Re-internationalization and Firm’s Post-re-entry Performance: The Role of International Heritage

Abstract

This paper studies the drivers of re-internationalization to export market and post-re-entry performance from the perspective of international heritage. We develop a conceptual framework to explain how three key aspects of international heritage (firm specific competitive advantage, market and product diversification strategies, and overall exporting experience) as well as firm’s time-out period drive re-internationalisation. Using granular trade transaction-level firm exports data from UK HM Revenue & Customs linked with profit records for 2002-2013, we found that, despite their inter-relationships, re-entry and post-re-entry performance are driven by different mechanisms, and therefore, the same factor may influence them differently or even in an opposite direction. In other words, what increases the chances of firm’s re-entry, may prove to be detrimental for their performance and vice versa.