Causes of the Difficulties in Internationalization

We study the causes of the difficulties faced by firms when they internationalize in search of new markets. We build on the resource-based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage: loss of advantage p...

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Bibliographic Details
Published in:Journal of international business studies 2007-09, Vol.38 (5), p.709-725
Main Authors: Alvaro Cuervo-Cazurra, Mary M. Maloney, Manrakhan, Shalini
Format: Article
Language:English
Subjects:
Business and Management
Business management
Business networks
Business Strategy/Leadership
Business structures
Business studies
Competition
Complementary resources
Consumer goods industries
Corporate strategies
Customers
Economic resources
Firm theory
Globalization
Host country
Impact analysis
Information resources
International Business
International economics
Internationalization
Management
Managers
Market entry
Natural resources
Organization
Organization theory
Organizational effectiveness
Resource allocation
Service industries
Strategic management
Studies
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Summary:We study the causes of the difficulties faced by firms when they internationalize in search of new markets. We build on the resource-based theory to argue that the difficulties in internationalization can be separated into three main sets based on their relationship to advantage: loss of advantage provided by resources transferred abroad; creation of a disadvantage by resources transferred abroad; and lack of complementary resources required to operate abroad. In each set, we further distinguish difficulties that are specific to a firm from those that are common to a set of firms. We argue that only a few of the resulting types of difficulties of internationalization are exclusive to the cross-border expansion, and propose solutions that address the root cause of each type.
ISSN:0047-2506
1478-6990
DOI:10.1057/palgrave.jibs.8400295