Drivers of emerging market professional service firm success: the role of internal firm competencies and capabilities
ISSN: 2040-8269
Article publication date: 17 October 2020
Issue publication date: 18 March 2021
Abstract
Purpose
The purpose of this study is to investigate the effects of emerging market professional service small and medium-sized enterprises’ (PSF SME) internal competencies and capabilities on their ability to establish relationship value among clients and achieve superior financial performance. This study addresses the paucity of research on emerging market PSF SMEs and their ability to build value for their clients.
Design/methodology/approach
Data were collected from 251 senior managers or owners of PSF SMEs who were from an emerging market economy but had operations in various foreign markets. The two-step structural equation modeling procedure was used to analyze the data and investigate the hypothesized relationships.
Findings
The results show the positive impacts of the PSF SME’s human capital on innovativeness, service capabilities and relationship value. Human capital also had indirect positive impacts on relationship value and financial performance. Service capabilities were found to have a positive impact on relationship value and financial performance. In addition, innovativeness was found to have a positive impact on financial performance.
Practical implications
Emerging market PSF SMEs can gain competitive advantages and build solid long-term relationships with clients in the global marketplace when they focus on strengthening their human capital resources and successfully leveraging their innovativeness and service capabilities.
Originality/value
The study fills a gap in international business and management literature by offering guidance on how emerging market PSF SMEs can effectively use their internal resources and capabilities to build solid relationships with clients, deliver superior services and achieve global marketplace success.
Keywords
Acknowledgements
This research was partly funded by Cleveland State University’s Graduate Student Research Award. The university was not directly involved in the study/research. They provided the funding to the principal researcher (Dr Nicholas Mathew), who then designed the study (along with this paper’s co-authors) and managed its final completion and submission.
Citation
Mathew, N., Javalgi, R.(R)., Dixit, A. and Gross, A. (2021), "Drivers of emerging market professional service firm success: the role of internal firm competencies and capabilities", Management Research Review, Vol. 44 No. 4, pp. 547-567. https://doi.org/10.1108/MRR-01-2020-0026
Publisher
:Emerald Publishing Limited
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