Despite the vital role of niche leaders, little is known about their internationalization. The purpose of this study is to examine how niche leaders achieve internationalization success by investigating the role of specialization strategy and the moderating effects of firm’s domestic market power and firm age.
Using panel data of Chinese listed “little giants” from 2017 to 2020, this study examines the impact of specialization on internationalization breadth and depth of niche leaders as well as the contingencies.
Specialization strategy significantly boosts the internationalization of niche leaders, while such effect is not significant in non-niche leader firms. Niche leader’s domestic market power weakens the positive impact of specialization, whereas firm age strengthens the impact.
This research advances our understanding of internationalization of niche leaders by showing that how niche leaders, especially those from emerging markets, use specialization strategy to achieve success in international markets. Also, the authors extend the diversification-performance literature by showing that specialization, rather than a moderate level of diversification, is optimal for internationalization of niche leaders. Furthermore, they identify firm’s domestic market power and firm age as boundary conditions, extending understanding of how niche leaders may differ in using a specialization strategy to expand internationally.
