Revisiting the Springboard Perspective: Market-seeking Internationalization, Dynamic Capabilities, and Digital Transformation of Emerging Market Firms

Abstract This study explores the impact of market-seeking internationalization, including exporting, industry linkages with foreign multinational enterprises (MNEs) at home (e.g., being a supplier), and market-seeking foreign direct investment (FDI) on the digital transformation of large manufacturing firms from an emerging economy. I revisit the springboard perspective, arguing that serving international customers contributes to emerging market firms gaining dynamic capabilities and eventually leads to the adoption of digital technologies. A four-step mediation analysis, as well as path analysis using structural equation modeling, is employed to test the hypotheses. The results show that dynamic capabilities mediate the relationship between internationalization and digital transformation for exporting and market-seeking FDI, while industry linkages with foreign MNEs at home directly lead to digital transformation. With strategic asset-seeking FDI being controlled, our findings highlight that capability upgrading is not only about acquiring knowledge from outward internationalization but also through the endogenous growth path of learning by doing and knowledge acquisition from inward internationalization.