Internationalization Revisited: The Big Step Hypothesis

We refine internationalization theory by hypothesizing that international expansion is a discontinuous process characterized by an initial ‘big step.’ Firms have to build an infrastructure (e.g., architecture, management systems, and mind-set) to support international operations the first time they venture abroad, and subsequent international operations are able to leverage this infrastructure. Thus, we hypothesize that the internationalization process is characterized by: (1) firms taking a long period to make their first international investment; and (2) firms taking shorter but constant periods for subsequent investments. We examine the international expansion activities of 176 Danish firms and find support for these arguments.