Causes of the difficulties in internationalization

Alvaro Cuervo-Cazurra (), Mary M Maloney and Shalini Manrakhan
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Mary M Maloney: Department of Management, Opus College of Business, University of St Thomas, Minneapolis, MN, USA
Shalini Manrakhan: Faculty of Engineering, University of Mauritius, Reduit, Mauritius

Journal of International Business Studies, 2007, vol. 38, issue 5, 709-725

Abstract: 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. Journal of International Business Studies (2007) 38, 709–725. doi:10.1057/palgrave.jibs.8400295

Date: 2007
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