Dynamic managerial capability portfolios in early internationalising firms

It is acknowledged that dynamic capabilities can underlie internationalisation of firms, yet extant research has tended to examine the role of capabilities in international entrepreneurship in separate studies, neglecting that international enterprises tend to develop different bundles or portfolios of capabilities that may have differing impacts on their internationalisation. Applying the concept of dynamic managerial capabilities, this study illustrates how different capability portfolios of entrepreneurial decision-making and network capabilities explain early internationalisation of small- and medium-sized enterprises (SMEs). Employing a machine learning method through artificial neural network (ANN) analysis, the findings show how early internationalisation is predicted by a portfolio of different dynamic managerial capabilities. This study thus contributes to the international entrepreneurship literature by outlining the capability portfolios necessary for early internationalisation and proposing a taxonomy for capability portfolios for early and late internationalising firms, by clarifying the role of dynamic managerial capabilities in early and successful entrepreneurial internationalisation and by introducing the ANN methodology as a useful tool in the research corpus of the international entrepreneurship domain. •Dynamic managerial capabilities are essential in internationalization.•Role of capability portfolios in internationalisation is important.•A taxonomy for six capability portfolios is developed shows performance differences.•Machine learning approach to internationalisation is applied.