How does rapid internationalization explain emerging-market multinationals' innovation? The moderating role of organizational capacity

Abstract

PurposeThe purpose of this study is to investigate the impact of rapid internationalization by emerging-market multinational enterprises (EMNEs) on their innovation performance. It also seeks to identify any potential moderating factors that could influence this relationship.Design/methodology/approachBy analyzing data from listed Chinese MNEs from 2012 to 2022, this study applies a negative binomial regression model to test the research hypotheses.FindingsThis study uncovers an inverted U-shaped relationship between the internationalization speed of EMNEs and their innovation performance. It also suggests that strong absorptive, learning and managerial capacities could play positive moderating roles in the effect of internationalization speed on EMNEs’ innovation performance.Originality/valueThis study highlights rapid global expansion, promoting new knowledge acquisition for EMNEs. However, due to time-compression dilemmas with limited EMNE firm-specific advantages, overly accelerated internationalization hinders learning effectiveness. Additionally, this study reveals the critical importance of three firm-specific capacities in EMNEs – absorptive, learning and managerial capacities – in efficiently assimilating newly acquired knowledge from foreign markets and enhancing their innovation performance through rapid internationalization.