Activating assets of foreignness in compressed developing markets: evidence from New Zealand SMEs entering the Chinese market

Abstract

The methods Western SMEs can use to activate assets of foreignness in compressed developing markets are not well understood. To fill this gap, this study identifies three main mechanisms for such activation: conforming to home-country institutions, creating distancing narratives and accentuating foreignness. It contributes knowledge about SME internationalization into compressed developing markets through two findings. First, SMEs can benefit from contrasting country practices and norms between home and host countries. Second, SMEs can activate institutional resources of their home country, which requires between-market learning because the value of these resources arises from their use in a different context.