Assets and Actions: Firm-Specific Factors in the Internationalization of U.S. Internet Firms

Abstract

By providing a nearly instant connection among parties at opposite corners of the world and enabling a variety of commercial exchanges, the Internet emerged as the technology expected to create a truly global market space. Internet firms faced the challenge of capitalizing on this development. In this paper we examine what firm-specific factors are associated with the propensity of pure U.S.-based Internet firms to enhance their international presence on the Internet by developing country-specific websites. Despite the assertion that all Internet firms are born global, our findings show that the pursuit of internationalization by Internet firms is related to the levels of their intangible assets and strategic activity. Two types of intangible assets—reputation and website traffic—are positively related to the degree of internationalization; so are the levels of competitive and cooperative activity, and the interaction effects between reputation and competitive and cooperative activity. These findings suggest that ideas from both resource-based theory and research on competitive dynamics can contribute to understanding the internationalization of Internet firms.