Learning Through Imports in the Internationalization Process

Abstract

Imports are seldom viewed as an integral part of the firm's internationalization process. Yet competitiveness in the 21st century demands that firms seek out ways to lower their costs, gain access to products, services, and knowledge not available domestically, and generally to take advantage of import opportunities just as they explore domestic supply opportunities. Imports thus provide an opportunity for organizational learning in the process of supply chain management, as well as in the process of internationalization, for firms today. This paper explores how imports fit into the strategies of a sample of 138 US-based companies. Imports are a central feature of the internationalization of US firms. Manufacturing firms use importing more intensively than service firms, and they use imports more in producing exports; service firms tend to import inputs before they export services. High-tech firms are involved earlier in importing, are more involved in using imports to produce exports, and use imports more to lower costs than low-tech firms; low-tech firms use imports more to obtain locally unavailable inputs. Older firms use imports more intensively, and they view imports as more important to the business than younger firms. Importing and exporting occur at approximately the same stage of development of the firm. An overall model of imports in the global supply chain is presented and tested. Organizational learning from the import activity passes on to further company benefit, through gaining access to foreign knowledge, as well as access to foreign suppliers and markets.