Organizational slack, firm size and internationalization speed into advanced and developing economies: a longitudinal study of Taiwanese firms

Abstract

Purpose This study aims to explore the differentiated influence of slack forms (high-discretion and low-discretion slack) on firms’ internationalization speed into diverse institutional environments. Specifically, this study examines firms’ internationalization speed into advanced economies (AEs) and emerging market and developing economies (EMDEs). This study also adds a discussion on internationalization from a focus on firm size, especially in its moderate influence on the relationship between organizational slack and internationalization speed. Design/methodology/approach This study conducts a longitudinal analysis to examine the hypotheses using 5544 observations from 264 publicly listed Taiwanese manufacturing companies over a period from 2001 to 2022. Findings This study finds that high-discretion slack accelerates internationalization into both AEs and EMDEs. While low-discretion slack hinders it in EMDEs. However, firm size moderates these relationships differently across environments. In AEs, larger firms experience greater benefits from high-discretion slack and are more negatively influenced by low-discretion slack. Conversely, in EMDEs, larger firms experience fewer benefits from high-discretion slack and are less negatively influenced by low-discretion slack. Originality/value This study fills gaps by examining the interaction between firm size, organizational slack form and internationalization speed across different institutional environments. By combining RBV and information-processing perspectives, the study offers a deeper understanding of how firms meet information-processing demands in international expansion. It highlights the mechanism of how firms’ information-processing capacity, associated with firm size, affects the effectiveness of their employment of different forms of organizational slack in AEs and EMDEs. The findings provide practical insights for optimizing resource allocation and expansion strategies.