INTERNATIONALIZATION REVISITED: THE "BIG STEP" HYPOTHESES

Torben Pedersen and J. Myles Shaver
Additional contact information
Torben Pedersen: Department of International Economics and Management, Copenhagen Business School, Postal: Department of International Economics and Management, Copenhagen Business School, Howitzvej 60, 2nd floor , DK-2200 Copenhagen N, Denmark
J. Myles Shaver: New York University, Postal: Stern School of Business, New York University, 44 W 4th St., Suite 7-74, New York, NY 10012-1126, USA

No 5-2000, Working Papers from Copenhagen Business School, Department of International Economics and Management

Abstract: We refine the prominent of the process by which firms expand internationally - internationalization theory. By argumenting the behavioral theory of the firm (which is the basis of internationalization theory) with theories of foreign direct investment, we argue that international expansion is not a gradual incremental process as argued by internationalization theory. Rather, we hypothesize that international expansion is a discontinuous process characterized by an initial "big step." We expect that the differences of operating in one`s home country versus abroad are the major difficulties faced by foreign firms, and subsequently the differences between foreign countries are only marginal. As a result, we hypothesize that the internationalization process will be characterized by the following observations: (a) firms take a long period of time to make their first international investment; (b) firms take shorter but constant periods of time for subsequent investments; (c) no relationship between time to expansion and the cultural distance of the target country will exist. We examine the international expansion activities of 176 Danish firms over 150 years and find support for these arguments.

Keywords: Internationalization; Globalization; Expansion; Firm beahvior; Culture differences; International investment; Denmark (search for similar items in EconPapers)
Pages: 32 pages
Date: 2000-03-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://openarchive.cbs.dk/cbsweb/handle/10398/6607 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhb:cbsint:2000-005

Access Statistics for this paper

More papers in Working Papers from Copenhagen Business School, Department of International Economics and Management Department of International Economics and Management, Copenhagen Business School, Howitzvej 60, DK-2000 Frederiksberg, Denmark. Contact information at EDIRC.
Bibliographic data for series maintained by Lars Nondal ().