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Introduction
Over the last few decades, liberalization of markets along with advances in information and communication technologies has spurred the rise of emerging economies, where strong economic growth patterns above the world average persist (UNCTAD, 2015). In contrast to the perception that emerging markets offer only low-cost outsourcing options, emerging market firms successfully offer high value, professional services (Milberg and Winkler, 2013) in highly competitive developed markets, as evidenced by global service trade patterns (UNCTAD, 2015). In particular, professional services have become one of the faster growing sectors of the world economy (Dotzel et al., 2013; Javalgi et al., 2011). Despite their prevalence and success, professional services pose a challenge to researchers in comparison to traditional services because they possess ambiguity, credence qualities, high customization, and uncertainty; all of which increase complexity (Jackson and Cooper, 1988; Zeithaml, 1981).
Professional service firms, which are specialized providers of knowledge-intensive, high-skill services, utilize a well-educated, professional workforce (Reihlen and Apel, 2007) to deliver services in the fields of law, accounting, management, consulting, and engineering (von Nordenflycht, 2010). Interestingly, these services are growing much faster than manufacturing and other service industries (Javalgi and Grossman, 2014). While many professional service firms remain committed to the creation of an overseas presence, a surprising number of small firms have already realized successful growth through the combination of resources and capabilities that has enabled smaller firms to seize upon opportunities abroad. Yet, many professional service firms face economic challenges in their emerging market location (Javalgi and White, 2002), and SMEs typically experience resource constraints (Lu and Beamish, 2001). Rising wages and price resistance from foreign markets, which are associated with emerging markets and low-cost outsourcing, threaten expansion and financial success (Milberg and Winkler, 2013). However, professional service firms have overcome their emerging market conditions, higher labor costs, and a liability of foreignness, showing persistent growth when developed nations’ economies have slowed (UNCTAD, 2015). Entrepreneurship scholars suggest that the strong performance of knowledge-intensive firms is due in part to an entrepreneurial orientation (EO), the strategic orientation of management that reflects the decision-making styles, methods, and practices as the organizational process of the firm and their manipulation of resources into value-creating strategies (Lumpkin and Dess, 1996).
To successfully expand internationally, a professional service...