selected either an Internet web-based or mail
survey. With the exception of 12 firms who preferred a mail survey 418 participants
accepted an e-mail questionnaire, as seen in appendix E, which corroborates findings
from recent research that highlights that top managers prefer electronic surveys
(Griffis, Goldsby & Cooper, 2003). A single reminder e-mail was also sent to
participants.
Step 3: Draft questionnaire
When designing a questionnaire, several issues need to be considered: question
content, question wording, response format, structure and layout of questionnaire
(Frazer & Lawley, 2000). In this study, questions were kept brief and legitimate with
double-barrelled and sensitive questions avoided to ensure minimal effort was
required to complete the questionnaire (Hair, et al., 2000). Questions were worded
precisely so as to only have one meaning: key words were emphasised with italics;
and no double negatives, leading or biased words or phrases, abbreviations or
incomplete sentences were used (Frazer & Lawley, 2000; Hair, et al., 2000).
An initial screening question was used. That is, questions about firm
internationalisation and the respondent‘s role within the firm were asked at the end of
Part C of the questionnaire and were also used as a double-check screening process.
Consequently, seven respondents were excluded as their firms had no international
customers and one respondent was excluded he/she did not hold an appropriate
position within the firm.
135
The technical issues of developing a HTML survey, auto submission system that
integrated with a statistical package and the inconsistent visual presentation of the
questionnaire depending on the computer system installed were important ones that
needed to be addressed (Burns & Bush, 2003). The Internet questionnaire was kept as
simple as possible to diminish technical issues. Further, presentation inconsistency
was reduced through a comprehensive testing process (Dommeyer & Moriarty, 2000;
Frazer & Lawley, 2000). For example, testing was conducted viewing the e-mail link
in different e-mail systems such as Outlook, Yahoo and Hotmail. Further, the Internet
questionnaire was viewed using different computer systems and screens. Minor
modifications were made to ensure optimal presentation in divergent computer
systems. Participants were also encouraged to contact the researcher if they had any
difficulty with the Internet survey. Only three participants contacted the researcher
about minor technical issues.
Using a web-based survey system allowed the data to be auto-coded and converted to
an Excel spreadsheet. Auto submission systems allow the researcher to integrate
results with a statistical package—in this case, Excel and SPSS 16 (Frazer & Lawley,
2000; Llieva, et al., 2002; Burns & Bush, 2003). This integration of technology
generated a full data spreadsheet along with a coded spreadsheet that auto-updated
every time a respondent completed the questionnaire (Hair, et al., 2000; Burns &
Bush, 2003). This automation reduced the data entry time as well as possible human
error associated with researcher data entry (Hair, et al., 2000; Llieva, et al., 2002;
Griffis, et al., 2003) and provided ongoing summaries of data (Dommeyer &
Moriarty, 2000). The main disadvantage of Internet-web based surveys is that they
are open to the general public (Hair, et al., 2000). This disadvantage of openness was
overcome by identifying a unique IP address from the respondent‘s computer. The
auto submission system also gave the computer name or IP address identity,
highlighting if any respondent had completed the survey more than once (Griffis, et
al., 2003). There was no evidence of multiple responses.
Step 4: Evaluation of reliability and validity
Reliability
Reliability indicates the extent to which a measure is without bias (error) and offers
consistent stable measures across time and within questionnaire items—the
136
‗goodness‘ of a measure (Churchill, 1979; Sekeran, 2000). To increase the reliability
of the questionnaire, interval scales were used predominantly, with limited use of
ratio and nominal scales. Further, clear guidelines were given to respondents.
Constructs were operationalised with multiple indicators, as opposed to a single-
measure item, to limit system error (Churchill, 1979). The instrument was pre-tested
extensively and modified accordingly, as discussed earlier.
Content validity ensures measures represent adequately the set of item indicators that
reflects the intended concept (Sekeran, 2000). In this research, a synthesis of the
literature was conducted (Chapter 2), an exploratory case-study analysis process
helped to confirm and refine constructs (Chapter 4), the questionnaire was pre-tested
with both academics and industry (Step 4) and an exploratory factor analysis (EFA)
and confirmatory factor analysis (CFA) were conducted (Chapter 5 and 6). These
evaluations helped to ensure content validity.
Construct validity addresses the question of what construct the scale is measuring
(Malhotra, 1996). The researcher needs to answer the theoretical question about why
the scale works and what deductions can be made in relation to the theory (Malhotra,
1996). Initial qualitative evaluation helped to refine scales. When possible,
established scales or adapted scales were used, as seen in table 5.2. Thus, construct
validity requires sound theories of the constructs being measured and the
interrelationships with other variables (Malhotra, 1996). This can be assessed through
convergent and discriminant validity. Convergent validity is assessed using the scores
obtained from two different instruments measuring the same concept and whether
they are positively correlated (Churchill, 1979; Malhotra, 1996; Sekeran, 2000). That
is, convergent validity is the degree of correlation between two different measurement
scales that are supposed to measure the same concept. Data analysis was used to help
differentiate similar scale measures, which were addressed in evaluations shown in
Chapter 5 and 6 (EFA and CFA). Conversely, discriminant validity is the degree to
which a measure is different from other scales that are supposed to measure distinct,
or novel constructs (Churchill, 1979). That is, discriminant validity is theory-based:
two variables are predicted to be distinct or uncorrelated and the scores obtained by
the measures are empirically found to be so (Sekeran, 2000). This demonstrates a lack
of correlation between different constructs (Malhotra, 1996). Data analysis was used
137
to distinguish accurate measures for specific constructs, which was addressed in
evaluations found in Chapter 5 and 6 (EFA and CFA).
5.2.6 Addressing potential non-response bias
Non-response bias has been criticised in self-administered surveys. That is, late
submission from respondents who required prompting (in this case, through a single
reminder e-mail) may be representative of non-respondents (Armstrong & Overton,
1977). There were a number of ways in which to address non-response bias. Firstly, a
high response rate created a more representative set of respondents and limits non-
response, due to high participation. Further, an independent creditable data source—
in this case, the Australian Bureau of Statistics— was used to assess the respondent
characteristic, establishing the respondent as representative of the population of firms
in Australia. For example, geographical locations such as postcodes may be used
(Wickramasekera & Oczkowski, 2006). Thirdly, the characteristics of eligible
respondents matched those who actually submitted or participated. And lastly, a more
rigorous process of using an extrapolation method such as a two tail T test ensured
that the data set was similar with respect to those respondents who submitted early
and those who submitted late with prompting (Armstrong & Overton, 1977).
The respondent characteristic of geographical location was measured by postcode,
showing that the respondent was representative of the broader business population.
The representativeness of these respondents, outlined in Table 5.4, indicated non-bias
in the data set.
Table 5.4 Postcode characteristics of the respondents
Postcode 2005 (June) 2006 (June) 2007 (June) Respondents
NSW 34.48 % 34.19 % 33.79 % 35.0 %
VIC 25.01 % 25.01 % 25.02 % 23.7 %
QLD 19.60 % 19.86 % 20.09 % 20.7 %
SA 07.21 % 07.17 % 07.13 % 08.0 %
WA 09.86 % 09.95 % 10.17 % 10.4 %
TAS 01.88 % 01.89 % 01.87 % 02.2 %
Source: adapted from ABS 2007 and analysis from data set
Further, of those respondents contacted and those responding were similar, so cases
were consistent. That is, those who accepted to participate and those that actually
participated were similar from an industry characteristic standpoint. For example,
138
agricultural business accounted for 15.81% of all firms accepted and 16.7% of all
firms responded. Information communications technologies firms accounted for
30.93% of firms that accepted and 31.5% that responded. Consumer goods accounted
for 19.76 % of firms that accepted and 19.8% responded. Lastly, business and finance
accounted for 30.93% firms that accepted and 32% responded, as seen in Table 5.5.
These findings indicate responding firms were representative accepted, therefore
reducing non-response bias.
Table 5.5 Industry representative proportions
Industry Accepted % responded %
Ag business 68 15.81 37 16.7
ICT 133 30.93 70 31.5
Consumer
goods
85 19.76 44 19.8
Business and
finance
133 30.93 71 32
Total 430 100 222 100
Source: developed for this research
Lastly, non-response bias was evaluated using the extrapolation method of a two-tail
T test (Armstrong & Overton, 1977). The test identified no significant differences at
the P<.05 level. Subsequently, eight items from the eight key factors were presented,
as illustrated in Table 5.6. Thus, these respondents were treated as a single data set, as
non-response bias was not evident.
Table 5.6 Significance two-tail test for non-response bias
Factor Factor name Factor code Item code Question Sig two
tail
Analysis
Factor 1 Information availability INFAVL COMINF 4 (2) .86 not sig.
Factor 2 Information usage INFUSE COMINF 6 (2) .20 not sig.
Factor 3 Interactive
communication
INTACT FUNCTN 5 (2) .64 not sig.
Factor 4 International mindset INTMND COMMIT 9 (2) .46 not sig.
Factor 5 Business network usage BUSNET STEREL 10 (2) .38 not sig.
Factor 6 Psychic distance PSYDIS NONATL 11 (2) .20 not sig. Factor 7 Internet intensity INTINS ONLSAL 2 (2) .55 not sig. Factor 8 International market
growth
INTGRO NEWCEX 7a (2) .76 not sig.
Source: developed for this research
5.3 Exploratory factor analysis
The test for internal consistency and reliability of the scale items was carried out
using Chronbach‘s alpha (Chronbach, 1951) in keeping with Churchill‘s (1979)
139
recommendation that test of alpha be the first measure one calculates to assess the
quality of the instrument. In the ‗traditional‘ approach to scale
development/adaptation the next step is to subject the items to exploratory factor
analysis (EFA) prior to SEM to examine each of the proposed model‘s dimensions
(Konecnik & Gartner, 2007). EFA is a statistical procedure aimed to produce a set of
items that identify a single underlying construct - a test of dimensionality and is
appropriate where theory is not substantive (Schumacker & Lomax, 2004). This study
used principle components EFA with a Varimax rotation to assess variables, as this is
the most common process for evaluating factors (Kline, 1994). All major variables
had a Chronbach‘s Alpha coefficient output of >.7, as illustrated in Table 5.7,
indicating the factors had a good level of internal reliability (Pallant, 2001). KMO is
an index that, indicates sample adequacy. KMO values are preferably above .8, but
values of .74 and .72, which are regarded as very good, were achieved and are
illustrated in Table 5.7 (Kline, 1994; Malhotra, 1996).
Table 5.7 Reliability and internal consistency tests
Factor Factor name Factor code Question.
no. items
Chronbach‘s
Alpha
KMO
Factor 1 Information availability INFAVL 4 (5) .89 .86
Factor 2 Information usage INFUSE 6 (5) .89 .81
Factor 3 Interactive communication INTACT 5 (5) .87 .83
Factor 4 International mindset INTMND 9 (6) .90 .88
Factor 5 Business network usage BUSNET 10 (6) .94 .86
Factor 6 Psychic distance PSYDIS 11 (8) .90 .85
Factor 7 Internet intensity INTINS 2 (8) .82 .74
Factor 8 International market growth INTGRO 7 (6) .88 .72
Source: developed for this research
Further, Bartlett‘s test of sphericity was used to examine the correlation matrix,
providing an assessment of statistical correlation between factors (Malhotra, 1996;
Hair, Black, Babin, Anderson & Tatham, 2006). Bartlett‘s test of sphericity should be
significant (p<.05) for the factors to be considered appropriate (Pallant, 2001). This
study all factors were found to be significant (p<.05).
The items within Factor 1: perceived information availability loaded together as a
factor. That is, the multi-item factoring of these items represents the construct
information availability. The KMO was .86 and all items were above .7, as seen in
Table 5.8. The items within Factor 2: information usage also factored, with the KMO
.81 and all items above the critical level of .7. Factor 3: interactive communication
140
had a KMO of .83. However, item 5 was moderate at .69. Some would argue that
above .4 or .6 is a strong factor-loading value (Kline, 1994): therefore, this item was
retained at this point.
The items in Factor 4: international mindset factored well together, with all items
above the level of .7, and a KMO of .88. Factor 5: the use of business networks also
factored, with all items loading above .7 and a KMO of .86. Factor 6: psychic
distance had a two-factor extraction; however, the factor with three items; 1, 2 & 3
(.90, .96 & .89), which all involve language issues and to a lesser extent, cultural
issues in item 4 & 7 (.63 & .66) was theoretically the most plausible. Thus, the factor
was formed with five items; 1, 2 and 3 (.90, .96 & .89), which all involved language
issues and, to a lesser extent, cultural issues in items 4 and 7 (.63 & .66) were adopted
for further analysis in Chapter 6.
Factor 7: Internet intensity factor loaded with two main items, 4 and 5 (.92 & .92).
Items 1–6 had a KMO .76. However, items 7 and 8 were extracted by evaluating the
factor using a Varimax rotation (Kline, 1994). Aspelund & Moen‘s (2004) focus on
international market management and market research was confirmed over the
general activities as advocated by Gibbs & Kraemer (2004). The two items for the
factor of Internet intensity identified were two of the three items found by Aspelund
& Moen‘s research (2004). This finding corroborated items for Internet intensity in;
a. market research and
b. international market management.
In Factor 8: International market growth, the dependent variable had a distinct two-
factor solution. That is, non-English speaking market growth and English-speaking
market growth factored separately. This distinction between perceptions of non-
English and English speaking based international markets was highly evident from
the Stage I case study evaluations, as illustrated in Chapter 4. Thus, the factor is split
into two distinct factors: English speaking market growth and non–English speaking.
141
Table 5.8 EFA measurement model
Expected
relationships Measures Factor
loading
Confirm
disconfirm
Comment
Factor 1 INFAVL Information availability
MKTINF COMINF
CUSINF RESINF SUPINF
Information about the market Information about competitors
Information about international customers
Information about resources Information about international suppliers
.73
.83
.79
.78
.76
Confirmed Items loaded well on factor for perceived information availability. KMO
.86
Factor 2 INFUSE Information usage
MKTINF COMINF
CUSINF RESINF
SUPINF
Use of information about the market
Use of information about competitors
Use of information about international customers Use of information about resources
Use of information about international suppliers
.79
.73
.78
.81
.89
Confirmed Items loaded well on factor for usage of
information. KMO .81
Factor 3 INTACT Interactive communication
EFFINT FREQCY
SPEED
FUNCTN
TIMLESS
An efficient mechanism of communication Greater frequency of communication
Enhanced speed of communication
Multiple interactive functions
Greater distribution communication
.72
.83
.83
.74*
.69*
Confirmed, & modified
Items 4 and 5 were excluded to form a stronger factor. That is, items 1, 2 & 3
KMO .73 with item loadings of .79
(item 1), .80 (item 2), .85 (item 3) would
be preferred
Factor 4 INTMND International mindset
CUSTOM
COMMIT IMPEMP
EXPERC
VISION RAPID
Committed to servicing international customers
Commits both financial and human resources Emphasises importance growth to employees
Views international experience as important
Regards the world as the market Views rapid internationalisation as achievable
.81
.72
.87
.76
.77
.78
Confirmed Items loaded well on factor for
international mindset with a KMO of .88
Factor 5 BUSREL Business networks
CUSREL
STEREL LLAREL
AQNCUS
NEWMKT INTPRF
Maintaining international customer relationship
Strengthening the existing relationships Developing longer lasting relationships
Acquiring new customers
Entering new international markets Enhancing our international performance
.90
.90
.86
.81
.77
.87
Confirmed Items loaded well on factor for business
networks with a KMO of .86
Factor 6 PSYDIS Psychic distance Modified
LMTFRN
NONATL
NOBUSL
DIFCUL
CONEDU
ECODEV UNDERST
FRNKNO
In non English markets
National language
Non-English business language
In countries with different culture
Low education level
Low economic development No staff read, speak and understand languages
Lack of knowledge of markets
.888
.89
.81
.42
.19*
.24*
.46
.21*
.89
.96
.89
.63
.66
There was a two-factor solution.
However, only one factor was
statistically evident. A number of weak
items were identified (items 5, 6 & 8)
with items 1, 2 & 3 loading well
together (.90, .96 & .89.) with loading of .63 & .66 (items 4 & 7) on the same
factor
Factor 7 INTINS Internet intensity Modified
ADVMKT ONLSAL
AFTSAL
MKTRES MKTMAN
ONLPUR
EXCSUP EXCBUS
Advertising and Marketing Online sales
After-sales service and support
Market research International market management
Online purchasing
Exchange of operational data with suppliers Exchange of data with business customers
.58*
.56*
.69*
.58
.66
.55*
.72*
.64*
Confirmed, modified
.91
.85
Two-factor extraction. Items 4 and 5 factored together well, corroborating
findings from Aspelund & Moen 2004.
Items 1, 2 & 3 factored together with items 4 & 5 but were very weak. KMO
.76. Further, items 7 & 8 were identified
as a different factor and excluded at this point.
Factor 8 DV INTGRO international market growth 2 factors
DEVMKT
NEWCEX
PENMKT
DEVMKT
NEWCEX PENMKT
English markets (increasing/decreasing) New customers in new international markets
Acquiring new customers in existing int. markets
Increases product usage of existing int. customers Non-English markets (increasing/decreasing)
New customers in new international markets
Acquiring new customers in existing int. markets Increases product usage of existing int. customers
.76
.75
.74
.81
.86
.83
Modified
.73
.98
.81
.84
.97
.92
Two factors were extracted. There was a clear two-factor solution. Both factors
hung together very well. In hindsight,
this was evident in the case study analysis of firms, as international
strategic growth was perceived as
distinct in non English markets compared to English based markets.
Note: * excluded due to weakness of measure
Source: developed for this research
5.4 Structural equation modelling
Using a confirmatory quantitative analysis helps the convergence of theory post-case
study analysis, as advocated by international marketing researchers Simpson Poon
142
and Paula Swatman (1997) as a means of overcoming the limitations of case study
methodology. Structural equation modeling is not isolated to a single form of
analysis, as the analytical process is made up of confirmatory factor analysis,
covariant analysis and latent variable analysis (Haenlein & Kaplan, 2004; Kline,
2005), with covariance analysis being at the core (Kline, 2005). A theoretical
‗Internetalisation‘ proposed model was developed from the evaluation of the literature
and the analysis and evaluation of Stage I qualitative multiple cases, as seen in Figure
4.11. By verifying constructs and modelling the initial qualitative study (Stage I), a
quantitative process gives statistical generalisability to the research through a
confirmatory process (Eisenhardt, 1989; Dyer, et al., 1991), as outlined in Table 5.9.
Table 5.9 Research design
Research pathway
Time frame/data collection
Stage I Qualitative: Exploration
of case studies 2005–2006
Stage II Quantitative:
Confirmation and testing 2007
Protocol development
Pilot case
Multiple in-depth case interviews
Findings (Stage I)/ literature
Questionnaire development
Pilot and survey
Source: developed for this research
Structural equation modelling (SEM) is used in complex studies that have multiple
variables, such as the interrelationships between internationalisation, Internet
intensity and international market growth in this project. This multivariate approach is
a vehicle in which the researcher can confirm construct theory through direct and
indirect relationships in a holistic manner (Bagozzi, 1994), in this research, from an
outward internationalisation process perspective. That is, SEM provides a higher level
of complexity than more traditional means of multiple variate analysis, as SEM goes
beyond linear relationships (Chin, 1998; Steenkamp & Baumgartner, 2000).
5.4.1 Analytical technique
Structural equation modelling (SEM) integrates traditional econometrics perspectives
with predictions and psychometric theory that model concepts as latent unobserved
variables, which are indirectly inferred from multiple observed measures, also known
as indicators or manifest variables (Chin, 1998). Thus, SEM has allowed social
scientists to not only perform path analytical modelling with manifested variables, but
also with latent variables (Kline, 2005). This has led to structural equation modelling
being recognised as the second generation of multivariate analysis in contemporary
literature (Chin, 1998). SEM goes beyond other statistical techniques—such as
143
multiple regression, multivariate analysis of variance and discriminant analysis—
which share the common limitation of only being able to examine a single construct
relationship at a time (Hair, Anderson, Tatham & Black, 1992). As a consequence,
contemporary social science research has adopted the powerful multivariate-
modelling tool for research in marketing (Baumgartner & Homburg, 1996; Hulland,
et al., 1996; Steenkamp & Baumgartner, 2000), international marketing (Mullen,
Milne & Doney, 1995; Alashban, Hayes, Zinkhan & Balazs, 2002),
internationalisation (Yip, et al., 2000), Internet-related research (Shim, Eastlick, Lotz
& Warrington, 2001; Hoffman, Novak & Schlosser, 2003; Taylor & Hunter, 2003)
and, more recently, Internet internationalisation (Aspelund & Moen, 2004). Further,
using structural equation modelling is recognised as a prudent approach when
evaluating and predicting complex marketing decisions (Steenkamp & Baumgartner,
2000), such as the strategic decisions concerning Internet technology and
international market growth in this research.
A key benefit of using a structural equation model in research compared to traditional
techniques such as component, factor and discriminant analysis or multiple regression
analysis was the ability to give greater flexibility to the relationship between data and
theory (Chin, 1998). That is, SEM provided researchers with the flexibility to model
relationships between multiple prediction and criterion variables, construct
unobservable latent variables (LVs), model errors in measurements for observed
variables (Steenkamp & Baumgartner, 2000), and statistically confirm theoretical and
measurement assumptions against empirical data (confirmatory analysis) (Chin, 1998,
p.7). Another advantage is that SEM can evaluate interrelationships within a set of
variables (Hu, 1997). Thirdly, latent variables (those implied variables) can also be
represented in the model (Hu, 1997). Thus, SEM analysis gives a more precise
prediction of the theoretical construct and an overall accurate holistic perspective
through modelling interrelations. SEM is a theory-orientated method that attempts to
emphasise the transition from exploratory to confirmatory analysis (Hulland, et al.,
1996). That is, SEM provided a method of dealing with multiple relationships
simultaneously while providing statistical efficiency (Hair, et al., 1992). Apart from
these multivariate SEM techniques, other quantitative techniques were used. These
included multivariate construct scale validity and reliability, along with respondent
profile descriptive data, as presented and evaluated in Chapter 6.
144
5.5 Summary
In this chapter, the research philosophy of realism in a structural equation modelling
methodology was justified, the benefits and challenges of using Internet surveys
shown, and the prudent use of mixed-mode surveys, phone screening and Internet and
mail surveys, established mixed survey modes have been shown to give better
population representation (Llieva, et al., 2002). Further, both questionnaire design
and administration were scrutinised to establish reliability and validity within the
research. Lastly, the sample frame, selection and processes were highlighted,
indicating proper sampling technique.
145
6.0 CHAPTER 6: QUANTITATIVE ANALYSIS AND EVALUATION
6.1 Introduction
In this chapter, the data set is examined (Section 6.2). Further, both the measurement
model (Section 6.3) and structural models (Section 6.4) are evaluated. The reliability
and validity of the measurement model are assessed, along with relevant model-fit
indices for the proposed and final competing models. As the research is primarily of
an exploratory nature, alternative competing modified models are assessed (Joreskog,
1993; Byrne, 2001). Finally, evaluations and conclusions are drawn from the data
analysed within SEM analysis pertaining to model measurement and structural model
fit (Section 6.5), as outlined in Figure 6.1.
Figure 6.1 Chapter overview
Source: developed for this research
Data preparation (6.2)
Respondent profile (6.2.1)
Missing data (6.2.2)
Measurement model (6.3)
Structural model (6.4)
Conclusion (6.6)
Introduction (6.1)
Normality of data (6.2.3)
Outliers (6.2.4)
Non-response bias (6.2.5)
Confirmatory Factor Analysis (6.3.1)
Hypotheses evaluation (6.5)
146
6.2 Examining and preparation of data
6.2.1 Respondent profile
The respondent firms had an average of 85 employees, with 96% of the firms falling
within the classification of small and medium-sized enterprises (SME) with 1–200
employees (Australian Bureau of Statistics, 2002). Small and medium-sized firms
account for 97% of the business population (Australian Bureau of Statistics, 2004).
Thus, the respondents adequately represented the broader business population in
Australia. Further, the geographical location of the firms was also representative of
the broader Australian business community (Australian Bureau of Statistics, 2007b).
Respondents were drawn from:
New South Wales (35% of respondents) (33.79% ABS, 2007)
Victoria (23.7% of respondents) (25.02 % ABS, 2007)
Queensland (20.7% of respondents) (20.09 % ABS, 2007)
Western Australia (10.4% of respondents) (10.17% ABS, 2007)
South Australia (8% of respondents) (7.13% ABS, 2007)
Tasmania (2.2% of respondents) (1.87% ABS, 2007).
The bulk of respondents were managing directors (30.6%), international and
marketing/sales managers (20%), general managers and other managers responsible
for international decisions (29.7%), as seen in Table 6.1. Respondents also consisted
of owners (8.4%) and chief executive officers, vice presidents, chief organisational
officers and chief marketing officers (10.2%).
Table 6.1 Respondent profile characteristic size, position and location summary
Profile Mean Parameters No. of
respondents
Percentage (%)
Size 85 staff 1–5
6–19
20–200
200+
Missing
Total
66
76
71 9
2
224
29.5
28.2
38.2 4
1
29.5
57.8
96.0 100
Respondent
Owner
CEO/CFO/COO/VP
Int./ marketing manager
Manager (GM & other)
Managing directors
Missing
Total
19 23
45
67 69
1
224
8.4 10.2
20
29.7 30.6
.5
Location State/Territory Respondents ABS (2007)
147
NSW
VIC
QLD
WA
SA
TAS
Missing
Total
78
53
46 23
18
5 1
224
35.0
23.7
20.7 10.4
08.0
02.2 .5
33.79
25.02
20.09 10.17
07.13
01.87
Note: N=224
Source: developed for this research
The annual mean revenue was $28 million. The majority of firms made less than $5
million per annum (68.5%), with 87.6% making less than $20 million. Further, the
mean number of international markets was 15. That is, the average firm had
customers in 15 country markets, with the vast majority of firms (82.3%) having less
than 20 markets. The predominant country markets were the United States of
America, New Zealand, the United Kingdom, Singapore, Hong Kong, Papua New
Guinea and Japan. Further, Asian countries formed the bulk of the main country
markets, accounting for 39%, as seen in Appendix M. The proportion of annual
turnover from international markets was 38%, with the vast majority recording an
international turnover accounting for more than 49% of their turnover (65.6%), as
seen in Table 6.2.
Table 6.2 Respondents’ profile international market characteristic summary
Profile Mean Parameters No. Percentage% Cumulative %
Annual turnover $28m $1m
$1–5m
$5–20m
$20–100m
$100m+
Missing
Total
61
60 34
14
8 47
224
34.3
34.2 19.1
07.9
04.5 21
34.3
68.5 87.6
95.5
100.0
International
percentage of
annual revenue
(%)
38 1–5%
6–15%
16–49%
50–100%
Missing
Total
36 41
62
72 13
224
17.2 19.6
28.8
34.4 7
17.2 36.8
65.6
100.0
International
markets
15 markets 1–2 markets
3–5 markets
6–10 markets
10–20 markets
20 + markets
Missing
Total
21
75 47
35
38 8
224
9.3
34.9 21.8
16.3
17.7 4
9.3
44.2 66.0
82.3
100.0
Main country
markets
Top 7 main countries
United States
New Zealand
United Kingdom
Singapore
Hong Kong
Papua New Guinea
Japan
Missing
43 37
25
16 13
12
9 2
19.54 16.81
11.36
7.27 5.90
5.45
4.09 1
Note: N=224
Source: developed for this research
148
The year in which firms had been established age ranged from 1833 to 2006. The
average age of firms was 22 years, with the majority (90%) established after 1981.
Respondents had a mean of 10 years experience with the firm and 16.6 years within
their industry, highlighting that they were data-rich respondents. The mean age of
respondents was 45 years of age, with the range from 22 to 83 years of age, as seen in
Table 6.3.
Table 6.3 Respondents profile age and experience characteristic summary
Profile Mean Parameters No. Percentage% Cumulative %
Experience
Year firm
established
1986 Pre–1950
1951–1980
1981–2000
2001–2006
Missing
Total
13 31
131
43 6
224
6.0 14.4
59.7
19.9 2
6.0 20.4
80.1
100.0
Industry
experience
16.6 years 1–3 years
4–6 years
7–15 years
16+ years
Missing
Total
17
26 76
105
0 224
7.7
11.4 34.1
46.8
0
7.7
19.1 53.2
100.0
Firm experience 9.97 years 1–3 years
4–6 years
7–5 years
16+ years
Missing
Total
52
41 86
45
0 224
23.3
18.3 38.3
20.1
0
23.3
41.6 79.9
100.0
Age of
respondent
45.3 years 18–25 years
26–35 years
36–45 years
46–60 years
60+ years
Missing
Total
6
35 68
99
14 2
224
2.8
15.8 30.7
44.2
6.5 .5
2.8
18.6 49.3
93.5
100.0
Note: N=224
Source: developed for this research
Internet use profile
All firms used the Internet for e-mail, with 89.2% of firms using e-mail extensively in
their business and zero firms recording no use, as seen in Table 6.4. In contrast,
personal consumer web-space was not used by 42.7% of firms, and only 12.3% of
firms used the technology extensively. Intranet use was polarised: 32.7% of firms
used intranets extensively and 33% of firms did not use them at all. These findings
indicated a complex Internet usage profile beyond simple e-mail and website usage.
More specifically, firms used e-mail and websites extensively. However, firms used
consumer personal web-space (57.3%); online support systems, such as auto-response
and tracking systems (68%); intranet systems (66.4%); online transactional facilities
(56.1%); Internet directories (88.7%) and Internet marketplaces (63.5%), showing
149
diversity in usage and types of Internet technology. The high use of Internet
directories and Internet marketplaces showed a level of sophistication not captured
previously in the literature. These third-party websites created access to a broad
customer base that was not possible without the Internet, highlighting the extensive
use of virtual intermediaries.
Table 6.4 Respondent profiles Internet usage characteristic summary
Internet activity No use
(%) 2
(%)
3
(%)
4
(%)
5
(%)
6
(%)
Extensive
use (%)
Mean
(#)
0.0 0.0 0.9 1.8 2.8 5.2 89.2 6.80
Website
4.1 4.6 5.5 11.4 10.5 15.1 48.9 5.61
Personal web-space
42.7 13.6 10.0 7.3 7.7 6.4 12.3 2.93
Online support systems, e.g.
auto response
32.0 16.2 11.3 9.9 7.2 6.8 16.7 3.33
Intranet system
33.6 6.8 1.8 9.5 6.8 8.6 32.7 4.06
Transaction facilities, e.g.
shopping cart
43.9 9.4 5.4 9.9 11.2 6.3 13.9 3.09
Internet directories, e.g.
yellowpages.com.au
11.3 9.0 11.3 16.7 12.6 15.8 23.4 4.52
Internet marketplaces, e.g.
ebay.com
36.5 12.6 10.8 12.6 7.7 7.2 12.6 3.15
Note: N=224
Source: developed for this research
6.2.2 Missing data
It was imperative to reduce and appropriately manage missing data, as missing data
can bias conclusions drawn (Byrne, 2001). Kline (1998) argues that missing data
should constitute less than 10% of the total valid responses. Of the 224 valid
responses received, missing data constituted less than 1% of the data items (cells).
While this was a positive outcome, strategies were needed to manage the missing
data. Mean replacement listwise or pairwise missing data replacement was
inappropriate for this study given the use of SEM, as within SEM a covariance matrix
is used for output (Byrne, 2001).
A maximum likelihood (ML) estimate is a well-established estimate imputation
method (Kline, 2005). It has been argued that ML is the best method for replacing
missing values, as it produces the least amount of bias in missing value replacement
(Byrne, 1994; Arbuckle, 1996; McDonald & Ho, 2002; Enders, 2006). For this study,
150
an ML technique implemented in SPSS (Version 16) was used to replace missing
data.
6.2.3 Normality of data
No extreme values were present in the data. Violating the assumption of normally
distributed data in multivariate analysis has adverse effects on goodness-of-fit indices
and standard error estimates (Hulland, et al., 1996). Two descriptive measures can
assess non-normal data: skewness and kurtosis (Hair, et al., 2006). Skewness is the
non-symmetrical shape of the data from the mean, whereas kurtosis is the measure of
relative peakness or flatness of the curve (Malhotra, 1996). Extreme skewness for
variables is usually considered to have an absolute value skew index of > 3.0 (Kline,
2005). This study did not exhibit extreme skewness or kurtosis, as presented in
Appendix I.
6.2.4 Outliers
As factor analysis and therefore SEM are susceptible to outliers, it was prudent to
exclude outliers from the data set. One record (Response 13) was identified as an
outlier due to insufficient data (44% missing). Further, univariate and multivariate
outlier analyses were conducted.
Within a univariate outlier analysis, there is no single definition of what constitutes
an outlier. However, the common rule is that more than three standard deviations
away from the mean may indicate an outlier (Kline, 2005). In a multivariate outlier
evaluation, extreme scores are identified on two or more variables (Kline, 2005). One
method of multivariate outlier evaluation is the Mahalanobis distance (D) statistic D²
(Tabachnick & Fidell, 1996), which highlights individual cases that deviate from the
centroid (Kline, 2005), or extreme cases distinct from the population (Hair, et al.,
2006). The Mahalanobis process is a discriminate analysis that assesses the distance
between the closest groups (Malhotra, 1996). Several outliers were identified in a
Mahalanobis analysis. Under closer inspection of these supposed outliers, no truly
aberrant observations were evident (Hair, et al., 2006). Thus, apart from respondent
13, no outliers were excluded, as presented in appendix I.
151
6.3 Measurement model
A two-stage SEM approach was adopted as the theoretical framework is not
extensively developed (Schumacker & Lomax, 2004). That is, considering the
theoretical goal of this research was to identify interrelationships, a two-stage
approach was appropriate. In the two-stage SEM approach, a measurement model
evaluation (Stage I) and then a full structural model evaluation (Stage II) were used to
assess the interactions of constructs. Stage I used a congeneric model for maximum
reliability. The re-specification of a structural equation model is common in practice;
however, this should not be done using statistical informational alone, as theory is at
the centre of any re-specification (Anderson & Gerbing, 1988). Any re-specification
was done with careful consideration of the theory. Due to this re-specification of the
SEM model, the output becomes primarily an exploratory with confirmatory elements
(Anderson & Gerbing, 1988).
6.3.1 Confirmatory factor analysis (CFA)
A confirmatory factor analysis tests the uni-dimensionality of each factor, so as to
establish a valid measurement model (Byrne, 2001; Kline, 2005). Further, construct
validity was assessed within the CFA (Yang & Yoo, 2004). That is, convergent
validity was deemed to be adequate, as factor loading scores were at the acceptable
levels of .7 (Yang & Yoo, 2004). Secondly, where a four item solution was evident, a
composite construct reliability was also performed to test for internal validity, with
the rule of thumb being that a score above .7 highlighted a good level of internal
consistency, which was adopted in this study (Hair, et al., 2006). Thirdly, where a
four item solution was evident an extracted variance test was also performed to assess
convergence. That is, a score of .5 or above indicated adequate construct convergence
or internal consistency (Hair, et al., 2006). Lastly, a chi-squared comparison
discriminant validity test was performed to assess differentiation of factors of the
final modified model (Bagozzi, Yi & Phillips, 1991).
Model fit indices supplied an average fit of the model that helped to formulate a
theoretical confirmation of the model interrelations. A single-model index may be
limited, as part of the model may be a bad fit; therefore, multiple indicators were used
to establish a good model. That is, a combination of measures, including, Chi-squared
Normed (CMIN), P value (P), Goodness of fit index (GFI), Tucker-Lewis index
152
(TLI), Comparative fit index (CFI), Root Mean-squared Residual (RMR),
Standardised Mean-squared Residual (SRMR) and Root Mean-Square Error of
Approximation (RMSEA) were used to establish the model, as using a single
indicator would not assure model fit (Kline, 2005). This is illustrated in Table 6.5.
Researchers use different fit indices depending on publication preferences and may
mask indices that are unfavourable (Kline, 2005). However, this research was
predominantly exploratory in nature and even unfavourable findings were of interest
to the researcher. Thus, all major indices were presented and evaluated in this
research.
Table 6.5 Model fit indicators Indicator Definition Acceptable level
CMIN Chi-squared normed (CMIN)
Model fit based on chi square
Ratio between chi square and degrees of
freedom
0 to 2.0
P-value Accept: support context
P-value should be non-significant
P-value>. 01 not significant
GFI Goodness-of-fit index Greater than .95, although greater than .90 indicates
a reasonable fit
TLI Tucker-Lewis Index: Greater than 1
indicates a lack of parsimony or over-
specification
Greater than .95, although greater than .92 indicates
a reasonable fit.
CFI Comparative fit index Greater than .95, although greater than .92 indicates
a reasonable fit.
RMR
SRMR
Root Mean-squared Residual
Standardised Mean-squared Residual
RMR and SRMR <.10 Large values may indicate
outliers in raw data.
RSMEA Root Mean Square Error of
Approximation
RMSEA<.10, although values between .05 & .08
indicate better fit
Source: adapted from Byrne (1994); Hu & Bentler (1999); Kline (2005) and Hair et
al. (2006)
Normed Chi-squared (CMIN). The statistic was based on a chi-squared model, also
known as the chi-squared likelihood ratio or generalised likelihood ratio to evaluate
the model fit (Kline, 2005). The chi-squared measure-of-fit was based on the chi-
squared that quantified the estimated covariance matrix with the observed covariance
matrix (Hair, et al., 2006). The chi-squared norm or CMIN is the ratio between the
chi- squared and the degrees of freedom (Byrne, 2001; Kline, 2005). Although CMIN
is affected by very large sample sizes (Kline, 2005; Hair, et al., 2006), the sample size
in this research was not large enough to adversely affect this test. There are no clear
guidelines to minimal acceptance of CMIN: however, the general rule is that below
2.0 and even up to 5.0 is acceptable. However, below 2.0 is preferable and was
adopted in this study (Kline, 2005).
153
P value. Normally, researchers require p-values to be significant. Conversely, within
SEM the smaller the p-value, the greater the chance the observable sample and
estimated covariance matrices are not equal (Hair, et al., 2006). This is an accept-
support context hypothesis for theory testing, as opposed to the usual reject-support
context for statistical testing (Kline, 2005). Thus, the p-value should not be
significant at the level of .05.
Goodness of Fit Index (GFI). A goodness-of-fit index was developed because of
potential unreliability of the chi-squared method (Byrne, 2001). The GFI measures
the relative amounts of variance and covariance. It is an absolute index that compares
the hypothesised model with no model at all (Hu & Bentler, 1999). The GFI is a fit
statistic that is less sensitive to sample size, which has a range between 0 and 1
(Bentler, 1990). GFI values greater than .90 typically indicate good fit (Byrne, 2001;
Hair, et al., 2006); however, .95 is preferable (Hair, et al., 2006) and was adopted in
this study.
Tucker-Lewis Index (TLI). The TLI is also known as the non-normed fit index
(Kline, 2005). It is similar to the CFI in that it involves a mathematical comparison
between a measurement model and a baseline model (Hair, et al., 2006). The TLI can
fall outside 0 and 1, as it is not normed. Models approaching 1.0 are considered better
models than those with lower values (Byrne, 2001; Hair, et al., 2006). More
specifically, Hair et al. (2006) advocate that the TLI and CFI should be larger than .92
if the sample size is less than 250 and the number of variables greater than 30. An
index of above .95 is preferable (Hair, et al., 2006) and was adopted for this study.
Comparative fit index (CFI). CFI is an incremental fit index that is an improvement
on the normed fit index (NFI), which has limitations of over-estimations in small
sample sizes. Thus, the CFI was used in this research rather than the NFI, as CFI does
not assume zero error (Byrne, 2001; Kline, 2005; Hair, et al., 2006). The CFI is
among the most widely used indices, with a range from 0 to 1. CFI, like all
incremental-fit indices, assesses relative improvement in fit of the researcher‘s model
compared to a baseline model (Kline, 2005). Values of less than .90 do not usually
indicate model fit (Hu & Bentler, 1999; Kline, 2005; Hair, et al., 2006). An index of
.95 is preferable (Kline, 2005) and was adopted in this study.
154
Root Mean Residual and Standardised Root Mean Residual (RMR and SRMR).
The RMR and SRMR are based on covariance residuals that evaluate the difference
between observed and predicted covariance (Kline, 2005). RMR is a measure of the
mean absolute value of covariance residuals, whereby values less than .10 are
generally considered favourable (Kline, 2005). One problem with RMR is that
interpreting RMR may be difficult if different scales are used. In this case a
standardised RMR was used, an SRMR (Kline, 2005). An SRMR represents the
average value across all standardised residuals ranging from 0 to 1 (Byrne, 2001).
Kline advocated a value of less than .10 for a good fit indicator (Kline, 2005). Thus,
SRMR was used as a model-fit tool rather than RMR, as SRMR is more interpretable.
Root Mean Square Error of Approximations (RMSEA). The RMSEA is a
‗badness-of-fit index‘ (Kline, 2005 p. 138), which represents how well a model fits
the population, not just the sample used for estimation (Byrne, 2001; Kline, 2005;
Hair, et al., 2006). The approximation attempts to correct for both model complexity
and sample size by including each in the computation (Hair, et al., 2006). Lower
values of RMSEA indicate a better fit. Typically, values under .10 are considered
acceptable, with >.05 indicating close fit. RMSEA values between 0.03 and 0.08,
giving a 95% confidence interval, are preferable (Hair, et al., 2006) and was adopted
in this study.
After the model indicators had been established (CMIN, P-value, GFI, CFI, TLI,
SRMR and RMSEA), those indicators were used to interpret the confirmatory factor
analysis for each factor, which will be assessed next.
Information availability (Factor 1)
Items drawn from Hamill and Gregory (1997) (items 1–3) were confirmed. That is,
information pertaining to markets, competitors, customers as well as information
pertaining to suppliers (Item 5) drawn from Torre and Moxon (2002) for the construct
‗information availability‘. A correlation between items 4 and 5—information
pertaining to resources and suppliers—was evident when evaluating the indicators.
Information pertaining to resources was more complex than simple information
availability. Therefore, item 4, ‗information pertaining to resources‘ was excluded.
155
The model CMIN normed chi-squared ratio with degrees of freedom was .942, p-
value .390, GFI .996, TLI .1.001, CFI 1.000, SRMR .0115 and RMSEA .000, as
presented in Table 6.6. Thus, the theoretical re-specification of the model improved
Factor 1 to fall within acceptable parameters. Item factor loadings ranged from .71 to
.87, with construct reliability for the factor of .79—above the acceptable score of
greater than .70 (Hair et al. 2007). Convergent validity was also within the acceptable
level of greater than .50 (Hair et al. 2007), as the variance-extracted score was .61.
Table 6.6 Summary of initial findings (CFA): information availability (F1)
Question
Item
Item wording
Initial
standardised
loadings
Final
Standardised
loadings
INFAVL 1 Information about international market/s is
available .74 .75
INFAVL 2 Information about competitors is available
.84 .87
INFAVL 3 Information about international customers
is available .80 .79
INFAVL 5 Information about international suppliers
is available .76 .71
Excluded INFAVL 4 Information about international resources
needed to produce goods or services is
available
.78
Achieved fit indices
CMIN/DF
(χ ²/DF)
RMSEA GFI CFI TLI SRMR P p-
value Initial 19.806/ 5
3.961 .115 .964 .975 .949 .0306 .001
Final 1.883/ 2
.942
.000 .996 1.000 1.000 .0115 .390
Composite Construct Reliability .79: Variance extracted (convergent validity) .61
Source: developed for this research
Information usage (Factor 2)
The three items measuring ‗information usage‘, the usage of; market, resources and
suppliers‘ information captured the concept of information usage. Thus, these three
items captured a more complex version of information, confirming items
predominantly drawn from Torre and Moxon (2002) as opposed to Hamill and
Gregory (1997). This is, items relating to processed and analysed information
pertaining to the market, resources and suppliers were captured as the concept of
information usage, with factor loadings of .61, .85 and .96 respectfully. Item factor
loading weights ranged from .61 to .96, as presented in Table 6.7. Although
156
information usage pertaining to market information .61 falls outside of the accepted
.70, it is prudent to take this item forward to the full structural model for a more
precise analysis.
Table 6.7 Summary of initial findings (CFA): information usage (F2)
Question
item
Item wording Initial
standardised
loadings
Final
Standardised
loadings
INFUSE 1 In my firm, we use information about international market/s.
.74 .61
INFUSE 4 In my firm, we use information about
international resources needed to produce
products or services.
.86 .85
INFUSE 5 In my firm, we use information about
international suppliers. .88 .96
Excluded INFUSE 2 In my firm, we use information about
competitors. .69
INFUSE 3 In my firm, we use information about
international customers. .74
Achieved fit indices
CMIN/DF
(χ ²/DF)
RMSEA GFI CFI TLI SRMR P p-
value
Final 77.875/ 5
15.575
.256 .864 .893 .787 .256 .000
Source: developed for this research
Interaction communication (Factor 3)
Items 1-3 were found to factor for the concept of interactive communication. That is,
efficiency of communication .79, frequency of communication .78 and speed of
communication .85 were found to be representative of the factor interactive
communication, as presented in Table 6.8. The item, multiple functions of
communication (item 4) was correlated with items 1, 3 and 5. Thus, multiple
functions as a component of interactive communication was excluded. The
efficiencies, frequency and speed of interactive communication are core items of
interaction based on communication drawn from the literature, as opposed to specific
Internet interaction espoused by Yuping (2003) and Brock and Yu (2005).
157
Table 6.8 Summary of initial findings (CFA): Interactive communication (F3)
Question
item
Item wording Initial
standardised
loadings
Final
Standardised
loadings
INTACT 1 In my firm, we have an efficient mechanism(s)
of communication .74 .79
INTACT 2 In my firm, we have a high frequency of
communication. .83 .78
INTACT 3 In my firm, we have fast speed of communication.
.83 .85
Excluded INTACT 4 In my firm, we have multiple functions for
interactive communication. .73
INTACT 5 In my firm, we have the ability to distribute
communication (e.g. website—24/7) .67
Achieved fit indices
CMIN/DF
(χ ²/DF)
RMSEA GFI CFI TLI SRMR P p-
value Final 36.191/5
7.238
.167 .939 .943 .887 .0480 .000
Source: developed for this research
International mindset (Factor 4)
Items 1, 3, 4, and 6 were confirmed to factor for the construct international mindset.
Items were drawn studies from Moen (item 1), Asplelund and Moen (2004) (item 3)
and a traditional internationalisation study by Numella et al (2004). However, items 2
and 5 by Aspelund and Moen (2004) correlated with similar questions. The item for
finance and human resources (item 2) correlated with other measures, such as items 1
(commits to service), 3 (emphasises importance of growth) and 5 (regards the world
as a market). Thus, item 2 was excluded. Further, Item 5, ‗regards the world as a
market‘, correlated with views that rapid internationalisation was achievable (Item 6).
Item 6, ‗perceptions of rapid internationalisation‘ captured the essence of
international vision more precisely than the global mindset item (Item 5). Thus, Item
5 was excluded.
Because of the model re-specification, the model CMIN normed chi-squared ratio
with degrees of freedom was 1.961, p-value .141, GFI .991, TLI coefficient .988, CFI
.996, SRMR .0160 and RMSEA .066, as presented in Table 6.9. Thus, the theoretical
re-specification of the model improved Factor 4 ‗international mindset‘ to fall within
acceptable model fit parameters.
158
Table 6.9 Summary of initial findings (CFA): International mindset (F4)
Question
Item
Item wording Initial
standardised
loadings
Final
Standardised
loadings
INTMND 1 The firm is committed to servicing
international customers. .82 .80
INTMND 3 The firm emphasises the importance of
international growth to employees. .88 .89
INTMND 4 The firm views managerial international
experiences as important for entering overseas
markets.
.75 .76
INTMND 6 The firm views fast international market growth as achievable.
.78 .78
Excluded INTMND 2 The firm commits sufficient financial and
human resources to international market(s.) .76
INTMND 5 The firm regards the world as the market.
.77
Achieved fit indices
CMIN/DF
(χ ²/DF)
RMSEA GFI CFI TLI SRMR P p-
value Initial 48.491/ 9
5.388
.140 .930 .954 .954 .0391 .000
Final 3.923/ 2
1.961
.066 .991 .996 .988 .0160 .141
Composite Construct Reliability .80: Variance extracted (convergent validity) .65
Source: developed for this research
Business networks (Factor 5)
The items captured were drawn from a single study by Wu et al (2003), which had a
primary focus on relationships. Item 5, ‗due to business networks, the firm enters new
international markets‘, correlated with item 6 (enhances international performance),
item 2 (strength of relationship), item 3 (longer-lasting relationships) and item 4
(acquisition of new customers). Thus, items 5 and 6 were excluded.
Because of the model re-specification, the model CMIN normed chi-squared ratio
with degrees of freedom was .640, p-value .527, GFI .997, TLI coefficient 1.003, CFI
1.000, SRMR .0053 RMSEA .000, as presented in Table 6.16. Thus, the theoretical
re-specification of the model provided acceptable model-fit parameters.
Table 6.10 Summary of initial findings (CFA): business relationship usage (F5)
Question
item
Item wording Initial
standardised
loadings
Final
Standardised
loadings
BUSREL 1 We use business networks to maintain
international customer relationships. .90 .87
159
BUSREL 2 We use business networks to strengthen
existing relationships. .93 .97
BUSREL 3 We use business networks to develop longer-
lasting relationships. .90 .92
BUSREL 4 We use business networks to acquire new
customers. .80 .78
Excluded BUSREL 5 We use business networks to enter new
international country market/s. .74
BUSREL 6 We use business networks to enhance our
international performance. .85
Achieved fit indices
CMIN/DF
(χ ²/DF)
RMSEA GFI CFI TLI SRMR P- p-
value Initial 190.430/ 9
21.159
.301 .772 .867 .779 .608 .000
Final 1.280/ 2
.640
.000 .997 1.000 1.003 .0053 .527
Composite Construct Reliability .80: Variance extracted (convergent validity) .78
Source: developed for this research
Psychic distance (Factor 6)
The concepts of language and cultural elements of psychic distance were captured in
the construct. Items 5 (low education), 6 (low economic), 7 (understanding) and 8
(lack of knowledge) were not captured in the factor psychic distance. That is,
language and culture elements captured the concept of psychic distance as opposed to
those elements of economics and education (O'Grady & Lane, 1996). Thus, these
items were excluded from the model.
After the model re-specification, the model CMIN normed chi-squared ratio with
degrees of freedom was 1.841. p-value 159, GFI .992, TLI coefficient .993, CFI .998,
SRMR .0133 and RMSEA .061. Thus, the theoretical re-specification of the
improved model provided acceptable model fit parameters, as presented in Table
6.11.
Table 6.11 Summary of initial findings (CFA): psychic distance (F6)
Question
item
Item wording Initial
standardised
loadings
Final
Standardised
loadings
PSYDIS 1 Customer acquisition is limited in non-English
language speaking country markets. .89 .89
PSYDIS 2 Customer acquisition is limited … when
English is not the national language. .95 .97
PSYDIS 3 Customer acquisition is limited … when
English is not the business language. .89 .88
160
PSYDIS 4 Customer acquisition is limited … when the
country has a different culture. .65 .62
Excluded PSYDIS 5 Customer acquisition is limited … when there
is a low level of education in that country. .52
PSYDIS 6 Customer acquisition is limited … when there
is a low level of economic development in that
country.
.52
PSYDIS 7 Customer acquisition is limited … when no
staff in the firm read, speak or understand the
language from the customer’s country.
.67
PSYDIS 8 Customer acquisition is limited … when there
is a lack of knowledge about international
market consumers.
.46
Achieved fit indices
CMIN/DF
(χ ²/DF)
RMSEA GFI CFI TLI SRMR P-
value Initial 275.237/20
12.242
.239 .729 .791 .708 .1261 .000
Final 3.682/ 2
1.841
.061 .992 .998 .993 .0133 .159
Composite Construct Reliability .79: Variance extracted (convergent validity) .72
Source: developed for this research
Internet intensity (Factor 7)
As identified earlier in the EFA, Factor 7 has a two-factor solution, whereby
Aspelund & Moen‘s (2004) measures were statistically more relevant for this
research than those of Gibbs and Kraemer (2004). That is, the factor identified is the
core of Aspelund and Moen (2004)—market research (.71) and marketing
management (.96), as presented in Table 6.12. Thus, a two-item solution was the best
representation of the concept Internet intensity. That is, the concept of digitalisation
was not captured through Internet usage items.
Table 6.12 Summary of initial findings (CFA): Internet intensity (F7)
Question
item
Item wording Initial
standardised
loadings
Final
Standardised
loadings
INTINS 4 The firm uses the Internet for market research.
.63 .71
INTINS 5 The firm uses the Internet for management of
international market. .70 .96
Source: developed for this research
International growth (Factor 8)
Items 1–3 were found to factor. That is, item factor loadings for new customers in
new country market/s (.73 in English model: .84 in non-English model), new
161
customers in existing country market/s (.98 in English model: .98 in non-English
model) and usage by existing customers in country market/s (.81 in English model:
.92 in non-English model) were found to capture the construct of international market
growth, as presented in Table 6.13.
Table 6.13 International market growth: English speaking markets (F8)
Question
item
Item wording Initial
standardised
loadings
Final
Standardised
loadings
INTGROE 1 Over the last 10 years, our sales to
predominantly English-speaking country
markets increase/decrease in new customers
in new country market/s.
.73 .73
INTGROE 2 Over the last 10 years, our sales to
predominantly English-speaking country
markets increase/decrease in new customers
in existing country market/s.
.98 .98
INTGROE 3 Over the last 10 years our sales to
predominantly English-speaking country
markets increase/decrease in usage by existing
customers in country market/s.
.81 .81
Question
item
Item wording Initial
standardised
loadings
Final
Standardised
loadings
INTGRONE 1 Over the last 10 years, our sales to
predominantly non-English-speaking country
markets increase/decrease in new customers
in new country market/s
.84
.84
INTGRONE 2 Over the last 10 years our sales to
predominantly non-English-speaking country
markets increase/decrease in new customers
in existing country market/s.
.98
.98
INTGRONE 3 Over the last 10 years, our sales to
predominantly non-English-speaking country
markets increase/decrease in usage by existing
customers in country market/s.
.92
.92
Source: developed for this research
Measurement model discussion
Along with adequate factor loading weights, indicators highlighted the reliability and
convergent validity of the measures in the model. That is, where it was possible to
test (more than a three item solution) reliability composite scores all fell within the
acceptable parameter of above .7, as argued for by Hair et al. (2006)
[(SUM(sli))2]/[(SUM(sli))
2 + SUM(ei))], because composite reliability scores ranged
from .74 to .89. Further, all variance-extracted scores also fell within the parameters
of above .5 as argued for by Hair et al. variance extracted = [(SUM(sli2)]/[(SUM(sli
2)
162
+ SUM(ei))] and based on latent model-convergent validity evaluations with
measurement error (Fornell & Larcker, 1981). That is, all variables had variance-
extracted scores ranging from .61 to .83, falling within acceptable levels and
highlighting convergent validity, as outlined in Table 6.14.
Table 6.14 Summary of measurement model fit statistics
Fit measures
Measurement
model
Overall model fit Composite
reliability Model fit Model comparison
CMIN/DF RMSEA GFI CFI TLI SRMR
Information
availability
.942 .000 .996 1.000 1.000 .0115 .79
Information usage Only a three-item solution
Interactive
communication
Only a three-item solution
International
mindset
1.961 .066 .991 .996 .988 .0160 .80
Business
relationships
.640 .000 .997 1.000 1.003 .0053 .80
Psychic distance 1.841 .061 .992 .998 .993 .0133 .79
Internet intensity Only two-item solution
International
(English) market
growth
Only a three-item solution
International (non-
English) market
growth
Only a three-item solution
Note * only two or three items—statistics should be considered with caution
Source: developed for this research
Now the full structural model will be assessed.
6.4 Full structural model evaluation
The full structural model process evaluated internetalisation from both an English-
speaking market model and non-English speaking market model through; a saturated
model analysis, the proposed model from section 6.3, and a competing model. Within
a saturated model with all factors interconnecting, researchers can assess the
contribution and/or level of contribution of a particular factor (Hox, 2002). As such,
there was an argument for performing a saturated model assessment (Byrne, 2001).
Firstly, a fully saturated mediated model was evaluated primarily to explore and
understand the interrelationships in the model (Byrne, 2001). Multiple mediation
effects were explored to assess interrelationships in a larger theoretical context
163
(Mathieu, DeShon & Bergh, 2008). In this study, it has been proposed that the
‗Internet intensity‘ of the firm mediates multiple factors. Thus, a fully saturated
model is presented next.
Saturated model
English market model (Model 1): The fully saturated English speaking market
model fit indicators highlighted model-fit normed chi-squared (2.133), SRMR .071
and a RSMEA that indicates reasonable fit (.0644). However, other indicators of
model fit highlighted deficiencies in the model. For example, p-value 0.00
(significant), GFI .824, TLI .902, and CFI .914 indicating poor model fit overall, as
outlined in Table 6.15 and Appendix J. These findings highlighted that the model had
significant covariance. However, findings also highlighted non-significant
interrelationships.
Non-English market model (Model 2): The fully saturated model highlighted the
CMIN normed chi-squared ratio with degrees of freedom was 2.198, GFI .826, TLI
coefficient .905, CFI .918, SRMR .1350 and RMSEA .073, as presented in Table
6.21. These findings indicate covariance, but not good model fit.
Table 6.15 Summary of full-saturated model fit statistics
Model
Overall fit
P value<.01 Model fit indices
χ ² /DF
CMIN < 3
RMSEA
>.10
GFI
>.92
CFI
>.92
TLI
>.92
SRMR
<.10
Saturated model
Saturated English
Model 1
631.253/ 296
2.133
.071 .832 .920 .906 .0644 .000
Saturated non
English Model 2
602.796/ 296
2.036
.068 .840 .931 .918 .0609 .000
Note: Indicators of model fit as outlined in Table 6.9: CMIN/DF <3; GFI>.90; TLI>.92; CFI>
.92; SRMR<1.0; RMSEA<1.0; P>.01
Source: developed for this research
Proposed model
English speaking market model (Model 1):
The proposed model that was postulated at the conclusion of Chapter 4 yielded a
CMIN normed chi-squared ratio with degrees of freedom of 2.292, GFI .818, TLI
coefficient .892, CFI .906, SRMR .1348 (SRMR) and RMSEA .076 (RMSEA), as
164
seen in Figure 6.2. The proposed model demonstrated covariance between factors
with some good model fit indicators; however, P-value, GFI, CFI, TLI and SRMR did
not indicate good model fit, as is presented in Table 6.16.
Figure 6.2 Proposed model (English speaking-Model 1)
.00
INFAVL
.53
4 [5]e1
.73
.64
4 [3]e2
.80
.72
4 [2]e3.85
.57
4 [1]e4.76
.24
INTGRO E
.67
7a [3]
e5
.82.89
7a [2]
e6
.94.55
7a [1]
e7
.74
.28
INTINS
.46
RES e8.68
.97
MNG e9
.99
e10
.33
INFUSE
.86
6 [5]
e12
.77
6 [4]
e13
.46
6 [1]
e14
.93.88.68
.11
INTACT
.71
5 [3]
e16
.66
5 [2]
e17
.63
5 [1]
e18
.84.81.79
.01
INTMND
.63
9 [6]
e19
.59
9 [4]
e20
.77
9 [3]
e21
.62
9 [1]
e22
.79.77.88.79
.22
BUSREL
.60
10 [4]
e23
.85
10 [3]
e24
.93
10 [2]
e25
.76
10 [1]
e26
.78.92.97.87
PYSDIS
.79
11 [1] e27.94
11 [2] e28.77
11 [3] e29.39
11 [4] e30
.89
.97
.88
.62
.03
.26.29 -.06
.14 .15.03
e31
chi-square=699.147
df305
p=.000
gfi.818
tli=.892
cfi=.906
rmsea=.076
caic=1167.197
.06-.08 .25 .34 .11
.08
.05-.08
.47
.57 .25
.11
e32
e33 e34 e35 e36
Source: developed for this research
Table 6.16 Summary of proposed structural model fit statistics
Model
Overall fit
P value<.01 Model fit indices
χ ² /DF
CMIN < 3
RMSEA
>.10
GFI
>.92
CFI
>.92
TLI
>.92
SRMR
<.10
Proposed model analysis
Proposed English
Model 1
699.147/ 305
2.292
.076 .818 .906 .892 .1348 .000
Proposed non
English Model 2
670.507/ 305
2.198
.073 .826 .918 .905 .1350 .000
Note: Indicators of model fit as outlined in Table 6.9: CMIN/DF <3; GFI>.90; TLI>.92; CFI>
.92; SRMR<1.0; RMSEA<1.0; P>.01
Source: developed for this research
165
Non-English speaking market model (Model 2):
The proposed non-English market model (Model 2) yielded CMIN normed chi-
squared ratio with degrees of freedom of 2.198. GFI .826, TLI .905, CFI .918, SRMR
.1350 and RMSEA .073, as seen in Figure 6.3. The proposed model demonstrated
interrelationships or covariance between factors with some good model fit indicators;
however, P-value, GFI, CFI, TLI and SRMR indicated poor model fit.
Figure 6.3 Proposed model (non English-Model 2)
.00
INFAVL
.53
4 [5]e1
.73
.64
4 [3]e2
.80
.71
4 [2]e3.84
.58
4 [1]e4.76
.32
INTGRO NE
.86
PEN
e5
.93.93
NEW
e6
.97.70
DEV
e7
.84
.29
INTINS
.46
RES e8.68
.97
MNG e9
.98
e10
.33
INFUSE
.87
6 [5]
e12
.77
6 [4]
e13
.46
6 [1]
e14
.93.88.68
.11
INTACT
.72
5 [3]
e16
.64
5 [2]
e17
.62
5 [1]
e18
.85.80.79
.01
INTMND
.62
9 [6]
e19
.59
9 [4]
e20
.77
9 [3]
e21
.62
9 [1]
e22
.79.77.88.79
.22
BUSREL
.60
10 [4]
e23
.85
10 [3]
e24
.93
10 [2]
e25
.76
10 [1]
e26
.78.92.97.87
PYSDIS
.79
11 [1] e27.94
11 [2] e28.78
11 [3] e29.39
11 [4] e30
.89
.97
.88
.62
-.01
.26.29 -.05
.14 .15.03
e31
chi-square=670.507
df305
p=.000
gfi.826
tli=.905
cfi=.918
rmsea=.073
caic=1138.557
-.07.09 .03 .46 .13
-.17
.05-.08
.47
.57 .25
.11
e32
e33 e34 e35 e36
Source: developed for this research
Competing model: ‘Internetalisation’
When working with SEM, it is important to know when to stop fitting the model.
Although there is no set rule as to when a researcher should stop modifying the
model, Byrne (2001) advocates the researcher should consider some key issues.
Firstly, the researcher should consider the knowledge of the theory. Secondly,
statistical criteria should be adequately assessed using information pooled from
various indices or fit. Thirdly, the researcher should keep a watchful eye on the
parsimony of the model. Hence, there should be a ‗balance between adequate
representation of the data and falling prey to the temptation of incorporating too
166
many parameters in attempting to model fit, statistically’ (Byrne, 2001 p, 7). Thus,
the researcher approached model modification from a theoretical perspective
(Anderson & Gerbing, 1988; McDonald & Ho, 2002), as the study is primarily
exploratory, which evaluated competing models for conclusions (Boomsma, 2000;
Byrne, 2001). This was especially the case because the research was in a
contemporary evolving body of knowledge. Thus, the researcher put theory before
statistics. For example, pathways between F2 to F5 and F1 to F6 yielded better
statistical model fit, but did not make sound theoretical sense. Thus, these pathways
were not included.
The competing model highlighted a more complex interrelationship between
variables than was initially postulated in Figure 6.2. Re-specifying a structural
equation model is common in practice; however, this should not be done on statistical
informational alone, as theory is at the centre of any re-specification (Anderson &
Gerbing, 1988). Any set of multivariate data has more than one plausible structural
model (McDonald & Ho, 2002). It is necessary to pay attention to alternative and
equivalent sustainable models (McDonald & Ho, 2002). In this research, only two
new pathways were added to the model, as illustrated in Figure 6.6. That is,
information availability was also correlated with both the international mindset of the
firm and the use of business relationships, which was not initially proposed. Now the
competing models are presented.
Internetalisation: English speaking markets (Model 1)
The final competing model yielded a CMIN normed chi-squared ratio with degrees of
freedom of 1.140. p-value .173, GFI .951, TLI coefficient .992, CFI .994, SRMR
.0442 and RMSEA .025 as presented in Table 6.17. Thus, all indicators highlighted
good model fit, as the partially mediated model was a good representation of how the
Internet of the firm covaried with more traditional elements of internationalisation
such as information, interactive communication, international mindset, business
relationships, but not psychic distance for English markets, as illustrated in Figure
6.4.
167
Table 6.17 Summary of competing model structural model fit statistics
Model
Overall fit
P- value<.01 Model fit indices
χ ² /DF
CMIN < 3
RMSEA
>.10
GFI
>.92
CFI
>.92
TLI
>.92
SRMR
<.10
Modified model analysis: Final models (21 items)
Modified English
Model 1
96.912/ 72
1.259
.034 .946 .989 .985 .0614 P>.01
Modified non
English Model 2
162.722/ 122
1.333
.039 .931 .979 .984 .0748 P>.01
Modified model analysis additional paths (3 paths): Final models (21 items)
Modified English
Model 1
85.501/ 75
1.140
.025 .951 .994 .992 .0442 P>.01
Modified non
English Model 2
147.593/ 120
1.240
.033 .936 .988 .985 .0532 P>.01
Note: Indicators of model fit as outlined in Table 6.9: CMIN/DF <3; GFI>.90; TLI>.92; CFI>
.92; SRMR<1.0; RMSEA<1.0; P>.01
Source: developed for this research
Figure 6.4 Competing model (English speaking markets-Model 1)
INFAVL
.61
COM
e3
.78
.72
MKT
e4
.85
.24
INTGRO E
.68
PEN
e5
.83.90
NEW
e6
.95.56
DEV
e7
.75
.31
INTINS
.47
RES e8.68
.99
MNG e9
1.00
e10
.24
INFUSE
.85
RESe13
.79
SUPe14
.92
.89
.14
INTACT
.67
SPE
e16
.68
EFF
e18
.82.82
.19
INTMND
.97
GRO
e21
.54
CUS
e22
.98.73
.16
BUSREL
.71
LLR e241.13
STR e25
.84
1.06
.04
e31
chi-square=87.496
df76
p=.173
gfi.950
tli=.991
cfi=.994
rmsea=.026
caic=369.608
.49 .18
.28
.23
.29e32
e33
.18
.14.26
.23 .23
.37
.31
e34e35
.08
Source: developed for this research
168
Internetalisation: Non-English speaking markets (Model 2)
The final competing model for non-English-speaking markets had a CMIN normed
chi-squared ratio with degrees of freedom of 1.240, GFI .936, TLI coefficient .985,
CFI .988, SRMR .0532 (SRMR) and RMSEA .033, as seen in Figure 6.5. All
indicators highlighted good model fit, with the partially mediated model representing
how the Internet of the firm covaried with more traditional elements of
internationalisation such as information, interactive communication, international
mindset, business relationships and psychic distance. These findings indicated good
model fit, as outlined in Table 6.17.
Figure 6.5 Competing model (non-English speaking markets-Model 2)
INFAVL
.61
COM
e3
.78
.72
MKT
e4
.85
.28
INTGRO NE
.86
PEN
e5
.93.94
NEW
e6
.97.71
DEV
e7
.84
.31
INTINS
.46
RES e8.68
1.00
MNG e9
1.00
e10
.24
INFUSE
.85
RESe13
.79
SUPe14
.92
.89
.14
INTACT
.72
SPE
e16
.64
EFF
e18
.85.80
.21
INTMND
.92
GRO
e21
.57
CUS
e22
.96.75
.18
BUSREL
.76
LLR e241.05
STR e25
.87
1.03
.03
e31
chi-square=147.593
df120
p=.044
gfi.936
tli=.986
cfi=.989
rmsea=.032
caic=474.587
.49 .18
.28
.23
.31e32
e33
.14
.16.26
.42
.37
.33
e34e35
.07
Psychic
1.02
NLG e371.01 .72
BLG e38.85
-.15
-.08
.37
cult e39
.61
Source: developed for this research
169
Bootstrap
English market model (Model 1):
It was essential to use a bootstrapping technique to help assess the model stability
(Boomsma, 2000). More importantly, the significance test p-value was increased
from .173 to .537 when using a Bollen-Stine bootstrap test (1000 cases) of the null
hypothesis that the model was correct, highlighting the robustness of the competing
model. No difference exists between the analyses of the competing model with a
bootstrap test (1000 samples). The CMIN normed chi-squared ratio with degrees of
freedom found no difference, and all other model indices were the same.
Non-English market model (Model 2):
No difference exists between the analyses of the competing model non-English
market model with a bootstrap test (1000 samples). More importantly, the
significance test p-value was increased from .058 to .332 when using a Bollen-Stine
bootstrap test (1000 cases) of the null hypothesis that the model is correct,
highlighting the robustness of the competing model in question.
Through a model modification process, nine items were excluded. For example,
cross-loadings occurred when customer acquisition correlated with items within
international market growth (F8). Therefore, the item model modification went from
32 items to 21 items for parsimony where theoretically appropriate, as outlined in
Table 6.18. Further, only one factor was partially excluded. Psychic distance was only
excluded in the English-speaking Model 1 market growth. This finding was
theoretically intuitive as psychic distance from Australia should not be present in
English-speaking markets (Model 1), giving further validation to the theoretical
plausible. Moreover, pathways between F1–F8, F2–F8, F3–F7, F6–F5 and F6–F7
were not found to be significant. Conversely, pathways F1–F4 and F1–F5 were found
to be both statistically significant and theoretically plausible.
Table 6.18 Final model measurement table summary
Factor Item Accepted/excluded Comment
Information available (F1)
Information pertinent to….
Markets
Competition
International consumers
Resources
Suppliers
Confirmed
Confirmed
Excluded
Disconfirmed
Excluded
Information availability was drawn from Hamill
and Gregory (1997). Items were adapted to
highlight core perceived information benefits to
firms, i.e. market, customer and competitor
information. Further, items were also derived from
information and knowledge-based perspectives of
transactional efficiency. This included information
170
pertaining to customers, competitors and markets,
which also included resources and suppliers
(Petersen et. al. 2002 and Torre & Moxon 2002—
conceptual papers).
Information usage (F2)
Information usage pertinent
to…
Markets
Competition
International consumers
Resources
Suppliers
Excluded
Disconfirmed
Disconfirmed
Confirmed
Confirmed
Information usage was not statistically based.
However, items were derived from information and
knowledge-based perspectives of transactional
efficiency. This included information pertaining to
market, customers and competitors, which was
drawn from conceptualisations founded in Petersen
et. al. (2002) and Torre and Moxon (2001)
Interactive communication
(F3)
In the firm we have …
communication
Efficient
Frequent
Speedy
Multiple function
Distribute any time
Confirmed
Excluded
Confirmed
Disconfirmed
Disconfirmed
Efficiency of communication as a measure of
interaction was derived from Brock and Yu, 2005
who were evaluating website interaction. Speed of
communication was derived from work in website
interaction from Yuping (2005) (CFA). The other
items excluded were also from the research
(Yuping 2005). The disconfirmed item was a new
item, multiple function.
International mindset (f4)
The firm …
Commit to int. customers
Commit to resources
Emphasises growth
Values int. experience
World as a market
Rapid internationalisation
Confirmed
Disconfirmed
Confirmed
Excluded
Disconfirmed
Excluded
Item 1 was derived from the international customer
orientation in the international orientation factor
evaluation the Internet in international marketing,
by Moen (2002b) (EFA). However, items that
emphasised resource commitment, the world as a
single market and International experience as
important either were disconfirmed or excluded
(Nummela, et al. 2004). The second item
confirmed was the factor derived from both
Aspelund & Moen (2004) (SEM) and Nummela,
where growth is emphasised in the firm.
Business Networks (F5)
We use business networks
to…
Rel. = relationship
Maintain customer rel.
Strengthen existing rel.
Develop long-lasting rel.
Acquire new customers
Enter new country markets
Enhance int. performance
Excluded
Confirmed
Confirmed
Excluded
Disconfirmed
Disconfirmed
The two confirmed items and Item 1, which was
excluded in the business network factor, were
derived from a single research paper (Wu et al.
2003). E-commerce and relationship development
(EFA & CFA). The three other items (4, 5 6),
were adaptations, resulting in measurement error.
Psychic Distance (F6)
Customer acquisition is limited
in …countries
Eng. = English
Lang. = Language
Non Eng. speaking markets
Eng. not national language
Eng. not business language
Different culture
Low level education
Low level economic
No staff read or speak lang.
Lack of knowledge of
Excluded
Confirmed (Dis)
Confirmed (Dis)
Excluded
Disconfirmed
Disconfirmed
Disconfirmed
Disconfirmed
Primarily, psychic distance was based on
conceptual work within the body of knowledge.
That is, O‘Grady and Lane‘s 1996 qualitative study
of the literature extrapolated key elements of
psychic distance, which were used in combination
with work from Torre and Moxon (2001) and
Hallan and Wiedersheim-Paul (2004).
Note: Psychic distance was only confirmed for
non-English country markets. Dis. = disconfirmed
for English country markets.
Internet intensity (f7)
The firm uses the Internet
for…
Market research
Market management
Confirmed
Confirmed
The two items confirmed came from a sole
research paper. SEM Internet intensity and
internationalisation. Aspelund & Moen 2004.
International Growth (f8)
Over the last 10 years the firm
has Increased/ decreased sales
in international country
markets…
Cust. = customer
English markets (8a)
New cust. new market
New cust. existing market
Existing cust. exist. market
Non-English markets (8b)
New cust. new market
New cust. existing market
Existing cust. exist. market
Confirmed
Confirmed
Confirmed
Confirmed
Confirmed
Confirmed
An adaptation of Gibbs & Kraemer 2004 who
evaluated perceived benefit of the Internet (EFA).
One of four items was the perceived benefit on
entering new businesses and markets (.841).
Notes:
Confirmed= the measurement item withstood EFA, CFA and structural measure evaluation.
Disconfirmed = the measure did not withstand an EFA or CFA rigour.
Excluded = withstood an EFA and CFA rigour, but did not withstand the full structural model
evaluation. Initial item 49 items.
Final measurement model 32 items.
Source: developed for this research
171
6.5 Model hypotheses interrelationship evaluation
Analysis of information availability (F1) pertaining to markets and competitors
positively co-correlated with information usage (F2) (estimation regression
coefficient .48), interactive communication (F3) (.37), international mindset (F4)
(.23), business relationships usage (F5) (.12) and Internet intensity of the firm (F7)
(.28), as presented in Table 6.19. That is, only information availability was found to
be an exogenous variable that had a significant influence on multiple endogenous
variables such as information usage, interactive communication, international
mindset, business relationships usage and the Internet intensity of the firm. In an
international market growth decision process, information is needed prior to
internationalisation (Petersen, et al., 2002). This finding was consistent with
theoretical viewpoints of information knowledge in the internationalisation process.
Firstly, informational availability of the firm was mediated by the Internet intensity of
the firm (.28 & .28). That is, information availability had a positive relationship with
information usage, interaction, international mindset and business relationship usage.
However, information availability did not have a direct relationship with international
market growth. Thus, hypotheses H2, H3 and H9 were accepted and hypothesis
H1 was not accepted. As previously discussed, information availability also had a
direct relationship with international mindset and business relationship usage. Thus,
hypotheses A1 and A2 were accepted as alternative pathways.
Table 6.19 Evaluated hypotheses table
Code Hypothesis Regression
weights
Accepted/rejected
INFAVL–INTGRO H1 Information availability has a direct relationship with
international market growth. -
-
Rejected (E)
Rejected (NE)
INFAVL–INTINS H2 The information availability of the firm is mediated by
the Internet intensity of the firm.
.28 (E)
.28 (NE)
Accepted
Accepted
INFAVL–INFUSE H3 Information availability has a correlating effect on
information usage of the firm.
.48 (E)
.48 (NE)
Accepted
Accepted
INFUSE–INTGRO H4 The usage of information has a direct relationship with
international market growth.
-
-
Rejected (E)
Rejected (NE)
INFUSE–INTINS H5 Information usage is mediated by the Internet intensity of
the firm.
.27 (E)
.26 (NE)
Accepted
Accepted
INFUSE–INTACT H6 Information usage is correlated with interactive
communication
-
-
Rejected (E)
Rejected (NE)
INTACT–INTGRO H7 Interactive communication has a direct relationship with
international market growth
-
.23 (NE)
Rejected
Accepted
INTACT–INTINS H8 Interactive communication is mediated by the Internet
Intensity of the firm.
-
-
Rejected (E)
Rejected (NE)
INFAVL–INTACT H9 The perceived information availability of the firm has a
positive relationship with interactive communication
.37 (E)
.37(NE)
Accepted
Accepted
INTMND–INTGRO H10 The international mindset of the firm has a direct
positive relationship with international market growth. .22 (E)
.41 (NE)
Accepted
Accepted
INTMND–INTINS H11 The international mindset of the firm is mediated by the
Internet intensity of the firm. .08 (E)
.07 (NE)
Accepted
Accepted
172
INTMND–BUSREL H12 International mindset has a positive relationship with the
use of business relationships.
.30 (E)
.33 (NE)
Accepted
Accepted
BUSREL–INTGRO H13 Business relationships have a direct relationship with
international market growth.
.18 (E)
.14 (NE)
Accepted
Accepted
BUSREL–INTINS H14 Business relationships are mediated by the Internet
intensity of the firm.
.14 (E)
.16 (NE)
Accepted
Accepted
PSYDIS–INTGRO H15 Psychic distance has a negative direct relationship with
international market growth.
-
.17 (-) (NE)
Rejected (E)
Accepted
PSYDIS–INTINS H16 The Internet intensity of the firm mediates the psychic
distance of the firm. -
-
Rejected (E)
Rejected (NE)
PSYDIS–INTMND H17 Psychic distance of the firm has a negative relationship
with the usage of business networks for the firm. -
-.10 (-) (NE)
Rejected (E)
Accepted (NE)
PSYDIS–BUSREL H18 Psychic distance of the firm has a negative relationship
with the international mindset of the firm. -
-
Rejected (E)
Rejected (NE)
INTINS–INTGRO H19 Internet intensity has a positive relationship with
international market growth of the firm. .04 (E)
.04 (NE)
Accepted
Accepted
Alternative
correlations
Re-specification correlations
INFAVL–INTMND A1 Information availability is positively correlated to the
international mindset of the firm .23 (E)
.23 (NE)
Accepted
Accepted
INFAVL–BUSREL A2 Information availability is positively correlated to the use
of business relationships. .12 (E)
.12 (NE)
Accepted
Accepted
INTACT–INTMND A3 Interactive communication is positively correlated with
the International mindset of the firm. .30 (E)
.31 (NE)
Accepted
Accepted
Notes: E=English-speaking model, NE= non-English-speaking model
Source: developed for this research
Further, information usage was not found to be correlate with interactive
communication (.06 & .07). Thus, Hypothesis 6 was not accepted. Interactive
communication of the firm (F3) was found to positively correlate with international
mindset of the firm. That is, the greater the perception of interactive communication
of the firm, the greater the propensity of the firm to have an international mindset (.30
& .31). Thus, Hypothesis A3 was accepted. Conversely, the interaction
communication of the firm was not found to be mediated by the Internet intensity of
the firm, as had been postulated. Thus, Hypothesis 4 was not accepted. This finding
highlighted that interaction communication is capturing a more traditional perspective
of interactive communication, as opposed to a specific Internet interaction. Further,
there was a direct relationship between interactive communication and the
international growth of the firm, but only in English speaking markets (.23 English
markets). However, non-English speaking markets are mediated by the international
mindset of the firm. Thus, Hypothesis 7 was partially accepted (for English
speaking market growth).
The international mindset of the firm (F4) was found to correlate with the use of
business relationships (.30 & .32). Thus, Hypothesis 12 was accepted. Further, the
international mindset of the firm positively correlated with the Internet intensity of
the firm. That is, the greater the international mindset of the firm, the greater the
173
perceived Internet intensity of the firm. Thus, the International mindset of the firm
was mediated by the Internet intensity of the firm in the pursuit of international
market growth (.08 & .07). Thus, Hypothesis 11 was accepted. Further, there was a
direct path relationship between international mindset and international market
growth. Thus, Hypothesis 10 was accepted. Moreover, International mindset of the
firm had a greater effect on non-English market growth than English market growth,
with standardised regression coefficients of (NE) .41 and (E) .22 respectfully, as seen
in Table 6.19. That is, the international mindset of the firm had the propensity to
affect international growth, but this was more marked in non-English speaking
markets.
The use of business relationships (F5) was mediated by the Internet intensity of the
firm. Thus, Hypothesis 14 was accepted. Further, the use of business relationships
has a direct relationship with international market growth. That is, the Internet
intensity of the firm was not the only explanation for business relationship usage as a
path toward international market growth (.18 & .14). Thus, Hypothesis 13 was
accepted.
Psychic distance (F6) was predicted to influence the psychology of decision makers
in the international market growth process. However, Factor 8 (International market
growth) split into two factors: English-speaking market growth and non-English-
speaking market growth. Consequently, psychic distance only correlated with non-
English market. Thus, psychic distance of the firm was found not to have a
covariance in the English-speaking market model, which is theoretically sound as
English markets would not be perceived as distinct from Australia. Thus, Hypothesis
16 was not accepted. Psychic distance of the firm was not correlated with business
relationships of the firm. Thus, Hypothesis 18 was not accepted. The psychic
distance of the firm was negatively correlated to the international mindset of the firm.
That is, the greater the psychic distance, the greater the negative international mindset
of the firm (-.10 non English model). Thus, Hypothesis 17 was partially accepted.
Moreover, psychic distance was also negatively correlated with international market
growth (non-English-speaking markets). Thus, Hypothesis 15 was accepted.
174
Lastly, the Internet intensity (F7) of the firm had a direct relationship with the
international market growth. Thus, Hypothesis 19 was accepted. Thus, hypotheses 1,
4, 6, 8, 16, and 18 were not found to be statistically significant. However, the
majority of hypotheses—2, 3, 5, 7, 9, 10, 11, 12, 13, 14, 15, 17, and 19—were found
to be statistically significant, as presented in Table 6.19. Further, three additional
paths were found to be statistically significant and theoretically plausible. That is, A1,
A2 and A3 were also found to be theoretically valid, as illustrated in Figure 6.6.
Figure 6.6 Internetalisation model: significant and non-significant paths
Internationalisation
components
H3 H1
H9
H2 H4 Mediating Performance outcome
H6 H5
H7
H8
H19
H11 H10
H12
H14 H13
H18
H16
H17 H15
Notes: ----- non significant pathway. Significant pathway. New pathways
F3 interactive communication significant for only English- speaking model. Psychic distance only
significant for non-English speaking model.
Source: developed for this research
Most paths were found to be significant (.05>) within the full model, as outlined in
Table 6.20. However, when interrelationships were assessed simultaneously, some
predicted pathways were found not to be significant. These construct
interrelationships, although model-fit indicators highlight good model fit, had non-
significant regression weightings. These inconsistencies will be evaluated next.
F1 Information
availability
F2 Information
usage
F8 International
market growth
F4 International
mindset
F7 Internet
intensity
F3 Communication
interactivity
F5 International
networks
F6 Psychic
distance
175
Although the relationships of international mindset (F4) and international market
growth (F8) with the Internet intensity of the firm (F7) were not significant in the
regression weights, this can be explained by the heavily shared context of the Internet
intensity factor. That is, multiple mediation effects were found for Internet intensity,
which diluted the regression weights. For example, regression weights without any
other shared co-correlation between Internet intensity and international market
growth were significant in both models: English speaking market Model 1) was .183
and non-English speaking market Model 2 was .195. Similarly, the relationship
between Internet intensity and the international mindset of the firm was also found to
be significant without co-correlations, with a regression weight of .365.
Table 6.20 Model 1 and 2 correlation matrices estimates
English market growth: Model 1 Non English market growth: Model 2
Factor Factor Est. Sig. Factor---- Factor Est. Sig.
INFAVL INFUSE .488 sig. INFAVL INFUSE .488 sig.
INFAVL INTACT .371 sig. INFAVL INTACT .373 sig.
INFAVL INTMND .235 sig. INFAVL INTMND .236 sig.
INFAVL BUSREL .177 sig. INFAVL BUSREL .178 sig.
INFAVL INTINS .284 sig. INFAVL INTINS .280 sig.
INFUSE INTINS .265 sig. INFUSE INTINS .261 sig.
INTACT INTMND .295 ns INTACT INTMND .314 sig.
INTACT INTGRO .232 sig. INTACT INTGRO .005 ns
INTMND BUSREL .307 sig. INTMND BUSREL .331 sig.
INTMND INTINS .078 ns INTMND INTINS .068 ns
INTMND INTGRO .225 sig. INTMND INTGRO .413 sig.
BUSREL INTINS .142 sig. BUSREL INTINS .158 sig.
BUSREL INTGRO .180 sig. BUSREL INTGRO .136 sig.
PYSDIS INTMND PYSDIS INTMND -.104 sig.
PYSDIS INTGRO PYSDIS INTGRO -.171 sig.
INTINS INTGRO .039 ns INTINS INTGRO .035 ns
Notes:
Est. the regression weight standardised estimate between constructs
Sig. significant relationships between constructs
ns non-significant Relationships between constructs
Source: developed for this research
176
Further, it was necessary to provide readers with a certain amount of information
pertaining to the model and interrelations discussed above. That is, a complete set of
data with parameters, standard errors, correlations, covariance matrixes, discrepancies
and goodness-of-fit indices has been discussed (Boomsma, 2000; McDonald & Ho,
2002). This information allows readers to employ independent critical judgment of
the model and is a benchmark for reporting in structural equation modelling
(McDonald & Ho, 2002). This enables readers to replicate the study (Boomsma,
2000). Thus, both sample matrices and implied matrices pertaining to covariance and
correlation are presented in appendixes K and L.
Validity
There should be a large change in the chi-squared score to indicate discrimination
between factors (Hair, et al., 2006). A series of confirmatory factor analysis tests
identifies whether a one-factor or two-factor solution fits better (Bagozzi, et al.,
1991). That is, through a CFA process, discriminant validity was assessed by un-
constraining and constraining a two-model solution, so as to identify whether the two
factors were indeed different or discriminated (Bagozzi, et al., 1991; Atuahene-Gima,
2005), as presented in Table 6.21. Analysis indicated a large change in the chi-
squared score, highlighting adequate discrimination between factors. Thus,
discriminant validity was established
Table 6.21 Discriminant validity chi-squared test (final modified model)
Factor Factor χ ² UC DF χ ² C DF
Information availability Information usage 83.6 13 292.2 14
Information availability Interactive communication 44.9 13 310.0 14
Information availability International mindset 55.1 19 400.5 20
Information availability Business relationships 26.8 19 399.2 20
Information availability Internet intensity 10.5 8 119.7 9
Information usage Internet intensity 27.0 4 134.0 5
Interactive communication Internet intensity 1.7 4 136.8 5
Interactive communication International mindset 27.6 13 261.8 14
Interactive
communication*
International market growth:
English model 16.1 8 260.2 9
International mindset Business relationships 53.9 19 447.4 20
177
International mindset Internet intensity 21.9 8 146.1 9
International mindset International market growth:
English model 52.2 13 312.5 14
International mindset International market growth:
Non English model 12.9 13 345.1 14
Business relationships Internet intensity 8.5 8 142.9 9
Business relationships International market growth:
English model 26.5 13 356.2 14
Business relationships International market growth:
Non English model 11.7 13 588.6 14
Psychic distance* International mindset 33.6 19 498.7 20
Psychic distance* International market growth:
Non English mode 24.6 13 625.2 14
Internet intensity International market growth:
English model 4.4 4 141.9 5
Internet intensity International market growth:
Non English model 1.9 4 142.9 5
Notes:
* Psychic distance only in non-English market growth model. And Interactive communication direct
relationship with international market growth only in English market growth.
UC unconstrained
C constrained
DF degree of freedom.
Source: developed for this research
Another measure of discriminant validity is the comparison between the correlation
coefficient and composite reliability scores (Gaski, 1984). That is, the correlation
coefficient should not exceed the construct reliability of the factors. In this study, the
composite reliability scores ranged from .61 to .83, and were larger than the highest
correlation score of .488. Thus, discriminant validity was supported as shown in
Table 6.21.
In conclusion, data was analysed for normality, missing data and addressing non-
response bias issues. A confirmatory factor analysis for individual factors and a
saturated CFA indicated reasonable factor interrelationships, without showing
definitive interactions and pathways. The proposed models were assessed as
illustrated in Figures 6.2 and 6.3. An oversimplification of the complex
interrelationships was evident within the competing model ‗internetalisation‘, as
illustrated in Figures 6.4 and 6.5 and summarised in a theoretical model in Figure 6.7.
178
Figure 6.7 Final model: theoretical interrelationships
Source: developed for this research
The interrelationships within the internetalisation model will be assessed next. That is
the research issues and research question are resolved with the theoretical
implications and contributions highlighted.
Information
availability
Information
usage
Interactive
communication
International
mindset
Business
relationships
Internet
intensity
International
market growth
Psychic
distance
----- For non English markets (PSYDIS)
English model only (INTACT)
179
7.0 CHAPTER 7: DISCUSSION AND CONCLUSION
7.1 Introduction
This PhD research study was conducted to investigate the research problem of ‗How
and why does the Internet influence international market growth of the firm’. In
Chapter 1, the background to the study was outlined, providing the impetus for the
research problem to be explored, a problem which was justified by the dearth of
literature in the area of the Internet and internationalisation. Furthermore, a lack of
recognition of the unique characteristics of the Internet, international market growth
and the internationalisation of the firm left a gap in the literature.
The final two competing models, internetalisation English speaking market Model 1
and internetalisation non-English speaking market Model 2, were presented, analysed
and evaluated for model fit and rigour in Chapter 6. This, the final discussion
(Chapter 7), examines:
the framework of the two research issues (sections 7.2 and 7.3)
the overall research question (Section 7.4)
the broader theoretical context, given that the research was exploratory in
nature (Section 7.5).
To this end, the two main research issues are explored for a resolution. The
implications of these findings to theory and practice will be evaluated (Section 7.6),
contributions discussed with limitations (Section 7.7) and future research highlighted
(Section 7.8), as outlined in Figure 7.1. Research Issue 1 will be discussed next.
180
Figure 7.1 Chapter 7 overview
Source: developed for this research
Research Issue 1 (7.2)
Research Issue 2 (7.3)
Information and knowledge (7.2.1)
International entrepreneurship (7.2.2)
Research question discussion
and conclusion (7.4)
Implications for theory and
practice (7.6)
Limitations (7.7)
Introduction (7.1)
Future direction for research
(7.8)
Conclusion (7.9)
English versus non-English market
growth (7.3.1)
Direct versus indirect international
market growth (7.3.2)
Internationalisation theory (7.5) Capabilities and perceived risk (7.5.3)
Theoretical contributions (7.6.1)
Contributions to practice and to policy
(7.6.2)
Born global (7.5.2)
Network theory (7.5.5)
Process stages theory (7.5.1)
International entrepreneurship (7.5.4)
181
7.2 Research Issue 1 discussion:
How and why has the Internet influenced the internationalisation process of the
firm?
The internationalisation components identified in Chapter 6 as being influenced by
the Internet included information availability, information usage, interactive
communication, international mindset and business relationship usage. These
internationalisation components relating to research Issue 1 will be assessed next.
7.2.1 Information availability, information usage and interaction
How and why has the Internet influenced information availability of the firm?
Previous research highlights the link between the Internet and information availability
in the firm‘s internetalisation process (Hamill & Gregory, 1997; Petersen, et al.,
2002). That is, research by Hamill and Gregory (1997) identified the Internet‘s
influence on the perceived benefit of information availability from a single item
descriptive frequencies analysis. Further, Petersen, Welch, and Liesch (2002)
conceptualised that the use of the Internet has influenced information availability in
the internationalisation process of the firm.
This PhD study reaffirms the concept of ‗information availability‘ in the context of
the Internet and internationalisation, as postulated by Hamill and Gregory (1997) and
Petersen, Welch, and Liesch (2002). However, the findings extend the literature by
firstly identifying a multi-item construct. That is, the construct of information
availability was found to consist of items pertaining to market, competitors and
customer information. The identification of a multi-item construct extends the current
literature by identifying a more accurate understanding of the concept, information
availability. Secondly, information availability was found to be the most influential
internationalisation component within the internetalisation model. That is,
information availability was the only independent variable and was the process
needed to precede all other internationalisation components. These findings highlight
the significant importance of information availability in the interrelationships
between the Internet and the internationalisation.
Thirdly, information availability was found to have multiple interrelationships with
the Internet intensity of the firm, which include; mediated relationships with
information usage, international mindset and business relationships, as illustrated in
182
Figure 7.2. That is, the construct of information usage, international mindset and
business relationships mediate information availability, which then influence the
Internet intensity of the firm. Further, information availability also has a direct
relationship with the firms Internet intensity.
To recapitulate, these findings extend the current literature by identifying a multi-item
construct for information availability. Secondly, these findings indicate that
information availability precedes all other internationalisation constructs. Lastly,
information availability plays a pivotal role in influencing information usage,
international mindset and business relationships, which in turn influence the Internet
intensity of the firm. Further, the information availability of the firm is also mediated
by the Internet intensity of the firm. That is, the Internet intensity mediates the
information availability of the firm in the internetalisation process.
Figure 7.2 RI 1: information availability, information usage and interaction
Source: developed for this research
How and why has the Internet influenced information usage of the firm?
Information usage is the processing, analysing and evaluation of information, also
referred to in the literature as knowledge. The need to acquire foreign market
knowledge in the process of organisational learning for expansion into international
markets has been well established, for example, Andersen, (1993), Calof and
Beamish, (1995), Inkpen and Beamish, (1997), Luo, (1997), Barkema and
Vermeulen, (1998), Lord and Ranft, (2000) and Zahra and Ireland, (2000). Previous
research highlights the potential of the Internet to transfer knowledge within the firm
Information
availability
Information
usage
Interactive
communication
International
mindset
Business
relationships
Internet
intensity
183
through a learned knowledge process (Petersen, et al., 2002). The knowledge
intensity of the firm can be a catalyst for sustaining international new ventures
(Coviello & McAuley, 1999; Autio, Sapienza & Almeida, 2000; Bell, McNaughton,
Young & Crick, 2003) and can affect the decisions concerning the mode of foreign
market entry (Calof & Beamish, 1995). The access to relevant internationalisation
information due to the Internet has the potential to enhances the process of knowledge
learning for the firm (Petersen, et al., 2002).
The findings in this PhD study firstly identified the concept of information usage in
the context of the Internetalisation model, extending the current conceptualisations by
Petersen, Welch, and Liesch (2002). Further, a multi-item concept of ‗information
usage‘ was identified, giving a more precise understanding of the concept. That is, the
information usage concept had items relating to suppliers, resources and consumers.
Statistical validation of the multi-item concept extends the current understanding,
beyond general conceptualisations by Petersen, Welch, and Liesch (2002). Thus, the
Internet has influenced knowledge transference in the internationalisation process,
through information usage.
The information usage mediated information availability of the firm, which in turn
influence the Internet intensity. These findings highlight the importance of the
Internet in the processing and analysing of information in the internationalisation
process. Thus, these findings underscore the importance of information usage in the
internetalisation model. Thus, the second contribution identified the specific impact
of information usage as apposed to general conceptualisations of potential impact of
the Internet.
How and why has the Internet influenced the interaction communication of the
firm?
Previously research pertaining to interactive communication stems from the Internet
marketing literature (Yuping, 2003). That is, the concept of interaction in the context
of the Internet and internationalisation is currently lacking. The findings from this
PhD study identified the concept of interaction communication with items relating to
efficiency, speed and timelessness of interaction. Interactive communication did not
directly correlate with Internet intensity. However, interaction communication was
184
mediated by international mindset, which in turn influences the Internet intensity of
the firm. That is, the level of interaction in the firm is influenced by the international
mindset of the firm towards internationalisation, which in turn influences Internet
intensity, as illustrated in Figure 7.2. These findings firstly highlight the importance
of including interaction communication within the theoretical framework of
internetalisation. Secondly, the findings also confirm that an international mindset is a
key element in decisions in mediating interaction communication in the process of
internationalisation, which in turn influence the implementation of Internet intensity
of the firm, as presented in Table 7.1.
Table 7.1 Information availability, information usage and interaction
Previous research
Current study
Contributions made by current study
Research Issue 1
Information availability Single item descriptive
frequencies whereby firms
viewed the importance of the
Internet in information
related to; the market,
competitors and customers
(Hamill & Gregory, 1997).
Conceptualisations of
information related to
supplier and resources
(Torre & Moxon, 2001;
Petersen, et al., 2002).
Information usage
Information usage pertaining
to supplier and resources has
been conceptualised in the
context of the Internet,
knowledge transference and
internationalisation (Torre &
Moxon, 2001; Petersen, et
al., 2002). Further,
information pertaining to the
market, competitors and
customers was found to be
influenced by the Internet
(Hamill & Gregory, 1997).
Interaction
Internet marketing literature
pertaining to interaction
(Yuping, 2003). Speed,
frequency, efficiency,
availability and multiple
Identification of multi item
construct ‘information
availability’. Statistically
validation of items for the
construct identification of a
complex interrelationship
between information
availability,
internationalisation
components and Internet
intensity.
The concept of knowledge
learned and transference was
in part captured through the
factor information usage.
Specifically, information
usage pertaining to suppliers,
resources and customer.
Information usage was found
to be statistically significant.
Confirming suggestions by
Petersen et al. (2002) and
Torre & Moxon (2001), that
the Internet impacts the
internationalisation learned
knowledge process of the
firm.
The findings highlight the
concept of interaction
communication into a single
multi-item construct. These
items include speed,
Firstly, these findings evolve the literature
beyond descriptive statistics by identifying
a multi-item construct. Secondly, the
identification that information availability
precedes all other internationalisation
components Thirdly, the identification of
direct and indirect interrelationships
between information, internationalisation
and the Internet intensity of the firm.
These findings confirm the construct of
‗information usage‘, a core component of
processing and analysing information in the
knowledge transference process.
Identification of this construct contributes
new evidence of this concept to the body of
knowledge concerning Internet
internationalisation—knowledge that did
not exist previously. Secondly, the
identification of an interrelationship
between information availability and the
Internet intensity of the firm also
contributes empirically based evidence
concerning interrelationships with
information availability and Internet
intensity.
Firstly, the identification of the construct
interaction within the Internet
internationalisation context extends the
body of knowledge—specifically, regarding
speed, efficiency and timelessness of
185
functions of interaction
communications (Yuping,
2003; Brock & Yu, 2005).
efficiency and to a lesser
extent timelessness (Brock &
Yu, 2005). Further, there
was an identification of
relationships between, the
international mindset,
interaction communication
and Internet intensity.
interaction. Secondly, the identified
interrelationship provides evidence of the
importance of interaction in the framework
of Internet internationalisation. For
example, international mindset mediates the
interaction of the firm, which in turn
increases the propensity to Internet
intensity.
Source: developed for this research
7.2.2 International mindset and business relationship use
Apart from information availability, information usage and interaction
communication, international mindset and business relationships were also influenced
by the Internet intensity in the process of internationalisation, as illustrated in Figure
7.3. International mindset and use of business relationships will be assessed next.
How and why has the Internet influenced the international mindset of the firm?
Previous research found that the Internet intensity is positively correlated with the
international vision of the firm (Aspelund & Moen, 2004). That is, the concept of
international vision in an Internet intensity context was founded on items pertaining
to an emphasis on international customers, growth and having a global firm
perspective (Moen, 2002b; Aspelund & Moen, 2004). These findings imply that firms
perceive the Internet‘s impact on internationalisation as giving unprecedented global
opportunity for access to customers outside domestic markets.
The findings of this PhD research confirm the construct of international mindset in
the context of internetalisation. However, the findings do not confirm the construct of
international vision as postulated by Aspelund & Moen (2004), but a more standard
international mindset was identified. That is, on this current study the international
mindset of the firm was shown to lead to a greater propensity to employ Internet
intensity as opposed to the global vision of the world postulated by Aspelund and
Moen (2004). Findings by Asplelund and Moen (2004) may be due to their focus on
technology intense software firms. That is, the industry of software manufacturing
has been highlighted as an industry in which rapid internationalisation is more
common than in other industries (Bell, 1995) and as such, international vision is also
more common. This PhD study used a broader range of traditional firms as opposed
to only high technology firms. Thus, the findings in this PhD study is more consistent
186
with a traditional perspective of international mindset leading to a great propensity to
implement tactics for international market growth (Nummela, et al., 2004). Further,
firms that were internationally minded used business relationships more often in their
internationalisation endeavours. That is, the greater the international mindset the
greater propensity to use business relationships in the process of internationalisation.
The contributions of this research are that firstly, these findings re-affirm the
construct of international mindset in the context of internetalisation. Secondly,
findings in this study are at variance with the current literature, as there is evidence
that the international mindset of the firm leads to a greater Internet intensity as
opposed to international vision. Thirdly, the identification of the multiple
interrelationships underscores the importance of the international mindset of the firm
in the use of business relationships and in the implementation of Internet intensity,
two important concepts which were not identified in the prior literature.
Figure 7.3 RI 1: International mindset and business relationship use
Source: developed for this research
How and why has the Internet influenced the use of business relationships of the
firm?
Previously, the literature conceptually highlights the potential for the Internet to
enhance international networks (Hamill & Gregory, 1997). However, previous
research failed to identify the specific construct relating to networks.
This PhD research establishes the construct of business relationship with items
relating to the development of relationships, maintenance of relationships, and the
strengthening of relationships, in an internetalisation context. That is, firstly this
Information
availability
Information
usage
Interactive
communication
International
mindset
Business
relationships
Internet
intensity
187
study identifies the multi-item construct of business relationships in the
Internetalisation literature, an extension to the current understanding, and one that
confirms the qualitative findings, highlighted in Chapter 4.
The evidence indicates that the Internet intensity mediates the use of business
relationships in the internationalisation process. Further, business relationships are
also influenced by the availability of information and international mindset, as
previously discussed in this section. These findings highlight the importance of
business relationships in the Internet internationalisation literature. This second
contribution extends the current literature by identifying the construct business
relationships, in the interrelationships between information availability, international
mindset and the Internet intensity of the firm, as presented in Table 7.2.
Table 7.2 International mindset and business relationships
Previous research
Current study
Contributions made by current study
Research Issue 1
International mindset
The present understanding of
international mindset in
relation to the Internet and
internationalisation highlights
items pertaining to emphasise
on international customers,
resources and a global firm
perspective (Moen, 2002b;
Aspelund & Moen, 2004). .
Business relationships
Presently the literature fails to
identify the concept business
relationships within Internet
internationalisation. Thus, a
traditional perspective of
business relationships in the
internationalisation process
was used to measure business
relationships. Specifically,
maintaining relationships,
strengthening relationships
and developing relationships
(Wu, et al., 2003).
Findings corroborate the
concept of international
mindset (Moen, 2002b;
Aspelund & Moen, 2004).
However, findings indicate
the path of the
interrelationship between the
Internet intensity and
international mindset.
Further, international
mindset plays a pivotal role
in the interrelationships
between information,
interaction, business
relationships and Internet
intensity.
Identifying a multi-item
construct of business
relationships in the context
of internetalisation.
Corroborating earlier
evidence from Chapter 4.
Further, there was evidence
that the usage of business
relationships is positively
influenced by the
international mindset of the
firm and mediated by the
Internet intensity of the firm.
Firstly, these findings give more evidence
of items pertaining to the concept of
international mindset, extending the few
studies recently published (Moen, 2002b;
Aspelund & Moen, 2004). Secondly,
findings in this study give an alternative
view to the current literature, as there is
evidence that the international mindset as
opposed to international vision of the firm
leads to a greater Internet intensity. Thirdly,
the identification of the multiple
interrelationships underscores the
importance of the international mindset of
the firm in the use of business relationships
and implementation of Internet intensity,
currently not established in the literature.
Firstly, the identification of the construct
business relationships in the context of the
Internet internationalisation theoretical
framework. Further, testing of the
measurement business relationship usage
strengthens the contribution. Secondly, the
interrelationships between the international
mindset, business relationships and Internet
intensity of the firm highlight the
importance of this construct to the growing
body of knowledge.
Source: developed for this research
188
In conclusion, the findings in research Issue 1 underscore the importance of the
Internet intensity in influencing; information availability, information usage,
interaction communication, international mindset and business relationship usage in
the internationalisation process. These findings highlight the specific
internationalisation components and interrelationships that the Internet has enhanced.
Now research Issue 2 will be assessed.
7.3 Research Issue 2 discussion:
How and why has the Internet influenced international a) market penetration
and b) market development of the firm?
Previous literature pays limited attention to the concept of market growth in the
context of the Internet and internationalisation. That is, it has been suggested that one
of the greatest benefits of the Internet is the potential for foreign expansion (Quelch &
Klein, 1996; Bennett, 1997; Hamill, 1997; Hamill & Gregory, 1997; Petersen, et al.,
2002; Aspelund & Moen, 2004; Morgan-Thomas & Bridgewater, 2004). However,
little to no attention has been given to the empirical confirmation of these aspersions.
Further, the term growth is used for the most part in generic terms, resulting in
ambiguity about the concept. Thus, the confirmation of international market growth
in the context of the Internet‘s impact on internationalisation assists in illuminating
the concept.
Research Issue 2 evaluates international market growth from both the market
penetration and market development perspectives. The construct of market growth is
assessed in the sub-components of penetration and development growth. Market
penetration will be assessed next.
How and why has the Internet influenced international market penetration?
Previous research has shown that the perceived benefit of the Internet is ‗to expand
the market for existing product/service‘, that is, market penetration (Gibbs &
Kraemer, 2004, p. 133). However, the Gibbs & Kraemer (2004) study focused on the
perceived benefit of Internet use on the perceived market penetration and in relation
to e-commerce scope, not on the actual market penetration and not in relation to
internationalisation.
189
Findings in this PhD study indicate extensive use of the Internet for international
market penetration, which confirms the link between the Internet and actual
international market penetration. The Internet has given the firm the ability to solicit
new business from existing clientele (market penetration). This fact was supported in
the findings from Chapter 4, Section 4.3.2. For example, e-direct marketing, database
marketing and the use of the website were linked to increased usage or sales through
existing customers. Secondly, the results highlight the importance of the Internet for
market penetration in the context of the Internet and internationalisation. That is,
currently the literature does not identify market penetration in the context of the
Internet and internationalisation. Both of these findings assist in extending the
literature beyond the current understanding.
Table 7.3 The Internet and international market growth
Previous research
Current study
Contributions made by current study
Research Issue 2
Market penetration
Presently the literature
founded on the concept
perceived benefit of market
penetration in relation to e-
commerce scope based on
factor analysis for perceived
benefit factor from Gibbs &
Kraemer (2004).
Market development
Presently the literature
founded on the concept
perceived benefit of new
business or market in
relation to e-commerce
scope based on factor
analysis for perceived
benefit factor from Gibbs &
Kraemer (2004) and
conceptualisation of foreign
market growth as a
consequence of the Internet
Petersen et al. (2002)
Results gave confirmation
of market penetration.
Further, findings validated
actual market penetration as
opposed to perceived market
penetration. Lastly, market
penetration was confirmed in
the context of international
market growth, as opposed
to a domestic context.
The concept of market
development was confirmed.
However, a market
development was identified
as a multi-item concept: new
customers existing country
markets and new customers
new country markets.
Firstly, the findings confirm the concept of
market penetration. The finding of actual
market penetration as opposed to perceived
benefit of the Internet extends the current
understanding. Secondly, results highlight
the importance of the Internet for market
penetration in the context of the Internet and
internationalisation
Firstly, the findings re-affirm the Internet‘s
influence on new market development.
Secondly, findings give a more accurate
account of market development extending
the current literature. Thirdly, the construct
of market development was validated in the
context of the Internet and
internationalisation. Lastly, beyond the
perception of market development this
study established actual market
development performance by the firm
influenced by the Internet.
Source: developed for this research
190
How and why has the Internet influenced international market development?
Gibbs and Kraemer (2004) also found a perceived benefit of the Internet was market
development. However, previous research was based on general conceptualisations
(Petersen, et al., 2002) and the perceived benefit of new business or markets (Gibbs &
Kraemer, 2004) due to the Internet.
Firstly, the findings in this PhD study re-affirm the Internet‘s influence on market
development. Secondly, beyond the general concept of market growth this study
found that market development consisted of; new customers in existing country
markets and new customers in new country markets. Thus, this more accurate account
of market development extends the current literature. Thirdly, the construct of market
development was validated in the context of the Internet and internationalisation. That
is, beyond the current literature, this study verifies the Internet‘s impact on
international market development as opposed to generic market development. Lastly,
beyond the perception of market development this study established actual market
development performance by the firm influenced by the Internet.
In conclusion the findings from this PhD research give a more accurate understanding
of the concept market growth. That is, market growth the construct includes; market
penetration, and market development, which in turn includes; new customers in
existing country markets and new customers in new country markets. Further, the
construct was validated in an internationalisation context. Lastly, beyond perceived
benefit the study confirmed actual market growth performance. These findings assist
in the accurate identification of market growth the construct in the Internet
internationalisation context, as summarised in Table 7.4.
191
Table 7.4 Research Issue 1, 2 and research question conclusions summary
Research issues Question Resolution Conclusion and
construct
Theoretical
contribution type
Current literature
Research Issue 1 How and why has the
Internet influenced the
internationalisation
process of the firm?
The information availability, information
usage, interaction communication, international
mindset and the use of business relationships in
the internationalisation process were influenced
by the Internet intensity of the firm. Overall,
the Internet intensity of the firm plays a
mediating role in the internationalisation
process toward international market growth.
Conclusion 1.1
Information available
Conclusion 1.2
Information usage
Conclusion 1.3
Interaction
Conclusion 1.4
International mindset
Conclusion 1.5
Business relationships
STAT TC
NEW TC
NEW TC
CONF TC
NEW TC
Descriptive statistics &
conceptual
Conceptual
Statistical in different
context
Statistical same context
Statistical in different
context
Research Issue 2 How and why has the
Internet influenced
international
a) market penetration
b) market development
of the firm?
Findings indicate that the separation of the
concept of market growth. That is, factor
loadings were significant for existing customer
in existing countries, new customers in existing
country markets and new customers in new
country markets, giving a better understanding
of international market growth as a concept.
Further, the concept was validated in an
internationalisation context and actual growth
as opposed to perceived benefit.
Conclusion 2.1
Penetration of existing
customer
Conclusion 2.2
Market development:
New customers in
existing country markets
New customers in new
country markets
NEW TC
NEW TC
Statistical in different
context
Currently no coverage
Research
question
How and why does the
Internet influence
international market
growth of the firm?
The internet has both an indirect and direct
pathway for firms in international market
growth. To a lesser extent, the Internet
influences the international entrepreneurship of
the firm. Internet intensity mediates
internationalisation information and knowledge
and enhances the use of business relationships
and the firm‘s international mindset, leading to
increased international market growth.
Conclusion 3.1
English versus non-
English
Conclusion 3.2
Direct and indirect
internationalisation
interrelationships
Conclusion 3.3
Internet mediation
NEW TC
NEW TC
NEW TC
Currently no coverage
Currently no coverage
Currently no coverage
Note: Contribution: Confirmed theoretical contribution (Conf TC) = Confirmation of theoretical relationship. New theoretical contribution (New TC) = not currently in the
Internet internationalisation body of knowledge, statistical confirmation (STAT TC) = previously not empirically confirmed
Source: developed from Chapter 6 findings and Chapter 7 conclusions
192
7.4 Research question discussion
How does the Internet influence international market growth of the firm?
The interrelationship between the Internet, internationalisation components and
international market growth, is predominantly a mediated relationship. That is, apart
from the direct path for internationalisation components to international market
growth, there is an indirect or mediated path of internetalisation through the construct
Internet intensity. Further, as predicted, psychic distance has a direct negative effect
on the firm‘s international market growth. These findings are consistent with
traditional perspectives of internationalisation theory. Further, these findings
highlight a complex set of interrelationships between constructs from information and
international entrepreneurship perspectives of the internationalisation process,
including direct and indirect relationships with mediation effects. That is, the findings
extend the current understanding of internationalisation and the Internet. For example,
this study establishes both direct and indirect interrelationships within the context of
the Internet, the internationalisation process and international market growth. This
finding contradicts the proposition that Internet technology does not have a positive
effect on international activities (Andersson, Gabrielsson & Wictor, 2004). That is,
evidence in this study shows that the firm‘s Internet intensity mediates the pathway of
internationalisation. More specifically, the Internet intensity of the firm positively
mediates the traditional internationalisation components, such as information
availability, information usage or knowledge, international mindset and business
relation use.
As discussed in the evaluation of psychic distance in Chapters 4 and 5, international
market growth was found to differ in English-speaking and non-English-speaking
country markets. This is a significant finding within the Internet internationalisation
literature, as it highlights language as a key concept that alters interrelationships
within the framework. This finding was first evident in stage I of the research,
‗English is the universal language for business‘ (Upsilon, 2005) – lingua franca, and
further explored in Chapter 4. That is, even with the introduction of the Internet,
language remains a barrier to internationalisation. Thus, this finding extends the
current understanding of Internet internationalisation by identifying a potential
impediment that currently has not been validated.
193
In this study, the Internet‘s role in international market growth was found to be
complex, with minor differences between English-speaking and non-English-
speaking market growth. For example, the relationships between international
mindset, business relationships and international market growth were found to be
greater in non-English-speaking markets compared to those constructs of information
and knowledge opportunities due to the Internet, as presented in Chapter 6. That is,
international entrepreneurship elements of internationalisation, such as international
mindset and business relationships, play a greater role in non-English-speaking
market internationalisation. The identification of a distinction between English-
speaking and non-English-speaking market growth in the Internet internationalisation
context was a significant finding, as was also highlighted in Section 7.2. For example,
outside of the major markets such as the United States, New Zealand and the United
Kingdom, predominantly Asian countries were the secondary market. That is, Asian-
country markets accounted for a large proportion of country markets for the
international market growth of Australian firms, as seen in Appendix M. Firms saw
great potential in Asian markets for growth, as illustrated in Chapter 4. However,
psychic distance remains a significant barrier to these firm aspirations. The Internet
has the potential to overcome these psychic distances with translation software such
as bablefish.com or Google translate. The Internet has diluted elements of psychic
distance, however language remains an impediment. This language impediment will
be further diluted with the adoption of Internet based translation technology.
7.5 Implications for internationalisation theory
The findings and subsequent implications have an impact on internationalisation
theory in the context of the Internet. That is, the use of multi internationalisation
frameworks to assess internationalisation patterns has been shown to be fruitful
(Calof & Beamish, 1995). Findings will be assessed firstly within the
internationalisation stages theory framework and then within a path and pace
perspective of internationalisation. Further, in the evaluation of the theoretical impact
the concept of a born global, international entrepreneurship, the network theory
perspective and the firm capabilities theory, will be explored, as these theories were
also identified earlier in Chapter 7. The rationale for the use of these theories is
provided in the relevant section. International processes and stages will be assessed
next.
194
7.5.1 Internationalisation process/ stages theory
The internationalisation process of the firm is a well established theory in the body of
knowledge (Johanson & Vahlne, 1977; Cavusgil, 1980; Cavusgil, 1984; Chetty &
Hamilton, 1993; Cavusgil & Zou, 1994; Styles & Ambler, 1996). However, new
paradigms within international marketing will have to take into account the
internationalisation process in a digital age (Hoffman & Novak, 1996). The findings
in this PhD study show an accelerated path by firms towards internationalisation, as
opposed to the traditional slow, cumbersome progression through the incremental
sequential movements or stage approach to internationalisation. These findings
confirm conceptualisations by Petersen, Welch, and Liesch (2002), that the Internet
has the potential to impact the pace of internationalisation. This finding further
reinforces the argument that the internationalisation stages perspective has limitations
(McDougall, Shane & Oviatt, 1994), because the stages model fails to explain new
international ventures (McDougall, et al., 1994) or rapidly international firms. For
example, the traditional Uppsala model of internationalisation focuses on more
traditional cross- border behaviour (Johanson & Weidersheim-Paul, 1975; Johanson
& Vahlne, 1977; Cavusgil, 1980; Johanson & Vahlne, 1990), as opposed to the rapid
internationalisation, evident in this PhD study.
The findings in this PhD study confirm the conceptualisations by Peterson, Welch
and Liesch (2002) of accelerated internationalisation due to the Internet. Evidence
was found that the extreme effects of the Internet have led to ‗rash foreign market
expansion‘, where proactive export activities were not present, but where the firm
generated a large amount of exports to many foreign markets (Petersen, et al., 2002 p,
215). Specifically, information, knowledge and international entrepreneurial
capabilities were enhanced by Internet marketing implementation. Thus, the Internet
has enabled the process of internationalisation to be compressed, due to the
availability of information, the enhanced information usage, international mindset and
use of business relationships. Further, in many cases in this research the Internet
enabled firms to internationalise when they would never have been able to do so
without the Internet, as stated by Gamma (2005)‘we wouldn’t be international if it
wasn’t for the Internet’. A more accurate understanding of rapid internationalisation
may be found in the born global concept of internationalisation; thus, this framework
will be assessed next.
195
7.5.2 Born global concept
A phenomenon identified in the 1990s, the born global concept describes the situation
where a firm creates a new venture that undertakes market expansion in multiple
markets rapidly (Knight & Cavusgil, 1996; Rasmussan, et al., 2001; Moen, 2002a;
Moen & Servais, 2002). Some have argued that the born global rapidly
internationalises within two years (Knight & Cavusgil, 1996), three years (Zhou, Wu
& Luo, 2007) or within a more broadly accepted time frame of six years (Oviatt &
McDougall, 1997; Shrader, 2001; Wickramasekera & Bamberry, 2003). Thus, there
remains some conjecture in the born global or rapidly international firm literature.
Firms that internationalise near inception are usually considered exceptional and/or
multi-nationals (Oviatt & McDougall, 1994). A born global, also known as an
international new venture, is a firm that internationalises close to inception and is
usually reported in advanced technology industries (Oviatt & McDougall, 1994) such
as small software firms (Bell, 1995). In this study there was evidence of rapid
internationalisation across a range of industries, not only in high-technology
industries as is the predominant focus in the literature (Bell, 1995; Moen, et al., 2003;
Aspelund & Moen, 2004). For example, the respondents were drawn from
agribusiness, business and finance services, consumer goods, and information
communication technology (ICT) industries
Evidence in this study identified multiple rapidly international firms. For example,
firms Delta, Epsilon and Eta rapidly internationalised within the first few months of
trade. Gamma internationalised for the first time within months of being online. This
finding is significant, as SMEs in their initial infant stages of business are able to
generate rapid growth in international markets because of the Internet. Further, nine
firms younger than three years had already internationalised, with customers in an
average of 17 countries. Further, the mean number of country markets for all firms
was 15 countries, with a scope of 78 countries, as seen in Appendix M. The mean
number of country markets for firms was:
under 10 years of age—12 country markets
under 5 years of age—11 country markets
under 3 years of age—17 country markets (illustrated in Appendix M).
196
These findings highlight that younger firms have a quicker and broader scope of
international market growth.
If six years is used to measure rapid internationalisation there were 60 firms or 27%
of the data set in the born global category. Further, the firms were not asked about
their first year of internationalisation, thus, it is reasonable to think that there was a
larger percentage of rapidly international firms in this data set. Nonetheless, these
results indicate a higher than average percentage of rapidly internationalising firms
compared to previous industry studies, which indicated that 2%-to-4% of firms
rapidly internationalise (UNCTAD, 1993; OECD, 1997).
To sum up, the findings in this PhD study corroborate predictions by Quelch and
Klein (1996), Hamill and Gregory (1997), Peterson, Welch and Liesch (2002) and
results from recent research showing that the Internet has dramatically accelerated
internationalisation for SMEs (Loane, et al., 2004). Further, the Internet allows a
broader scope of international markets and a faster pace of internationalisation
(McNaughton, 2001, 2003). However, this PhD study goes beyond general
conceptualisations, by identifying and tests specific internationalisation components
enhanced by the Internet that have facilitated and accelerated the interrelationships
that have given the impetus for the internationalisation of the firm.
7.5.3 Firm capabilities theory and perceived risk
The Internet has given firms the potential to capitalise on information capabilities
traditionally only held by multinational companies. Resources consist of a bundle of
services or impetus available to the firm, and the ‗capability‘ to deploy these for
productivity (Penrose, 1959). More precisely, in opposition to the emphasis some
authors have placed on group resources and capabilities (Barney, 1991) capabilities
theory refers to the firm‘s capacity to deploy resources (Amit & Shoemaker, 1993), in
this case for the purposes of internationalisation and international market growth. It
can be argued that tangible and intangible technology resources build distinctive
capabilities, which can enhance the speed and degree of sales in international markets
(Zahra, Matherne & Carleton, 2003). However, the relationship between capabilities
and performance is difficult to prove; for example, information capability responses
may suffer from self-bias, as managers may overestimate their capability (Powell,
197
Lovallo & Caringal, 2006). However, there is evidence that capabilities are the
platform for competitive advantage and that firm performance is reliant on where and
how the firm establishes and implements these capabilities (Ethiraj, et al., 2005). This
PhD study has highlighted the need to capitalise on the information, knowledge and
entrepreneurial capabilities, which have shown to accelerate internationalisation of
the firm through the mediation of the Internet.
One perspective of international capabilities theory, is the international dynamic
capabilities processes (Teece, Pisano & Shuen, 1997), which highlights the
importance of the entrepreneurial behaviour of the internationalising firm. This is an
important focus of internationalisation research, considering the gap relating to actual
firm behaviour in major theories of internationalisation (Young, et al., 2003). This
gap between firm behaviour and internationalisation theory can be filled with a better
understanding of international entrepreneurship frameworks (McDougall, et al., 1994;
Knight & Cavusgil, 1996; Moen & Servais, 2002; Styles & Seymour, 2006). That is,
the gap of firm behaviour and internationalisation theory can be filled with a better
understanding of international entrepreneurship frameworks (Styles & Seymour,
2006). In this PhD study, international entrepreneurship was identified, through the
increased use of business networks and an enhanced international mindset, which in
turn was mediated by Internet intensity in the international market growth of the firm.
Thus, international entrepreneurial capabilities affect the firm‘s international market
growth behaviour. Further, international entrepreneurship was found to be more
important for non-English-speaking market growth than it was for English speaking
markets.
Internationalisation information and knowledge have been enhanced by the Internet,
as was evident in this PhD study. International entrepreneurship shifted what would
normally be a risk judgment by the manager to an attractiveness judgment. These risk
judgment issues have either a positive or negative affect on constructs such as the
international mindset, use of business relationships and psychic distance perceptions
of the firm, as confirmed in this research and as illustrated in Figure 7.5. The Internet
has created a perceived low-risk decision for internationalisation by reducing the
asymmetry of information, which has led to an increased international mindset.
Further, firms using the Internet need not have a physical presence in the market to
198
internationalise. For example, only 32.6% of firms in this study had a physical
presence in international markets, as seen in Appendix M. These low risk
opportunities, as a consequence of the Internet, create an environment whereby firms
allocate capabilities toward internationalisation as opposed to not. That is, the Internet
has become a low risk mode of entry for internationalisation.
7.5.4 International entrepreneurship
Currently there is no model that depicts the forces on the speed of internationalisation
(Oviatt & McDougall, 2005). Oviatt and McDougall (2005) highlight the importance
of technology-enabled capacities of the firm. Apart from transportation,
communication and digital technology can enable rapid internationalisation (Knight
& Cavusgil, 1996; Oviatt & McDougall, 1999, 2005). The findings in this PhD study
provide a more precise understanding of how the Internet intensity of the firm
influences the pace of internationalisation. Oviatt and McDougall (2005) have
contributed the bulk of impetus for the speed of internationalisation to the
international entrepreneurship of the firm. However, as Oviatt recently conceded, ‗the
sole focus of this research (Oviatt and McDougall, 2005) was international
entrepreneurship and the potential impact on internationalisation’ (Oviatt, 2008,
pers. com. 02 July). Thus, the focus and findings of the Oviatt and McDougall (2005)
research had an international entrepreneurship scope.
An alternative view of accelerated internationalisation is international
entrepreneurship dynamics (Matthews & Zander, 2007). That is, the transactional
cost-based framework is limited as international entrepreneurship dynamics (IED)
which includes, discovery of international opportunity, deployment of resources to
that international opportunity and engagement with international competitors is
argued as the impetus for the accelerated internationalisation phenomenon (Matthews
& Zander, 2007). Matthews and Zander (2007, p. 390) proclaim that born global
firms or international new ventures are ‗a new species of MNEs‘. However, this
conceptual work neglects any suggestion of the Internet‘s influence in the
internationalisation process. Considering that there is consensus in the literature
concerning the Internet‘s positive influence on the speed of internationalisation, for
example, Peterson, Welch and Liesch (2002) and Oviatt and McDougall (2005),
conceptualisations by Matthews and Zander (2007) that neglect the Internet are
199
limited. Moreover, networks have also been shown to be powerful tools for
entrepreneurs (Dubini & Aldrich, 1991) and international entrepreneurship (Oviatt &
McDougall, 1994). Therefore, networks will be assessed next.
7.5.5 Network theory
Traditional theories including the stages and process models have been explored,
along with firm capabilities and international entrepreneurship frameworks. However,
network theory provides a rich explanation of Internet internationalisation. The range
of foreign markets can be linked to the network of firm relationships (Coviello &
Munro, 1995). Further, networks help firms to identify international opportunities and
can assist in explaining internationalisation and the speed of internationalisation
(Oviatt & McDougall, 2005). Both of these points have been confirmed in this PhD
research. In this study, business relationships have been shown to mediate the
international mindset of the firm in the performance of international market growth,
corroborating findings that social networks mediate international orientation in the
firm‘s internationalisation performance (Zhou, et al., 2007). As Bell (1995)
concludes, the network approach better explains the firm‘s internationalisation
process. Recently, the principal researchers of the Uppsala internationalisation theory,
Johanson and Vahlne (2003), advocated an integrated approach between stages and
network theories. That is, it would be fruitful to integrate the network theory of
internationalisation with traditional stages perspectives of internationalisation
(Johanson & Vahlne, 2003). The Internet facilitates these international networks by
strengthening current relationships and influencing the longevity of relationships, as
this PhD study has demonstrated. Some would argue that cooperation and
relationship factors such as networks are decisive for born global firms (Gabrielsson
& Manek Kirpalani, 2004). Moreover, researchers Gabrielsson and Manek Kirpalani
(2004) have argued that the Internet influences enhancing the collaboration within
and management of relationships in international business networks.
It has been suggested that the Internet reduces the dependency on more traditional
networks or intermediaries (Quelch & Klein, 1996; Hamill & Gregory, 1997).
Further, as found in Chapter 4 and as argued by Varadarajan and Yadav (2002)
network theory should highlight the importance of non-personal perspectives of
networks. For example, in this PhD study the virtual networks, such as virtual
200
intermediaries; tender.com and future platforms such as second life.com and
facebook.com are a significant change in the networks for internationalising firms.
Including virtual network intermediaries better explains how the Internet has altered
international market growth, as illustrated in Figure 7.4. That is, the incorporation of
the contemporary concepts of rapidly international, traditional networks and virtual
network intermediaries together, deepens the understanding of how the Internet
influences internationalisation theory from a network perspective. This finding
extends recent findings that traditional social networks mediate the rapid
internationalisation processes and international performance of the firm (Zhou, et al.,
2007). However, the contribution in this PhD study is the finding that not only
traditional social networks, but also technology-based networks such as virtual
network intermediaries and virtual social networks, play a role in outward
internationalisation performance. Thus, the findings in this research extend the
current literature by identifying not only the Internet‘s influence on virtual networks
but also that the Internet enhances traditional networks through business
relationships.
Figure 7.4 Internetalisation and networks
Business network intermediaries
= increased usage for international market growth
Source: developed for this research
In conclusion, the Internet‘s influence is positive on networks within the
internationalisation process, both traditional and virtual. This new dynamic hybrid
network for firms has given rise to international market opportunities. The Internet
Internet Usage
Primary mechanism
Complimentary
mechanism
Trad
ition
al netw
ork
s
Virtu
al netw
ork
s
International market
growth
Internet intensity of the firm
201
has enabled firms to develop new information, knowledge and international
entrepreneurial capabilities which in turn enables firms to exploit internationalisation
opportunities such as international market growth. Further, these enhanced
capabilities not only lead to a reduced perceived risk of internationalisation, but also
the decision making process becomes a judgement related decision as opposed to a
risk related decision. Lastly and most importantly the output as a consequence of
these influences has enabled firms to internationalise rapidly, with a greater breath of
international markets on a platform of virtual and traditional networks as a
consequence of the Internet, as illustrated in Figure 7.5. Now the contributions of
these findings will be presented.
Figure 7.5 Internetalisation framework
Source: developed for this research
7.6 Contributions
Now that the broader theoretical impact has been evaluated, specific contributions
will be assessed. That is, contributions to theory, practice and policy will be
presented. Firstly, theoretical contributions are outlined in respect to construct
identification and effects on the broader range of internationalisation theory.
Secondly, the implications of these findings for industry practice are shown. Lastly,
policy contributions are presented.
Internet
opportunity
Internet enhancing
capabilities
Internet reducing
received risk
Internet enhanced
internationalisation
Dynamic networks:
traditional &
virtual networks
Increased
International
entrepreneurship
capabilities
Information/
knowledge capabilities
Decision making:
reducing perceived
risk of
internationalisation
Increased speed
and breadth of
internationalisation
202
7.6.1 Theoretical contributions
This PhD research gives a more precise account of specific internationalisation
components enhanced by the Internet, as seen in Table 7.5. That is, the identification
of the Internet‘s influence on the internationalisation components of; information
availability, information usage, interaction communication, international mindset and
business relationship usage, gives a better understanding of the phenomenon, as
illustrated in Figure 7.6. Findings highlight the Internet‘s enhancement of
information, knowledge and entrepreneurship components of internationalisation,
which inturn allows for a broader and accelerated international market growth for the
firm. Thus, the major theoretical contributions stem from the evidence of a holistic
perspective of the Internet‘s effects on internationalisation. Further, the integration of
information knowledge and international entrepreneurship internationalisation
components in a single framework illustrates the broad impact of the Internet on
international market growth.
Figure 7.6 Final Internetalisation model: theoretical interrelationships
Source: developed for this research
The first contribution is the identification of a empirically supported holistic
perspective of the interrelationships pertaining to the Internet‘s influence on
Information
availability (F1)
Information
usage (F2)
Interactive
communication
(F3)
International
mindset (F4)
Business
relationships
(F5)
Internet
intensity (F7)
International
market growth
(F8)
Psychic
distance (F6)
Internet marketing
capabilities
---- For non English markets (PSYDIS)
English model only (INTACT)
International
entrepreneurship capabilities
Information and
knowledge capabilities
203
international market growth, deepening the understanding of the phenomenon, as
outlined in Table 7.5, Contribution 1. Further, the literature is dominated by studies of
high technology industries. This study gives empirical evidence from not only high
tech firms, as seen in Moen (2002 b), Moen et al (2003) and Aspelund and Moen
(2004), but also firms from agribusiness, business and finance services, consumer
goods, and information communication technology (ICT) industries, which gives
greater generalisability to the findings.
More specifically, contributions 1a–1f are the internationalisation constructs that have
been influenced by the Internet—for example, information availability, information
usage, international mindset and business relationships—in the firm‘s
internationalisation process in respect to international market growth. That is, there
was evidence indicating; the identification of internationalisation constructs, multi-
item constructs, internationalisation constructs in a new Internet context, and
interrelationships between these constructs, findings beyond what is currently
established in the literature, as outlined in Section 7.2 and 7.3, and Table 7.1 and 7.2.
Further, although causality is not argued, statistical confirmation progresses the
literature, which has been dominated by conceptual non-empirically based research
(Contribution 1), as seen in Chapter 3, Table 3.1. Whereas, this PhD study
substantiates interrelationships between multiple multi-item internationalisation
constructs pertaining to the Internet and international market growth. Hence, this
study brings a better understanding of the Internet‘s impact on internationalisation
and international market growth.
Table 7.5 Contribution summary Contribution Contribution explained Section
Contribution 1 Empirically based holistic perspective of the Internet‘s effects on the
outward internationalisation process. Not only in high tech industries
7.1
7.2
7.3
Contribution 1a Information, the Internet and internationalisation 7.1.1
Contribution 1b Knowledge transference, the Internet and internationalisation 7.1.1
Contribution 1c Interaction, the Internet and internationalisation 7.1.1
7.1.2
Contribution 1d International mindset, the Internet and internationalisation 7.1.2
Contribution 1e Business relationships, the Internet and internationalisation 7.1.2
Contribution 1f Psychic distance, the Internet and internationalisation 7.3.2
Contribution 2 An understanding of the Internet‘s effects on the path and pace of
international market growth
7.1
7.2.2
Contribution 2a Identification of components of international market growth.
Measurement development
7.3.1
Contribution 2b Stages theory of internationalisation and the Internet 7.3.1
204
Contribution 2c Accelerated internationalisation, born global or rapidly international.
Digitalisation of the firm
7.2
Contribution 2d Network theory of internationalisation. Traditional business
relationships and the Internet. Virtual intermediary networks and
traditional networks
7.3.2
Contribution 3 Bringing information/ knowledge, international entrepreneurship,
network and firm capabilities theory together in relation to internet
intensity
7.1
7.2
Source: developed for this research
The second contribution is the application of these findings to the broader theoretical
body of knowledge in internationalisation. That is, contributions 2a–2d describe how
these findings increase knowledge of the rapid internationalisation process
perspective, capabilities, international entrepreneurship and network theory of
internationalisation. The evidence indicates that the firm‘s international opportunities
have been enhanced due to the Internet‘s influence on information, knowledge and
international entrepreneurial capabilities. Further, these firm capabilities are
underpinned by international market opportunities due to the Internet‘s impact on
international networks, both traditional and virtual. This research goes some way
towards filling the current gap in the literature with respect to the Internet‘s impact on
internationalisation, specifically international market growth. This study addresses
this current deficiency and extends work from the mid-1990s (Bennett, 1997; Hamill,
1997; Hamill & Gregory, 1997; Samiee, 1998b, a) and more recent work by Petersen,
Welch, and Liesch (2002) and Aspelund and Moen (2004). That is, this research
evolves the body of knowledge to include precise measures and interrelationships
pertaining to Internet intensity and the outward internationalisation process. That is,
beyond the sole SEM model by Aspelund and Moen (2004), which identified the
Internet‘s influence on international vision, this PhD study identified a broader impact
of the Internet on the internationalisation components of the firm. This study also
identified the impact of the Internet on the path and pace of internationalisation, for
example, a broader range of international markets at an accelerated rate of
internationalisation for the firm.
The last, and most important, contribution is that the interrelationships which pertain
to the Internet and internationalisation process have been captured within a single-
framework. More specifically, the interrelationships between the Internet intensity of
the firm, internationalisation components and international market growth have been
shown to statistically model together. Beyond construct identification, variable/scale
205
development and testing, a holistic perspective of how the Internet has affected the
internationalisation process of the firm has been captured and shown in a statistically
significant manner. Further, the research integrates the information/knowledge and
international entrepreneurship components in a simultaneous modelling process that
has an outward internationalisation context (Contribution 3). That is, a traditional
information/knowledge internationalisation process has been combined with an
international entrepreneurial perspective of internationalisation to investigate the
effect of the Internet and international market growth in an integrated model. The
concept of international entrepreneurship has not previously been evaluated in an
Internet intensive context, where international entrepreneurship theory is advocated as
a theoretical platform for understanding a born global theory of internationalisation.
These findings relating to the Internet internationalisation body of knowledge
contribute significantly to the broader international marketing literature.
7.6.2 Contributions to practice and policy
The practical contributions are twofold. Firstly, the findings of the research illustrate
contemporary issues for international and e-marketers concerning international
market growth effectiveness. The findings in this study give creditability to how the
Internet can enhance internationalisation opportunities. For example, this includes
issues pertaining to the firm‘s ability to exploit information and knowledge
capabilities through the Internet intensity of the firm. Further, if internationalisation is
becoming a more easily attained growth outcome, then more firms will need to
develop these internationalisation and Internet capabilities. For example, firms will
need to focus solidly on information, knowledge, international mindset and use of
business relationships/networks to deal with the process of rapid internationalisation
more efficiently and effectively.
Marketing practitioners can use this evidence to formulate international marketing
frameworks and programs. This is the second practical contribution. Marketing
managers and international managers can incorporate their firm‘s current practice
with the findings from this study, which will not only help to achieve better practice,
but help them to formulate an Internet international marketing vision. That is,
frameworks for capitalising on internationalisation would also focus on e-marketing
capabilities to exploit the information/knowledge, international mindset and business
206
relationship opportunities due to the Internet. Training programs and education
systems need to be in place to handle these digital changes, as the Internet has
become a lower risk mode of entry to international markets.
From a policy perspective, appropriate educational institutions and government
bodies need programs for Internet international marketing. One might think that the
normal market and/or business practices can apply in a digital environment; however,
this is not necessarily the case. Thus, institutions developing policy need to
understand the dynamics of the Internet and create educational opportunities to
harness the growth potential for Australian firms. Moreover, institutions should be
aware of successful firms using the Internet in internationalisation so as to draw
benchmarks and to develop sets of exemplars to build knowledge for the broader
business population (Chaudhry & Crick, 2002). Now that the theoretical and practical
implications have been highlighted, the limitations of the research will be evaluated.
7.7 Limitations
The dearth of substantive theory within the discipline means that the measures
developed have limitations. That is, measurement error is an issue, as the body of
knowledge remains in its infancy and the scales are not well established. Thus,
limited scale development, or statistical reproduction for scale verification in
particular, remains a limitation. However, every endeavour was made to use
established scales.
As the research is predominantly an exploratory interpretation of the sample
estimates, ‗a fragile balance between dutiful theoretical considerations and statistical
interpretation‘ (Boomsma, 2000 p, 474) was established. That is, although minor
modifications were made to the proposed model, theoretical integrity was left intact.
Modifications were made to only two pathways and only when theoretical plausibility
was evident. As a consequence, replication or cross-validation would be needed for a
stronger statistical argument of causal predictions (Boomsma, 2000). As with most
studies modification and measurement error do limit this study‘s claim to be
confirmatory; however, the objective was exploratory with confirmatory elements, as
opposed to a strictly confirmatory model (Byrne, 2001).
207
The Australian perspective potentially limits the broader generalisability of the
research. Further, as the findings are drawn from predominantly SME‘s the results
may not be generalisable to multi-national firms. However, having a single country
perspective enables the environment to be held constant, giving the study some
experimental control. For the research to have a larger theoretical impact, a multi-
country study would have helped to give the findings greater generalisability. Further,
the focus of the research is predominantly from an outward internationalisation
perspective. Thus, the inward internationalisation elements may yield distinct
evidence. However, considering international market growth was the focus, an
outward internationalisation perspective was prudent. Notwithstanding these
limitations, the study makes a valuable contribution to international marketing theory
and practice.
7.8 Future directions for research
The research uses competing models that vary slightly from the proposed model, the
research findings should be considered exploratory with confirmatory elements. That
is, replication and/or cross-validation is needed for strict statistical confirmation
(Byrne, 2001). Future research will endeavour to address these issues.
A verification (test/re-test) study is necessary to ensure that these findings have
greater credibility. As this is a pioneering study in many respects and considering this
is a single study, it is essential to verify the interrelationships identified, multi-item
constructs and re-evaluated excluded items. Thus, once a verification study has been
conducted, the findings will become more generalisable. Further, measurement
development is needed, in combination with a verification study. For example,
Internet intensity, information availability, information usage and interactive
communication require scale development. Together with these contemporary
constructs, the research highlighted the need for scale development in more
traditional elements of internationalisation, such as business relationships and psychic
distance. Although the construct of international market growth was confirmed, it is
necessary to re-test items in different studies to establish credible scales for
international market growth.
208
Further, a re-test study would allow the research to investigate measures that were not
confirmed in this study. This process would allow a better understanding of the
dynamic concepts within the Internet international marketing body of knowledge. For
example, the concept of digitalisation was found to be important in the analysis of
case studies (Chapter 4), but not within the measurement of firm Internet usage.
Further research would assist in understanding this concept of digitalisation. The
digitalisation concept is not about the Internet‘s impact on goods versus services as
initially proposed (Chapter 3, Section 3.3.2), but to what extent the product offering
can be transformed into a digital format, which then has a greater capacity to enhance
internationalisation through the Internet. Thus, the focus for future research should
also attempt to clarify this issue.
Another finding from this study was the effect of the international entrepreneurship
elements of internationalisation. International entrepreneurship, although captured
here in a small way using international mindset, business relationships and psychic
distance, could be the primary focus of a study in which greater emphasis is placed on
the international entrepreneurship components of internationalisation. As identified in
a recent special edition of the Journal of International Entrepreneurship, ‗international
entrepreneurship and the Internet‘, there is ongoing debate about the interface
between the Internet and international entrepreneurship (Sinkovics & Bell, 2006). For
example, the Internet‘s interface between the international entrepreneurial dimensions
recently identified such as; e-entrepreneurship, motivation, innovation (Ramsey &
Ibbotson, 2006), commitment level (Mostafa, Wheeler & Jones, 2006), knowledge
building (Loane, 2006), liability of foreignness and resource scarcity (Arenius, Sasi &
Gabrielsson, 2006), along with those constructs already identified in this PhD study,
need further exploration.
7.9 Conclusion
In this chapter, the two research issues were resolved. The explicit influence of the
Internet was described, with constructs identified and statistically confirmed. The
interrelationships between constructs were established in an SEM process and the
implications for internationalisation processes were highlighted. The overall research
question was addressed with respect to the implications to a broader range of
internationalisation theories, such as stages of internationalisation, rapid accelerated
209
internationalisation, international capabilities, international entrepreneurship and
network theory of internationalisation. Further, the contribution and level of
contribution were established, limitations highlighted and future research possibilities
explored.
The Internet‘s influence on internationalisation extends beyond the
internationalisation process knowledge-management explanation proposed by
Peterson et al. (2002) and Overby and Min‘s (2001) suggestions that international
supply chain management (ISCM) explains the Internet‘s impact through the
implementation of international networks. However, Internetalisation can be
theorised through an enhanced international network model including both personal
and virtual networks. This conceptual reasoning must consider and report the
importance of the Internet to the process components of information, knowledge, and
entrepreneurship so as to give a richer picture of the theoretical landscape.
International network theory is the advocated theoretical framework that was found to
best explain the Internet phenomenon in international market growth. Further, this
research also confirms that international network theory underpins the conceptual
theorisation of post-Internet internationalisation, albeit in a new dynamic form with
information/knowledge and international entrepreneurship impetus. Firms need
information, knowledge and Internet capabilities, along with international
entrepreneurs, to capitalise fully on opportunities for ‗Internetalisation‘.
The study provides an initial framework or platform for the future research of the
Internet‘s influence on internationalisation and international market growth. Because
the study used a two-stage process of case studies and a structural equation modelling
evaluation, it can be considered creditable. With the Internet only established for little
more than a decade, this research area will continue to evolve, due to the dynamic
nature of Internet technology. This research shows some of the key areas where
further research is required.
210
8.0 REFERENCES
Aaker, D. 1998, Strategic Market Management. 5th ed. United States of America:
John Wiley & Sons.
Aaker, D. 2001, Developing business strategies. 6th ed. New York: John Wiley.
Aaker, D., Kumar, V., Day, G., and Lawley, M. 2005, Marketing Research. the
pacific rim ed. Brisbane: John Wiley & Sons Australia, Ltd.
Aaker, D. A., and Joachimsthaler, E. 2000, Brand leadership. New York: Free Press.
Abas, Z. W. 2002, Internet growth based on languages. Computimes Malaysia, pp. 1.
ABS. 2008, Number and Characteristics of Australian Exporters, 2006-07. pp, section
5368.0.55.006. Canberra: Australian Bureau of Statistics.
Alashban, A. A., Hayes, L. A., Zinkhan, G. M., and Balazs, A. L. 2002, International
brand-name standardization/adaptation: Antecedents and consequences. Journal of
International Marketing Vol.10, no. 3, pp. 22-48.
Al-Mashari, M. 2002, Electronic commerce: A comparative study of organizational
experiences. Benchmarking Vol.9, no. 2, pp. 182-89.
Amaratunga, D., and Baldry, D. 2001, Case study methodology as a means of theory
building: Performance measurement in facilities management organisations. Work
Study Vol.50, no. 3, pp. 95-105.
Amaratunga, D., Baldry, D., Sarshar, M., and Newton, R. 2002, Quantitative and
qualitative research in the built environment: Application of "mixed" research
approach. Work Study Vol.51, no. 1, pp. 17-31.
Amit, R., and Shoemaker, P. 1993, Strategic assets and organizational rent. Strategic
Management Journal Vol.14, no. 1, pp. 33-46.
Andersen, O. 1993, On the internationalization process of the firm: A critical
analysis. Journal of International Business Studies Vol.24, no. 2, pp. 209-31.
Anderson, J., and Gerbing, D. 1988, Structural Equation Modeling in Practice: A
review and recommneded Two-Step approach. Psychological Bulletin Vol.103, no. 3,
pp. 411- 23.
Andersson, S., Gabrielsson, J., and Wictor, I. 2004, International Activities in Small
Firms: Examining Factors Influencing the Internationalization and Export Growth of
Small Firms. Canadian Journal of Administrative Sciences Vol.21, no. 1, pp. 22-34.
Ang, L., and Lee, B. 2000, Transacting on the Internet: A Qualitative and
Quantitative exploration of trust, brand equity and purchase guarantee, Visionary
Marketing for the 21st Century: Facing the Challenge. Paper presented at the
ANZMAC, Australia.
211
Ansoff, I. 1957, Strategies for diversification. Harvard Business Review Vol.35, pp.
113-24.
Ansoff, I. 1965, Corporate strategy: an analytic approach to business policy for
growth and expansion. New York: McGraw-Hill.
Ansoff, I. 1968, Corporate strategy: an analytic approach to business policy for
growth and expansion, Pelican library of business and management.
Harmondsworth: Penguin.
Ansoff, I. 1969, Business strategy: selected readings, Penguin modern management
readings. Harmondsworth: Penguin Books.
Ansoff, I., and McDonnell, E. J. 1988, The new corporate strategy. Rev. ed. New
York: Wiley.
Arbuckle, J. 1996, Full Information Estimation in the Presence of Incomplete Data. In
Advanced Structural Equation Modeling: Issues and Techniques, edited by
Marcoulides, G. and Schumacker, R., 243-78. New Jersey: Lawrence Erlbaum
Associates Inc.
Arenius, P., Sasi, V., and Gabrielsson, M. 2006, Rapid internationalisation enabled by
the Internet: The case of a knowledge intensive company. Journal of International
Entrepreneurship Vol.3, no. 4, pp. 279-90.
Armstrong, S., and Overton, T. 1977, Estimating Non response Bias in Mail Surveys.
Journal of Marketing Research Vol.14, no. 3, pp. 396-402.
Arnott, D., and Bridgewater, S. 2002, Internet, Interaction and implications for
marketing. Marketing Intelligence & Planning Vol.20, no. 2, pp. 86-95.
Aspelund, A., and Moen, O. 2004, Internationalization of small High-Tech Firms:
The role of information technology. Journal of Euro-Marketing Vol.13, no. 2/3, pp.
85-105.
Atuahene-Gima, K. 2005, Resolving the Capability-Rigidity Paradox in New Product
innovation. Journal of Marketing Vol.69, no. 4, pp. 61-83.
Austrade. Export Markets - Industries Australian trade commission: Austrade, 2008
[cited 20 October 2008]. Available from http://www.austrade.gov.au/Agribusiness.
Australian Bureau of Statistics. 2002, Small Business in Australia. pp, Section.
1321.0. Canberra: ABS.
Australian Bureau of Statistics. 2004, Characteristics of small business in Australia.
pp, section: 8127.0: ABS.
Australian Bureau of Statistics. 2006, Information and Communication Technology,
Australia 2004-2005. pp, Section 8126.0. Canberra: Australian Government, ABS.
212
Australian Bureau of Statistics. 2007a, Business use of information technology,
Australia 2005-2006. pp, Section 8129.0. Canberra: Australian Government, ABS.
Australian Bureau of Statistics. 2007b, Counts of Australian Businesses, including
entries and exits. pp, 1-34. Canberra: Australian Government: ABS.
Autio, E., Sapienza, H., and Almeida, J. 2000, Effects of age at entry, knowledge
intensity and imitability on international growth. Academy of Management Journal
Vol.43, no. 5, pp. 909-24.
Bagozzi, R., Yi, Y., and Phillips, L. 1991, Assessing Construct Validity in
Organizational Research. Administration Science Quarterly Vol.36, no. September,
pp. 421-58.
Bagozzi, R. P. 1994, Principles of marketing research. Cambridge, Mass: Blackwell
Business.
Barkema, H., and Vermeulen, F. 1998, International expansion through start-up or
acquisition: A learning perspective. Academy of Management Journal Vol.41, no. 1,
pp. 7-26.
Barney, J. 1991, Firm resources and sustained competitive advantage. Journal of
Management Vol.17, no. 1, pp. 99-120.
Baron, R., and Kenny, D. 1986, The Moderator-Mediator variable distinction in
social psychological research: Conceptual, strategy, and statistical considerations.
Journal of Personality and Social Psychology Vol.51, no. 6, pp. 1173-82.
Bauer, C., and Colgan, J. 2001, Planning for electronic commerce strategy: an
explanatory study from the financial services sector. Logistics Information
Management Vol.14, no. 1/2, pp. 24-32.
Baumgartner, H., and Homburg, C. 1996, Applications of structural equation
modeling in marketing and consumer research: A review. International Journal of
Research in Marketing Vol.13, no. 2, pp. 139-61.
Bell, J. 1995, The internationalization of small computer software firms: A further
challenge to "stage" theories. European Journal of Marketing Vol.29, no. 8, pp. 60-
75.
Bell, J., Deans, K., Ibbotson, P., and Sinkovics, R. 2001, Towards the
Internetalization of International Marketing Education. Marketing Education Review
Vol.11, no. 3, pp. 69-78.
Bell, J., McNaughton, R., Young, R., and Crick, D. 2003, Towards an integrated
model of small firm internationalisation. Journal of International Entrepreneurship
Vol.1, no. 4, pp. 339-62.
Bell, J., and Young, S. 1998, Towards an integrative framework of the
internationalization of the firm. In Internationalization: Process, Context and
213
Markets, edited by Hooley, G., Loveridge, R. and Wilson, D., pp. 5-28. London:
Macmillan.
Bennett, R. 1997, Export Marketing and the Internet. International Marketing Review
Vol.14, no. 5, pp. 324-44.
Bentler, P. 1990, Quantitative Methods in Psychology: Comparative Fit Indexes in
Structural Models. Psychological Bulletin Vol.107, no. 2, pp. 238-46.
Bergstrom, A. 2000, Cyberbranding: leveraging your brand on the Internet. Strategy
& Leadership Vol.28, no. 4, pp. 10-15.
Berry, M., and Brock, J. 2004, Marketspace and Internationalisation Process of the
Small Firm. Journal of International Entrepreneurship Vol.2, pp. 187-216.
Bilkey, W., and Tesar, G. 1977, The export behavor of smaller sized Wisconsin
manufacturing firms. Journal of International Business Studies Vol.8, no. 1, pp. 93-
98.
Blake, B., and Neuendorf, K. 2004, Cross national differences in website appeal: A
framework for assessment. Journal of Computer Mediated Communication Vol.9, no.
4, pp. 1-34.
Boomsma, A. 2000, Reporting analyses of covariance structures. Structural equation
modeling Vol.7, no. 3, pp. 461-83.
Booz-Allen, and Hamilton. 1999, Competing in the digital age : how the Internet will
transform global business. in. New York: Economist Intelligence Unit (Great
Britain).
Bouma, G. D. 1996, The research process. 3rd ed. Melbourne: Oxford University
Press.
Brock, J., and Yu, Z. 2005, Organizational use of the Internet, Scale development and
validation. Internet Research Vol.15, no. 1, pp. 67-87.
Broussard, G. 2000, How advertising frequency can work to build online advertising
effectiveness. International Journal of Market Research Vol.42, no. 4, pp. 439-58.
Buckley, P., Newbould, D., and Thurwell, J. 1979, Going international – the foreign
direct investment decisions of smaller UK firms, pp. 72-87. Paper presented at the
EIBA Proceedings, Uppsala.
Burgess-Limerick, T., and Burgess-Limerick, R. 1998, Conversational interviews and
multiple-case research in psychology. Australian Journal of Psychology Vol.50, no.
2, pp. 63-70.
Burns, A., and Bush, R. 2003, Marketing Research: Online research applications.
4th International ed. United States of America: Prentice Hall.
214
Buttriss, G., and Wilkinson, I. 2003, Towards a process Model of Internetalisation:
Becoming an e-Business. Paper presented at the 19th Annual IMP conference,
Lugano, Switzerland.
Byrne, B. M. 1994, Structural equation modeling with EQS and EQS/Windows :
basic concepts, applications, and programming. Thousand Oaks: Sage Publications.
Byrne, B. M. 2001, Structural equation modeling with AMOS : basic concepts,
applications, and programming, Multivariate applications book series. Mahwah, N.J.
London: Lawrence Erlbaum Associates.
Calof, J., and Beamish, P. 1995, Adapting to foreign markets: Explaining
internationalization. International Business Review Vol.4, no. 2, pp. 115-31.
Carter, S. 1999, Anatomy of a qualitative management PhD. part one - getting started.
Management Research News Vol.22, no. 11, pp. 9-22.
Cavusgil, S. T. 1980, On the internationalization process of the firms'. European
Research Vol.8, no. November, pp. 273-81.
Cavusgil, S. T. 1984, Organisational characteristics associated with export activity.
Journal of Management Studies Vol.21, no. 1, pp. 3-22.
Cavusgil, T., and Zou, S. 1994, Marketing strategy-performance relationship: An
empirical link in export market ventures. Journal of Marketing Vol.58, no. 1, pp. 1-
21.
Chan, C., and Swatman, P. M. C. 2000, From EDI to Internet commerce: the BHP
Steel experience. Internet Research Vol.10, no. 1, pp. 72-83.
Chao, P., Samiee, S., and Yip, L. S.-C. 2003, International marketing and the Asia-
Pacific region: Developments, opportunities, and research issues. International
Marketing Review Vol.20, no. 5, pp. 480-92.
Chaudhry, S., and Crick, D. 2002, A research policy note on UK government support
and small firms' internationalization using the Internet: the use of www.tradeuk.com.
Strategic Change Vol.11, no. 2, pp. 95-104.
Chetty, S. 1996, The case study method for research in small-and medium-sized
firms. International Small Business Journal Vol.15, no. 1, pp. 73-85.
Chetty, S., and Hamilton, R. 1993, Firm-level determinants of export performance.
International Marketing Review Vol.10, no. 3, pp. 26-34.
Chin, W. W. 1998, Issues and opinion on structural equation modeling. MIS
Quarterly Vol.22, no. 1, pp. 7-16.
Churchill, G. 1979, A paradigm for developing better measures of marketing
constructs. Journal of Marketing Research Vol.16, no. 1, pp. 64-73.
215
Churchill, J., and Peter, P. 1984, Research Design Effects on the Reliability of Rating
Scales: A Meta-analysis. Journal of Marketing Research Vol.21, no. November, pp.
360-75.
Coviello, N., and McAuley, A. 1999, Internationalization and the smaller firm: A
review of contemporary empirical research. Management International Review
Vol.39, no. 3, pp. 223-56.
Coviello, N., and Munro, H. 1995, Growing the entrepreneurial firm: Networking for
international market development. European Journal of Marketing Vol.29, no. 7, pp.
49-61.
Coviello, N., and Munro, H. 1997, Network relationships and the internationalization
process of small software firms. International Business Review Vol.6, no. 4, pp. 361-
86.
Cullen, J. B., and Parboteeah, K. P. 2004, Multinational management : a strategic
approach. 3rd ed. Mason, Ohio: South-Western Thomson Learning.
Czinkota, M. R. 1982, Export development strategies: U.S. promotion policy. New
York: Praeger.
Dann, S., and Dann, S. 2001, Strategic Internet Marketing. Queensland, Australia:
John Wiley Publications.
Darby, R., Jones, J., and Madani, G. A. 2003, E-commerce marketing: Fad or
fiction? Management competency in mastering emerging technology. An
international case analysis in the UAE. Logistics Information Management Vol.16,
no. 2, pp. 106-13.
Das, T. H. 1983, Qualitative Research in Organizational Behaviour. The Journal of
Management Studies Vol.20, no. 3, pp. 301-14.
Davis, J. 1999, Going global. Infoworld, pp. 34-35.
Davis, R., and Buchanan-Oliver, M. 1999, Marketing relationships in a computer
mediated environment. Australasian Marketing Journal Vol.7, pp. 89-101.
de Chernatony, L. 2001, Succeeding with brands on the Internet. Brand Management
Vol.8, pp. 186-95.
de Weerd-Nederhof, P. C. 2001, Qualitative case study research. The case of a PhD
research project on organising and managing new product development systems.
Management Decision Vol.39, no. 7, pp. 513-38.
Deeter-Schmelz, D. R., and Kennedy, K. N. 2004, Buyer-seller relationships and
information sources in an e-commerce world. The Journal of Business & Industrial
Marketing Vol.19, no. 3, pp. 188-96.
Deibert, R. J. 2002, Dark guests and great firewalls: The Internet and Chinese
security policy. The Journal of Social Issues Vol.58, no. 1, pp. 143-59.
216
Dommeyer, C., and Moriarty, E. 2000, Comparing two forms of an e-mail survey:
embedded vs. attached. International Journal of Market Research Vol.42, no. 1, pp.
39-50.
Dubini, P., and Aldrich, H. 1991, Personal and extended networks are central to the
entrepreneurial process. Journal of Business Venturing Vol.6, no. 5, pp. 305-13.
Dunning, J. 1988, The eclectic paradigm of international production: a restatement
and some possible extensions. Journal of International Business Studies Vol.19, no.
1, pp. 1-31.
Dunning, J. 1993, The globalization of business. London: Routledge.
Dyer, G., Wilkins, A., and Eisenhardt, K. 1991, Better Stories, Not Better Constructs,
to Generate Better Theory. Academy Of Management. The Academy Of Management
Review Vol.16, no. 3, pp. 613-19.
Eid, R., and Trueman, M. 2002, The Internet: New international marketing issues.
Management Research News Vol.25, no. 12, pp. 54-67.
Einhorn, B. 2002, The great firewall of China, Beijing is clamping down tighter on
Internet search engines. Business Week, no. 3800, pp. 58.
Eisenhardt, K. 1989, Building Theories From Case Study Research. Academy Of
Management. The Academy Of Management Review Vol.14, no. 4, pp. 532-50.
Enders, C. 2006, Analyzing Structural Equation Models with Missing Data. In
Structural equation modeling, edited by Hancock, G. and Mueller, R., 313-44.
Connecticut: Information Age Publishing.
Ethiraj, S., Kale, P., Krishnan, M., and Singh, J. 2005, Where do capabilities come
from and how do they matter? A study in the software services industry. Strategic
Management Journal Vol.26, pp. 25-45.
Evans, J. R., and Berman, B. 1985, Marketing. 2nd ed. New York: Macmillan.
Ford, I. D. 1980, The development of buyer-seller relationships in industrial markets.
European Journal of Marketing Vol.14, no. 5/6, pp. 339-53.
Fornell, C., and Larcker, D. 1981, Evaluating structural equation models with
unobserved variables and measure... Journal of Marketing Research Vol.18, no. 1,
pp. 39-50.
Forrester. 2006, Forrester's NACTAS 2006 Benchmark Survey, Forrester's Consumer
Technographics Q2 and Q4 2005 European Studies, and Forrester's APCTAS Q1
Survey. pp: Forrester Research.
Frazer, L., and Lawley, M. 2000, Questionnaire design & administration. Brisbane:
John Wiley & Sons Australia.
217
Freeman, L. 1998, Net drives b-to-b new highs world wide. Advertising Ages
Business Marketing Vol.83, no. 1, pp. 1-2.
Gabrielsson, M., and Manek Kirpalani, V. H. 2004, Born globals: how to reach new
business space rapidly. International Business Review Vol.13, no. 5, pp. 555-71.
Gaski, J. 1984, The effects of Discrepant Power Perceptions in a Marketing Channel.
Psychology & Marketing Vol.1, no. 3/4, pp. 45-56.
Gibbs, J., and Kraemer, K. 2004, A cross country investigation of the Determinants of
scope of e-commerce use: an institutional approach. Electronic markets Vol.14, no. 2,
pp. 124-37.
Godfrey, P., and Hill, C. 1995, The problem of unobservables in strategic
management research. Strategic Management Journal Vol.16, no. 7, pp. 519-33.
Griffis, S., Goldsby, T., and Cooper, M. 2003, Web-based and mail surveys: A
comparison of response, data, and cost. Journal of Business Logistics Vol.24, no. 2,
pp. 237-58.
Gronhaug, K., and Kvitastein, O. 1992, Expansion strategies in international markets:
An exploratory study. Scandinavian International Business Review Vol.1, no. 1, pp.
57-70.
Guba, E. G. 1990, The paradigm dialog. Newbury Park, Calif: Sage Publications.
Guba, E. G., and Lincoln, Y. S. 1989, Fourth generation evaluation. Newbury Park,
Calif: Sage Publications.
Guba, E. G., and Lincoln, Y. S. 1994, Competing paradigms in qualitative research
(Eds) Denzin, N. K. and Lincoln, Y. S., Handbook of Qualitative Research. Thousand
Oaks: Sage.
Guba, E. G., and Lincoln, Y. S. 2004, Competing Paradigms in Qualitative Research.
In Approaches to qualitative research: a reader on theory and practice, edited by
Hesse-Biber, S. J. and Leavy, P., xiii, 545. New York: Oxford University Press.
Gummesson, E. 2000, Qualitative methods in management research. 2nd ed.
Thousand Oaks, Calif.: Sage Publications.
Gummesson, E. 2004, Qualitative research in marketing. Road-map for a wilderness
of complexity and unpredictability. European Journal of Marketing Vol.39, no. 3/4,
pp. 309-27.
Gutmann, E. 2002, Who lost China's Internet? The Weekly Standard Vol.7, no. 23,
pp. 24.
Haenlein, M., and Kaplan, A. 2004, A Beginner's guide to Partial Least Squared
Analysis. Understanding Statistics Vol.3, no. 4, pp. 283-97.
218
Hair, J., Anderson, R., Tatham, R., and Black, W. 1992, Structural Equation
Modelling, a Multivariate Data Analysis with readings. 4 ed. New Jersey: Prentice
Hall.
Hair, J., Black, W., Babin, B., Anderson, R., and Tatham, R. 2006, Multivariate Data
Analysis. 6th ed. New Jersey: Pearson Prentice Hall.
Hair, J., Bush, R., and Ortinau, D. 2000, Marketing Research: a practical approach
for the new millennium. Singapore: McGraw-Hill.
Hallen, L., and Wiedersheim-Paul, F. 2004, Psychic distance and buyer-seller
interaction. In The internationalisation of the firm, edited by Buckley, P. and Ghauri,
P., 349-60. United Kingdom: Thompson Learning.
Hamill, J. 1997, The Internet and International Marketing. International Marketing
Review Vol.14, no. 5, pp. 300-23.
Hamill, J., and Gregory, K. 1997, Internet marketing in the internationalisation of
U.K. SME's. Journal of Marketing Management Vol.13, no. 1-3, pp. 9-28.
Hanson, W. 2000, Principles of Internet Marketing. United States of America: South-
Western College Publishing.
Harper, S. C. 1992, Developing a 'Corpreneurial' Strategy for Fostering Business.
Industrial Management Vol.34, no. 4, pp. 19.
Harrison-Walker, J. 2002, If you build it, will they come? Barriers to international e-
marketing. Journal of Marketing, Theory and Practice Vol.10, no. 2, pp. 12-21.
Harvin, R. 2000, In Internet branding, the off-lines have it. Brandweek Vol.41, no. 4,
pp. 30.
Hastings, K., and Perry, C. 2000, Do services exporters build relationships? Some
qualitative perspectives. Qualitative Market Research Vol.3, no. 4, pp. 207-14.
Healy, M., and Perry, C. 2000, Comprehensive criteria to judge validity and
reliability of qualitative research within the realism paradigm. Qualitative Market
Research Vol.3, no. 3, pp. 118-26.
Hiebert, M. 2002, Counters to Chinese checkers. Far Eastern Economic Review
Vol.165, no. 44, pp. 24.
Hill, C., Hwang, P., and Kim, C. 1990, An eclectic theory of the choice of
international entry mode. Strategic Management Journal Vol.11, no. 2, pp. 117-28.
Hill, C. W. L. 2004, Global business today. 3 rd . ed. Boston: McGraw Hill/Irwin.
Hoffman, D., and Novak, T. 1996, Marketing in hypermedia computer-mediated
environments: Conceptual foundations. Journal of Marketing Vol.60, no. 3, pp. 50-
68.
219
Hoffman, D. L., and Novak, T. P. 1997, A New Marketing Paradigm for Electronic
Commerce. Information Society Vol.13, no. 1, pp. 43-54.
Hoffman, D. L., Novak, T. P., and Peralta, M. 1999, Building Consumer Trust
Online. In Communications of the ACM, pp, 80-85: Association for Computing
Machinery.
Hoffman, D. L., Novak, T. P., and Schlosser, A. E. 2003, Locus of control, Web use,
and consumer attitudes toward Internet regulation. Journal of Public Policy &
Marketing Vol.22, no. 1, pp. 41-57.
Hoskisson, R. E., Hitt, M. A., Wan, W. P., and Yiu, D. 1999, Theory and research in
strategic management: Swings of a pendulum. Journal of Management Vol.25, no. 3,
pp. 417-56.
Hox, J. 2002, Multi level analysis: Techniques and applications. United States:
Lawrence Erlbaum Associates.
Hu, L. t. 1997, Structural equation modeling: New insight for a promising path. The
American Journal of Psychology Vol.110, no. 3, pp. 474-84.
Hu, L. t., and Bentler, P. 1999, Cuttoff criteria for fit indices in covariance structure
analysis: conventional criteria versus new alternatives. Structural equation modeling
Vol.6, pp. 1-55.
Hughes, T. J. 2002, Marketing principles in the application of e-commerce.
Qualitative Market Research Vol.5, no. 4, pp. 252-60.
Hulland, J., Chow, Y. H., and Lam, S. 1996, Use of causal models in marketing
research: A review. International Journal of Research in Marketing Vol.13, no. 2, pp.
181-97.
Inkpen, A., and Beamish, P. 1997, Knowledge bargaining power and the instability of
international joint venture. Academy of Management Journal Vol.22, no. 1, pp. 177-
202.
Internet World Stats. Internet usage statistics: World Internet Users and population
Stats 2008 [cited 12 October 2008]. Available from
http://www.internetworldstats.com/.
Javalgi, R., and Ramsey, R. 2001, Strategic issues of e-commerce as an alternative
global distribution system. International Marketing Review Vol.18, no. 4, pp. 376-91.
Jevons, C., and Gabbott, M. 2000, Trust, Brand Equity and Brand Reality in Internet
Business Relationships: An Interdisciplinary... In Journal of Marketing Management,
pp, 619-34: Westburn Publishers Limited.
Johanson, J., and Mattsson, L. 1988, Internationalisation in industrial systems- A
network approach. In Strategies in global competition, edited by Hood, N. and
Vahlne, J.-E., pp. 287-314. London: Croom Helm.
220
Johanson, J., and Vahlne, J. 1977, The internationalization process of the firm-A
model of knowledge development and increasing foreign market commitments.
Journal of International Business Studies Vol.8, no. 01-spring, pp. 23-32.
Johanson, J., and Vahlne, J.-E. 1990, The mechanism of internationalisation.
International Marketing Review Vol.7, no. 4, pp. 11-24.
Johanson, J., and Vahlne, J.-E. 2003, Business relationship learning and commitment
in the internationalization process. Journal of International Entrepreneurship Vol.1,
no. 1, pp. 83-101.
Johanson, J., and Weidersheim-Paul, F. 1975, The internationalization of the firm:
Four Swedish cases. Journal of Management Studies Vol.12, no. 3, pp. 305-22.
Joreskog, K. G. 1993, Testing structural equation models. In Testing structural
equation models, edited by Bollen, K. A. and Long, J. S., pp. 294-316. Newbury
Park, CA: Sage.
Julian, C., and Liesch, P. 2004, The impact of the Internet on Australian firms' export
marketing performance. Paper in conference proceedings, Australian & New Zealand
International Business academy, pp. 61.
Klein, L. R., and Quelch, J. A. 1997, Business-to-business market making on the
Internet. International Marketing Review Vol.14, no. 5, pp. 345-61.
Kline, P. 1994, An Easy Guide to Factor Analysis. London: Routledge.
Kline, R. 2005, Principles and practice of structural equation modeling (Eds) 2nd.
New York, United States of America: The Guilford press.
Knight, G. A., and Cavusgil, S. T. 1996, The born global firm: A challenge to
traditional internationalization theory. Advances in International Marketing Vol.8,
pp. 11-26.
Koh, S. C. L., and Maguire, S. 2004, Identifying the adoption of e-business and
knowledge management within SMEs. Journal of Small Business and Enterprise
Development Vol.11, no. 3, pp. 338-48.
Kolesar, M. B., and Galbraith, R. W. 2000, A services-marketing perspective on e-
retailing: implications for e-retailers and directions for further research. Internet
Research Vol.10, no. 5, pp. 424-38.
Konecnik, M., and Gartner, W. C. 2007, Customer-Based Brand Equity for a
Destinations. Annals of Tourism Research Vol.34, no. 2, pp. 400-21.
Kotabe, M., and Helsen, K. 2004, Global marketing management. 3rd ed. Hoboken,
N.J.: Wiley.
Kotha, S., Rindova, V. P., and Rothaermel, F. T. 2001, Assets and actions: Firm-
specific factors in the internationalization of U.S. Internet firms. Journal of
International Business Studies Vol.32, no. 4, pp. 769-91.
221
Kotler, P. 1998, Marketing. 4th ed. New York Sydney: Prentice Hall.
Kotler, P. 2001, Marketing. 5th ed. Frenchs Forest, N.S.W.: Pearson Education.
Kotler, P., and Armstrong, G. 1994, Principles of marketing. 6th (International). ed,
Prentice-Hall international editions. Englewood Cliffs, N.J: Prentice Hall
International.
Kotler, P., Brown, L., Adam, S., and Armstrong, G. 2004, Marketing. 6th ed. Sydney:
Pearson Prentice Hall.
Kotler, P., Keller, L., Ang, S., Leong, S., and Tan, C. 2006, Marketing management:
An Asian perspective. 4th ed. Singapore: Pearson Prentice Hall.
Kuada, J., and Sørensen, O. J. 2000, Internationalisation of Companies from
Developing Countries. New York: International Business Press.
Larsson, R. 1993, Case survey methodology: Quantitative analysis of patterns across
case studies. Academy of Management Journal Vol.36, no. 6, pp. 1515-46.
Lawrence, P., and Lorsch, J. 1967, Differentiation and Integration in Complex
Organizations. Administrative Science Quarterly Vol.12, pp. 1-30.
Lee, W.-Y., and Brasch, J. 1978, The Adoption of Export as an Innovative Strategy.
Journal of International Business Studies Vol.9, no. 1, pp. 85–94.
Liamputtong, P., and Ezzy, D. 2005, Qualitative research methods (Eds) 2nd.
Melbourne: Oxford University Press.
Lim, J.-S., Sharkey, T. W., and Kim, K. I. 1993, Determinants of international
marketing strategy. Management International Review Vol.33, no. 2, pp. 103-20.
Ling, C. 2001, E-Commerce(A Special Report): The Business --- Learning a New
Language: Companies That Teach English in Asia See Their Business Quickly Being
Transformed by the Web. Wall Street Journal, Mar 12, 2001, p. R.18.
Lituchy, T. R., and Rail, A. 2000, Bed and breakfasts, small inns, and the Internet:
The impact of technology on the globalization of small businesses. Journal of
International Marketing Vol.8, no. 2, pp. 86-97.
Liu, Y. 2001, The net, cafe crackdown-China enlists the public in its ongoing
campaign to censor the Internet. Asiaweek, pp. 1.
Llieva, J., Baron, S., and Healey, N. 2002, Online surveys in marketing research: pros
and cons. International Journal of Market Research Vol.44, no. 3, pp. 361-82.
Loane, S. 2006, The role of the internet in the internationalisation of small and
medium sized companies. Journal of International Entrepreneurship Vol.3, no. 4, pp.
263-77.
222
Loane, S., McNaughton, R. B., and Bell, J. 2004, The Internationalization of Internet-
Enabled Entrepreneurial Firms: Evidence from Europe and North America. Canadian
Journal of Administrative Sciences Vol.21, no. 1, pp. 79-96.
Lord, M., and Ranft, A. 2000, Organizational learning about new international
markets: Exploring the internal transfer of local market knowledge. Journal of
International Business Studies Vol.31, no. 4, pp. 573-89.
Luo, Y. 1997, Partner selection and venturing success: The case of joint ventures with
firms in the People's Republic of China. Organizational Science Vol.8, no. 6, pp. 648-
62.
Luostarinen, R., and Welch, L. 1990, International business operations. Helsinki:
Exporting consulting Oy.
Lynch, P., and Beck, J. 2001, Profiles of Internet buyers in 20 countries: Evidence
for region-specific strategies. Journal of International Business Studies Vol.32, no. 4,
pp. 725-48.
Malhotra, N. 1996, Marketing Research, an applied orientation. New Jersey: Prentice
Hall Inc.
Malhotra, N., Hall, J., Shaw, M., and Oppenheim, P. 2002, Marketing Research: An
applied orientation. 2nd ed. Sydney: Prentice Hall.
Marshall, C., and Rossman, G. 1999, Designing qualitative research. Thousand
Oaks–CA: Sage.
Mathieu, J., DeShon, R., and Bergh, D. 2008, Mediation interferences in
organizational research: Then, Now, and Beyond. Organizational Research Methods
Vol.11, no. 2, pp. 203-23.
Mathur, L. K., Mathur, I., and Gleason, K. C. 1998, Services advertising and
providing services on the Internet. The Journal of Services Marketing Vol.12, no. 5,
pp. 334-47.
Matthews, J., and Zander, I. 2007, The international entrepreneurial dynamics of
accelerated internationalisation. Journal of International Business Studies Vol.38, no.
April, pp. 387-403.
Maylor, H., and Blackmon, K. 2005, Researching Business and Management: A
Roadmap for Success. UK: Palgrave-Macmillan.
McDonald, R., and Ho, M. 2002, Principles and practice in reporting structural
equation analyses. Psychological Methods Vol.7, no. 1, pp. 64-82.
McDougall, P., and Oviatt, B. 1996, New Venture Internationalization, Strategic
Change, and Performance: A Follow-Up Study. Journal of Business Venturing
Vol.11, pp. 23-40.
223
McDougall, P., Shane, S., and Oviatt, B. 1994, Explaining the formation of
international new ventures: The limits of theories from international business
research. Journal of Business Venturing Vol.9, no. 6, pp. 469–87.
McNaughton, R. 2001, The export mode decision-making process in small
knowledge-intensive firms. Market Intelligence and Planning Vol.19, no. 1, pp. 12-
20.
McNaughton, R. 2003, The number of export markets that a firm serves: Process
models versus the born-global phenomenon. Journal of International
Entrepreneurship Vol.1, no. 3, pp. 297-311.
Melewar, T. C., and Stead, C. 2002, The impact of information technology on global
marketing strategies. Journal of General Management Vol.27, no. 4, pp. 15-26.
Merrilees, B. 2001, Do traditional strategic concepts apply in the e-marketing
context? Journal of Business Strategies Vol.18, no. 2, pp. 177-90.
Miles, M. B., and Huberman, A. M. 1994, Qualitative data analysis : an expanded
sourcebook. 2nd ed. Thousand Oaks, Calif.: Sage Publications.
Miles, R. E., and Snow, C. C. 1978, Organizational strategy, structure, and process.
New York: McGraw-Hill.
Milliken, J. 2001, Qualitative research and marketing management. Management
Decision Vol.39, no. 1, pp. 71-78.
Mitchell, V. W. 1994, Using Industrial Key Informants: Some Guidelines. Journal of
the Market Research Society Vol.36, no. April, pp. 139-45.
Mitra, K., Reiss, M. C., and Capella, L. M. 1999, An examination of perceived risk,
information search and behavioral intentions in search, experience and credence
services. The Journal of Services Marketing Vol.13, no. 3, pp. 208-28.
Moen, O. 2002a, The Born Globals: A new generation of small European exporters.
International Marketing Review Vol.19, no. 2/3, pp. 156-76.
Moen, O. 2002b, The Internet and international marketing: An empirical analysis of
small and medium sized Norwegian firms. Quarterly Journal of Electronic
Commerce Vol.3, no. 1, pp. 31-41.
Moen, O., Endresen, I., and Gavlen, M. 2003, Use of the Internet in International
Marketing: A Case Study of Small Computer Software Firms. Journal of
International Marketing Vol.11, no. 4, pp. 129-49.
Moen, O., and Servais, P. 2002, Born global or gradual global? Examining the export
behavior of small and medium-sized enterprises. Journal of International Marketing
Vol.10, no. 3, pp. 49-72.
224
Morgan-Thomas, A., and Bridgewater, S. 2004, Internet and exporting: Determinants
of success in virtual export channels. International Marketing Review Vol.21, no. 4/5,
pp. 393-408.
Mostafa, R., Wheeler, C., and Jones, M. 2006, Entrepreneurial orientation,
commitment to the Internet and export performance in small and medium sized
exporting firms. Journal of International Entrepreneurship Vol.3, no. 4, pp. 291-302.
Mullen, M. R., Milne, G. R., and Doney, P. M. 1995, An international marketing
application of outlier analysis for structural equations: A methodological note.
Journal of International Marketing Vol.3, no. 1, pp. 45.
Muller, D., Judd, C., and Yzerbyt, V. 2005, When Moderation Is Mediated and
Mediation Is Moderated. Journal of Personality and Social Psychology Vol.89, no. 6,
pp. 852-63.
Murphy, R., and Bruce, M. 2003, Strategy, accountability, e-commerce and the
consumer. Managerial Auditing Journal Vol.18, no. 3, pp. 193-201.
Nummela, N., Saarenketo, S., and Puumalainen, K. 2004, A Global Mindset-A
prerequisite for successful internationalization. Canadian Journal of Administrative
Sciences Vol.21, no. 1, pp. 51-64.
OECD. 1997, Globalisation and Small and Medium Enterprises. in. Paris:
Organisation for Economic Co-operation and Development.
OECD. 2002, Officially supported export credits and small exporters. in,
www.oecd.org/dataoecd/62/8/2634848.pdf: OECD.
O'Farrell, P. N., Wood, P. A., and Zheng, J. 1998, Regional influences on foreign
market development by business service companies: Elements of a strategic context
explanation. Regional Studies Vol.32, no. 1, pp. 31-48.
Ogbuehi, A., and Longfellow, T. 1994, Perceptions of U.S. manufacturing SME's
concerning exporting: A comparison based on export experience. Journal of Small
Business Management, no. October, pp. 37-47.
O'Grady, S., and Lane, H. 1996, The Psychic Distance Paradox. Journal of
International Business Studies Vol.27, no. 2nd Quarter, pp. 309-33.
Okazaki, S. 2004, Do multinationals standardise or localise? The cross-cultural
dimensionality of product-based Web sites. Internet Research: Electronic Networking
Applications and Policy Vol.14, no. 1, pp. 81-94.
Overby, J. W., and Min, S. 2001, International supply chain management in an
Internet environment: A network-oriented approach to internationalization.
International Marketing Review Vol.18, no. 4, pp. 392-420.
Oviatt, B. 2008. QUT Business Seminar: Entrepreneurship & Innovation Cluster
Research Seminar Series: Presentation highlight research projects that Ben Oviatt is
225
currently working on (1) the formation of international new ventures, Wednesday 2
July 2008
Oviatt, B., and McDougall, P. 1994, Towards a Theory of International New
Ventures. Journal of International Business Studies Vol.25, no. 1, pp. 45-64.
Oviatt, B., and McDougall, P. 1995, Global Start-Ups:Entrepreneurs on a Worldwide
Stage. Journal of Management Executive Vol.9, no. 2, pp. 30-43.
Oviatt, B., and McDougall, P. 1997, Challenges for internationalization process
theory: The case of international new ventures. Management International Review
Vol.37, no. 2, pp. 85-99.
Oviatt, B., and McDougall, P. 1999, A framework of understanding accelerated
internatinal entrepreneurship. In R. Wright ed, Research in global strategic
management. Stamford: JAI Press.
Oviatt, B., and McDougall, P. 2005, Defining International Entrepreneurship and
Modeling the Speed of Internationalization. Entrepreneurship Theory & Practice
Vol.29, no. 5, pp. 537-650.
Pallant, J. 2001, SPSS survival manual: a step by step guide to data analysis using
SPSS for Windows (version 10). NSW Australia: Allen & Unwin.
Palumba, F., and Herbig, P. 1998, International Marketing tool: the Internet.
Industrial Management & Data Systems Vol.98, no. 6, pp. 253-61.
Parkhe, A. 1993, 'Messy' research, methodological predispositions, and theory.
Academy Of Management. The Academy Of Management Review Vol.18, no. 2, pp.
227-68.
Patton, M. Q. 1990, Qualitative evaluation and research methods. 2nd ed. Newbury
Park, London: Sage Publications.
Penrose, E. 1959, The Theory of the Growth of the Firm. New York: Wiley.
Perry, C. 1987, Growth strategies: Principles and case studies. International Small
Business Journal Vol.5, no. 2, pp. 17-25.
Perry, C. 1998, Processes of a case study methodology for postgraduate research in
marketing. European Journal of Marketing Vol.32, no. 9/10, pp. 785-802.
Perry, C., and Pyatt, R. 1995, Network theory's contribution to the development of
marketing research. Paper presented at the Proceedings of the 7th Biannual World
Marketing Congress, Academy of Marketing Science, Monash, 6-10 July.
Perry, C., Riege, A., and Brown, L. 1998, Realism rules OK: Scientific Paradigms in
marketing research about networks. Paper presented at the Australia & New Zealand
Marketing Academy, ANZMAC, Dunedin, New Zealand.
226
Perry, C., Riege, A., and Brown, L. 1999, Realism's role among scientific paradigms
in marketing research. Irish Marketing Review Vol.12, no. 2, pp. 16-23.
Peters, J. 1993, On growth. Management Decision Vol.31, no. 6, pp. 18-21.
Petersen, B., Welch, L. S., and Liesch, P. W. 2002, The Internet and foreign market
expansion by firms. Management International Review Vol.42, no. 2, pp. 207-22.
Podsakoff, P. M., MacKenzie, S., Lee, J.-Y., and Podsakoff, N. P. 2003, Common
method biases in behavioral research: A critical review of the literature and
recommended remedies. Journal of Applied Psychology Vol.88, no. 5, pp. 879-903.
Poon, S., and Swatman, P. 1997, Small business use of the Internet Findings from
Australian case studies. International Marketing Review Vol.14, no. 5, pp. 385-402.
Porter, M. E. 2001, Strategy and the Internet. Harvard Business Review Vol.79, no. 3,
pp. 63-78.
Powell, T., Lovallo, D., and Caringal, C. 2006, Causal ambiguity, management
perception, and firm performance. Academy of Management Review Vol.31, no. 1, pp.
175-96.
Prasad, V. K., Ramamurthy, K., and Naidu, G. M. 2001, The influence of Internet-
marketing integration on marketing competencies and export performance. Journal of
International Marketing Vol.9, no. 4, pp. 82-110.
Pride, W. M., and Ferrell, O. C. 1997, Marketing : concepts and strategies. 10th ed.
Boston: Houghton Mifflin.
Quelch, J., and Klein, L. 1996, The Internet and international marketing. Sloan
Management Review Vol.37, no. 3, pp. 60-76.
Quinn, J. B., Mintzberg, H., and James, R. M. 1988, The strategy process : concepts,
contexts, and cases. Englewood Cliffs, N.J.: Prentice-Hall.
Raisinghani, M., Vinaja, R., and Frank, B. 2001, e-business Global readiness: an
empirical study from a strategic perspective. Paper presented at the 4th International
conference on electronic commerce research, Dallas, Texas, November.
Raisinghani, M. S. 2001, Global Information Technology and Electronic Commerce:
Issues for the New Millenium. Journal of Global Information Technology
Management Vol.4, no. 4, pp. 58.
Ramsey, E., and Ibbotson, P. 2006, 'E' entrepreneurial SMEs: An Irish study of micro
and macro influences. Journal of International Entrepreneurship Vol.3, no. 4, pp.
317-32.
Raney, A. A., Arpan, L. M., Pashupati, K., and Brill, D. A. 2003, At the movies, on
the Web: An investigation of the effects of entertaining and interactive Web content
on site and brand evaluations. Journal of Interactive Marketing Vol.17, no. 4, pp. 38-
53.
227
Rasmussan, E. S., Madsen, T. K., and Evangelista, F. 2001, The founding of the born
global company in Denmark and Australia: Sense making and networking. Asia
Pacific Journal of Marketing and Logistics Vol.13, no. 3, pp. 75-107.
Rayport, J. F., and Sviokla, J. J. 1994, Managing in the marketspace. Harvard
Business Review Vol.72, no. 6, pp. 141-50.
Reid, S. 1981, The Decision-Maker and Export Entry and Expansion. Journal of
International Business Studies Vol.12, no. 02, pp. 101-12.
Reid, S. 1983, Firm internationalization transaction costs and strategic choice.
International Marketing Review Vol.1, no. 2, pp. 45-55.
Reynolds, J. 2000, eCommerce: a critical review. International Journal of Retail &
Distribution Management Vol.28, no. 10, pp. 417-44.
Rogers, E. 1962, Diffusion of innovation. New York: Free Press.
Rose, L., and Feldman, J. 1996, Before you advertise on the 'Net--check the
international marketing laws. Bank Marketing Vol.28, no. 5, pp. 40-42.
Rosson, P. 1984, Success factors in manufacturing-overseas distributor relationships
in international marketing. In International Marketing Management, edited by
Kaynak, E., 91-107. New York: Praeger.
Rowley, J. 2000, Product search in e-shopping: a review and research propositions.
The Journal of Consumer Marketing Vol.17, no. 1, pp. 20-35.
Rudolph, T., Rosenbloom, B., and Tillmann, W. 2004, Barriers to Online Shopping in
Switzerland. Journal of International Consumer Marketing Vol.16, no. 3, pp. 55-74.
Ryans, J. J. 1999, Global marketing in the new millennium. Marketing Management
Vol.8, no. 4, pp. 44-48.
Ryssell, R., Ritter, T., and Gemunden, H. 2004, The impact of information
technology on trust, commitment and value creation in business relationships.
Journal of Business and Industrial Marketing Vol.19, no. 3, pp. 197-207.
Samiee, S. 1998a, Exporting and the Internet: a conceptual perspective. International
Marketing Review Vol.15, no. 5, pp. 413-26.
Samiee, S. 1998b, The Internet & international marketing: Is there a fit? Journal of
Interactive Marketing Vol.12, no. 4, pp. 5-21.
Saunders, M., Lewis, P., and Thornhill, A. 2003, Research methods for business
students. Harlow, England: Prentice Hall.
Schnaars, S. P. 1991, Marketing strategy: a customer-driven approach. New York:
Free Press Collier Macmillan Canada.
228
Schumacker, R., and Lomax, R. 2004, A Beginners guide to structural equation
modeling. 2nd ed. USA: Lawrence Erlbaum Associates.
Sekeran, U. 2000, Research methods for business, a skill building approach. United
States of America: John Wiley & Sons.
Shim, S., Eastlick, M. A., Lotz, S. L., and Warrington, P. 2001, An online
prepurchase intentions model: The role of intention to search. Journal of Retailing
Vol.77, no. 3, pp. 397-416.
Shiu, E. C. C., and Dawson, J. A. 2004, Comparing the impacts of Internet
technology and national culture on online usage and purchase from a four-country
perspective. Journal of Retailing and Consumer Services Vol.11, no. 6, pp. 385-94.
Shrader, R. 2001, Collaboration and performance in foriegn markets: The case of
young high-technology manufacturing firms. Academy of Management Journal
Vol.44, no. 1, pp. 45-60.
Siegel, C. 2004, Internet marketing : foundations and applications. Boston:
Houghton Mifflin.
Simeon, R. 1999, Evaluating domestic and international Web-site strategies. Internet
Research Vol.9, no. 4, pp. 297-308.
Simeon, R. 2001, Evaluating the branding potential of web sites across borders.
Marketing Intelligence & Planning Vol.19, no. 6/7, pp. 418-24.
Simpson, M., and Docherty, A. J. 2004, E-commerce adoption support and advice for
U.K. S.M.E.'s. Journal of Small Business and Enterprise Development Vol.11, no. 3,
pp. 315-28.
Singh, N., and Baack, D. 2004, Web site adaptation: a cross-cultural comparison of
U.S. and Mexican sites. Journal of Computer Mediated Communication Vol.9, no. 4,
pp. 1-26.
Sinkovics, R., and Bell, J. 2006, Current perspectives on international
entrepreneurship and the Internet. Journal of International Entrepreneurship Vol.3,
no. 4, pp. 247-49.
Stake, R. E. 1995, The art of case study research. Thousand Oaks: Sage Publications.
Steenkamp, J.-B. E., and Baumgartner, H. 2000, On of the use of structural equation
models for marketing modeling. International Journal of Research in Marketing
Vol.17, no. 2,3, pp. 195-202.
Steinfield, C., and Klien, S. 1999, Local Vs Global issues in electronic commerce.
Electronic markets Vol.9, no. 1, pp. 45-50.
Strauss, A., and Corbin, J. 1998, Basics of Qualitative Research: Techniques and
Procedures for Developing Grounded Theory (Eds) 2nd. London: SAGE.
229
Strauss, J., and Frost, R. 2001, E marketing. 2nd ed. Upper Saddle River, N.J.:
Prentice Hall.
Styles, C., and Ambler, T. 1996, Successful export practice: the UK experience.
International Marketing Review Vol.11, no. 6, pp. 23-47.
Styles, C., and Seymour, R. 2006, Opportunities for marketing researchers in
international entrepreneurship. International Marketing Review Vol.23, no. 2, pp.
126-45.
Suzuki, L. A. 1999, Using qualitative methods in psychology. Thousand Oaks: Sage.
Sylvie, C. 1996, The case study method for research in small-and medium-sized
firms. International Small Business Journal Vol.15, no. 1, pp. 73-86.
Tabachnick, B., and Fidell, L. 1996, Using multivariate statistics. New York: Harper
Collins College Publishers.
Tang, J. 2000, Recent Internet developments in the People's Republic of China: an
overview. Online Information Review Vol.24, no. 4, pp. 316-21.
Taylor, M., and Murphy, A. 2004, SMEs and e-business. Journal of Small Business
and Enterprise Development Vol.11, no. 3, pp. 280-89.
Taylor, S., and Hunter, G. 2003, An exploratory investigation into the antecedents of
satisfaction, brand attitude, and loyalty within (b2B) eCRM industry. Journal of
consumer satisfaction, dissatisfaction and complaining behaviour Vol.16, pp. 19-35.
Teece, D., Pisano, G., and Shuen, A. 1997, Dynamic Capabilities and Strategic
Management. Strategic Management Journal Vol.18, no. 7, pp. 509-33.
Thompson, A. A., and Strickland, A. J. 1996, Strategic management : concepts &
cases. 9th ed. Chicago, Ill: Irwin.
Thompson, F., and Perry, C. 2004, Generalising results of an action research project
in one work place to other situations: Principles and practice. European Journal of
Marketing Vol.38, no. 3/4, pp. 401-17.
Tian, R. G., and Emery, C. 2002, Cross-cultural issues in Internet marketing. Journal
of American Academy of Business, Cambridge Vol.1, no. 2, pp. 217-24.
Torre, J. d. l., and Moxon, R. W. 2001, Introduction to the symposium e-commerce
and global business: The impact of the information and communication technology
revolution on the conduct of international business. Journal of International Business
Studies Vol.32, no. 4, pp. 617-40.
Tsoukas, H. 1989, The Validity of Idiographic Research Explanations. Academy of
Management Review Vol.14, no. 4, pp. 551-61.
Turnbull, P. 1987, A challenge to the stages theory of the internationalization
230
process. In Managing Export Entry and Expansion, edited by Reid, i. P. R. S., 21-40.
New York: Praeger.
Turnbull, P., and Valla, J. 1986, Strategies for international industrial marketing.
London: Croom Helm.
UNCTAD. 1993, Small and Medium-sized Transnational Corporations. in. New
York: United Nations.
Vahlne, J., and Weidersheim-Paul, F. 1973, Psychic distance - an inhibiting factor in
international trade, working paper. in. Uppsala: University of Uppsala.
Vernon, R. 1966, International investment and international trade in the product
cycle. The Quarterly Journal of Economics Vol.80, no. 2, pp. 190-207.
Ward, A. 2003, Love affair starts to grip South Korea's internet generation: More than
seven out of 10 homes are linked to broadband services, making the country a world
leader, Andrew Ward reports. Financial Times, Oct 9, 2003, p. 14.
Warkentin, M., Bapna, R., and Sugumaran, V. 2001, E-knowledge networks for inter-
organizational collaborative e-business. Logistics Information Management Vol.14,
no. 1/2, pp. 149-62.
Watts, G., Cope, J., and Hulme, M. 1998, Ansoff's Matrix, pain and gain Growth
strategies and adaptive learning among small food producers. International Journal of
Entrepreneurial Behaviour & Research Vol.4, no. 2, pp. 101-11.
Welch, L., and Luostrarinen, R. 1993, Inward and outward connections in
internationalization. Journal of International Marketing Vol.1, no. 1, pp. 46-58.
Welch, L. S., and Luostarinen, R. 1988a, Internationalization: evolution of a concept,
Management paper / Monash University, Graduate School of Management ; no.14.
Clayton, Vic.: Graduate School of Management Monash University.
Welch, L. S., and Luostarinen, R. K. 1988b, Internationalization: evolution of a
concept. Journal of General Management Vol.14, no. 2, pp. 36-64.
Wickramasekera, R., and Bamberry, G. 2003, An Overview of a Successful Export
Industry from Regional Australia. International Journal of Wine Marketing Vol.15,
no. 3, pp. 15-30.
Wickramasekera, R., and Oczkowski, E. 2006, Stages Model Re-visited: a measure of
the stage of internationalisation of a firm. Management International Review Vol.46,
no. 1, pp. 39-55.
Wilhelm, K. 2001, Tongue-tied on the Net. Far Eastern Economic Review Vol.164,
no. 7, pp. 38.
Wu, F., Mahajin, V., and Balasubramanian, S. 2003, An analysis of e-business
adoption and its impact of business performance. Journal of the Academy of
Marketing Science Vol.31, no. 4, pp. 425-47.
231
Wynne, C., Berthon, P., Pitt, L., Ewing, M., and Napoli, J. 2001, The impact of the
Internet on the distribution value chain: The case of the South African tourism
industry. International Marketing Review Vol.18, no. 4, pp. 420-31.
Yadav, M., and Varadarajan Rajan. 2005, Interactivity in Electronic marketplace: An
exposition of the concept and implications for research. Academy of marketing
science journal Vol.33, no. 4, pp. 585-604.
Yang, H., and Yoo, Y. 2004, It's all about attitude: revisiting the technology
acceptance model. Decision Support Systems Vol.38, pp. 19-31.
Yin, R. 1994, Case study research, design and method. 2nd ed. United States of
America: SAGE Publication Ltd.
Yin, R. K. 1989, Case study research: design and methods. Rev. ed, Applied social
research methods series ; v. 5. Newbury Park, CA: Sage Publications.
Yip, G. S., Biscarri, J. G., and Monti, J. A. 2000, The role of the internationalization
process in the performance of newly internationalizing firms. Journal of International
Marketing Vol.8, no. 3, pp. 10-35.
Young, S. 1987, Business strategy and the internationalization of business: recent
approaches. Managerial and Decision Economics Vol.8, no. 1, pp. 31-40.
Young, S., Dimitratos, P., and Dana, L.-P. 2003, International entrepreneurship
research: What scope for International Business Theories? Journal of International
Entrepreneurship Vol.1, no. 1, pp. 31-42.
Yuping, L. 2003, Developing a scale to measure the interactivity of websites.
Journal of Advertising Research, pp. 207-16.
Zahra, S., and Ireland, R. 2000, International expansion by new venture firms:
International diversity, mode of market entry, technology learning and performance.
Academy of Management Journal Vol.43, no. 5, pp. 925-50.
Zahra, S., Matherne, B., and Carleton, J. 2003, Technological Resource Leveraging
and the Internationalisation of New Ventures. Journal of International
Entrepreneurship Vol.1, no. 2, pp. 163-86.
Zhou, L., Wu, W., and Luo, X. 2007, Internationalisation and the performance of
born-global SMEs: the mediating role of social networks. Journal of International
Business Studies Vol.38, no. May, pp. 673-90.
Zikmund, W. 2003, Essentials of marketing research. 2e ed. United States of
America: Thomson.
Zongying, Y., Haoming, L., and Qiaoying, Z. 1998, The China Education Research
Network (CERNET) and library services. Asian Libraries Vol.7, no. 9, pp. 210-14.
232
Zugelder, M., Flaherty, T., and Johnson, J. 2000, Legal issues associated with
international Internet Marketing. International Marketing Review Vol.17, pp. 253-71.
233
APPENDICES
The influence of the digital environment on the integration of International Marketing Strategy
Appendix A: Interview protocol
AUSTRALIAN RESEARCH
CONFIDENTIAL
Shane Mathews
Faculty of Business School of International Business Queensland University of Technology
Phone: (07) 3864 9433 Fax: (07) 3864 2550
E-mail: [email protected]
FACULTY OF BUSINESS QUEENSLAND UNIVERSITY OF TECHNOLOGY
234
INTERVIEW PROTOCOL
Case no………………..Interview no………….Date:………………………...……
Business name:……………………………………………………………………...
Interviewee‘s name:………………………………………………………………...
Interviewee‘s title:…………………………………………………………………..
Location:…………………………………………………………………………....
Business profile:……………………………………………………………….……
Time: Start…………….………………..….Finish.………………………………...
PART A: Introduction
Thank you for allowing me to talk with you. This university research would not be possible without
your valuable participation. The benefits of this research are the implications for how business people
like yourself can build and improve international marketing practices in a digital environment.
Purpose of this research
While the Internet has been growing at a rapid pace globally, scant attention has been paid to the
international marketing implications and those implications for marketing strategy. Therefore this
research aims to investigate this topic by exploring the elements currently being used by Australian
marketers for a better understanding of the Internet with respect strategies in international markets. By
exploring current practices by international firms utilising the Internet, results of this research will serve
as a reference for industry when making decisions about foreign market expansion.
Status of this research
This research is university research conducted by the Queensland University of Technology. If
confirmation is required you may contact my supervisor, Dr Marilyn Healy, Lecturer at the School of
International Business, on (07) 3864 2652, or e-mail, [email protected]. Complaints about ethical
conduct are instructed to contact the research ethics officer Wendy Heffernan on (07) 3864 2340 or
Ethical concerns of this research
All the data collected in the interview is confidential and anonymous. For the safety and benefit of
the firm and yourself, I will disguise your company‘s name in the final research report in order to
achieve anonymity, along with any other identifying details, unless prior permission in writing has
235
been obtained to reveal your identity. Even incidental identification of your firm will not be
possible, as steps will be taken to disguise all participants.
Undisguised information about participants in this research will not be made public nor given to a
third party outside of my direct supervisor Dr Marilyn Healy.
Note
Would you mind if I tape the interview as this will help with the data analysis? You can push the
‗pause‘ button at any point throughout the interview.
Are there any further questions either about the interview procedure or the purpose of the research?
If you wish I would be happy to provide you with a summary of the results.
236
Part B Opening questions
General business and background experience questions
1. Could you please tell me about the business? __________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
________________________________
2. Would you please tell me the story of your experiences about your marketing activities for your
firm?
__________________________________________________________________________________________________
__________________________________________________________________________________________________
_________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
_________________________________________________________________
3. Could you please indicate some internet specific critical events in terms of your business? Can you
please indicate the significance of any changes and the time period of any major impact?
Graph over time
Level of importance
High
Low
1995-96 97 98 99 / 2000 01 02 03 04 05 Years
237
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
________________________________________________________________________________
________________________________________________________________
4. What market or market‘s is your firm currently operating in?
How would you describe the way in which your firm achieves international market development
presently?
Further, what entry modes does the firm currently use to access markets? ______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________
5. How would you describe your product in terms of being a physical product, a service, an
informational-based product or a combination? Please explain?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
________________________________________________________________________________
________________________________________________________________
238
Part C Issues relating to Internet use by the firm
1. How has the Internet affected the business? Specifically, the international business elements?
Please explain?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
2. On what level do your customers interact with your company through the firm‘s website.
Please indicate on the Table below?
Level of interaction
with customers
No
importance
Little
importance
Moderate
importance
Strong
importance
Very strong
importance
Comments
One way simple
information
Two way
interaction
Transacting
Collaboration
Other
a. Further, do you think this will change in the future? If so how and why? If not, why not?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
239
3. What Internet tools do you use to communicate or interact with your customers? Please indicate
on the Table below?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
Tool‘s used for
interaction with
customers
No
importance
Little
importance
Moderate
importance
Strong
importance
Very strong
importance
Comments
Simple
communication
Chat rooms
Digital notice
board
240
Part D Market
1. Is there a difference between how the firm uses the Internet for domestic customers and
international customers? If so, why? If not, why not?
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________
2. Do you target any specific international markets online? If so why? If not why not?
Please specify these markets………..
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
3. You described your product as……………….in an earlier question (Part B. Q.4.). Has
digitalisation affected your product offering? If so, why? If not, why not?
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
241
Part E Marketing elements
1. How is the website used for marketing of the firm? Please explain?
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
2. Research has shown that trust is a pivotal element for companies online in international and
Internet environments. What are your thoughts on this subject? Could you clarify what your
impression of trust is online?
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
3. In terms of: (a) company brand name (b) brand image and (c) product brand, is the firm‘s brand
consistent in foreign markets. Please give examples.
(a)______________________________________________________________________________
________________________________________________________________
(b)______________________________________________________________________________
________________________________________________________________
(c)______________________________________________________________________________
________________________________________________________________
242
4. How do you think your firm‘s brand perceived by customers online?
a. Do you think the brand‘s perception is the same online as it is offline? Please explain?
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
___________________________________________________________
243
Part F Strategy/ International markets
1. What is your strategy online? How did it develop?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________
2. What would you consider to be the advantages and disadvantages of the Internet in international
markets?
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________
3. A number of internationalisation categories have been identified in the literature listed below. If
you had to choose which category would best describe your web strategy and why?
(a) Not included for international customers
(b) Passively attracts international customers (if an order is placed then the company will
supply)
(c) Global (actively targets customers with a standard marketing strategy)
(d) Glocal (actively targets customers with a customised marketing strategy including local
content for different countries)
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________
244
4. Does the firm use the Internet to attract new customers in existing international markets? If so,
why? If not, why not?
a. If so how effective is the Internet at penetrating existing international markets?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________
5. Does the firm use the Internet to attract new international markets? If so, why? If not, why not?
Do you think this will change in the future?
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________
6. How difficult is it to evaluate a potential market online? Why?
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________________________________________________________________
___________________________
245
Part G Internationalisation
1. Has the Internet affected the way you go about your process of internationalisation? Please
elaborate?
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________
2. From the list below please indicate which would best describe the firm‘s process of
internationalisation? (These do not have to be mutually exclusive)
Through stages or increments by gaining experience in one marketing before entering another
market
Through relationships with either domestic or foreign networks
As a consequence of cost efficiencies gained in international markets
Became instantly international
Further, has this process altered due to the Internet? If so, why? If not, why not
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________
a. Each of these elements below influence the firm‘s internationalisation. Please rank these in order of
importance in terms of your internationalisation generally? Why have you ranked this way?
Comments
Relationships and networks ( )………………………….
Relations with supply chains ( )………………………….
Experiences and knowledge ( )………………………….
Sourcing of resources ( )………………………….
Efficiencies from production or markets ( )………………………….
246
b. Would this ranking differ for your online internationalisation strategies? Why? (if older firm)
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________
3. From the Table below how has the Internet affected international marketing of your firm? Please
explain?
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
__________________________________________
4. Has the Internet influenced the transference of knowledge and information concerning markets
internally?
a. Do you have a special system for knowledge? Please explain?
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________
5. Where do you see your international marketing heading in the future?
a. Does the Internet play a role in this?
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
_____________________________________________________________________________________________________
Least important Most important
Level of importance 1 2 3 4 5 Comment
Gaining information
about the market
Information about
competitors
Information about
customers
Information about
resources
247
Part H General ending questions
1. Are there any other questions I could have asked?
__________________________________________________________________________________________________
__________________________________________________________________________________________________
_________________________________________________________________
2. Has answering these questions helped you think about how you do business? If so, how?
__________________________________________________________________________________________________
__________________________________________________________________________________________________
_________________________________________________________________
3. Who else can I talk to?
__________________________________________________________________________________________________
__________________________________________________________________________________________________
_________________________________________________________________
4. If I need to clarify any points, do you mind if I come back to you?
248
Part H – Background information
1. Industry____________________________
2. Range of services offered
__________________________________________________________________________________________________
____________________________________________________________________________
3. No. of offices/outlets______________________________
4. Age of firm______________
5. No. of fulltime employees___________parttime employees_______________
6. Age of owner/manager
< 20 years 21-30 years 31-40 years 41-50 years 51-60 years 61 and over
7. Education level
Primary school Secondary
school
Certificate or
diploma
Degree Post graduate
8.Years of experience in this industry __________Years with this firm________
9.Total turnover $AUD millions
<1 1 - <2.5 2.5 - <5 5m – <10 10 or >
10. What is your international portion of that total?____________________
Your contribution to this research is greatly appreciated.
Thank you.
_______________________________________________________________
249
Appendix B Interview information package
This is a preliminary request to participate in university research conducted by the Queensland
University of Technology that looks at the effects of the Internet on international marketing strategies.
This project is being investigated as part of my Doctorate at the Queensland University of Technology.
Participation in this study is of a voluntary nature. Respondents can choose to withdraw at any time
without any loss of benefit, nor will this affect any current of future involvement with QUT. If
confirmation is required you may contact me on contact details outlined at the end of this document or
my supervisor, Dr Marilyn Healy, Lecturer at the School of International Business, on (07) 3864 2652
or e-mail: [email protected].
While the Internet has been growing at a rapid pace globally scant attention has been paid to the
international marketing strategy and the implications for marketing managers. Therefore this research
aims to investigate this topic by exploring the elements currently being used by Australian marketers,
for a better understanding of the Internet with respect to international strategies. By exploring current
practices by firms utilising the Internet, results of this research will serve as a reference for industry
when making decisions about international marketing.
The process of in-depth interviews will be used to ascertain the pertinent information necessary for the
project. These in-depth interviews will take approximately 1-1½ hours to complete for respondents.
Information will be gathered by tape recorder in the interview and will go towards the completion of my
doctoral dissertation. Furthermore, a summary of the results gathered will be available to you on
completion of the project, if requested. Your contribution to the research will help to create a better
understanding academically and professionally of these contemporary issues pertaining to the Internet
and international marketing strategy.
A short list of businesses have been developed which conform to the selection criteria below for the
case study interviews.
Criteria:
Company must be international
Company must have an individual with marketing knowledge and/ or experience
Contact details were either obtained by University and professional networks or by publicly obtainable
data such as the telephone book.
The research is confidential. Therefore all of the data collected in the interview is confidential and
anonymous. For the safety and benefit of the firm and yourself, I will disguise your company‘s name in
250
the final research report in order to achieve anonymity, along with any other identifying details. Even
incidental identification of your firm will not be possible, as steps will be taken to disguise all
participants. Undisguised information about participants in this research will not be made public nor
given to a third party outside of my direct supervisor Dr Marilyn Healy unless written prior permission
is obtained from the firm involved. Any concerns or complaints about ethical conduct you can contact
the research ethics officer Wendy Heffernan on (07) 3864 2340 or email [email protected].
FACULTY OF BUSINESS QUEENSLAND UNIVERSITY OF TECHNOLOGY
Shane Mathews
Faculty of Business
Department of International Business
Queensland University of Technology
Phone: (07) 3864 9433
Fax: (07) 3864 2550
E-mail: [email protected]
251
Appendix C survey questionnaire Thank you for your participation in this important Australian research. Without your contribution
this research would not be possible.
The focus of the questionnaire is the ‗Internet & international customer growth‘
Part A. Perceived Internet importance Question 1. The following is about the general usage of Internet technology in your firm. How much does your
firm use the following Internet technology? Please indicate (by ticking the box) the extent of usage of the following
using a 7-point scale. 1= no usage, and 7 = extensive usage.
Question 2. The following questions are about the implementation of Internet in your business processes within the
firm. How much does your firm use the Internet for the following business processes or activities? Please indicate (by
ticking the appropriate box) the extent of usage of the following using a 7-point scale. 1= no usage, and 7= extensive usage.
No usage Extensive
usage The firm uses……. 1 2 3 4 5 6 7
firm Website
personal website space for customers/clients or suppliers
(extranet or personal web-space)
online customer support systems (example, auto emailsystem,
online helpdesk or other)
an intranet system (internal firm computer system) consumer transaction technologies either through electronic
transfer or a form of website shopping cart
Internet directories: General and/or industry based websites that
support a directory so customers can find the firm/ website
(Examples, search engines, austrade.gov.au, yellowpages.com)
Internet marketplaces: Websites that support buyers and sellers
in any way. (For example, either industry specific or general
websites such as ebay.com, amazon.com, hoteldeals.com, tender
& job sites such as tendermatch.com). Not your own sales site
No use Extensive use
The firm uses the Internet for…. 1 2 3 4 5 6 7
marketing and advertising
online sales to customers
after sales service and support
market research
management of international market
online purchasing/procurement (emailor a third party website)
exchange of operational data with suppliers
exchange of operational data with business customers
252
Part B. Internationalisation process, path and growth
Question 3. The following questions concern the firms product characteristics. Please indicate (by
ticking the appropriate box) the extent of your agreement or disagreement with the following statements
using a 7-point scale. 1= strongly disagree, and 7= strongly agree
Question 4. The following questions are about information availability. Please indicate (by ticking the
appropriate box) the extent of information usage with the following statements using a 7-point scale. 1=
no information, and 7= extensive information
Question 5. The following questions are about communication. Please indicate (by ticking the
appropriate box) the extent of your agreement or disagreement with the following statements using a 7-
point scale. 1=strongly disagree, and 7= strongly agree
Strongly
disagree Strongly
agree
In my firm the company’s product/s……
1
2
3
4
5
6
7
is/ are classified as sophisticated
is/ are complex in nature
need(s) specialised know how to market
take(s) a long time to learn about
has/have a large proportion that is technological in nature
can be difficult to resolve customers problems
need (s) a high level of specialised service
No information extensive
information
Information …….………is available 1 2 3 4 5 6 7
about international market/s
about competitors
about international customers
about international resources needed to produce goods or
services
about international suppliers
Strongly
disagree
Strongly
agree
In my firm we have…….
1
2
3
4
5
6
7
an efficient mechanism(s) of communication
a high frequency of communication
fast speed of communication
multiple functions for interactive communication
the ability to distribute communication (eg- website (24/7))
253
Question 6. The following questions are about the usage of information. Please indicate (by ticking the
appropriate box) the extent of information usage with the following statements using a 7-point scale. 1=
no usage, and 7= extensive usage
Question 7. Over the last 10 years has the firm increased sales in international country markets?
Please indicate the extent to which your firm‘s sales increase or decrease in English and non-English
speaking country markets within the three growth factors. Please indicate (by ticking the appropriate box)
the extent of your agreement or disagreement with the following statements using a 7-point scale,
1=significant decrease, and 7= significant increase. 7a. Over the last 10 years our sales to predominantly English speaking country markets increase/decrease
…………..
Note: Existing country market is a country where the firm already has customer, whereas, a new country market is
where the firm has not had customers recently
7b. Over the last 10 years our sales to predominantly non-English speaking country markets
increase/decrease …………
Significant
decreases
Significant
increases
in new customers in new country
market/s
1 2 3 4
5 6 7
in new customers in existing
country market/s
1 2 3 4
5 6 7
in usage by existing customers in
country market/s
1 2 3 4
5 6 7
Note: Existing country market is a country where the firm already has customer, whereas, a new country market is
where the firm has not had customers recently
Question 8. Please indicate (by ticking the appropriate box) the extent the firm uses the Internet for servicing
international customers, as a sole or complementary mechanism. (1= complementary and 7= sole mechanism
for international customers.)
Complementary mechanism INTERNET Sole mechanism
1 2 3 4 5 6 7
No use Extensive
use
In my firm we use……… 1 2 3 4 5 6 7
information about international market/s
information about competitors
information about international customers
information about international resources needed to produce
products or services.
information about international suppliers
Significant
decreases
Significant
increases
in new customers in new country
market/s
1 2 3 4
5 6 7
in new customers in existing
country market/s
1 2 3 4
5 6 7
in usage by existing customers in
country market/s
1 2 3 4
5 6 7
254
Question 9. The following questions are about the firm’s view of international markets.
Please indicate (by ticking the appropriate box) the extent of your agreement or disagreement with the following
statements using a 7-point scale. 1=strongly disagree, and 7= strongly agree
Question 10. The following questions are about your business networks. Please indicate the extent of usage of the
following using a 7-point scale. 1= no usage, and 7= extensive usage
Question 11. The following question is about acquiring customers in international markets. Please indicate (by
ticking the appropriate box) the extent of your agreement or disagreement with the following statements using a 7-
point scale. 1=strongly disagree, and 7= strongly agree
Strongly
disagree
Strongly
agree
The firm …… 1 2 3 4 5 6 7
is committed to servicing international customers
commits sufficient financial and human resources to the
international market (s)
emphasises the importance of international growth to employees
views managerial international experiences as important for
entering overseas markets
regards the world as the market
views fast international market growth as achievable
no usage extensive
usage
We use business networks to………
1
2
3
4
5
6
7
maintain international customer relationships
strengthen existing relations
develop longer lasting relationships
acquire new customers
enter new international country market/s
enhance our international performance
Strongly
disagree
Strongly
agree
Customer acquisition is limited … 1 2 3 4 5 6 7
in non-English language speaking country markets
when English is not the national language
when English is not the business language
when the country has a different culture
when there is a low level of education in that country
when there is a low level of economic development in that
country
when no staff in the firm read, speak or understand the
language from the customers country
when there is a lack of knowledge about international market
consumers
255
Part C General Business background
Question 12.
(a) Types of product (s) or service (s) _____________
(b) Number of employees (FT and/or PT) __________
Question 13.
(a) Year firm was established in what year _________
(b) Firm postcode_________
(c) Industry or industry classification-ANZSIC code (if known) _________
(d) First international country market (1st international customer) ____________.
(e) Number of county market/s you have customers in _________
(f) Please list the country market/s you have customers in (all if possible, however, at least the largest 5
country market/s for the firm) ____________________________________________
______________________________________________________________________
(g) Does the firm have a physical office or place of business in their overseas market (s)
__________________________ type of premise______________________?
(h) What percentage of the firm‘s total gross sales were generated from international customers over the
last 12 months? ________%
(i) Firms total annual turnover $AUD_________ (approximately)
Question 14.
(a) Your position within the firm_______
(b) Years of experience in industry _______
(c) Years of employment with this firm ________
(d) Age of respondent________
Question 15.
Are there any other comments you would like to make?
___________________________________________________________________________________
___________________________________________________________________________________
__________________________________________________
Your contribution to this research is greatly appreciated.
Any information will be kept strictly confidential and anonymous
Thank you very much for your help.
256
Please indicate if you would like a summary of the findings from the research and/ or if you want
to enter the draw for the prize by entering your emailaddress below.
E-mail________________________________________________
257
INTERNATIONAL INTERNET MARKETING SURVEY QUESTIONNAIRE
Definition of terms:
The term international market is any market outside of the national borders of Australia. Firms to be studied:
Only Australian firms in international markets. Non-commercialisation and confidential:
Data collected from firms will be used to test hypotheses relating to the theoretical model as part of the doctoral thesis. It does not involve any commercial activities. All information will be treated in strictest of confidence. Questionnaire content:
The questionnaire consists of three parts. Part A Internet usage, Part B evaluates the Internets influence on internationalisation Part C is a set of background questions needed for descriptive analysis.
Who should answer the questions? Top managers or decision makers concerning international customers should answer the questionnaire. However, if there is some information that you might not be fully aware of, please consult the relevant functional department or person. How to answer the questions:
Most questions ask you to click a box. However, others you will need to write in the response. Please click the appropriate box or give your opinion in the appropriate area. Benefits to firm: Managers that contribute to the research will receive a summary of the findings on request and be eligible to go into the draw for a special prize?
258
Participant Information Sheet
A comparative evaluation of the Internets influence on international market
penetration and development strategies of Australian SME’s
Researcher: Shane Mathews PhD research
Description This project is being undertaken as part of a PhD project for Shane Mathews. The purpose of this project is to evaluate the overall influence the Internet is having on traditional international market growth for Australian small and medium firms (1-250 employees). The research investigator requests your assistance in identifying these influences. Participation
Your participation will involve a questionnaire that will take approximately 15 minutes to complete and will be generated online. That is, an emailwith a link to a Queensland University of Technology server will be sent to participants so the questionnaire can be completed online. Expected benefits
It is expected that the results of the survey will benefit the development of a better theoretical understanding of how the Internet is affecting the internationalisation of Australian firms. Further, participants can receive a summary of the findings on request. Confidentiality
All comments and responses are anonymous and will be treated confidentially. The names of individual persons are not required in any of the responses. Voluntary participation
Your participation in this project is voluntary. If you do agree to participate, you can withdraw from participation at any time during the study without comment or penalty. Your decision to participate will in no way impact upon your current or future relationship with QUT or with any external body. Questions / further information
Please contact the research team if you require further information about the project, or to have any questions answered. Shane Mathews 3138 5310 or [email protected] Concerns / complaints Please contact the Research Ethics Officer on 3138 2340 or [email protected] if you have any concerns or
complaints about the ethical conduct of the project.
259
Appendix D Phone screening script
Script for telephone
Internet and international customer growth
Hi My name is ______________ I am from the Queensland University of Technology we are doing
research which evaluates the Internet‘s capacity to attract and maintain international customers for
Australian firms. We would be willing to share the finding with you and your co. and there is a prize,
which is a $100 David Jones voucher.
We would need to speak to the person in charge of your international customers at a marketing
level/department.
Screaming question are:
1. You must have international customers
2. We must get the person who is responsible for the marketing/development of international
markets/customers
The research can be done in two ways:
1. online survey, which we can emailto you (on QUT website)
2. We can send you a hardcopy of the survey with a return envelope and you send it back via mail
All information is totally confidential and anonymous. A very high standard of ethics is kept for anyone
participating. Your input is very valuable to the research and appreciated.
260
Appendix E e-mail
Subject line: Queensland University of Technology: National Research
Dear David,
I recently contacted you about our national research project. Thank you kindly for agreeing to
participate in this important Australian research. Please follow the link below. The survey will only take
about 10-12 minutes. Your input is very valuable to the research and appreciated.
http://survey.bus.qut.edu.au/index.php?sid=70
A summary of findings and a chance for a $100 David Jones Voucher will be given on request.
If there any problems or questions please do not hesitate in contacting me.
Regards,
Shane Mathews
Note: If the link does not work, please cut and paste the link into the browser address.
Shane Mathews
Queensland University of Technology | Faculty of Business, School of Advertising Marketing and Public
Relations | 2 George Street, BRISBANE QLD 4000
T: 07 3138 5310 | F: 07 3864 1811 | www.bus.qut.com
261
Appendix F: Education in SEM Date Event -Topic Expert-position &
expertise
Comment-outcome
2005
Jan 2005 ACSPRI: Level Advanced: Introduction to Structural Equation Modelling AMOS (1 week full
time)
Australian National University
Dr Everarda Cunningham, Swinburne University of
Technology
A better understanding of Multiple regression, factor analysis and covariance analysis. What
SEM can do and techniques to ensure the
highest of research standards
Jan 2005 ACSPRI: Level Advanced: Applied Structural
Equation Modelling (1 week full time) Australian
National University
Mr Philip Holmes-Smith,
School Research,
Evaluation and Measurement Services
(SREAMS)
An understanding of challenges and issues of an
applied nature in AMOS and LISREL
Workshop Queensland University of Technology
SEM workshop,
School of International Business (research)
Model process in the internationalisation of the firm
Workshop 1
Queensland University of Technology
SEM workshop,
Dr Stephen Cox
Faculty of Business
research advisor (QUT)
Measurement modelling & Structural modelling
Workshop 2
Queensland University of Technology SEM workshop,
Dr Stephen Cox
Faculty of Business research advisor (QUT)
Measurement modelling & Structural modelling
2006
Workshop
Queensland University of Technology
STAT07 Bivariate and multivariate regression
procedures (research)
QUT Research Teaching
and Learning training
A better understanding of what multivariate
analysis can do for your research
Workshop
Queensland University of Technology
STAT08 Advanced regression analysis
(research)
QUT Research Teaching
and Learning training
An understanding of multiple regression analysis
December2006 ANZMAC SEM seminar
Associate Professor Len
Coote, University of Queensland (SEM
marketing expert)
Introduction to Structural Equation Modelling
2007
October 2007 QUT: Faculty of Business seminar, topic: An introduction to SEM using PLS
Dr Ian Lings, University of Technology Sydney (SEM
expert)
Smart PLS potential
November 2007 QUT: Faculty of Business seminar, topic: An
introduction to SEM using LISREL
Associate Professor Len
Coote, University of
Queensland (SEM marketing expert)
LISREL potential for my research
Appendix G: SEM experts review Date Event -Topic Expert-position &
expertise
Comment-outcome
October 2005
25th School of International Business
Queensland University of Technology
Seminar (1 hour) ‗comparative evaluation of the Internet‘s influence on International market
Penetration and Development growth strategies. An
Australian SME perspective‘ Structural model presentation
Dr Rumintha
Wickramasekera (SL)
Prof. Gordon Boyce Dr Marilyn Healy
Dr Diane Hutchinson
Dr. Xiaohua Yang Dr Mike Quayle
Refining research question
Tighten hypotheses
Measurement scales Model not-specified
25th Private meeting
Queensland University of Technology Measures
Dr Rumintha
Wickramasekera (SL) Internationalisation
Justification for measures
25th Private meeting
University of Sydney
Research framework- Hypothesis
Dr Diane Hutchinson (SL)
Technology and
internationalisation
Conceptual formulation
Hypothesis
Strategy construct misspecification
25th Private meeting
Queensland University of Technology
Research question
Dr Mike Quayle
International economics
More refined research question
Better defined research focus
Research focus for model
November 2005
03rd Private meeting
Sunshine Coast University
Construct measures
Dr. Meredith Lawley (Ass.
Prof.) Director of Graduate
Studies (PhD SEM)
Refinement of the Structural equation model
Direction on measurements
262
08th Private meeting
Queensland University of Technology
Measures
Dr. Yunus Ali (SL)
Export expert
Measurements (internationalisation)
29th Private meeting
Queensland University of Technology
Item measures- Survey questions
Dr. Stephen Cox
Faculty of Business
research advisor (QUT)
Model measures
Model structure
December 2005
01st Private meeting
University of Queensland
SEM process-development Measurement scales
Dr Len Coote (SL)
Dr Coote runs the LISREL
course at ACSPRI
Model process
Model structure
Model measurements Mixing constructs. Re-design process
05th Private meeting
Queensland University of Technology Measures Model structure
Dr Stephen Cox
Faculty of Business research advisor (QUT)
Survey refinement-model development
February 2006
27th Private meeting
Queensland University of Technology Questionnaire design
Model construct validity
Dr Yunus Ali (SL)
Export & internationalisation expert.
Refined survey question terminologies by
reducing. Redundant questions Model validity and possible parsimonious
outcomes
March 2006
07th Private meeting Queensland University of Technology
Questionnaire design - measures
Model refinement from ambiguity
Dr Stephen Cox Faculty of Business
research advisor (QUT)
Measurement refinement Convoluted factors. Ambiguous question
Major dependent variable needs to be
independently assessed to give model construct validity
14th Queensland University of Technology
Model structure
Dr. Rebekah Bennett (SL)
SEM
Dependant variable. Specifically the outcome
growth question
April -May 2006
Sunshine Coast University Questionnaire design
Model structure
Dr. Meredith Lawley (Ass. Prof.)
(PhD SEM)
Terminology-how does it relate to the model specifically
University of Queensland Questionnaire design
Model structure
Dr Len Coote (SL) Dr Coote runs the LISREL
course at ACSPRI
Mixing variables in questions. Model development issues
June-July 2006
Group meeting
Queensland University of Technology
Questionnaire design in relation to Model
refinement. Construct validity
Dr Yunus Ali (SL)
Export
Dr Marilyn Healy
A rigorous critique of variables and interaction.
Construct validly issues addressed
Private meeting
Queensland University of Technology
Questionnaire design - measures Model refinement from ambiguity
Dr. Stephen Cox
Faculty of Business
research advisor (QUT)
Measurement refinement
Items: potentially cross factoring
Tightening up terminology, Shorten the amount of items.
November-
December2006
ANZMAC PhD colloquium
Research track-SEM
Dr Nick Lee: Research Group Convenor and Senior
Lecturer, Marketing Group Aston Business School.
Model refinement
Dr Len Coote UQ
(Marketing SEM expert)
Dr Nick Lee University of
Aston, UK (Marketing
SEM expert)
Measurements (strengthen)
Focus model-narrow: Capabilities theory
International entrepreneurship Use controls in size, industry, product type
Model should be used as Internet-mediating
variable not moderating variable
November-
December2006
ANZMAC conference
Internet - international marketing track
Support model with a more conservative theoretical
foundation in capabilities theory and International
Entrepreneurship
Prof Richard Fletcher
(UWS)
(International Business &
Marketing expert)
Prof. Chris Styles (US)
(International Business & Marketing expert)
Outward internationalisation perspective, not
holistic internationalisation perspective
Capabilities theory focus
International entrepreneurship
Networks (IMP group)
Model should be used as Internet-mediating variable not moderating variable
263
Appendix H: Expert guidance in SEM
Date University, Event -Topic Expert-position &
expertise
Comment-outcome
October 2005
20th Private meeting Queensland University of Technology
Questionnaire design
Dr Rumintha Wickramasekera (SL) (PhD
SEM)
Internationalisation
Shorten questionnaire Shorten questions
Simplify design
25th Private meeting
Queensland University of Technology
Measures
Dr Rumintha
Wickramasekera (SL)
Internationalisation
Justification for measures, measurement Table
25th Private meeting
Queensland University of Technology
Research question
Dr Mike Quayle
International economics
More refined research question
Better defined research focus in relation to
questions being asked
November 2005
08th Private meeting
Queensland University of Technology Measures
Dr. Yunus Ali (SL)
Export expert
Measurements (internationalisation), scale
development
December 2005
05th Private meeting Queensland University of Technology
Questionnaire design- measures
Model structure
Dr Stephen Cox Faculty of Business
research advisor (QUT)
Survey refinement, wording, terminologies, redundancy
February 2006
27th Private meeting Queensland University of Technology
Questionnaire design
Model construct validity
Dr Yunus Ali (SL) Export &
internationalisation expert.
Refined survey question terminologies by reducing redundant questions
Model validity and possible parsimonious
outcomes
March 2006
07th Private meeting
Queensland University of Technology Questionnaire design - measures
Model refinement from ambiguity
Dr Stephen Cox
Faculty of Business research advisor (QUT)
Measurement refinement
Convoluted factors, Ambiguous question Major dependent variable needs to be
independently assessed to give model construct
validity
14th Queensland University of Technology Questionnaire design
Model structure
Dr. Rebekah Bennett (SL) SEM
Change to sequence of questionnaire The flow of questions. Specifically the outcome
growth question
April -May 2006
Sunshine Coast University
Questionnaire design
Model structure
Dr. Meredith Lawley (Ass.
Prof.)
(PhD SEM)
Question terminology adjustment-only one
meaning
University of Queensland Questionnaire design
Model structure
Dr Len Coote (SL) Runs the LISREL SEM
course at ACSPRI
Mixing variables in questions, validity issues
Queensland University of Technology Questionnaire design
Model structure
Dr Rumintha Wickramasekera (SL)
Industry classification code Highlight/underline topic in question
Open end question at the end
June-July2006
Group meeting
Queensland University of Technology
Questionnaire design in relation to Model
refinement. Construct validity
Dr Yunus Ali (SL)
Export
Dr Marilyn Healy
A rigorous critique of variables and interaction.
Construct validly issues addressed
Private meeting
Queensland University of Technology Questionnaire design - measures
Model refinement from ambiguity
Dr. Stephen Cox
Faculty of Business research advisor (QUT)
Measurement refinement
Items: potentially cross factoring Tightening up terminology
Shorten the amount of items
More concise factor. Technical terminologies or jargon replaced
January 2007 Pilot-business: feedback on survey International Businesses
(12 firms)
Minor adjustment to terminology
Mar–Sept 2007 Data collection. Pilot study analysed after 100 sample firms
International firms with international manager
Positive feedback indicating the survey was not a burden or misunderstood. Limited missing data
264
Appendix I Descriptive Statistics
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation Skewness Kurtosis
Statistic Statistic Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error
2 [1] 223 1 7 5.30 1.744 -.768 .163 -.451 .324
2 [2] 224 1 7 3.39 2.425 .418 .163 -1.473 .324
2 [3] 223 1 7 4.13 2.210 -.082 .163 -1.409 .324
2 [4] 224 1 7 4.53 2.055 -.385 .163 -1.160 .324
2 [5] 223 1 7 4.26 2.041 -.193 .163 -1.223 .324
2 [6] 224 1 7 3.94 2.012 .036 .163 -1.214 .324
2 [7] 224 1 7 3.62 2.105 .155 .163 -1.327 .324
2 [8] 224 1 7 4.24 2.166 -.161 .163 -1.327 .324
4 [1] 224 1 7 4.64 1.581 -.337 .163 -.556 .324
4 [2] 224 1 7 4.42 1.580 -.185 .163 -.630 .324
4 [3] 224 1 7 4.27 1.624 -.023 .163 -.885 .324
4 [4] 223 1 7 4.25 1.705 -.143 .163 -.892 .324
4 [5] 223 1 7 4.36 1.718 -.147 .163 -.905 .324
5 [1] 222 1 7 5.56 1.336 -.999 .163 1.007 .325
5 [2] 222 1 7 5.68 1.308 -1.176 .163 1.460 .325
5 [3] 222 1 7 5.69 1.307 -1.162 .163 1.298 .325
5 [4] 221 1 7 5.02 1.695 -.707 .164 -.371 .326
5 [5] 221 1 7 5.46 1.707 -1.102 .164 .444 .326
6 [1] 224 1 7 4.94 1.692 -.491 .163 -.746 .324
6 [2] 224 1 7 4.71 1.632 -.319 .163 -.877 .324
6 [3] 222 1 7 4.82 1.619 -.459 .163 -.616 .325
6 [4] 222 1 7 4.44 1.853 -.248 .163 -1.029 .325
6 [5] 223 1 7 4.51 1.808 -.270 .163 -1.004 .324
7a [1] 222 1 7 4.57 1.634 -.198 .163 -.509 .325
7a [2] 222 1 7 4.78 1.522 -.367 .163 -.151 .325
7a [3] 222 1 7 4.67 1.447 -.269 .163 .096 .325
7b [1] 219 1 7 4.55 1.648 -.250 .164 -.478 .327
7b [2] 217 1 7 4.40 1.548 -.170 .165 -.293 .329
7b [3] 218 1 7 4.44 1.511 -.212 .165 -.112 .328
9 [1] 224 1 7 5.92 1.566 -1.337 .163 .783 .324
9 [2] 222 1 7 4.95 1.660 -.494 .163 -.560 .325
9 [3] 221 1 7 5.09 1.752 -.567 .164 -.805 .326
265
9 [4] 222 1 7 5.23 1.751 -.771 .163 -.410 .325
9 [5] 224 1 7 5.94 1.577 -1.532 .163 1.350 .324
9 [6] 224 1 7 5.12 1.674 -.660 .163 -.433 .324
10 [1] 222 1 7 4.81 1.763 -.477 .163 -.689 .325
10 [2] 221 1 7 5.09 1.558 -.683 .164 -.052 .326
10 [3] 220 1 7 5.06 1.623 -.621 .164 -.388 .327
10 [4] 218 1 7 5.22 1.509 -.713 .165 -.091 .328
10 [5] 222 1 7 4.77 1.794 -.543 .163 -.699 .325
10 [6] 221 1 7 4.85 1.736 -.524 .164 -.656 .326
11 [1] 222 1 7 4.28 1.902 -.190 .163 -1.040 .325
11 [2] 223 1 7 4.21 1.825 -.114 .163 -1.018 .324
11 [3] 222 1 7 4.53 1.824 -.292 .163 -.924 .325
11 [4] 224 1 7 3.81 1.784 .123 .163 -.909 .324
11 [5] 224 1 7 4.29 1.842 -.197 .163 -1.060 .324
11 [6] 222 1 7 4.84 1.680 -.506 .163 -.615 .325
11 [7] 221 1 7 4.82 1.936 -.500 .164 -.959 .326
11 [8] 221 1 7 4.89 1.713 -.503 .164 -.597 .326
Mahalanobis: multivariate outlier analysis
Variable Case no. Mahalanobis d2 Variable Case no. Mahalanobis d2
Factor 1:
Information
availability
215
75
176
183
80
42.35
29.03
28.51
22.25
21.97
Factor 2:
Information
usage
215
143
25
22
40
31.29
20.47
18.74
17.70
16.50
Factor 3:
Interactive
communication
176
177
26
119
204
46.64
31.74
25.53
25.01
25.01
Factor 4:
Business
networks
176
216
80
142
69
39.07
28.69
27.78
26.36
24.60
Factor 5:
International
mindset
143
5
208
61
156
38.58
34.08
32.31
32.16
29.06
Factor 6:
Psychic distance
75
123
8
126
22
48.72
48.45
46.83
39.36
32.81
Factor 7:
Internet intensity 181
215
179
69
26
30.82
25.78
22.61
21.80
21.08
Factor 8:
International
market growth
208
98
112
158
142
39.11
32.76
27.31
24.66
23.51
266
Appendix J Saturated models English markets
INFAVL
4 [1]e11
.764 [2]e12
.844 [3]e13.81
4 [5]e15.71
INFOUSE
6 [1]e21
6 [2]e22
6 [3]e23
6 [5]e25
.86
.73
.80
.76
INTACT
5 [1]e31
5 [2]e32
5 [3]e33
5 [5]e35
.77
.83
.83
.64
BUSREL
10 [1]e51
.8710 [2]e52
.9710 [3]e53
.9210 [4]e54 .78
INTMND
9 [6]e46
.78
9 [4]e44.77
9 [3]e43 .88
9 [1]e41
.79
PSYDIS
11 [1]
e61
.89
11 [2]
e62
.97
11 [3]
e63
.88
11 [4]
e64
.62
.34
.43
.06
.40
.33
.64
.29
.35
.01
-.08
.46
.01
-.16
.38
.50
INTGRO E
7a [1] e65.75
7a [2] e66.95
7a [3] e67
.83
INTINS2 [4] e68.72
2 [5] e69.95
.49
.58
.22
.34
.37
.22
.07
.46
.34
.42
.24
.24
-.01
chi-square=681.107
df350
p=.000
gfi.834
tli=.913
cfi=.925
rmsea=.065
caic=1226.096
Non English markets
INFAVL
4 [1]e11
.764 [2]e12
.844 [3]e13.81
4 [5]e15.71
INFOUSE
6 [1]e21
6 [2]e22
6 [3]e23
6 [5]e25
.86
.74
.80
.76
INTACT
5 [1]e31
5 [2]e32
5 [3]e33
5 [5]e35
.77
.83
.83
.63
BUSREL
10 [1]e51
.8710 [2]e52
.9710 [3]e53
.9210 [4]e54 .78
INTMND
9 [6]e46
.78
9 [4]e44.77
9 [3]e43 .89
9 [1]e41
.79
PSYDIS
11 [1]
e61
.89
11 [2]
e62
.97
11 [3]
e63
.88
11 [4]
e64
.62
.33
.42
.06
.40
.33
.64
.29
.35
.01
-.08
.46
.01
-.16
.38
.50
INTGRO NE
7b [1] e65.84
7b [2] e66.97
7b [3] e67
.93
INTINS2 [4] e68.72
2 [5] e69.95
.49
.58
.22
.34
.37
.20
-.21
.54
.35
.24
.28
.16
-.01
chi-square=675.323
df350
p=.000
gfi.837
tli=.919
cfi=.930
rmsea=.065
caic=1220.312
267
Appendix K: Model 1 English market growth matrices
Matrices (Group number 1 - Default model)
Implied (for all variables) Covariances (Group number 1 - Default model)
INFAVL INTACT INTMND INFUSE BUSREL INTINS INTGRO
E BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO1 INTGRO2 INTGRO3 INFAVL1 INFAVL2
INFAVL 1.800
INTACT .530 1.138
INTMND .795 .705 3.003
INFUSE 1.063 .313 .470 2.708
BUSREL .609 .315 1.031 .571 2.697
INTINS .892 .308 .652 1.027 .702 1.963
INTGRO
E .368 .453 .800 .262 .617 .337 1.410
BUSNET2 .609 .315 1.031 .571 2.697 .702 .617 2.417
BUSNET3 .507 .262 .858 .475 2.245 .585 .514 2.245 2.618
INTMND1 .526 .466 1.986 .311 .682 .431 .529 .682 .568 2.440
INTMND3 .795 .705 3.003 .470 1.031 .652 .800 1.031 .858 1.986 3.097
INTACT1 .543 1.166 .722 .321 .322 .316 .463 .322 .268 .478 .722 1.764
INTACT3 .530 1.138 .705 .313 .315 .308 .453 .315 .262 .466 .705 1.166 1.688
INFUSE4 1.063 .313 .470 2.708 .571 1.027 .262 .571 .475 .311 .470 .321 .313 3.468
INFUSE5 1.095 .323 .484 2.789 .588 1.057 .270 .588 .489 .320 .484 .330 .323 2.789 3.316
INTINS5 1.296 .448 .947 1.492 1.021 2.853 .490 1.021 .849 .626 .947 .459 .448 1.492 1.537 4.171
INTINS4 .892 .308 .652 1.027 .702 1.963 .337 .702 .585 .431 .652 .316 .308 1.027 1.057 2.853 4.191
INTGRO1 .377 .463 .818 .268 .631 .345 1.442 .631 .525 .541 .818 .474 .463 .268 .276 .501 .345 2.637
INTGRO2 .445 .547 .967 .317 .746 .408 1.705 .746 .621 .640 .967 .560 .547 .317 .326 .593 .408 1.743 2.286
INTGRO3 .368 .453 .800 .262 .617 .337 1.410 .617 .514 .529 .800 .463 .453 .262 .270 .490 .337 1.442 1.705 2.065
INFAVL1 1.800 .530 .795 1.063 .609 .892 .368 .609 .507 .526 .795 .543 .530 1.063 1.095 1.296 .892 .377 .445 .368 2.489
INFAVL2 1.653 .487 .731 .977 .560 .820 .338 .560 .466 .483 .731 .499 .487 .977 1.006 1.191 .820 .346 .409 .338 1.653 2.485
Implied (for all variables) Correlations (Group number 1 - Default model)
INFAVL INTACT INTMND INFUSE BUSREL INTINS INTGRO
E BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO1 INTGRO2 INTGRO3 INFAVL1 INFAVL2
INFAVL 1.000
INTACT .370 1.000
INTMND .342 .381 1.000
INFUSE .482 .178 .165 1.000
BUSREL .277 .180 .362 .211 1.000
INTINS .475 .206 .268 .445 .305 1.000
INTGRO
E .231 .357 .389 .134 .316 .203 1.000
BUSNET2 .292 .190 .383 .223 1.057 .322 .334 1.000
BUSNET3 .234 .152 .306 .178 .845 .258 .267 .892 1.000
INTMND1 .251 .280 .734 .121 .266 .197 .285 .281 .225 1.000
INTMND3 .337 .376 .985 .162 .357 .264 .383 .377 .301 .723 1.000
INTACT1 .305 .823 .314 .147 .148 .170 .294 .156 .125 .230 .309 1.000
INTACT3 .304 .821 .313 .146 .147 .169 .293 .156 .125 .230 .308 .675 1.000
INFUSE4 .426 .158 .146 .884 .187 .393 .119 .197 .158 .107 .143 .130 .129 1.000
INFUSE5 .448 .166 .153 .931 .197 .414 .125 .208 .166 .113 .151 .137 .136 .822 1.000
INTINS5 .473 .206 .268 .444 .304 .997 .202 .321 .257 .196 .264 .169 .169 .392 .413 1.000
INTINS4 .325 .141 .184 .305 .209 .684 .139 .221 .176 .135 .181 .116 .116 .269 .284 .682 1.000
INTGRO1 .173 .267 .291 .100 .237 .152 .748 .250 .200 .213 .286 .220 .219 .089 .093 .151 .104 1.000
INTGRO2 .220 .339 .369 .127 .300 .193 .949 .317 .254 .271 .364 .279 .278 .113 .119 .192 .132 .710 1.000
INTGRO3 .191 .295 .321 .111 .261 .168 .826 .276 .221 .236 .316 .243 .242 .098 .103 .167 .115 .618 .785 1.000
INFAVL1 .850 .315 .291 .410 .235 .404 .197 .249 .199 .213 .287 .259 .259 .362 .381 .402 .276 .147 .187 .163 1.000
INFAVL2 .782 .289 .267 .377 .216 .371 .181 .229 .183 .196 .263 .238 .238 .333 .351 .370 .254 .135 .172 .149 .665 1.000
268
Implied Covariances (Group number 1 - Default model)
BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO1 INTGRO2 INTGRO3 INFAVL1 INFAVL2
BUSNET2 2.417
BUSNET3 2.245 2.618
INTMND1 .682 .568 2.440
INTMND3 1.031 .858 1.986 3.097
INTACT1 .322 .268 .478 .722 1.764
INTACT3 .315 .262 .466 .705 1.166 1.688
INFUSE4 .571 .475 .311 .470 .321 .313 3.468
INFUSE5 .588 .489 .320 .484 .330 .323 2.789 3.316
INTINS5 1.021 .849 .626 .947 .459 .448 1.492 1.537 4.171
INTINS4 .702 .585 .431 .652 .316 .308 1.027 1.057 2.853 4.191
INTGRO1 .631 .525 .541 .818 .474 .463 .268 .276 .501 .345 2.637
INTGRO2 .746 .621 .640 .967 .560 .547 .317 .326 .593 .408 1.743 2.286
INTGRO3 .617 .514 .529 .800 .463 .453 .262 .270 .490 .337 1.442 1.705 2.065
INFAVL1 .609 .507 .526 .795 .543 .530 1.063 1.095 1.296 .892 .377 .445 .368 2.489
INFAVL2 .560 .466 .483 .731 .499 .487 .977 1.006 1.191 .820 .346 .409 .338 1.653 2.485
Implied Correlations (Group number 1 - Default model)
BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO1 INTGRO2 INTGRO3 INFAVL1 INFAVL2
BUSNET2 1.000
BUSNET3 .892 1.000
INTMND1 .281 .225 1.000
INTMND3 .377 .301 .723 1.000
INTACT1 .156 .125 .230 .309 1.000
INTACT3 .156 .125 .230 .308 .675 1.000
INFUSE4 .197 .158 .107 .143 .130 .129 1.000
INFUSE5 .208 .166 .113 .151 .137 .136 .822 1.000
INTINS5 .321 .257 .196 .264 .169 .169 .392 .413 1.000
INTINS4 .221 .176 .135 .181 .116 .116 .269 .284 .682 1.000
INTGRO1 .250 .200 .213 .286 .220 .219 .089 .093 .151 .104 1.000
INTGRO2 .317 .254 .271 .364 .279 .278 .113 .119 .192 .132 .710 1.000
INTGRO3 .276 .221 .236 .316 .243 .242 .098 .103 .167 .115 .618 .785 1.000
INFAVL1 .249 .199 .213 .287 .259 .259 .362 .381 .402 .276 .147 .187 .163 1.000
INFAVL2 .229 .183 .196 .263 .238 .238 .333 .351 .370 .254 .135 .172 .149 .665 1.000
Residual Covariances (Group number 1 - Default model)
BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO1 INTGRO2 INTGRO3 INFAVL1 INFAVL2
BUSNET2 .017
BUSNET3 .014 .012
INTMND1 -.068 -.048 .000
INTMND3 .040 .045 .000 .000
INTACT1 .047 .149 -.035 -.028 .000
INTACT3 .158 .307 .045 .026 -.001 .000
INFUSE4 .093 .162 .254 .447 .005 .111 .000
INFUSE5 .135 .167 .323 .274 -.004 .137 .000 .000
INTINS5 .063 .122 .013 .105 .015 .021 .060 .038 .028
INTINS4 -.156 -.097 -.013 .276 .014 .073 .145 .074 .019 .013
INTGRO1 .217 .251 .423 .344 .097 .163 .280 .114 .220 .107 .005
INTGRO2 -.037 -.079 .079 -.061 .021 -.043 .067 -.066 -.003 -.072 .009 .008
INTGRO3 .017 -.034 .087 .023 .066 -.031 .136 .078 .034 -.143 -.068 .017 .005
INFAVL1 .041 .041 .048 .037 .005 .015 -.062 -.079 -.012 -.033 .016 -.083 -.142 .000
INFAVL2 -.132 -.188 -.142 -.142 -.033 -.020 .055 .052 -.011 .109 -.121 .000 -.048 .010 .000
269
Standardized Residual Covariances (Group number 1 - Default model)
BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO1 INTGRO2 INTGRO3 INFAVL1 INFAVL2
BUSNET2 .073
BUSNET3 .062 .046
INTMND1 -.402 -.279 .000
INTMND3 .202 .226 .000 .000
INTACT1 .334 1.029 -.249 -.168 .000
INTACT3 1.151 2.165 .321 .159 -.004 .000
INFUSE4 .469 .793 1.296 2.015 .032 .678 .000
INFUSE5 .698 .837 1.687 1.264 -.024 .855 .000 .000
INTINS5 .283 .532 .060 .420 .079 .114 .219 .141 .071
INTINS4 -.716 -.432 -.062 1.127 .079 .409 .548 .284 .057 .034
INTGRO1 1.243 1.397 2.436 1.727 .659 1.128 1.376 .572 .980 .479 .022
INTGRO2 -.224 -.467 .479 -.324 .154 -.314 .355 -.356 -.014 -.345 .044 .035
INTGRO3 .112 -.216 .561 .130 .504 -.238 .754 .440 .170 -.719 -.372 .092 .027
INFAVL1 .240 .233 .284 .189 .035 .108 -.295 -.382 -.053 -.146 .090 -.513 -.923 .000
INFAVL2 -.783 -1.084 -.842 -.740 -.229 -.145 .266 .254 -.048 .490 -.699 -.001 -.312 .050 .000
Sample Moments (Group number 1)
Sample Covariances (Group number 1)
BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO1 INTGRO2 INTGRO3 INFAVL1 INFAVL2
BUSNET2 2.433
BUSNET3 2.259 2.630
INTMND1 .614 .519 2.440
INTMND3 1.071 .903 1.986 3.097
INTACT1 .369 .417 .442 .694 1.764
INTACT3 .472 .569 .511 .731 1.165 1.688
INFUSE4 .663 .637 .565 .917 .326 .424 3.468
INFUSE5 .723 .657 .643 .758 .326 .459 2.789 3.316
INTINS5 1.084 .971 .639 1.052 .474 .469 1.552 1.575 4.199
INTINS4 .546 .487 .418 .928 .330 .382 1.171 1.131 2.872 4.204
INTGRO1 .848 .776 .964 1.162 .571 .626 .548 .390 .721 .452 2.642
INTGRO2 .709 .542 .718 .906 .582 .504 .384 .260 .590 .336 1.752 2.294
INTGRO3 .635 .479 .616 .823 .530 .422 .398 .347 .524 .195 1.373 1.722 2.070
INFAVL1 .650 .548 .574 .832 .548 .545 1.002 1.016 1.284 .859 .392 .362 .226 2.489
INFAVL2 .428 .278 .342 .589 .465 .466 1.032 1.058 1.180 .929 .225 .409 .291 1.663 2.485
Sample Correlations (Group number 1)
BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO1 INTGRO2 INTGRO3 INFAVL1 INFAVL2
BUSNET2 1.000
BUSNET3 .893 1.000
INTMND1 .252 .205 1.000
INTMND3 .390 .316 .723 1.000
INTACT1 .178 .194 .213 .297 1.000
INTACT3 .233 .270 .252 .320 .675 1.000
INFUSE4 .228 .211 .194 .280 .132 .175 1.000
INFUSE5 .255 .222 .226 .237 .135 .194 .822 1.000
INTINS5 .339 .292 .200 .292 .174 .176 .407 .422 1.000
INTINS4 .171 .147 .130 .257 .121 .143 .307 .303 .683 1.000
INTGRO1 .334 .294 .380 .406 .265 .296 .181 .132 .217 .136 1.000
INTGRO2 .300 .221 .304 .340 .289 .256 .136 .094 .190 .108 .712 1.000
INTGRO3 .283 .205 .274 .325 .277 .226 .148 .133 .178 .066 .587 .790 1.000
INFAVL1 .264 .214 .233 .300 .261 .266 .341 .354 .397 .266 .153 .151 .100 1.000
INFAVL2 .174 .109 .139 .212 .222 .228 .352 .369 .365 .287 .088 .171 .128 .669 1.000
270
Appendix L: Model 2 non-English market growth matrices
Matrices (Group number 1 - Default model)
Implied (for all variables) Covariances (Group number 1 - Default model) Psychic INFAVL INTACT INTMND BUSREL INFUSE INTINS
INTGRO NE
PSYDIS3 PSYDIS2 BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO4 INTGRO5 INTGRO6 INFAVL1 INFAVL2
Psychic 2.549
INFAVL .000 1.788
INTACT .000 .546 1.201
INTMND -.282 .799 .746 2.869
BUSREL -.088 .633 .351 1.072 2.575
INFUSE .000 1.083 .331 .484 .383 2.750
INTINS -.028 .889 .321 .646 .681 .997 1.936
INTGRO NE -.486 .381 .313 1.168 .707 .247 .374 1.934
PSYDIS3 2.820 .000 .000 -.311 -.098 .000 -.031 -.538 3.290
PSYDIS2 2.549 .000 .000 -.282 -.088 .000 -.028 -.486 2.820 3.317
BUSNET2 -.088 .633 .351 1.072 2.575 .383 .681 .707 -.098 -.088 2.437
BUSNET3 -.078 .556 .308 .941 2.262 .337 .598 .621 -.086 -.078 2.262 2.633
INTMND1 -.196 .558 .521 2.002 .748 .338 .451 .815 -.217 -.196 .748 .657 2.451
INTMND3 -.282 .799 .746 2.869 1.072 .484 .646 1.168 -.311 -.282 1.072 .941 2.002 3.120
INTACT1 .000 .530 1.165 .724 .340 .321 .312 .304 .000 .000 .340 .299 .505 .724 1.764
INTACT3 .000 .546 1.201 .746 .351 .331 .321 .313 .000 .000 .351 .308 .521 .746 1.165 1.688
INFUSE4 .000 1.083 .331 .484 .383 2.750 .997 .247 .000 .000 .383 .337 .338 .484 .321 .331 3.468
INFUSE5 .000 1.098 .335 .491 .389 2.789 1.011 .250 .000 .000 .389 .342 .343 .491 .325 .335 2.789 3.316
INTINS5 -.041 1.303 .471 .947 .998 1.462 2.838 .548 -.045 -.041 .998 .877 .661 .947 .457 .471 1.462 1.482 4.150
INTINS4 -.028 .889 .321 .646 .681 .997 1.936 .374 -.031 -.028 .681 .598 .451 .646 .312 .321 .997 1.011 2.838 4.182
INTGRO4 -.482 .378 .311 1.159 .701 .245 .371 1.920 -.534 -.482 .701 .616 .809 1.159 .302 .311 .245 .248 .544 .371 2.693
INTGRO5 -.519 .406 .335 1.248 .754 .263 .399 2.065 -.574 -.519 .754 .663 .870 1.248 .325 .335 .263 .267 .585 .399 2.050 2.349
INTGRO6 -.486 .381 .313 1.168 .707 .247 .374 1.934 -.538 -.486 .707 .621 .815 1.168 .304 .313 .247 .250 .548 .374 1.920 2.065 2.238
INFAVL1 .000 1.788 .546 .799 .633 1.083 .889 .381 .000 .000 .633 .556 .558 .799 .530 .546 1.083 1.098 1.303 .889 .378 .406 .381 2.489
INFAVL2 .000 1.648 .503 .737 .584 .998 .820 .351 .000 .000 .584 .513 .514 .737 .488 .503 .998 1.012 1.201 .820 .348 .375 .351 1.648 2.485
Implied (for all variables) Correlations (Group number 1 - Default model)
Psychic INFAVL INTACT INTMND BUSREL INFUSE INTINS INTGRO
NE PSYDIS3 PSYDIS2 BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO4 INTGRO5 INTGRO6 INFAVL1 INFAVL2
Psychic 1.000
INFAVL .000 1.000
INTACT .000 .373 1.000
INTMND -.104 .353 .402 1.000
BUSREL -.034 .295 .200 .394 1.000
INFUSE .000 .488 .182 .172 .144 1.000
INTINS -.013 .478 .211 .274 .305 .432 1.000
INTGRO NE -.219 .205 .206 .496 .317 .107 .193 1.000
PSYDIS3 .974 .000 .000 -.101 -.034 .000 -.012 -.213 1.000
PSYDIS2 .877 .000 .000 -.091 -.030 .000 -.011 -.192 .854 1.000
BUSNET2 -.035 .303 .205 .405 1.028 .148 .314 .325 -.035 -.031 1.000
BUSNET3 -.030 .256 .173 .342 .869 .125 .265 .275 -.029 -.026 .893 1.000
INTMND1 -.079 .266 .303 .755 .298 .130 .207 .374 -.077 -.069 .306 .259 1.000
INTMND3 -.100 .338 .385 .959 .378 .165 .263 .476 -.097 -.088 .389 .328 .724 1.000
INTACT1 .000 .298 .800 .322 .160 .146 .169 .165 .000 .000 .164 .139 .243 .308 1.000
INTACT3 .000 .314 .843 .339 .168 .154 .178 .173 .000 .000 .173 .146 .256 .325 .675 1.000
INFUSE4 .000 .435 .162 .153 .128 .891 .385 .095 .000 .000 .132 .111 .116 .147 .130 .137 1.000
INFUSE5 .000 .451 .168 .159 .133 .923 .399 .099 .000 .000 .137 .116 .120 .153 .135 .142 .822 1.000
INTINS5 -.013 .478 .211 .274 .305 .433 1.001 .194 -.012 -.011 .314 .265 .207 .263 .169 .178 .385 .400 1.000
INTINS4 -.009 .325 .143 .187 .208 .294 .681 .132 -.008 -.007 .213 .180 .141 .179 .115 .121 .262 .272 .681 1.000
INTGRO4 -.184 .172 .173 .417 .266 .090 .163 .841 -.179 -.161 .274 .231 .315 .400 .138 .146 .080 .083 .163 .111 1.000
INTGRO5 -.212 .198 .199 .480 .307 .104 .187 .969 -.206 -.186 .315 .266 .363 .461 .159 .168 .092 .096 .187 .127 .815 1.000
INTGRO6 -.203 .190 .191 .461 .294 .099 .180 .930 -.198 -.178 .303 .256 .348 .442 .153 .161 .089 .092 .180 .122 .782 .901 1.000
INFAVL1 .000 .848 .316 .299 .250 .414 .405 .173 .000 .000 .257 .217 .226 .287 .253 .266 .369 .382 .406 .276 .146 .168 .161 1.000
INFAVL2 .000 .782 .291 .276 .231 .382 .374 .160 .000 .000 .237 .200 .208 .265 .233 .246 .340 .353 .374 .254 .135 .155 .149 .663 1.000
271
Implied Covariances (Group number 1 - Default model) PSYDIS3 PSYDIS2 BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO4 INTGRO5 INTGRO6 INFAVL1 INFAVL2
PSYDIS3 3.290
PSYDIS2 2.820 3.317
BUSNET2 -.098 -.088 2.437
BUSNET3 -.086 -.078 2.262 2.633
INTMND1 -.217 -.196 .748 .657 2.451
INTMND3 -.311 -.282 1.072 .941 2.002 3.120
INTACT1 .000 .000 .340 .299 .505 .724 1.764
INTACT3 .000 .000 .351 .308 .521 .746 1.165 1.688
INFUSE4 .000 .000 .383 .337 .338 .484 .321 .331 3.468
INFUSE5 .000 .000 .389 .342 .343 .491 .325 .335 2.789 3.316
INTINS5 -.045 -.041 .998 .877 .661 .947 .457 .471 1.462 1.482 4.150
INTINS4 -.031 -.028 .681 .598 .451 .646 .312 .321 .997 1.011 2.838 4.182
INTGRO4 -.534 -.482 .701 .616 .809 1.159 .302 .311 .245 .248 .544 .371 2.693
INTGRO5 -.574 -.519 .754 .663 .870 1.248 .325 .335 .263 .267 .585 .399 2.050 2.349
INTGRO6 -.538 -.486 .707 .621 .815 1.168 .304 .313 .247 .250 .548 .374 1.920 2.065 2.238
INFAVL1 .000 .000 .633 .556 .558 .799 .530 .546 1.083 1.098 1.303 .889 .378 .406 .381 2.489
INFAVL2 .000 .000 .584 .513 .514 .737 .488 .503 .998 1.012 1.201 .820 .348 .375 .351 1.648 2.485
Implied Correlations (Group number 1 - Default model)
PSYDIS3 PSYDIS2 BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO4 INTGRO5 INTGRO6 INFAVL1 INFAVL2
PSYDIS3 1.000
PSYDIS2 .854 1.000
BUSNET2 -.035 -.031 1.000
BUSNET3 -.029 -.026 .893 1.000
INTMND1 -.077 -.069 .306 .259 1.000
INTMND3 -.097 -.088 .389 .328 .724 1.000
INTACT1 .000 .000 .164 .139 .243 .308 1.000
INTACT3 .000 .000 .173 .146 .256 .325 .675 1.000
INFUSE4 .000 .000 .132 .111 .116 .147 .130 .137 1.000
INFUSE5 .000 .000 .137 .116 .120 .153 .135 .142 .822 1.000
INTINS5 -.012 -.011 .314 .265 .207 .263 .169 .178 .385 .400 1.000
INTINS4 -.008 -.007 .213 .180 .141 .179 .115 .121 .262 .272 .681 1.000
INTGRO4 -.179 -.161 .274 .231 .315 .400 .138 .146 .080 .083 .163 .111 1.000
INTGRO5 -.206 -.186 .315 .266 .363 .461 .159 .168 .092 .096 .187 .127 .815 1.000
INTGRO6 -.198 -.178 .303 .256 .348 .442 .153 .161 .089 .092 .180 .122 .782 .901 1.000
INFAVL1 .000 .000 .257 .217 .226 .287 .253 .266 .369 .382 .406 .276 .146 .168 .161 1.000
INFAVL2 .000 .000 .237 .200 .208 .265 .233 .246 .340 .353 .374 .254 .135 .155 .149 .663 1.000
Residual Covariances (Group number 1 - Default model)
PSYDIS3 PSYDIS2 BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO4 INTGRO5 INTGRO6 INFAVL1 INFAVL2
PSYDIS3 .000
PSYDIS2 .000 .000
BUSNET2 .002 .059 -.004
BUSNET3 .193 .325 -.003 -.003
INTMND1 .050 -.042 -.134 -.138 -.011
INTMND3 .134 .121 -.001 -.038 -.016 -.023
INTACT1 .396 .294 .029 .118 -.063 -.029 .000
INTACT3 .117 .073 .121 .261 -.009 -.015 .000 .000
INFUSE4 .036 -.212 .280 .300 .227 .433 .005 .093 .000
INFUSE5 -.291 -.431 .334 .315 .301 .267 .001 .124 .000 .000
INTINS5 .147 -.016 .086 .094 -.021 .105 .017 -.002 .090 .092 .049
INTINS4 .093 .017 -.135 -.111 -.033 .282 .019 .061 .174 .120 .033 .023
INTGRO4 .036 -.029 -.053 .003 .226 .067 -.080 .082 .213 .336 .112 -.068 -.012
INTGRO5 .098 .062 .025 .045 .033 -.074 -.162 .057 .217 .318 -.004 -.219 -.006 -.014
INTGRO6 -.067 -.067 .003 .061 .111 .000 -.100 .028 .289 .438 .055 -.120 -.033 -.012 -.012
INFAVL1 .051 -.119 .017 -.008 .016 .033 .018 -.001 -.082 -.082 -.019 -.030 -.100 -.119 -.051 .000
INFAVL2 .297 .190 -.155 -.235 -.172 -.148 -.023 -.037 .034 .045 -.021 .109 -.033 -.100 -.072 .015 .000
272
Standardized Residual Covariances (Group number 1 - Default model)
PSYDIS3 PSYDIS2 BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO4 INTGRO5 INTGRO6 INFAVL1 INFAVL2
PSYDIS3 .000
PSYDIS2 .000 .000
BUSNET2 .011 .310 -.016
BUSNET3 .980 1.644 -.014 -.011
INTMND1 .260 -.218 -.781 -.784 -.049
INTMND3 .621 .557 -.005 -.189 -.069 -.079
INTACT1 2.454 1.815 .203 .812 -.440 -.178 .000
INTACT3 .740 .459 .881 1.829 -.068 -.095 .000 .000
INFUSE4 .157 -.931 1.426 1.474 1.154 1.943 .030 .570 .000
INFUSE5 -1.317 -1.939 1.739 1.582 1.565 1.228 .006 .774 .000 .000
INTINS5 .594 -.065 .384 .411 -.098 .420 .091 -.011 .331 .344 .125
INTINS4 .373 .070 -.618 -.492 -.153 1.148 .101 .338 .661 .464 .099 .058
INTGRO4 .179 -.142 -.297 .017 1.255 .321 -.542 .570 1.038 1.671 .495 -.301 -.046
INTGRO5 .516 .329 .147 .260 .196 -.371 -1.176 .420 1.131 1.691 -.020 -1.033 -.029 -.061
INTGRO6 -.362 -.359 .018 .364 .670 .001 -.746 .211 1.543 2.389 .266 -.581 -.159 -.056 -.057
INFAVL1 .267 -.618 .100 -.047 .096 .169 .124 -.006 -.389 -.398 -.083 -.133 -.571 -.726 -.318 .000
INFAVL2 1.554 .986 -.918 -1.344 -1.020 -.768 -.159 -.262 .161 .223 -.093 .491 -.188 -.614 -.451 .075 .000
Sample Correlations (Group number 1)
PSYDIS3 PSYDIS2 BUSNET2 BUSNET3 INTMND1 INTMND3 INTACT1 INTACT3 INFUSE4 INFUSE5 INTINS5 INTINS4 INTGRO4 INTGRO5 INTGRO6 INFAVL1 INFAVL2
PSYDIS3 1.000
PSYDIS2 .854 1.000
BUSNET2 -.034 -.010 1.000
BUSNET3 .036 .084 .893 1.000
INTMND1 -.059 -.084 .252 .205 1.000
INTMND3 -.056 -.050 .390 .316 .723 1.000
INTACT1 .164 .122 .178 .194 .213 .297 1.000
INTACT3 .050 .031 .233 .270 .252 .320 .675 1.000
INFUSE4 .011 -.062 .228 .211 .194 .280 .132 .175 1.000
INFUSE5 -.088 -.130 .255 .222 .226 .237 .135 .194 .822 1.000
INTINS5 .027 -.015 .339 .292 .200 .292 .174 .176 .407 .422 1.000
INTINS4 .017 -.003 .171 .147 .130 .257 .121 .143 .307 .303 .683 1.000
INTGRO4 -.167 -.171 .254 .233 .405 .426 .102 .185 .150 .196 .196 .090 1.000
INTGRO5 -.172 -.164 .327 .285 .379 .436 .080 .197 .169 .210 .186 .058 .817 1.000
INTGRO6 -.223 -.203 .305 .282 .398 .445 .103 .176 .193 .253 .197 .083 .772 .901 1.000
INFAVL1 .018 -.041 .264 .214 .233 .300 .261 .266 .341 .354 .397 .266 .108 .119 .140 1.000
INFAVL2 .104 .066 .174 .109 .139 .212 .222 .228 .352 .369 .365 .287 .122 .114 .118 .669 1.000
273
Appendix M Country markets summary
Country markets summary (78 countries) (overall)
Country Firms % Country Firms %
United States 134 59.80 Finland 5 2.23
New Zealand 121 50.01 Samoa 5 2.23
United Kingdom 99 44.19 Spain 5 2.23
Singapore 73 32.58 Sri Lanka 5 2.23
China 68 30.35 Cambodia 4 1.78
Japan 63 28.12 Kuwait 4 1.78
Malaysia 53 23.66 New Caledonia 4 1.78
Hong Kong 52 23.21 Saudi Arabia 4 1.78
Canada 42 18.75 Brunei 3 1.33
Indonesia 41 18.30 Burma 3 1.33
Thailand 37 16.51 Columbia 3 1.33
Papua New Guinea 35 15.62 Czech Republic 3 1.33
South Korea 34 15.17 Egypt 3 1.33
Germany 32 14.28 Iran 3 1.33
Taiwan 31 13.83 Kenya 3 1.33
South Africa 28 12.5 Tonga 3 1.33
India 26 11.60 Turkey 3 1.33
France 25 11.16 Vanuatu 3 1.33
Philippines 25 11.16 Bangladesh 2 .89
Fiji 22 9.82 Ecuador 2 .89
Netherlands 22 9.82 Hungary 2 .89
UAE 22 9.82 Lebanon 2 .89
Sweden 15 6.69 Luxemburg 2 .89
Vietnam 14 6.62 Mauritius 2 .89
Denmark 11 4.91 Monaco 2 .89
Switzerland 11 4.91 Romania 2 .89
Mexico 11 4.91 Tahiti 2 .89
Brazil 10 4.46 Yemen 2 .89
Belgium 9 4.01 Uruguay 1 .44
Dubai 9 4.01 Algeria 1 .44
Norway 9 4.01 Argentina 1 .44
Austria 8 3.57 Cayman Islands 1 .44
Oman 8 3.57 Jordan 1 .44
Solomon Islands 8 3.57 Laos 1 .44
Italy 7 3.12 Lithuania 1 .44
Russia 7 3.12 Mongolia 1 .44
Pakistan 6 2.67 Paraguay 1 .44
Chile 6 2.67 Poland 1 .44
Greece 6 2.67 Syria 1 .44
Qatar 6 2.67
Source: developed for this research
International country markets summary
Market concept Mean Break-up Percentage Comment
International
markets
14.79
countries 1-2 markets
3-5 markets
6-10 markets
10-20 markets
20 + markets
9.3 %
34.9 %
21.8 % 16.3 %
17.7 %
Nearly 15 markets is a large dispersion of international
markets for the mean whereby the majority of firms are small
and medium.
Pace of
internationalisation
Age time of survey
16.6 countries
11 countries 11.5 countries
3 years or younger (9 firms)
5 years or younger (26 firms) 10 years or younger (75 firms)
Firms were not explicitly asked retrospectively about country
markets pertaining to pace of internationalisation. That is, firms were asked about age of firm and number of country
markets as opposed to retrospective questions about
countries where they had customers. Thus, firms are presented with respect to current standing.
International
percentage
37.97 % 1-5%
6-15%
16-49%
50%-100%
17.2 %
19.6 % 28.8 %
34.4 %
With the mean of almost 38 % of revenue as a proportion of
the total firm turnover the international percentage is considerable.
First country
market
United Sates
New Zealand
United Kingdom
Singapore
Hong Kong
Papua New Guinea
Japan
19.54 % 16.81 %
11.36 %
7.27 % 5.90 %
5.45 %
4.09 %
Other minor groups of markets include South Africa, Middle East, Canada and some European countries such as France,
Germany, Netherlands etc. as seen in county summary Table
Appendix M. However, the three markets are all English speaking markets
274
Major markets 1st Market
United States
United Kingdom
New Zealand
China
Japan
Singapore
18.68 %
12.62 %
8.58 % 7.57 %
6.56 %
4.04 %
Pacific 6.06 %
Europe 7.57 %
Canada 3.53 %
Africa 3.53 %
Other Asian countries 16.66 %
Total Asia 34.83 %
2nd Market United Kingdom
United States
China
Singapore
New Zealand
Hong Kong
10.88 %
8.29 %
7.77 % 6.21 %
5.18 %
5.18 %
Pacific 6.21 %
Asia total 43.0 %
3rd Market New Zealand
Singapore
United States
Korea
United Kingdom
Germany
7.90 % 6.77 %
5.64 % 5.64 %
5.08 %
5.08 %
New Zealand 9.15 % 4th Market China 7.04 %
Japan 5.63 % Hong Kong 5.63 %
Singapore 4.22 %
United States 4.22 % United Kingdom 4.22 %
Physical office or
store within
international
market
Presence
No presence
32.6 %
67.4 %
Only 32.6 % of firms have indicated they have a physical
presence such as a store or office in the international markets
which they conduct their business. Conversely, 67.4 % of firms who engage in international business do not have a
physical presence in international markets even though their
customers are in these markets.
Source: developed for this research
Appendix N: 1st Country market
Country Firms % Country Firms %
United States 37 16.51 Finland 0 0
New Zealand 39 17.41 Samoa 0 0
United Kingdom 25 11.16 Spain 0 0
Singapore 14 6.25 Sri Lanka 0 0
China 4 1.78 Cambodia 0 0
Japan 9 4.01 Kuwait 0 0
Malaysia 6 2.67 New Caledonia 0 0
Hong Kong 12 5.35 Saudi Arabia 3 1.33
Canada 5 2.23 Brunei 1 0.44
Indonesia 6 2.67 Burma 1 0.44
Thailand 3 1.33 Columbia 0 0
Papua New Guinea 13 5.80 Czech Republic 0 0
South Korea 5 2.23 Egypt 0 0
Germany 1 0.44 Iran 0 0
Taiwan 6 2.67 Kenya 0 0
South Africa 3 1.33 Tonga 0 0
India 3 1.33 Turkey 0 0
France 1 0.44 Vanuatu 0 0
Philippines 2 0.89 Bangladesh 0 0
Fiji 2 0.89 Ecuador 0 0
Netherlands 2 0.89 Hungary 0 0
UAE 2 0.89 Lebanon 0 0
Sweden 1 0.44 Luxemburg 0 0
Vietnam 0 0 Mauritius 0 0
Denmark 0 0 Monaco 0 0
Switzerland 2 0.89 Romania 0 0
Mexico 0 0 Tahiti 0 0
Brazil 0 0 Yemen 0 0
Belgium 0 0 Uruguay 0 0
Dubai 0 0 Algeria 0 0
Norway 0 0 Argentina 0 0
Austria 0 0 Cayman Islands 0 0
Oman 1 0.44 Jordan 0 0
Solomon Islands 0 0 Laos 0 0
Italy 0 0 Lithuania 0 0
Russia 0 0 Mongolia 0 0
Pakistan 2 Paraguay 0 0
Chile 0 0 Poland 0 0
Greece 0 0 Syria 0 0
Qatar 1
Source: developed for this research