**5. Conclusions**

**4. Results**

*χ***2**

dependency relations.

Research in business-related sciences has gradually been enriched by the introduction of more sophisticated methodologies. This greater degree of development has enabled researchers to design and test increasingly complex models addressed to explaining the business reality.

**Scale 1st order 2nd order**

*λ* 0.74–0.87 0.72–0.84 0.85–0.86 0.71–0.82 0.81–0.91 0.73–0.90 0.77–0.91 0.72–0.87 0.76–0.95 *α* 0.887 0.749 0.841 0.732 0.845 0.871 0.887 0.847 NP CR 0.887 0.753 0.842 0.738 0.850 0.876 0.891 0.857 0.915 AVE 0.612 0.606 0.727 0.586 0.741 0.704 0.732 0.667 0.731

**/df RMSEA SRMR GFI AGFI NFI NNFI IFI CFI** 1.726 0.049 0.050 0.894 0.864 0.901 0.947 0.956 0.955

**Pair of variables CACOS-ABS CACOS-CADIF CACOS-NMO ABS-CADIF ABS-NMO I.C**. [0.143; 0.415] [0.145; 0.421] [0.124; 0.376] [0.148; 0.436] [0.198; 0.454] **Pair of variables CADIF-NMO CACOS-PERF ABS-PERF CADIF-PERF NMO-PERF I.C**. [0.036; 0.312] [0.117; 0.369] [0.049; 0.321] [0.154; 0.418] [0.279; 0.503]

Significant loads All *t* > 2.58 *R*<sup>2</sup> All *R*<sup>2</sup>

**Table 3.** Summary of the results after the definitive factor analysis.

56 Knowledge Management Strategies and Applications

**Table 4.** Discriminant validity analysis using the confidence interval (CI) test.

**PERF ABS CACOS CADIF COUP COOR CONF EXCH NMO**

> 0.49

Structural equations models have emerged from the evolution of multi-equation modelling developed chiefly in econometrics and combined with the principles of measurement from psychology and sociology, aimed at overcoming the limitation shared by other multivariate techniques such as multiple regression, factor analysis, multivariate analysis of variance or discriminant analysis, all of which can examine just one relation at a time [91]. Unlike the above-mentioned techniques, a structural equations model (SEM)-based analysis is able to explore a series of dependent relations simultaneously [91]. Therefore, this technique is particularly useful when a dependent variable becomes an independent variable in subsequent

For this reason, as with the scale validation, SEM was used to test the hypotheses, since they have proved to be highly useful in a non-experimental situation when the study aims to

The hypotheses that constitute the model of effects were tested using EQS 6.1 software. **Table 5** shows that none of the proposed hypotheses were refuted. First, as expected, NMO

uncover the causal influence from one factor to another [88].

This research was motivated by the large number of studies pointing to the important contribution BGs make to the progress of global economies. This circumstance has identified the study of the particularities that define BGs and that characterise their internationalisation process as a topic of major interest for academics and researchers [5, 6, 14, 17, 22]. Recent work in the international entrepreneurship field has urged researchers to contribute to the current understanding of firms' rapid internationalisation processes through richer empirical and theoretical studies [7, 8, 17, 25]. In this line, the Journal of International Business Studies will dedicate a special issue in 2017 to the determination of the factors that facilitate the creation and capture of entrepreneurial opportunities across national borders.

In general, our work adds to the growing support in the recent literature to the consideration of market knowledge as a key factor that determines the speed with which new companies adopt a proactive approach in crossing their national borders to seize new opportunities in


**Table 5.** Results of the estimation of standardised parameters for the model of effects.

other foreign markets [19, 56, 95–98]. As Javalgi et al. [99: p.15] point out, in current dynamic contexts BGs 'must listen to and correctly interpret the voice of the market. […] Firms that lose touch with the market, that either ignore or misinterpret its signals, will fail in hypercompetitive environments'.

Specifically, our findings contribute to the specialised literature with various relevant theoretical and empirical implications. First, gradualist models emphasise experience as an essential factor in the firm's internationalisation process by centring on determining the most relevant sources of external market knowledge [1]. However, the experience derived from physical presence in foreign markets is minimal in the case of BGs due to their recent creation. Experience cannot therefore be considered as the main source of knowledge BGs use in their entry into foreign markets. For this reason, a growing number of scholars highlight the role of vicarious knowledge from relations in networks as key source of external information and knowledge in BGs [56, 57]. As Lin and Chen [65: p.160] note, 'relationships between firms in a network context constitute an inter-organisational scenario for the exchange, compilation, integration and development of resources and valuable complementary knowledge that originally come from individual agents'. The links a BG builds into its network from its creation give it access to external information, knowledge, experiences and resources that it can apply internally [22]. In line with these arguments, the construct of NMO can be seen as a reference for determining how BGs generate and manage vicarious knowledge.

Second, based on ref. [37], our research enables theoretical identification and empirical testing of the behaviours and basic mechanisms that characterise the development of a coordinated market orientation among firms in BG networks. Our study responds to previous calls emphasising the need to complete the assumptions of individual market orientation with a relational view [43, 100, 101]. These findings show that the market orientation construct must be applied at individual and also network level [101], thereby supplementing the existing literature on the importance of individual market orientation in BGs [102, 103].

Furthermore, our results show that the knowledge these firms derive from their marketoriented networks helps them to develop an absorptive dynamic capability in order to act sustainably in their international markets. Therefore, BGs' development of absorptive capability should not be understood as a completely internal process, but as a relational process. This finding contributes to the discussion around the lack of attention paid to identifying the main variables beyond BG competitiveness [13, 71–73]. Indeed, our study responds to some authors' remarks that, despite the growing interest shown in recent years as a result of the intense process of globalisation in the markets, the theoretical and empirical knowledge about the internal and external antecedents of the international performance of new companies remains insufficient [13, 72, 73, 104, 105]. Our study complements previous literature in which analysis of these variables has tended to adopt an individual approach, highlighting the relevance for BGs of developing a market orientation [102, 103], an entrepreneurial orientation [3, 106, 107] or specific capabilities such as marketing and managerial capabilities [7, 22, 108, 109].

In sum, it is empirically demonstrated that adopting an orientation grounded in market knowledge and social networks (NMO) promotes the development by BGs of a dynamic absorptive capability that contributes to the systematic and effective adaptation to the dynamic and changing markets in which they operate, and the exploitation of the valuable knowledge generated. Our study integrates theoretical approaches from international business and entrepreneurship, providing a new framework that improves our understanding of the central role of knowledge in the way BGs capture and create opportunities across national borders.
