Foreign interfirm networks and internationalization: Evidence from sub-Saharan Africa

Abstract

This study investigates how buyer-supplier interfirm networks with foreign affiliates affect the internationalization of local firms in developing countries. In a study of 1601 sub-Saharan African manufacturing firms, we find that foreign supply linkages positively influence firm internationalization, but this does not relate to marketing linkages. We further examine the role of absorptive capacity and find that both potential and realized absorptive capacity has positive and independent effects on firm internationalization. However, potential absorptive capacity has no moderating effect and realized absorptive capacity negatively moderates the relationship between foreign supplying networks and internationalization. Finally, implications for public policy and managerial practice are discussed.