ABSTRACT
This chapter presents a quantitative study undertaken in the Indian software industry. It also presents a study that tests the prospect that ties with peers may be detrimental for internationalization capability learning, to underline the significance of MNE ties in emerging economies as a means of compensating for weak local support. In the context of new ventures, ties with foreign MNE subsidiaries have the potential to aid internationalization capability development, but they also represent a set of asymmetric interfirm ties. The challenge of building internationalization capability is compounded in an emerging economy where firms are latecomers to globalization and in need of catching up on various competencies. Greve suggests that actors typically have implicit reference groups that form the basis of their aspirations and consequent mimetic behaviors. Selecting local SMEs as its reference group, particularly in an emerging economy, may lead to the focal young actor setting its horizons too low in the realm of internationalization.
