Relationships Matter in Firm Internationalization: Findings from a 30- year Longitudinal Study

Abstract

This study argues that firm's network positions play important roles in its internationalization, and intends to provide a network explanation for the purported relationship between firm's network positions and its internationalization in the context of the semiconductor industry. This study adopts the quantitative methodology to explore the research questions. Drawing on thirty years of observations for each of the five years from 1980 to 2010 for distributor firms in the semiconductor industry, this study utilizes panel data regression to examine the effects of a firm's network positions on its internationalization. The sample of this study is the 113 franchised semiconductor distributor firms in Taiwan of the WSTS' (World Semiconductor Trade Statics) 63 member companies. WSTS' member companies represent more than 75% of the world semiconductor market. Worldwide top 20 semiconductor suppliers are WSTS members. This virtually includes all major semiconductor manufacturers around the world. Results of this study support the positive relationship between firm's centrality of its network positions and its internationalization, the positive relationship between firm’s structural holes of its network positions and its internationalization, and the positive relationship between firm's brokerage of its network positions and its internationalization.