Internationalization Process Model Research Articles

Asynchronicities of growth: a process extension to the Uppsala model of internationalisation

AbstractWe contend that the Uppsala internationalisation process (IP) Model offers the basis, yet unrealised, for a process theory of growth of the internationalising firm. From the Model’s origins, particularly in Penrosean theory, we develop this potential by offering a theory extension that explicates the organisational changes within the firm required to sustain international growth. This repositioning distinguishes us from previous attempts to amend, supplant or extend the IP Model. In developing the theory extension, we specify how we remain faithful to the IP Model’s behavioural assumption ground. We provide a model of the internationalising firm that posits non-linear growth paths. This is due to the challenges of synchronising the external opportunity seeking of the firm as it expands internationally with the internal capacity building required to realise these opportunities. Introducing to the IB field this asynchronicity problem, an absence of temporal concurrence, we show its potential in explaining organisational changes and discontinuities in the internationalising firm’s development as it seeks to grow. By extending the IP Model to offer a theory of growth of the internationalising firm, we provide the basis for further process scholarship on this topic that addresses contemporary concerns and developments.

Three-tier SME internationalization process model: a Vietnam study on the relationship between managerial capacity, innovation strategies and technological and innovation leadership

ABSTRACT Drawing on the strategic capacity-building perspective, we examine the mediating roles of three innovation strategies, i.e. export formalization, foreign business networking, and proactive competitiveness between managerial capacity and technological and innovation leadership in SME internationalization. Employing a sample of 900 Vietnamese SMEs, we found support for a three-staged internationalization process models allowing for SMEs that export, SMEs with plans to export, and SMEs with no-plans to export. With the identification of the three SME stages, the emphasis on the internationalization process shifts from export performance perspectives to leadership, and this shift has theoretical and practical implications for current knowledge about the SME internationalization process.

APPLICATION OF UPPSALA THEORY IN THE INTERNATIONALIZATION OF FURNITURE PRODUCTS

The research problem raised aims to find out how the process of internationalization of furniture companies is related to the Uppsala theory. This research is a case study with an object, namely the company Aida Furniture which is one of the Micro, Small and Medium Enterprises (MSMEs) engaged in the furniture industry. This research was conducted through a descriptive and qualitative approach. To obtain the necessary data, the authors conducted in-depth interviews with business owners from Aida Furniture. Determination of the subject is done purposively where the researcher determines the sampling by determining the special characteristics that are by the research objectives so that they are expected to be able to answer research problems. The biggest problem in the process of market internationalization is on the supply side where the government and universities are expected to be able to fill this gap by standardizing treatment in usage and other processes. In the internationalization process described, Uppsala's theory cannot be used to explain the internationalization process model at Aida Furniture. Meanwhile, the process of spreading sales areas can be explained by the Uppsala theory.

Ethnic networks in the internationalization of Turkish food producers

Abstract The Uppsala Internationalization Process Model falls short in its ability to explain how emerging market firms internationalize. In this respect, the model needs to be enhanced through theoretical and empirical contributions. In this study, we aimed to increase the relationality of the model by employing the ethnic networks approach. As a case study for emerging market companies, we focused on the internationalization processes of Turkish food companies, which have been relatively little studied until now. Based on data from qualitative interviews, we found that ethnic networks in Germany play an important role in the initial stages of export activities, in location selection, in gaining market information, and in reaching the mainstream retailers and consumers for Turkish food companies. Adopting the ethnic networks approach enables us to see the roles of previously ignored relationships. Our findings show that, in future research, the role of ethnic networks should not be overlooked in the process of applying the Uppsala Internationalization Process Model on emerging market firms.

Firm age and Chinese firms’ OFDI in developing and developed countries: the moderating roles of industry munificence and state ownership

PurposeApplying the internationalization process model (IPM) and the strategic fit perspective, this research aims to test the effects of firm age on Chinese firms’ outward foreign direct investment (OFDI) in developing and developed countries.Design/methodology/approachUsing data on some Chinese firms, this study applied the zero-inflated negative binomial model and Heckman two-stage model to do the analyses.FindingsThis research found that firm age has different effects on Chinese firms’ OFDI in developed and developing countries. State ownership and industry munificence independently and jointly can moderate these effects.Originality/valueThis study contributes to the IPM and solves the theoretical conflict about the firm age–OFDI relationship.

Learning About Entry Mode, Institutional Distance, and Cross-Border M&As in China

Drawing on the learning perspective, we examine the validity of the repetitive momentum perspective vis-à-vis the conventional internationalization process (IP) model in the setting of MNCs’ entry into China. We argue that the accumulation of experience and knowledge regarding a certain entry mode such as cross-border merger and acquisition (M&A) or international alliance may lead an MNC to keep investing in the same mode. We also argue that institutional distance, which increases the necessity and difficulty of experiential learning, strengthens this repetitive momentum. Analyses based on a sample of 1,561 MNCs from 40 different countries entering China through M&As from 2003 to 2013 provide considerable support to our predictions.

Domestic clustered networks and internationalization of agrifood SMEs

AbstractThis paper examines how participating in domestic clustered networks in the agri‐food industry affects the export status and export intensity of small and medium‐sized enterprises (SMEs). The Uppsala internationalization process model has been revisited in light of the knowledge that these networks can contribute to promoting the presence of SMEs abroad. The study uses a sample of companies in the Spanish wine industry and characterizes 76 domestic clustered business networks (Protected Designations of Origin). The value and originality of the paper reside in its contribution in terms of measuring the degree of internationalization of domestic clustered networks to which SMEs belong. It also assesses the effect of these networks on the internationalization process of the agri‐food industry, considering that domestic clustered networks with a strong international commitment generate greater internationalization opportunities. [EconLit Citations: F14, M21, Q13, Q17].

The Impact of Interfirm Linkages on Chinese MNEs’ Entry into Foreign Markets

The Impact of Interfirm Linkages on Chinese MNEs’ Entry into Foreign Markets-Linkage, Strategic Alliance, Outward Foreign Direct Investment (OFDI), Location Choice, Internationalization Process Model (IPM)

China’s FDI Location Choice in the Lens of the Internationalization Process Model

China’s FDI Location Choice in the Lens of the Internationalization Process Model

Performance shortfalls and outward foreign direct investment by MNE subsidiaries: Evidence from China

Foreign subsidiaries of multinational enterprises (MNEs) have been conducting outward foreign direct investment (OFDI) into new overseas destinations. Drawing upon the behavioural theory of the firm, we explain that such OFDI can occur in response to performance shortfalls relative to aspirations. When performance shortfalls in subsidiaries are attributed to the institutional distance between them and the home country of the parent firm, these subsidiaries select institutionally closer destinations for their own OFDI. Our study goes beyond the direct investment of MNE headquarters and advances the internationalisation process model by investigating the underexplored, secondary and springboard-based internationalisation, and by underscoring the value of a subsidiary’s OFDI behaviour.

Internationalization performance effects of causation and effectuation: a contingency approach

Our study addresses a fundamental research question at the heart of IB and IE research: what specific configurations of internal (organizational) characteristics, external contingencies and entry mode choice drive organizational performance? We incorporated insights from the literature on cognitive micro-foundations in the internationalization process model that allowed us to include effectuation logics in the analysis of entry mode decision making of MNEs and performance of an internationalizing firm. We also explored the combined and simultaneous effects of endogenous and exogenous factors on the firm’s performance, such as the decision-making logic (effectuation and causation), the actual entry mode decision, entrepreneurial and international experience of the decision makers as well as exogenous factors such as the psychic distance of the host country. Examined through fuzzy set Qualitative Comparative Analysis (QCA), we look at the simultaneous effect of the endogenous and exogenous variables on a firm’s performance offering a holistic view and a more nuanced understanding of the possible configurations that lead to superior performance.

Internationalization Patterns of European Mobile Network Operators

The mobile communication industry is one of the most important industries, because it contributes almost five percent to the global GDP and provides the platform for most technological innovations like internet of things (IoT) or digitalization. The purpose of this qualitative, multiple-case study is to explore the internationalization patterns of the four major European mobile network operators (MNO) Deutsche Telekom, Orange, Vodafone, and Telefonica using the Uppsala Internationalization Process Model (UIPM) and the cultural, administrative, geographical, and economic distance (CAGE) distance framework as conceptual frameworks. The findings suggest that European MNOs opt for an active market entry strategy while using a “buy” market entry form to benefit from business opportunities in foreign markets with a high administrative and political proximity and identified government ownership as an impact factor on the speed of internationalization. These findings confirm and add to the current research about MNO’s internationalization patterns and offer important insights for practitioners. There is a need for additional research with other case study firms to replicate the research findings and quantitative methods to strengthen their generalizability.

Internationalization Patterns of Digital Payment System Firms: A Multiple Case Analysis

The purpose of this study is to investigate the internationalization patterns of digital payment system firms through the use of the Uppsala Internationalization Process Model (UIPM) as a conceptual framework. The phenomenon is explored via a multiple-case analysis in order to understand the patterns among the different case studies. Data were collected through different sources: scientific papers, corporate websites, and reputable consulting companies’ reports websites. Data analysis found five themes to answer the research question. The results and the findings of the research suggest that: 1) digital payments system firms, when analyzed by the UIPM, express a fast internationalization process and they start to internationalize by low distance countries in cultural, administrative, geographic, and economic (CAGE) terms, 2) all those firms use a network (technical or business partnerships) to enter overseas, 3) technological and demographic elements are not suitable to understand the possibility of internationalization, 4) the regulatory barriers are not so important as the users’ ones seem to be, 5) the firm-specific advantage that every company had was directly involved in the e-commerce system. Limitations of the research are its methodology and the sampling strategy that limits the results’ generalizability. Nevertheless, the results add knowledge on the UIPM when related to digital payment systems (DPS) firms. According to that vision, it can be helpful for scholars, consultants, entrepreneurs, as well as for private or public managers to better recognize the behavior of these companies when internationalizing.

Internationalization Via Instagram: An Exploratory Study of Small and Medium Enterprises

This study used content analyzed ten Australian Small and Medium Enterprises (SME) sites for their brand awareness, communication, information, integration and cultural awareness to examine how best they use Instagram to internationalize. In this study, the internationalization process was provided through engaging a 3-stage internationalization process model (no plans to export, potential exporter, exporters) and, training outcomes were identified. Findings showed that owing to reduced barriers of engaging with overseas market, SMEs with the higher brand and cultural awareness, and acceptable online communication practices were primed for internationalization while SMEs who had poor business integration were negatively viewed for internationalization. These findings have implications for theory and practice.

Are Neoclassic Internationalization Models Enduring? A Case-Review of the Uppsala Paradigm

Internationalization is a theme of great interest to practitioners worldwide, intensified by the increasing business environmental turbulence in last decades. The latter led to the proliferation and expanding of research into new areas, while neoclassic archetypes were conversely dubbed as, supposedly “old-fashioned.” In this context, a review article aims at breaking with such dogma, rejuvenating prior knowledge, and contextualizing it in current time. Hence, this research focus on a seminal framework, the well-known Uppsala Model, purposively selected as being an exception, as it keeps capturing the interest of scholars and is still one of the most cited frameworks in this area. Thus, a theoretical review addresses the evolution of the model in the aftermath of more than 40 years of research, and contextualizes it within the state-of-the-art of internationalization-related theories. An integrative review process is applied to a purposeful selection of descending frameworks of the model, circumscribed to the last decade (2009–2019). An enduring utility is positively observed, grounded on a reactive adaption purpose. In parallel, a shift is assisted from the neoclassic paradigm to a behavioral paradigm pillared on a capability-building logic for the adaption toward volatile, uncertain, complex, and ambiguous environments. This led to the extension of the Uppsala paradigm from a pure internationalization process model to enter the realm of the international capabilization framework.

Development of the Uppsala model of internationalization process: From internationalization to evolution

AbstractResearch SummaryI explain how the Uppsala model of the internationalization process progressed from explaining internationalization to explaining evolution. Initially, empirical findings led to the formulation of a model, later named the Uppsala model, driven by the interplay between experiential learning and commitments to expand the business into new foreign markets and deepen engagements in existing markets. Later, conceptions led to networks becoming a key ingredient in the model. As a result, globalization, geographical extensions and reconfigurations, and coordination changes were shown to follow the same pattern of learning and commitments as internationalization did. More recently, other dimensions in firms' evolution, such as R&D, and organizational and strategic change processes appear to follow similar processes of learning and commitments.Managerial SummaryI explain how the Uppsala model of the internationalization process changed from explaining internationalization to explaining evolution. Superior profitability depends on not waiting until everything is known but rather managing under uncertainty, preferably acting before competitors do, which is risky, and this risk must be kept at an acceptable level. This is possible not only by learning from experience, as was proposed in the initial version of the model, but also from engaging with a network of partners and actors in the relevant field of knowledge, as a subsequent revision of the model acknowledged. The latest version of the model highlights the importance of evolution in the access and development of knowledge, with performance depending on both environmental change and managerial action.

The JIBS 2019 Decade Award: The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership

The JIBS 2019 Decade Award: The Uppsala internationalization process model revisited: From liability of foreignness to liability of outsidership

Process in family business internationalisation: The state of the art and ways forward

Although the internationalisation of family businesses (FBs) has received increasing attention in recent years, much remains to be learned about how FB internationalisation unfolds as a process. Our review of 172 empirical studies from the period of 1991–2018 indicates that only 25 studies included both longitudinal data and strong process theorising, even though internationalisation is inherently processual, and FBs are longitudinal in nature. We acknowledge that both variance- and process-based theorising are needed to build an understanding of the FB internationalisation process. We contribute to the field by building an FB internationalisation process model based on a review analysis. Within the model, process-based internationalisation pathways are combined with variance-based capabilities (positive influences) and liabilities (negative influences) that affect internationalisation, with economic and non-economic goals viewed as driving the various internationalisation processes. On the basis of the model, we suggest that future research could adopt more longitudinal and individually focused approaches, as a means to understand the FB internationalisation process in various FBs and contexts, over various time periods, life cycles, and FB generations.

The theoretical evolution and use of the Uppsala Model of internationalization in the international business ecosystem

The Uppsala Model – typically viewed as an internationalization process model, an internationalization stages model, or a sequential internationalization model – has served as a theoretical underpinning in the international business literature since Johanson and Vahlne’s (J Int Bus Stud 8(1):23–32, 1977) article incorporated thoughts by researchers at Uppsala University in one all-encompassing model. Major updates to the model were published in 2009 and 2017 by the original authors. Our work examines what has now become the time-tested and Decade Award–winning 2009 version of the Uppsala Model relative to the original model in 1977. We also provide an outlook for international business research within the scope of the 2017 version of the model. This evaluation and dive across times into the nuances of the Uppsala Model capture aspects of the model’s theoretical and empirical power, as well as its limitations within today’s international business ecosystem. (The international business ecosystem is defined as the organisms of the business world – including stakeholders, organizations, and countries – involved in exchanges, production, business functions, and cross-border trade through both marketplace competition and cooperation.) In the process, we push the theoretical boundaries of the model and provide a unique connection to marketing thought.

National Internationalization Processes: SME on the way to Eastern Europe

Going alone on an adventure tour can be hazardous. Good friends help, if only through their advice. The same holds true for small businesses aiming for major international markets. They rely on information, support services and networks that are jointly built up with business partners. Business communities therefore follow a joint path of gradual internationalization that resembles the internationalization of firms described by Uppsala scholars. We present a model that integrates business networks with the internationalization process model to explain international business of small and medium size enterprises (SME). While global multinationals may be able to tap into several clusters and networks, SMEs are to a large extent part of the internationalization process of their national economy. Our survey evidence points to differences in the home country environment that explain why Danish firms, relative to Austrian firms, are less active. Our case evidence sheds more light on the dynamics of entry, as events in the network, and expansion of the network, motivate increased increased commitment.