The Role of Networks in Improving International Performance and Competitiveness: Perspective View of Open Innovation

With perspective view of open innovation, this study examines how international networks form and evolve and the empirical relationships among antecedents of international network embeddedness, international performance, and sustainable competitiveness. Data from 356 small and medium-sized exporters (SMEs) in manufacturing or technology industries in South Korea are analyzed by structural equation modeling. It assumes that international network embeddedness plays a mediating role in the relationship between internationalization and related variables. This analysis indicates that information management and proximity significantly affect international performance, while cultural differences do not, and that international network embeddedness mediates relationships between information management and international performance, and proximity and international performance. The results imply that greater international network embeddedness increases SMEs’ international performance—information management and proximity play a pivotal role in embedding international networks and improving international performance. SMEs must establish and intensify international networks to improve international performance and seek to overcome limitations by developing international networks with the goal of entering international markets. Nevertheless, there is relatively little research on international network formation and embeddedness, especially for SMEs. This study determines network formation principles, determinants of international networks, and roles of international network embeddedness in relationships between the determinants and international performance. Notably, this study verifies a comprehensive model of international networks.