Exploring the relationship between innovation, entry modes and destination countries

Abstract

In a world characterized by globalization, where the internationalization of businesses is pivotal for their prosperity, innovation is emerging as a pivotal strategic choice influencing their growth and competitive edge. Despite the broad consensus on the growing importance of internationalization and innovation, some questions arise about the relationship of innovation with entry modes with less commitment to the market and with destination markets with less risks. In order to determine whether there is a pattern of relationship between internationalization modes, destination markets, and innovation for Portuguese firms, the objective is to study this possibility. To achieve this goal, we carried out an online questionnaire survey to collect data. The questionnaire was carefully designed based on a literature review and included various variables related to the internationalization of firms. It was sent to all 8183 firms listed in the AICEP database of Portuguese internationalized firms through Google Forms tool. The data was collected over an 8-month period, starting in May 2019. To analyze the data, we used IBM SPSS Statistics 27.0 software, applying a quantitative approach. We employed Quantitative Analysis Methodologies: Univariate and Multivariate Exploratory Factorial Analysis (EFA), Correlation analysis and the nonparametric tests Chi-square and Mann-Whitney. Based on the findings, the empirical evidence clearly demonstrates that firms employing internationalization modes demanding higher commitment, along with those targeting geographically and psychologically distant markets, place significantly greater emphasis on innovation as a pivotal factor driving their international expansion.