International network-oriented behavior as a strategic mechanism driving financial performance and the moderating role of absorptive capacity

Abstract

Although international networking has been recognized as a highly important aspect of industrial firms, the mechanisms contributing to firm performance are not well understood. Here, a strategic mechanism is the organizational network-oriented behavior enabling the firm to alter its position within its global business-network for positional advantage and gaining higher performance. We collected quantitative survey and accounting-based performance data from 186 firms. Our findings show that network-oriented behavior increases the firm's financial performance via internationalization, but the capacity to absorb new market knowledge is an important moderating mechanism. Hence, we contribute by finding that behavioral aspects of networking and absorptive capacity are critical for enhancing both internationalization and financial performance.