This paper aims to reassess the influence of firm resources on international performance in the context of a major emerging economy – India. This reexamination aims to update knowledge in the area and assess the efficacy of the resource-based view (RBV) as a theoretical base for international business studies.
Encompassing 67 firms in India, across industries, over a period of five years, the study uses Panel Data Analysis on secondary data from a comprehensive database, CMIE Prowess.
The study finds scale resources and international experience have positive impacts on international performance. However, the positive impact of other resources considered – marketing capabilities, R&D intensity and innovativeness – on international performance was not supported. The study finds the research-based theory (RBV) needs to be supplemented with the dynamics capabilities perspective to understand factors determining international performance better.
The major research implications of the study include that RBV by itself may not be sufficient to examine the drivers of international business performance and needs to be supplemented with the dynamic capabilities approach. Further, the study finds that despite high quality, secondary sources may not be sufficient to assess international business performance. The limitations of the study include the lack of consideration of dynamic capabilities and subjective measures of international business performance.
The study aids top management to gauge the extent to which their firm resources may abet international performance allowing decision-making, accordingly.
The study extends and updates prior research to the context of emerging economies as against most research in the area that is focused on the developed nations. To the best of the authors’ knowledge, this study is perhaps the first to provide empirical evidence for the need to supplement RBV with the dynamic capabilities approach to better understand the drivers of international business performance.
