The Role of Dynamic Capabilities in Internationalization Performance of Technology-Based Firms in Iran

Amir Zakery () and Mohammad Sadegh Saremi ()
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Amir Zakery: Iran University of Science and Technology
Mohammad Sadegh Saremi: Technology Studies Institute

Journal of the Knowledge Economy, 2025, vol. 16, issue 1, No 16, 453-477

Abstract: Abstract Dynamic capabilities empower firms to reconfigure their resources and routines in response to external pressures. Existing research on how dynamic capability supports international performance in emerging countries is scant. We aim to explore supportive mechanisms that enhance the effect of dynamic capability on sustaining SMEs’ export under foreign pressures. Following a qualitative approach, the performance of 12 technology-based firms (TBFs) rising from the Iranian market to international markets was investigated through observations and in-depth interviews with top managers. The interview content was analyzed by extracting the main themes describing dynamic capability aspects as well as the factors moderating the effect of dynamic capabilities on maintaining international performance. Networking and technological learning were recognized as the two main components of dynamic capability that influence the performance in international markets. In addition, foreign market choice and entry mode choice are two moderating factors that could stabilize the dynamic capability’s effect on international performance, even under foreign pressures. Six propositions were developed and proposed for further empirical studies, including the dynamic capability’s positive effect on international performance, and also the moderation effect which is supposed by the appropriate choice of target markets and entry modes. This study contributes to the intersection of two areas of dynamic capability and internationalization from the aspect of an emerging country. The exploration of the relationships between dynamic capability and international expansion choices (market and entry mode) sheds light on dynamic capability precedents that helps TBFs to survive their export even under imposed trade barriers.

Keywords: Internationalization; Dynamic capability; Entry mode; Market choice; Technological learning; Networking (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-024-01916-x

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