Antecedents of knowledge competency and performance in born globals : The moderating effects of absorptive capacity

Purpose – This study aims to investigate the antecedents of knowledge competency and international performance in South Korean born globals, with particular focus on the moderating effects of the absorptive capacity. Design/methodology/approach – Building on previous studies, the study constructs and tests a research model using structural equation modeling and multiple regression analysis for data collected from 271 early internationalizing SMEs. To secure results of hypothesis testing, non‐response bias was assessed using a t ‐test, and tests for data screening and common method bias were conducted. Findings – The results indicate that, for early internationalizing small firms, the prior international business experience of managers and networks affect building knowledge competencies. In the relationship between the use of networks and knowledge competencies, in particular, absorptive capacity is found to play a moderating role. It also finds that international business performance is driven by knowledge competencies the small firms accumulate. The findings imply that firms shortly after inception should raise their ability to acquire and utilize external resources and knowledge to secure international performance. Originality/value – This study makes an important contribution to the body of literature on rapid internationalization of small firms by examining the moderating effects of absorptive capacity on the relationship between founding teams' prior international business experience and firms' networks and knowledge competencies. The present study thus helps move forward our understanding on drivers of knowledge competency building and performance of the early internationalizing firm.