Benefits of IT-Enabled Flexibilities for Foreign versus Local Firms in Emerging Economies

Jiban Khuntia, Abhishek Kathuria, Terence JV Saldanha, Benn R Konsynski
Journal of Management Information Systems,Vol. 36, Issue 3, Pages: 855-892.
Emerging economies present attractive opportunities to foreign firms. However, internationalization risk faced by foreign firms can have significant implications for their performance relative to local firms. Information Technology (IT) and IT-enabled capabilities help firms overcome internationalization risk and compete globally. Marketing Capability and Relational Capability also mitigate this risk through access to information related to markets and the business environment. We examine how foreign firms and local firms compare in leveraging synergies between such IT and firm capabilities. We focus on two kinds of IT-enabled capabilities: IT-enabled Flexibility in Customer Services, and IT-enabled Flexibility in Partner Services, and develop hypotheses for their complementary effects with Marketing Capability and Relational Capability respectively, to positively influence firm performance. We then draw on the firm