Testing the revisited Uppsala model: does insidership improve international performance?

Abstract

Purpose – The purpose of this paper is to analyse insidership vs outsidership, enriching the revisited Uppsala model with the resource-based view, transaction cost economics and internalisation theory. The authors also address empirical gaps affecting the role of dyadic business relationships (BRs) (customers/suppliers/research institutions/competitors) and business networks and their effect on international performance. Finally, the authors research whether insiders’ firm-specific advantages have a stronger effect on international performance than outsiders’. Design/methodology/approach – The authors work with an unbalanced panel data set of 14,231 firm-observations (period: 2000-2010). First, the author use ANOVA models (with pooled and panel data) in order to test the Uppsala basics. Second, the authors refine the research through dynamic Tobit models. Findings – The authors find that insiders perform significantly better than outsiders. When analysing the impact on international performance, the authors confirm that not only do dyadic BRs with customers or suppliers have a positive effect, but so do BRs with research institutions; however, business networks with customers and suppliers have a negative impact. Finally, when testing interactions, the results point at technological skills as an alternative means to overcome the liability of outsidership. Originality/value – Prior studies on this topic have been broadly focused on testing the original Uppsala (1977) model. However, the authors advance it by reconciling the revisited Uppsala (2009) model with the main international business theories as well as testing and refining its content in line with Johanson and Vahlne’s guidelines.