Abstract
The Internet has been shown to facilitate elements of internationalisation such as information accumulation and network opportunities. However, there is limited understanding of how the Internet combined with marketing capabilities drives international market growth. This study, based on a sample of 224 Australian firms, develops and tests, using structural equation modelling (SEM), a conceptual model of Internet marketing capabilities and international market growth. Results indicate that firms deploying Internet marketing capabilities will benefit due to the reduction of information uncertainty and increased capacity to develop international network capabilities. Moreover, Internet marketing capabilities indirectly lead to international market growth when the firm has a high level of international strategic orientation and international network capabilities. Overall, Internet marketing capabilities enhance the firm's ability to generate other internal capabilities within the firm, which in turn have a positive impact on the international market growth of the firm.
1. Introduction
The Internet is an evolving technology which has facilitated the development of new business relationships and has opened up cross-border market opportunities for companies (Hinson & Adjasi, 2009; Petersen, Welch, & Liesch, 2002; Rayport & Sviokla, 1994). The investigation of the Internet’s impact on the international firm is part of a growing body of knowledge in the marketing and international business literature (Mathews & Healy, 2008; Moen, Endresen, & Gavlen, 2003; Moen, Madsen, & Aspelund, 2008). Despite strong interest in the impact of the Internet on internationalisation and potential to reach foreign customers, there is a lack of comprehension of and research related to the complex relationships between the digitalization of internationalising firms and international marketing performance (Sinkovics, Sinkovics, & Jean, 2013; Yamin & Sinkovics, 2006).
6. Conclusions, implications, limitations and future research
The study provides new insights into international Internet marketing capabilities and the relationship between international strategic orientation and international network capabilities and how they drive the international market growth of the firm. The study contributes to our understanding of the aggregate nature of capabilities related to Internet marketing capabilities beyond a singular perspective of simple Internet use. The idea that Internet marketing capabilities are a group of distinct marketing activities that can be leveraged for international performance outcomes extends our knowledge of international business digital capabilities. The bundling of more traditional capabilities with these evolving Internet marketing capabilities will benefit the firm when strategically orientated towards internationalisation. Moreover, Internet marketing capabilities also enhance the international strategic orientation of the firm. Our study sheds additional light on the relationship between capabilities and firm performance. It examines the links between capabilities, functional competences and performance outcomes. Although the literature on Internet related capabilities asserts a positive impact on firm performance, these claims have not been empirically tested. Our study provides this empirical evidence based on data pertaining to a sample of Australian firms with international customers.
