Reviewing the Role of International Experience to Firm Internationalization. Traditional Assumptions and Selected Deviations

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Seminar paper from the year 2015 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,0, Universi...

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Seminar paper from the year 2015 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,0, University of Dalarna, language: English, abstract: Expanding onto foreign markets and being successive abroad is often considered as the peak of business success of a firm. Unsurprisingly, the process of firm internationalization received a lot of attention from scholars. A major influence to the pace and pattern of firm internationalization is international experience and resulting knowledge. In fact, knowledge is considered to be a main driver for competitive advantages. However, in spite of its identified importance, literature has yet to present a unifying theory which explains its exact role and impact to the process of internationalization. This noble aim may be aggravated by the fact that different types of firms appear to be effected dissimilarly by accrued international experience. Moreover, international experience is gained, processed and exploited in various ways resulting in diverse firm specific advantages. These differences in experiential learning further contribute to the complexity on grasping the issue. Finally, the process of internationalization itself includes many different aspects and hence does the effects of international experience to such. Just to name a few, scholars reviewed the role of international experience to the choice of entry mode, establishment mod, market selection or pace of internationalization. The resulting assumptions regarding international experience are broad and, unfortunately, often contradicting. This paper attempts to review selected deviating effects of international experience from the traditional frameworks and analyze their specifications. By doing so, one may be able to bridge gaps to traditional models or further highlight insufficiencies of such. When referring to the traditional framework of firm internationalization, this paper refers to the seminal work of Johanson and Vahlne (1977), as well as supporting models, and their theory regarding the role of knowledge development and market commitments in the process of internationalization. Furthermore, more recent studies regarding the role of knowledge on the choice of entry mode are being reviewed. The reviewed literature covers a time span of almost 40 years and opposes scientifically established work to most recently published articles from renowned outlets.