Leveraging the International Context: Essays on Building Offshoring Capabilities and Enhancing Firm Innovation

Abstract

The increased globalization of the last decades created a business environment in which firms are exposed to foreign competition but also to important foreign opportunities. However, while many opportunities exist abroad, capitalizing on these opportunities is not straightforward. This dissertation advances the understanding of how firms can leverage the international environment, especially for increasing innovation. For this purpose, this dissertation contains four research studies asking complementary research questions. In the first study, I perform a systematic review of offshoring research to develop a decisional framework that integrates insights on the factors that inform the key decisions firms make when offshoring and to suggest avenues for future research. The second study shows how firms can build offshoring capabilities in order to benefit from foreign operations. Employing a qualitative methodology, I uncovered what an offshoring capability consists of and how firms can develop it. In the remaining studies, I address the more specific question of how firm can use international opportunities to increase their ability to innovate. To this end, the third study puts forward theoretical proposition suggesting firms can use offshoring to innovate, but this depends on the top management team processes and the degree of integration with foreign activities. The fourth study take a large-scale quantitative approach to find that the degree of international diversification affects firms’ ability to innovate and that different elements of international diversification are interrelated in their influence on innovation. Overall, this dissertation finds that firms can use international opportunities to increase their innovation